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Segment Information (Tables) | 9 Months Ended
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Sep. 30, 2016
Segment Reporting [Abstract] |
Business Segment Financial Information | The following tables present financial information by segment for the three and nine months ended September 30, 2016 and 2015. Table 22.1 – Business Segment Financial Information
|  | Three Months Ended September 30, 2016
(In Thousands) |  | Residential Mortgage Banking |  | Residential Investments |  | Commercial |  | Corporate/ Other |  | Total
Interest income |  | $ | 8,831 |  |  | $ | 39,981 |  |  | $ | 7,195 |  |  | $ | 4,899 |  |  | $ | 60,906 |
Interest expense |  | (3,826 | ) |  | (4,471 | ) |  | (542 | ) |  | (12,758 | ) |  | (21,597 | )
Net interest income (loss) |  | 5,005 |  |  | 35,510 |  |  | 6,653 |  |  | (7,859 | ) |  | 39,309 |
Reversal of provision for loan losses |  | — |  |  | — |  |  | 859 |  |  | — |  |  | 859 |
Non-interest income |  |  |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | 9,766 |  |  | — |  |  | — |  |  | — |  |  | 9,766 |
MSR income (loss), net |  | — |  |  | 3,770 |  |  | — |  |  | — |  |  | 3,770 |
Investment fair value changes, net |  | — |  |  | 11,973 |  |  | 203 |  |  | (258 | ) |  | 11,918 |
Other income |  | — |  |  | 1,643 |  |  | — |  |  | — |  |  | 1,643 |
Realized gains, net |  | — |  |  | 1,991 |  |  | 4,624 |  |  | — |  |  | 6,615 |
Total non-interest income, net |  | 9,766 |  |  | 19,377 |  |  | 4,827 |  |  | (258 | ) |  | 33,712 |
Direct operating expenses (1) |  | (5,807 | ) |  | (2,498 | ) |  | (253 | ) |  | (11,797 | ) |  | (20,355 | )
Provision for income taxes |  | (240 | ) |  | (732 | ) |  | — |  |  | — |  |  | (972 | )
Segment Contribution |  | $ | 8,724 |  |  | $ | 51,657 |  |  | $ | 12,086 |  |  | $ | (19,914 | ) |  |
Net Income |  |  |  |  |  |  |  |  |  | $ | 52,553 |
Non-cash amortization income (expense) |  | $ | (28 | ) |  | $ | 6,124 |  |  | $ | (1 | ) |  | $ | (983 | ) |  | $ | 5,112 |
|  | Three Months Ended September 30, 2015
(In Thousands) |  | Residential Mortgage Banking |  | Residential Investments |  | Commercial |  | Corporate/ Other |  | Total
Interest income |  | $ | 12,115 |  |  | $ | 34,074 |  |  | $ | 11,191 |  |  | $ | 6,104 |  |  | $ | 63,484 |
Interest expense |  | (4,313 | ) |  | (2,660 | ) |  | (3,502 | ) |  | (13,400 | ) |  | (23,875 | )
Net interest income (loss) |  | 7,802 |  |  | 31,414 |  |  | 7,689 |  |  | (7,296 | ) |  | 39,609 |
Reversal of provision for loan losses |  | — |  |  | — |  |  | 60 |  |  | — |  |  | 60 |
Non-interest income |  |  |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | 331 |  |  | — |  |  | 1,002 |  |  | — |  |  | 1,333 |
MSR income (loss), net |  | — |  |  | 3,549 |  |  | — |  |  | — |  |  | 3,549 |
Investment fair value changes, net |  | — |  |  | (13,622 | ) |  | — |  |  | (547 | ) |  | (14,169 | )
Other income |  | — |  |  | 327 |  |  | — |  |  | — |  |  | 327 |
Realized gains, net |  | — |  |  | 5,548 |  |  | — |  |  | — |  |  | 5,548 |
Total non-interest income, net |  | 331 |  |  | (4,198 | ) |  | 1,002 |  |  | (547 | ) |  | (3,412 | )
Direct operating expenses |  | (11,278 | ) |  | (1,311 | ) |  | (3,136 | ) |  | (8,772 | ) |  | (24,497 | )
(Provision for) benefit from income taxes |  | 2,690 |  |  | 4,082 |  |  | (389 | ) |  | 1,021 |  |  | 7,404 |
Segment Contribution |  | $ | (455 | ) |  | $ | 29,987 |  |  | $ | 5,226 |  |  | $ | (15,594 | ) |  |
Net Income |  |  |  |  |  |  |  |  |  | $ | 19,164 |
Non-cash amortization income (expense) |  | $ | (45 | ) |  | $ | 9,115 |  |  | $ | (61 | ) |  | $ | (1,007 | ) |  | $ | 8,002 |
Hedging allocations |  | (1,683 | ) |  | 1,683 |  |  | — |  |  | — |  |  | — |
