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Segment Information (Tables) | 6 Months Ended
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Jun. 30, 2017
Segment Reporting [Abstract] |
Business Segment Financial Information | The following tables present financial information by segment for the three and six months ended June 30, 2017 and 2016. Table 21.1 – Business Segment Financial Information
|  | Three Months Ended June 30, 2017
(In Thousands) |  | Investment Portfolio |  | Residential Mortgage Banking |  | Corporate/ Other |  | Total
Interest income |  | $ | 45,833 |  |  | $ | 8,415 |  |  | $ | 4,976 |  |  | $ | 59,224 |
Interest expense |  | (7,231 | ) |  | (4,403 | ) |  | (12,600 | ) |  | (24,234 | )
Net interest income (loss) |  | 38,602 |  |  | 4,012 |  |  | (7,624 | ) |  | 34,990 |
Non-interest income |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | — |  |  | 12,046 |  |  | — |  |  | 12,046 |
MSR income, net |  | 2,778 |  |  | — |  |  | — |  |  | 2,778 |
Investment fair value changes, net |  | 9,115 |  |  | — |  |  | (1,000 | ) |  | 8,115 |
Other income |  | 986 |  |  | — |  |  | — |  |  | 986 |
Realized gains, net |  | 2,124 |  |  | — |  |  | (752 | ) |  | 1,372 |
Total non-interest income, net |  | 15,003 |  |  | 12,046 |  |  | (1,752 | ) |  | 25,297 |
Direct operating expenses |  | (1,454 | ) |  | (6,021 | ) |  | (11,166 | ) |  | (18,641 | )
Provision for income taxes |  | (2,320 | ) |  | (3,002 | ) |  | — |  |  | (5,322 | )
Segment Contribution |  | $ | 49,831 |  |  | $ | 7,035 |  |  | $ | (20,542 | ) |  |
Net Income |  |  |  |  |  |  |  | $ | 36,324 |
Non-cash amortization income (expense) |  | $ | 5,194 |  |  | $ | (27 | ) |  | $ | (744 | ) |  | $ | 4,423 |
|  | Three Months Ended June 30, 2016
(In Thousands) |  | Investment Portfolio |  | Residential Mortgage Banking |  | Corporate/ Other |  | Total
Interest income |  | $ | 54,046 |  |  | $ | 7,910 |  |  | $ | 4,831 |  |  | $ | 66,787 |
Interest expense |  | (6,159 | ) |  | (3,604 | ) |  | (12,681 | ) |  | (22,444 | )
Net interest income (loss) |  | 47,887 |  |  | 4,306 |  |  | (7,850 | ) |  | 44,343 |
Reversal of provision for loan losses |  | 6,532 |  |  | — |  |  | — |  |  | 6,532 |
Non-interest income |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | — |  |  | 7,728 |  |  | — |  |  | 7,728 |
MSR income, net |  | 2,783 |  |  | — |  |  | — |  |  | 2,783 |
Investment fair value changes, net |  | (10,779 | ) |  | — |  |  | (287 | ) |  | (11,066 | )
Other income |  | 1,559 |  |  | — |  |  | — |  |  | 1,559 |
Realized gains, net |  | 9,884 |  |  | — |  |  | — |  |  | 9,884 |
Total non-interest income, net |  | 3,447 |  |  | 7,728 |  |  | (287 | ) |  | 10,888 |
Direct operating expenses |  | (2,827 | ) |  | (6,047 | ) |  | (11,281 | ) |  | (20,155 | )
Provision for income taxes |  | (327 | ) |  | — |  |  | — |  |  | (327 | )
Segment Contribution |  | $ | 54,712 |  |  | $ | 5,987 |  |  | $ | (19,418 | ) |  |
Net Income |  |  |  |  |  |  |  | $ | 41,281 |
