Commercial Loans (Tables)

12 Months Ended

Dec. 31, 2014

Summary of Classifications and Carrying Value of Loans

The following table summarizes the classifications and carrying value of commercial loans at December 31, 2014 and 2013.


(In Thousands)	December 31, 2014		December 31, 2013
Held-for-sale, at fair value	$	166,234	$	89,111
Held-for-investment
At fair value		71,262		—
At amortized cost		329,431		343,344

Total Commercial Loans	$	566,927	$	432,455

Geographic Concentration of Loans Recorded on Consolidated Balance Sheet

The following table displays the geographic concentration of commercial loans recorded on our consolidated balance sheets at December 31, 2014 and 2013.


	December 31, 2014						December 31, 2013
Geographic Concentration (by Principal)	Held-for-Sale			Held-for- Investment			Held-for-Sale			Held-for- Investment
Washington, District of Columbia		25	%		—			—			—
Michigan		18	%		8	%		—			8	%
Colorado		17	%		—			—			—
Connecticut		10	%		—			—			—
Texas		9	%		—			—			7	%
Maryland		7	%		—			—			—
California		6	%		19	%		—			21	%
Florida		—			17	%		—			10	%
New York		—			18	%		39	%		19	%
North Carolina		—			6	%		28	%		—
New Jersey		—			—			13	%		—
Ohio		—			—			8	%		—
Indiana		—			—			6	%		—
Illinois		—			—			6	%		6	%
Other states (none greater than 5%)		8	%		32	%		—			29	%

Total		100	%		100	%		100	%		100	%

Loan Product Type and Accompanying Loan Characteristics of Loans

The following table displays the loan product type and accompanying loan characteristics of commercial loans recorded on our consolidated balance sheets at December 31, 2014 and 2013.


December 31, 2014 (In Thousands)
Loan Balance	Number of Loans		Interest Rate	Maturity Date	Total Principal		30-89 Days DQ		90+ Days DQ
Held-for-Investment:
Fixed-rate loans:
$0 to $5,000		37	9.50% to 12.50%	8/2016 - 12/2024	$	102,994	$	—	$	—
$5,001 to $10,000		14	4.43% to 11.00%	4/2015 - 1/2025		109,551		—		—
$10,001 to $15,000		2	9.50% to 9.50%	1/2018 - 6/2021		24,874		—		—
$15,001 to $20,000		2	10.0% to 11.00%	6/2016 - 6/2022		37,700		—		—
$25,001 to $30,000		1	10.00%	10/2016		25,629		—		—

		56				300,748		—		—

ARM loans:
$5,001 to $10,000		2	10.80% to 12.00%	2/2015 - 10/2016		15,478		—		—
$10,001 to $15,000		2	9.16% to 11.20%	11/2014 - 8/2016		25,524		—		—

		4				41,002		—		—

Total Held-for-Investment		60			$	341,750	$	—	$	—

Held-for-Investment, at fair value:
Fixed-rate loans:
$0 to $5,000		3	10.00% to 10.00%	12/2023 to 4/2024	$	4,555	$	—	$	—
$10,001 to $15,000		1	4.95% to 4.95%	1/2024		11,399		—		—
$20,001 to $25,000		1	4.83% to 4.83%	12/2023		22,102		—		—
$25,001 to $30,000		1	4.79%	4/2024		29,500		—		—

		6			$	67,556	$	—	$	—

Held-for-Sale
Fixed-rate loans:		13	4.19% to 4.79%	12/2024 to 1/2045	$	162,790	$	—	$	—


December 31, 2013 (In Thousands)
Loan Balance	Number of Loans		Interest Rate	Maturity Date		Total Principal		30-89 Days DQ		90+ Days DQ
Held-for-Investment:
Fixed-rate loans:
$0 to $5,000		24	9.75% to 12.50%		8/2016 - 1/2024	$	70,597	$	—	$	—
$5,001 to $10,000		15	4.43% to 12.25%		4/2015 - 6/2023		112,887		—		—
$10,001 to $15,000		3	9.50% to 10.00%		6/2015 - 6/2021		35,463		—		—
$15,001 to $20,000		2	10.50% to 11.00%		6/2016 - 6/2022		37,700		—		—
$20,001 to $25,000		1	9.50%		12/2014		21,500		—		—
$25,001 to $30,000		1	10.00%		10/2016		25,839		—		—

		46					303,986		—		—

ARM loans:
$5,001 to $10,000		2	10.80% to 12.00%		2/2015 - 10/2016		15,497		—		—
$10,001 to $15,000		1	11.20%		11/2014		14,598		—		—
$15,001 to $20,000		1	11.99%		8/2014		19,250		—		—

		4					49,345		—		—

Total Held-for-Investment		50				$	353,331	$	—	$	—

Held-for-Sale
Fixed-rate loans:		7	4.79% to 5.52%		12/2023 - 1/2024	$	87,650	$	—	$	—

Carrying Value for Loans Held-for-Investment

The following table provides additional information for our commercial loans held-for-investment at December 31, 2014 and 2013.