|  | Nine Months Ended September 30, 2016
(In Thousands) |  | Residential Mortgage Banking |  | Residential Investments |  | Commercial |  | Corporate/ Other |  | Total
Interest income |  | $ | 24,610 |  |  | $ | 120,812 |  |  | $ | 29,927 |  |  | $ | 14,672 |  |  | $ | 190,021 |
Interest expense |  | (10,719 | ) |  | (14,076 | ) |  | (5,001 | ) |  | (38,195 | ) |  | (67,991 | )
Net interest income (loss) |  | 13,891 |  |  | 106,736 |  |  | 24,926 |  |  | (23,523 | ) |  | 122,030 |
Reversal of provision for loan losses |  | — |  |  | — |  |  | 7,102 |  |  | — |  |  | 7,102 |
Non-interest income |  |  |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | 26,774 |  |  | — |  |  | (2,062 | ) |  | — |  |  | 24,712 |
MSR income (loss), net |  | — |  |  | 12,834 |  |  | — |  |  | — |  |  | 12,834 |
Investment fair value changes, net |  | — |  |  | (16,913 | ) |  | 408 |  |  | (2,181 | ) |  | (18,686 | )
Other income |  | — |  |  | 4,130 |  |  | 27 |  |  | — |  |  | 4,157 |
Realized gains, net |  | — |  |  | 21,312 |  |  | 4,433 |  |  | 292 |  |  | 26,037 |
Total non-interest income, net |  | 26,774 |  |  | 21,363 |  |  | 2,806 |  |  | (1,889 | ) |  | 49,054 |
Direct operating expenses (1) |  | (17,175 | ) |  | (6,517 | ) |  | (2,524 | ) |  | (44,746 | ) |  | (70,962 | )
Provision for income taxes |  | (240 | ) |  | (1,087 | ) |  | — |  |  | — |  |  | (1,327 | )
Segment Contribution |  | $ | 23,250 |  |  | $ | 120,495 |  |  | $ | 32,310 |  |  | $ | (70,158 | ) |  |
Net Income |  |  |  |  |  |  |  |  |  | $ | 105,897 |
Non-cash amortization income (expense) |  | $ | (102 | ) |  | $ | 20,531 |  |  | $ | (24 | ) |  | $ | (2,978 | ) |  | $ | 17,427 |
|  | Nine Months Ended September 30, 2015
(In Thousands) |  | Residential Mortgage Banking |  | Residential Investments |  | Commercial |  | Corporate/ Other |  | Total
Interest income |  | $ | 37,886 |  |  | $ | 98,335 |  |  | $ | 34,784 |  |  | $ | 19,598 |  |  | $ | 190,603 |
Interest expense |  | (11,389 | ) |  | (8,137 | ) |  | (10,488 | ) |  | (40,830 | ) |  | (70,844 | )
Net interest income (loss) |  | 26,497 |  |  | 90,198 |  |  | 24,296 |  |  | (21,232 | ) |  | 119,759 |
Reversal of provision for loan losses |  | — |  |  | — |  |  | 115 |  |  | — |  |  | 115 |
Non-interest income |  |  |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | 7,383 |  |  | — |  |  | 3,323 |  |  | — |  |  | 10,706 |
MSR income (loss), net |  | — |  |  | (6,545 | ) |  | — |  |  | — |  |  | (6,545 | )
Investment fair value changes, net |  | — |  |  | (14,745 | ) |  | — |  |  | (2,360 | ) |  | (17,105 | )
Other income |  | — |  |  | 2,435 |  |  | — |  |  | — |  |  | 2,435 |
Realized gains, net |  | — |  |  | 16,170 |  |  | — |  |  | — |  |  | 16,170 |
Total non-interest income, net |  | 7,383 |  |  | (2,685 | ) |  | 3,323 |  |  | (2,360 | ) |  | 5,661 |
Direct operating expenses |  | (33,214 | ) |  | (3,600 | ) |  | (9,638 | ) |  | (28,326 | ) |  | (74,778 | )
Benefit from income taxes |  | 3,562 |  |  | 3,824 |  |  | 321 |  |  | 2,565 |  |  | 10,272 |
Segment Contribution |  | $ | 4,228 |  |  | $ | 87,737 |  |  | $ | 18,417 |  |  | $ | (49,353 | ) |  |
Net Income |  |  |  |  |  |  |  |  |  | $ | 61,029 |
Non-cash amortization income (expense) |  | $ | (135 | ) |  | $ | 28,277 |  |  | $ | (188 | ) |  | $ | (2,984 | ) |  | $ | 24,970 |
Hedging allocations |  | 1,120 |  |  | (1,070 | ) |  | — |  |  | (50 | ) |  | — |
(1) | For the three and nine months ended September 30, 2016, charges associated with the restructuring of our conforming residential mortgage loan operations and commercial operations, included in the direct operating expense line item, are presented under the Corporate/Other column. See Note 11 for further discussion of these restructuring charges.