Non-cash amortization income (expense) |  | $ | 6,332 |  |  | $ | (31 | ) |  | $ | (1,005 | ) |  | $ | 5,296 |
|  | Six Months Ended June 30, 2017
(In Thousands) |  | Investment Portfolio |  | Residential Mortgage Banking |  | Corporate/ Other |  | Total
Interest income |  | $ | 88,083 |  |  | $ | 15,889 |  |  | $ | 9,880 |  |  | $ | 113,852 |
Interest expense |  | (12,495 | ) |  | (7,327 | ) |  | (25,443 | ) |  | (45,265 | )
Net interest income (loss) |  | 75,588 |  |  | 8,562 |  |  | (15,563 | ) |  | 68,587 |
Non-interest income |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | — |  |  | 29,650 |  |  | — |  |  | 29,650 |
MSR income, net |  | 4,491 |  |  | — |  |  | — |  |  | 4,491 |
Investment fair value changes, net |  | 12,474 |  |  | — |  |  | (2,808 | ) |  | 9,666 |
Other income |  | 2,170 |  |  | — |  |  | — |  |  | 2,170 |
Realized gains, net |  | 7,827 |  |  | — |  |  | (752 | ) |  | 7,075 |
Total non-interest income, net |  | 26,962 |  |  | 29,650 |  |  | (3,560 | ) |  | 53,052 |
Direct operating expenses |  | (3,047 | ) |  | (11,902 | ) |  | (21,918 | ) |  | (36,867 | )
Provision for income taxes |  | (4,057 | ) |  | (7,422 | ) |  | — |  |  | (11,479 | )
Segment Contribution |  | $ | 95,446 |  |  | $ | 18,888 |  |  | $ | (41,041 | ) |  |
Net Income |  |  |  |  |  |  |  | $ | 73,293 |
Non-cash amortization income (expense) |  | $ | 11,041 |  |  | $ | (54 | ) |  | $ | (1,741 | ) |  | $ | 9,246 |
|  | Six Months Ended June 30, 2016
(In Thousands) |  | Investment Portfolio |  | Residential Mortgage Banking |  | Corporate/ Other |  | Total
Interest income |  | $ | 102,809 |  |  | $ | 15,779 |  |  | $ | 10,527 |  |  | $ | 129,115 |
Interest expense |  | (13,666 | ) |  | (6,893 | ) |  | (25,835 | ) |  | (46,394 | )
Net interest income (loss) |  | 89,143 |  |  | 8,886 |  |  | (15,308 | ) |  | 82,721 |
Reversal of provision for loan losses |  | 6,243 |  |  | — |  |  | — |  |  | 6,243 |
Non-interest income |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | — |  |  | 17,008 |  |  | (2,062 | ) |  | 14,946 |
MSR income, net |  | 9,064 |  |  | — |  |  | — |  |  | 9,064 |
Investment fair value changes, net |  | (28,681 | ) |  | — |  |  | (1,923 | ) |  | (30,604 | )
Other income |  | 2,514 |  |  | — |  |  | — |  |  | 2,514 |
Realized gains, net |  | 19,130 |  |  | — |  |  | 292 |  |  | 19,422 |
Total non-interest income, net |  | 2,027 |  |  | 17,008 |  |  | (3,693 | ) |  | 15,342 |
Direct operating expenses (1) |  | (4,938 | ) |  | (11,368 | ) |  | (34,301 | ) |  | (50,607 | )
Provision for income taxes |  | (355 | ) |  | — |  |  | — |  |  | (355 | )
Segment Contribution |  | $ | 92,120 |  |  | $ | 14,526 |  |  | $ | (53,302 | ) |  |
Net Income |  |  |  |  |  |  |  | $ | 53,344 |
Non-cash amortization income (expense) |  | $ | 14,384 |  |  | $ | (74 | ) |  | $ | (1,995 | ) |  | $ | 12,315 |
(1) | For the six months ended June 30, 2016, $11 million of costs 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.