(In Thousands)	December 31, 2014			December 31, 2013
Principal balance	$	341,750		$	353,331
Unamortized discount, net		(4,862	)		(2,614	)

Recorded investment		336,888			350,717
Allowance for loan losses		(7,457	)		(7,373	)

Carrying Value	$	329,431		$	343,344

Summary of Activity in Allowance for Loans Losses

The following table summarizes the activity in the allowance for commercial loan losses for the years ended December 31, 2014, 2013, and 2012.


	Year Ended December 31,
(In Thousands)	2014		2013		2012
Balance at beginning of period	$	7,373	$	4,084	$	608
Charge-offs, net		—		—		—
Provision for loan losses		84		3,289		3,476

Balance at End of Period	$	7,457	$	7,373	$	4,084

Commercial Loans Held For Investment

Commercial Loans Held-for-Investment by Risk Category

The following table presents the principal balance of commercial loans held-for-investment by risk category.


(In Thousands)	December 31, 2014		December 31, 2013
Pass	$	316,122	$	309,792
Watch list		25,628		43,539

Total Commercial Loans Held-for-Investment	$	341,750	$	353,331

Residential Loans

Summary of Classifications and Carrying Value of Loans

The following table summarizes the classifications and carrying values of the residential loans owned at Redwood and at consolidated Sequoia entities at December 31, 2014 and 2013.


December 31, 2014 (In Thousands)	Redwood		Sequoia		Total
Held-for-sale
Fair value - Conforming	$	244,714	$	—	$	244,714
Fair value - Jumbo		1,096,317		—		1,096,317
Lower of cost or fair value		1,488		—		1,488
Held-for-investment
Fair value - Jumbo		581,668		—		581,668
At amortized cost		—		1,474,386		1,474,386

Total Residential Loans	$	1,924,187	$	1,474,386	$	3,398,573


December 31, 2013 (In Thousands)	Redwood		Sequoia		Total
Held-for-sale
Fair value - Conforming	$	11,502	$	—	$	11,502
Fair value - Jumbo		391,100		—		391,100
Lower of cost or fair value		1,665		—		1,665
Held-for-investment, at amortized cost		—		1,762,167		1,762,167

Total Residential Loans	$	404,267	$	1,762,167	$	2,166,434

Geographic Concentration of Loans Recorded on Consolidated Balance Sheet

The following table presents the geographic concentration of residential loans recorded on our consolidated balance sheets at December 31, 2014 and 2013.


	December 31, 2014									December 31, 2013
Geographic Concentration (by Principal)	Held-for-Sale			Held-for- Investment			Held-for- Investment at FVO			Held-for-Sale			Held-for- Investment			Held-for- Investment at FVO
California		39	%		20	%		24	%		44	%		20	%		—
Texas		9	%		5	%		14	%		7	%		5	%		—
Massachusetts		6	%		2	%		5	%		4	%		—			—
Virginia		5	%		3	%		7	%		6	%		—			—
Washington		5	%		2	%		4	%		6	%		—			—
Florida		4	%		13	%		6	%		—			13	%		—
New York		2	%		8	%		3	%		3	%		9	%		—
Georgia		2	%		5	%		—			1	%		5	%		—
Colorado		—			—			8	%
Other states (none greater than 5%)		28	%		42	%		29	%		29	%		48	%		—

Total		100	%		100	%		100	%		100	%		100	%		—

Loan Product Type and Accompanying Loan Characteristics of Loans

The following table displays the loan product type and accompanying loan characteristics of residential loans recorded on our consolidated balance sheets at December 31, 2014 and 2013.


December 31, 2014 (In Thousands)
Loan Balance	Number of Loans		Interest Rate ⁽¹⁾	Maturity Date		Total Principal		30-89 Days DQ		90+ Days DQ
Held-for-Investment:
ARM loans:
$0 to $250		3,400	0.25% to 5.5%		12/2012 - 11/2035	$	400,779	$	14,604	$	16,332
$251 to $500		1,041	0% to 5.63%		12/2013 - 05/2036		360,848		14,536		13,955
$501 to $750		328	0.5% to 4.66%		08/2013 - 09/2035		198,661		7,218		12,862
$751 to $1,000		162	0.25% to 2.38%		02/2019 - 07/2035		143,687		2,396		9,262
over $1,000		132	0% to 2.63%		01/2022 - 05/2036		207,539		2,494		16,106

