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Basis of Presentation (Tables) | 12 Months Ended
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Dec. 31, 2019
Accounting Policies [Abstract] |
Schedule of Assets Acquired and Liabilities Assumed | Through December 31, 2019, there were no significant changes to our purchase price allocations, which are summarized in the following table. Table 2.1 – Purchase Price Allocations
(In Thousands) |  | 5 Arches |  | CoreVest
Acquisition Date |  | March 1, 2019 |  | October 15, 2019
Purchase price: |  |  |  |
Cash |  | $ | 12,575 |  |  | $ | 482,311 |
Contingent consideration, at fair value |  | 24,621 |  |  | — |
Purchase option, at fair value |  | 5,082 |  |  | — |
Equity method investment, at fair value |  | 8,052 |  |  | — |
Total consideration |  | $ | 50,330 |  |  | $ | 482,311 |
Allocated to: |  |  |  |
Business purpose residential loans, at fair value |  | $ | 2,022 |  |  | $ | 2,610,490 |
Cash and cash equivalents |  | 2,128 |  |  | 30,685 |
Restricted cash |  | 9,082 |  |  | — |
Other assets |  | 5,473 |  |  | 67,420 |
Goodwill |  | 28,747 |  |  | 59,928 |
Intangible assets |  | 24,800 |  |  | 56,500 |
Deferred tax asset |  | — |  |  | 2,577 |
Total assets acquired |  | 72,252 |  |  | 2,827,600 |
Asset-backed securities issued, at fair value |  | — |  |  | 1,656,023 |
Short-term debt, net |  | 3,800 |  |  | 663,275 |
Accrued expenses and other liabilities |  | 13,920 |  |  | 25,991 |
Deferred tax liability |  | 4,202 |  |  | — |
Total liabilities assumed |  | 21,922 |  |  | 2,345,289 |
Total net assets acquired |  | $ | 50,330 |  |  | $ | 482,311 |
Schedule of Finite-Lived Intangible Assets | The amortization period for each of these assets and the activity for the year ended December 31, 2019 is summarized in the table below. Table 2.2 – Intangible Assets – Activity
|  | Carrying Value at December 31, 2018 |  | Additions |  | Amortization Expense |  | Carrying Value at December 31, 2019 |  | Weighted Average Amortization Period (in years)
(Dollars in Thousands) |  |  |  |  |
5 Arches |  |  |  |  |  |  |  |  |  |
Broker network |  | $ | — |  |  | $ | 18,100 |  |  | $ | (3,017 | ) |  | $ | 15,083 |  |  | 5
Non-compete agreements |  | — |  |  | 2,900 |  |  | (806 | ) |  | 2,094 |  |  | 3
Loan administration fees on existing loan assets |  | — |  |  | 2,600 |  |  | (2,167 | ) |  | 433 |  |  | 1
Tradename |  | — |  |  | 1,200 |  |  | (333 | ) |  | 867 |  |  | 3
Total 5 Arches |  | — |  |  | 24,800 |  |  | (6,323 | ) |  | 18,477 |  |  | 5
CoreVest |  |  |  |  |  |  |  |  |  |
Borrower network |  | — |  |  | 45,300 |  |  | (1,348 | ) |  | 43,952 |  |  | 7
Non-compete agreements |  | — |  |  | 6,600 |  |  | (458 | ) |  | 6,142 |  |  | 3
Tradename |  | — |  |  | 2,800 |  |  | (194 | ) |  | 2,606 |  |  | 3
Developed technology |  | — |  |  | 1,800 |  |  | (188 | ) |  | 1,612 |  |  | 2
Total CoreVest |  | — |  |  | 56,500 |  |  | (2,188 | ) |  | 54,312 |  |  | 6
Total |  | $ | — |  |  | $ | 81,300 |  |  | $ | (8,511 | ) |  | $ | 72,789 |  |  | 6
Finite-lived Intangible Assets Amortization Expense | Estimated future amortization expense is summarized in the table below. Table 2.3 – Intangible Asset Amortization Expense by Year
December 31, 2019 |  |  |  |  |  |
(In Thousands) |  | 5 Arches |  | CoreVest |  | Total
2020 |  | $ | 5,420 |  |  | $ | 10,505 |  |  | $ | 15,925 |
2021 |  | 4,987 |  |  | 10,317 |  |  | 15,304 |
2022 |  | 3,848 |  |  | 8,952 |  |  | 12,800 |
2023 |  | 3,620 |  |  | 6,471 |  |  | 10,091 |
2024 |  | 602 |  |  | 6,471 |  |  | 7,073 |
2025 and thereafter |  | — |  |  | 11,596 |  |  | 11,596 |
Total Future Intangible Asset Amortization |  | $ | 18,477 |  |  | $ | 54,312 |  |  | $ | 72,789 |
Schedule of Goodwill | The following table presents the goodwill activity for the year ended December 31, 2019. Table 2.4 – Goodwill – Activity
|  | Year Ended December 31, 2019
(In Thousands) |  | 5 Arches |  | CoreVest |  | Total
Beginning balance |  | $ | — |  |  | $ | — |  |  | $ | — |
Goodwill recognized from acquisition |  | 28,747 |  |  | 59,928 |  |  | 88,675 |
Impairment |  | — |  |  | — |  |  | — |
Ending Balance |  | $ | 28,747 |  |  | $ | 59,928 |  |  | $ | 88,675 |
Pro Forma Information | The following unaudited pro forma financial information presents Net interest income, Non-interest income, and Net income of Redwood, 5 Arches, and CoreVest combined, as if the acquisitions occurred as of January 1, 2018. These pro forma amounts have been adjusted to include the amortization of intangible assets and acquisition-related compensation expense for both periods, and to exclude the income statement impacts related to our equity method investment in 5 Arches. The unaudited pro forma financial information is not intended to represent or be indicative of the consolidated financial results of operations that would have been reported if the acquisition had been completed as of January 1, 2018 and should not be taken as indicative of our future consolidated results of operations. During the period from March 1, 2019 to December 31, 2019, 5 Arches had net interest income of less than $0.1 million, non-interest income of $19 million, and net income of $3 million. In addition, 5 Arches had intangible asset amortization expense of $6 million for this period. During the period from October 15, 2019 to December 31, 2019, CoreVest had net interest income of $11 million, non-interest income of $19 million, and net income of $22 million. In addition, CoreVest had intangible asset amortization expense of $2 million for this period. Table 2.5 – Unaudited Pro Forma Financial Information
|  | Years Ended December 31,
(In Thousands) |  | 2019 |  | 2018
Supplementary pro forma information: |  |  |  |
Net interest income |  | $ | 167,680 |  |  | $ | 165,849 |
Non-interest income |  | 193,519 |  |  | 103,179 |
Net income |  | 185,896 |  |  | 118,125 |

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