Components of Corporate and Other | The following tables present the components of Corporate/Other for the three and six months ended June 30, 2017 and 2016. Table 21.2 – Components of Corporate/Other
|  | Three Months Ended June 30,
|  | 2017 |  | 2016
(In Thousands) |  | Legacy Consolidated VIEs (1) |  | Other |  | Total |  | Legacy Consolidated VIEs (1) |  | Other |  | Total
Interest income |  | $ | 4,863 |  |  | $ | 113 |  |  | $ | 4,976 |  |  | $ | 4,911 |  |  | $ | (80 | ) |  | $ | 4,831 |
Interest expense |  | (3,692 | ) |  | (8,908 | ) |  | (12,600 | ) |  | (3,271 | ) |  | (9,410 | ) |  | (12,681 | )
Net interest income (loss) |  | 1,171 |  |  | (8,795 | ) |  | (7,624 | ) |  | 1,640 |  |  | (9,490 | ) |  | (7,850 | )
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |
Investment fair value changes, net |  | (987 | ) |  | (13 | ) |  | (1,000 | ) |  | (251 | ) |  | (36 | ) |  | (287 | )
Realized gains, net |  | — |  |  | (752 | ) |  | (752 | ) |  | — |  |  | — |  |  | — |
Total non-interest income, net |  | (987 | ) |  | (765 | ) |  | (1,752 | ) |  | (251 | ) |  | (36 | ) |  | (287 | )
Direct operating expenses |  | — |  |  | (11,166 | ) |  | (11,166 | ) |  | — |  |  | (11,281 | ) |  | (11,281 | )
Total |  | $ | 184 |  |  | $ | (20,726 | ) |  | $ | (20,542 | ) |  | $ | 1,389 |  |  | $ | (20,807 | ) |  | $ | (19,418 | )
|  | Six Months Ended June 30,
|  | 2017 |  | 2016
(In Thousands) |  | Legacy Consolidated VIEs (1) |  | Other |  | Total |  | Legacy Consolidated VIEs (1) |  | Other |  | Total
Interest income |  | $ | 9,701 |  |  | $ | 179 |  |  | $ | 9,880 |  |  | $ | 9,688 |  |  | $ | 839 |  |  | $ | 10,527 |
Interest expense |  | (7,208 | ) |  | (18,235 | ) |  | (25,443 | ) |  | (6,568 | ) |  | (19,267 | ) |  | (25,835 | )
Net interest income (loss) |  | 2,493 |  |  | (18,056 | ) |  | (15,563 | ) |  | 3,120 |  |  | (18,428 | ) |  | (15,308 | )
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | — |  |  | — |  |  | — |  |  | — |  |  | (2,062 | ) |  | (2,062 | )
Investment fair value changes, net |  | (2,797 | ) |  | (11 | ) |  | (2,808 | ) |  | (1,831 | ) |  | (92 | ) |  | (1,923 | )
Realized gains, net |  | — |  |  | (752 | ) |  | (752 | ) |  | — |  |  | 292 |  |  | 292 |
Total non-interest income, net |  | (2,797 | ) |  | (763 | ) |  | (3,560 | ) |  | (1,831 | ) |  | (1,862 | ) |  | (3,693 | )
Direct operating expenses |  | — |  |  | (21,918 | ) |  | (21,918 | ) |  | — |  |  | (34,301 | ) |  | (34,301 | )
Total |  | $ | (304 | ) |  | $ | (40,737 | ) |  | $ | (41,041 | ) |  | $ | 1,289 |  |  | $ | (54,591 | ) |  | $ | (53,302 | )
(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, 2017 and December 31, 2016. Table 21.3 – Supplemental Segment Information
(In Thousands) |  | Investment Portfolio |  | Residential Mortgage Banking |  | Corporate/ Other |  | Total
June 30, 2017 |  |  |  |  |  |  |  |
Residential loans |  | $ | 2,360,234 |  |  | $ | 837,371 |  |  | $ | 707,686 |  |  | $ | 3,905,291 |
Real estate securities |  | 1,218,503 |  |  | — |  |  | — |  |  | 1,218,503 |
Mortgage servicing rights |  | 63,770 |  |  | — |  |  | — |  |  | 63,770 |
Total assets |  | 3,809,618 |  |  | 859,706 |  |  | 986,158 |  |  | 5,655,482 |
December 31, 2016 |  |  |  |  |  |  |  |
Residential loans |  | $ | 2,261,016 |  |  | $ | 835,399 |  |  | $ | 791,636 |  |  | $ | 3,888,051 |
Real estate securities |  | 1,018,439 |  |  | — |  |  | — |  |  | 1,018,439 |
Mortgage servicing rights |  | 118,526 |  |  | — |  |  | — |  |  | 118,526 |
Total assets |  | 3,615,535 |  |  | 866,356 |  |  | 1,001,586 |  |  | 5,483,477 |

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