		5,063					1,311,514		41,248		68,517

Hybrid ARM loans:
$0 to $250		3	2.63% to 2.63%		09/2033 - 03/2034		364		—		—
$251 to $500		26	2.5% to 5.15%		07/2033 - 12/2039		10,056		—		319
$501 to $750		23	2.5% to 4.65%		07/2033 - 09/2040		14,711		—		—
$751 to $1,000		11	2.5% to 4.8%		07/2033 - 12/2040		9,393		—		—
over $1,000		7	2.5% to 4.95%		09/2033 - 11/2040		11,786		—		—

		70					46,310		—		319

Fixed loans:
$0 to $250		7	3.70% to 4.9%		04/2039 - 02/2041		1,040		—		—
$251 to $500		42	3.45% to 5.13%		02/2039 - 07/2041		17,574		—		—
$501 to $750		71	3.65% to 5.25%		02/2039 - 08/2041		42,609		—		—
$751 to $1,000		38	4.2% to 5.25%		08/2040 - 08/2041		32,966		—		726
over $1,000		24	4.3% to 5.38%		09/2040 - 06/2041		31,200		—		—

		182					125,389		—		726

Total Held-for-Investment		5,315				$	1,483,213	$	41,248	$	69,562

Held-for-Investment at fair value:
Hybrid ARM loans
$251 to $500		29	2.38% to 3.75%		01/2044 - 10/2044	$	12,487	$	—	$	—
$501 to $750		80	2.38% to 4.25%		02/2044 - 11/2044		49,085		619		—
$751 to $1,000		51	2.38% to 3.75%		05/2043 - 11/2044		43,835		—		—
over $1,000		14	2.38% to 3.25%		03/2044 - 11/2044		17,720		—		—

		174					123,127		619		—

Fixed loans
$0 to $250		1	4.13% to 4.13%		07/2044 - 07/2044		75		—		—
$251 to $500		158	3.13% to 4.75%		01/2029 - 12/2044		72,931		894		—
$501 to $750		272	3.13% to 5%		04/2029 - 12/2044		165,574		624		—
$751 to $1,000		136	3.13% to 4.88%		01/2029 - 12/2044		116,892		—		—
over $1,000		63	3.25% to 5%		01/2024 - 12/2044		87,773		—		—

		630					443,245		1,518		—

Total Held-for-Investment		804				$	566,372	$	2,137	$	—

Held-for-Sale:
ARM loans
$66 to $359		8	1.88% to 2.25%		11/2032 - 10/2033	$	1,286	$	170	$	471
Hybrid ARM loans
$252 to $1,985		109	2.63% - 4%		06/2037 - 01/2045		84,271		—		—
Fixed loans
$75 to $2,496		2,165	2.88% - 5%		12/2024 - 01/2045		1,219,936		1,178		—

Total Held-for-Sale		2,282				$	1,305,493	$	1,348	$	471


December 31, 2013 (In Thousands)
Loan Balance	Number of Loans		Interest Rate⁽¹⁾	Maturity Date		Total Principal		30-89 Days DQ		90+ Days DQ
Held-for-Investment:
ARM loans:
$0 to $250		3,917	0.25% to 6.45%		12/2012 - 11/2035	$	449,458	$	16,038	$	16,856
$251 to $500		1,231	-0.13% to 5.63%		07/2013 - 05/2036		428,503		14,111		15,775
$501 to $750		395	0.50% to 4.66%		08/2013 - 09/2035		240,407		8,951		14,527
$751 to $1,000		191	0.25% to 2.25%		09/2022 - 07/2035		170,454		3,108		7,886
over $1,000		169	-0.13% to 2.38%		02/2019 - 05/2036		269,153		5,309		23,340

		5,903					1,557,975		47,517		78,384

Hybrid ARM loans:
$0 to $250		2	2.63% to 4.25%		10/2033 - 07/2039		428		—		—
$251 to $500		34	2.63% to 5.15%		07/2033 - 07/2040		13,491		335		350
$501 to $750		26	2.63% to 4.75%		07/2033 - 09/2040		16,376		597		—
$751 to $1,000		20	2.63% to 4.88%		07/2033 - 12/2040		16,592		—		—
over $1,000		10	2.63% to 4.95%		09/2033 - 11/2040		15,662		—		—

		92					62,549		932		350

Fixed loans:
$0 to $250		9	3.70% to 4.90%		04/2039 - 02/2041		1,529		—		—
$251 to $500		40	3.45% to 5.63%		02/2039 - 07/2041		16,929		—		—
$501 to $750		86	3.65% to 5.25%		02/2039 - 08/2041		52,642		—		—
$751 to $1,000		47	4.20% to 5.25%		08/2040 - 08/2041		41,225		—		—
over $1,000		29	4.00% to 5.38%		09/2040 - 06/2041		37,954		—		—

		211					150,279		—		—

Total Held-for-Investment		6,206				$	1,770,803	$	48,449	$	78,734

Held-for-Sale:
ARM loans		9	1.88% to 2.50%		11/2032 - 10/2033	$	1,490	$	166	$	352
Hybrid ARM loans		114	2.38% to 4.63%		06/2037 - 01/2044		91,976		—		—
Fixed loans		424	3.13% to 5.63%		06/2037 - 01/2044		307,407		—		—

Total Held-for-Sale		547				$	400,873	$	166	$	352

(1)	Rate is net of servicing fee for consolidated loans for which we do not own the MSR. For borrowers whose current rate is less than the applicable servicing fee, the rate shown in the table above is zero.