Components of Corporate and Other | The following tables present the components of Corporate/Other for the three and nine months ended September 30, 2016 and 2015. Table 22.2 – Components of Corporate/Other
|  | Three Months Ended September 30,
|  | 2016 |  | 2015
(In Thousands) |  | Legacy Consolidated VIEs (1) |  | Other |  | Total |  | Legacy Consolidated VIEs (1) |  | Other |  | Total
Interest income |  | $ | 4,837 |  |  | $ | 62 |  |  | $ | 4,899 |  |  | $ | 6,098 |  |  | $ | 6 |  |  | $ | 6,104 |
Interest expense |  | (3,274 | ) |  | (9,484 | ) |  | (12,758 | ) |  | (3,842 | ) |  | (9,558 | ) |  | (13,400 | )
Net interest income (loss) |  | 1,563 |  |  | (9,422 | ) |  | (7,859 | ) |  | 2,256 |  |  | (9,552 | ) |  | (7,296 | )
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |
Investment fair value changes, net |  | (255 | ) |  | (3 | ) |  | (258 | ) |  | (501 | ) |  | (46 | ) |  | (547 | )
Total non-interest income, net |  | (255 | ) |  | (3 | ) |  | (258 | ) |  | (501 | ) |  | (46 | ) |  | (547 | )
Direct operating expenses |  | — |  |  | (11,797 | ) |  | (11,797 | ) |  | — |  |  | (8,772 | ) |  | (8,772 | )
Provision for income taxes |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,021 |  |  | 1,021 |
Total |  | $ | 1,308 |  |  | $ | (21,222 | ) |  | $ | (19,914 | ) |  | $ | 1,755 |  |  | $ | (17,349 | ) |  | $ | (15,594 | )
|  | Nine Months Ended September 30,
|  | 2016 |  | 2015
(In Thousands) |  | Legacy Consolidated VIEs (1) |  | Other |  | Total |  | Legacy Consolidated VIEs (1) |  | Other |  | Total
Interest income |  | $ | 14,525 |  |  | $ | 147 |  |  | $ | 14,672 |  |  | $ | 19,578 |  |  | $ | 20 |  |  | $ | 19,598 |
Interest expense |  | (9,842 | ) |  | (28,353 | ) |  | (38,195 | ) |  | (12,372 | ) |  | (28,458 | ) |  | (40,830 | )
Net interest income (loss) |  | 4,683 |  |  | (28,206 | ) |  | (23,523 | ) |  | 7,206 |  |  | (28,438 | ) |  | (21,232 | )
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |
Investment fair value changes, net |  | (2,086 | ) |  | (95 | ) |  | (2,181 | ) |  | (2,277 | ) |  | (83 | ) |  | (2,360 | )
Realized gains, net |  | — |  |  | 292 |  |  | 292 |  |  | — |  |  | — |  |  | — |
Total non-interest income, net |  | (2,086 | ) |  | 197 |  |  | (1,889 | ) |  | (2,277 | ) |  | (83 | ) |  | (2,360 | )
Direct operating expenses |  | — |  |  | (44,746 | ) |  | (44,746 | ) |  | — |  |  | (28,326 | ) |  | (28,326 | )
Provision for income taxes |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,565 |  |  | 2,565 |
Total |  | $ | 2,597 |  |  | $ | (72,755 | ) |  | $ | (70,158 | ) |  | $ | 4,929 |  |  | $ | (54,282 | ) |  | $ | (49,353 | )
(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, 2016 and December 31, 2015. Table 22.3 – Supplemental Segment Information
(In Thousands) |  | Residential Mortgage Banking |  | Residential Investments |  | Commercial |  | Corporate/ Other |  | Total
September 30, 2016 |  |  |  |  |  |  |  |  |  |
Residential loans |  | $ | 1,188,514 |  |  | $ | 2,282,674 |  |  | $ | — |  |  | $ | 839,976 |  |  | $ | 4,311,164 |
Commercial loans |  | — |  |  | — |  |  | 30,400 |  |  | — |  |  | 30,400 |
Real estate securities |  | — |  |  | 864,300 |  |  | 72,610 |  |  | — |  |  | 936,910 |
Mortgage servicing rights |  | — |  |  | 106,009 |  |  | — |  |  | — |  |  | 106,009 |
Total assets |  | 1,215,240 |  |  | 3,470,013 |  |  | 103,507 |  |  | 1,083,859 |  |  | 5,872,619 |
December 31, 2015 |  |  |  |  |  |  |  |  |  |
Residential loans |  | $ | 1,115,738 |  |  | $ | 1,791,195 |  |  | $ | — |  |  | $ | 1,021,870 |  |  | $ | 3,928,803 |
Commercial loans |  | — |  |  | — |  |  | 402,647 |  |  | — |  |  | 402,647 |
Real estate securities |  | 197,007 |  |  | 1,028,171 |  |  | 8,078 |  |  | — |  |  | 1,233,256 |
Mortgage servicing rights |  | — |  |  | 191,976 |  |  | — |  |  | — |  |  | 191,976 |
Total assets |  | 1,347,492 |  |  | 3,140,604 |  |  | 415,716 |  |  | 1,316,235 |  |  | 6,220,047 |

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