Carrying Value for Loans Held-for-Investment

The following table details the carrying value for residential loans held-for-investment at amortized cost at December 31, 2014 and 2013. These loans are owned at Sequoia securitization entities that we consolidate for financial reporting purposes.


(In Thousands)	December 31, 2014			December 31, 2013
Principal balance	$	1,483,213		$	1,770,803
Unamortized premium, net		12,511			16,791

Recorded investment		1,495,724			1,787,594
Allowance for loan losses		(21,338	)		(25,427	)

Carrying Value	$	1,474,386		$	1,762,167

Recorded Investment in Residential Loans Held-For-Investment Organized by Year of Origination

The following table displays our recorded investment in residential loans held-for-investment at December 31, 2014 and 2013, organized by year of origination.


(In Thousands)	December 31, 2014		December 31, 2013
2003 & Earlier	$	717,783	$	881,364
2004		437,221		513,458
2005		58,931		62,675
2006		135,872		149,776
2007		—		—
2008		—		—
2009		17,943		25,860
2010		76,944		92,728
2011		51,030		61,733

Total Recorded Investment	$	1,495,724	$	1,787,594

Summary of Activity in Allowance for Loans Losses

The following table summarizes the activity in the allowance for loan losses for the years ended December 31, 2014, 2013, and 2012.


	Years Ended December 31,
(In Thousands)	2014			2013			2012
Balance at beginning of period	$	25,427		$	28,504		$	66,881
Charge-offs, net		(4,966	)		(4,525	)		(11,903	)
Provision for loan losses		877			1,448			171
Deconsolidation adjustment		—			—			(26,645	)

Balance at End of Period	$	21,338		$	25,427		$	28,504

Loan Modifications Determined to be Troubled Debt Restructuring

The following table presents the details of the loan modifications determined to be TDRs for the years ended December 31, 2014, 2013, and 2012.


	Years Ended December 31,
(Dollars in Thousands)	2014			2013			2012
TDRs
Number of modifications		28			12			15
Pre-modification outstanding recorded investment	$	8,652		$	2,939		$	6,603
Post-modification outstanding recorded investment		8,639			2,838			6,540
Loan modification effect on net interest income after provision and other MVA		(2,214	)		(863	)		(1,448	)
TDRs that Subsequently Defaulted
Number of modifications		7			6			10
Recorded investment	$	3,427		$	1,462		$	5,078

Collectively Evaluated for Impairment | Commercial Loans

Loans Evaluated for Impairment

The following table summarizes the balances for loans collectively evaluated for impairment at December 31, 2014 and 2013.


(In Thousands)	December 31, 2014		December 31, 2013
Principal balance	$	341,750	$	353,331
Recorded investment		336,888		350,717
Related allowance		7,457		7,373

Collectively Evaluated for Impairment | Residential Loans

Loans Evaluated for Impairment

The following table summarizes the balances for loans collectively evaluated for impairment at December 31, 2014 and 2013.


(In Thousands)	December 31, 2014		December 31, 2013
Principal balance	$	1,466,819	$	1,762,165
Recorded investment		1,479,667		1,779,161
Related allowance		19,840		24,762

Recorded Investment and Past Due Status of Loans

The following table summarizes the recorded investment and past due status of residential loans collectively evaluated for impairment at December 31, 2014 and 2013.


(In Thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Current		Total Loans
December 31, 2014	$	28,484	$	8,464	$	69,223	$	1,373,496	$	1,479,667
December 31, 2013		34,187		13,248		79,010		1,652,716		1,779,161

Individually Evaluated for Impairment | Residential Loans

Recorded Investment and Past Due Status of Loans

The following table summarizes the recorded investment and past due status of residential loans individually evaluated for impairment at December 31, 2014 and 2013.


(In Thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Current		Total Loans
December 31, 2014	$	2,419	$	2,295	$	1,015	$	10,328	$	16,057
December 31, 2013		1,560		—		567		6,306		8,433

Loans Evaluated for Impairment

The following table summarizes the balances for loans individually evaluated for impairment, all of which had an allowance, at December 31, 2014 and 2013.


(In Thousands)	December 31, 2014		December 31, 2013
Principal balance	$	16,394	$	8,638
Recorded investment		16,057		8,433
Related allowance		1,498		665