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Segment Information (Tables) | 9 Months Ended
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Sep. 30, 2020
Segment Reporting [Abstract] |
Business Segment Financial Information | The following tables present financial information by segment for the three and nine months ended September 30, 2020 and 2019. Table 23.1 – Business Segment Financial Information
|  | Three Months Ended September 30, 2020
(In Thousands) |  | Residential Lending |  | Business Purpose Lending |  |  |  | Third-Party Investments |  | Corporate/ Other |  | Total
Interest income |  | $ | 26,672 |  |  | $ | 55,930 |  |  |  |  | $ | 37,576 |  |  | $ | 1,804 |  |  | $ | 121,982 |
Interest expense |  | (22,541) |  |  | (46,027) |  |  |  |  | (27,534) |  |  | (4,309) |  |  | (100,411) |
Net interest income |  | 4,131 |  |  | 9,903 |  |  |  |  | 10,042 |  |  | (2,505) |  |  | 21,571 |
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | 11,864 |  |  | 47,531 |  |  |  |  | — |  |  | — |  |  | 59,395 |
Investment fair value changes, net |  | 2,443 |  |  | 16,892 |  |  |  |  | 87,890 |  |  | (178) |  |  | 107,047 |
Other income, net |  | (2,011) |  |  | 623 |  |  |  |  | 340 |  |  | 934 |  |  | (114) |
Realized gains, net |  | — |  |  | — |  |  |  |  | 602 |  |  | — |  |  | 602 |
Total non-interest income, net |  | 12,296 |  |  | 65,046 |  |  |  |  | 88,832 |  |  | 756 |  |  | 166,930 |
General and administrative expenses |  | (4,602) |  |  | (9,321) |  |  |  |  | (709) |  |  | (12,998) |  |  | (27,630) |
Loan acquisition costs |  | (304) |  |  | (1,660) |  |  |  |  | (194) |  |  | — |  |  | (2,158) |
Other expenses |  | (3,309) |  |  | (3,874) |  |  |  |  | (470) |  |  | (135) |  |  | (7,788) |
(Provision for) benefit from income taxes |  | (826) |  |  | (8,544) |  |  |  |  | 257 |  |  | — |  |  | (9,113) |
Segment Contribution |  | $ | 7,386 |  |  | $ | 51,550 |  |  |  |  | $ | 97,758 |  |  | $ | (14,882) |  |  |
Net Income |  |  |  |  |  |  |  |  |  |  |  | $ | 141,812 |
Non-cash amortization (expense) income, net |  | $ | 1,785 |  |  | $ | (6,719) |  |  |  |  | $ | 117 |  |  | $ | (1,516) |  |  | $ | (6,333) |
|  | Nine Months Ended September 30, 2020
(In Thousands) |  | Residential Lending |  | Business Purpose Lending |  |  |  | Third-Party Investments |  | Corporate/ Other |  | Total
Interest income |  | $ | 123,956 |  |  | $ | 162,732 |  |  |  |  | $ | 155,583 |  |  | $ | 7,738 |  |  | $ | 450,009 |
Interest expense |  | (94,112) |  |  | (119,854) |  |  |  |  | (123,160) |  |  | (12,622) |  |  | (349,748) |
Net interest income |  | 29,844 |  |  | 42,878 |  |  |  |  | 32,423 |  |  | (4,884) |  |  | 100,261 |
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | (19,222) |  |  | 43,733 |  |  |  |  | — |  |  | — |  |  | 24,511 |
Investment fair value changes, net |  | (159,107) |  |  | (84,837) |  |  |  |  | (366,696) |  |  | (917) |  |  | (611,557) |
Other income, net |  | (2,278) |  |  | 3,493 |  |  |  |  | 1,072 |  |  | 1,692 |  |  | 3,979 |
Realized gains, net |  | 2,001 |  |  | — |  |  |  |  | 3,236 |  |  | 25,182 |  |  | 30,419 |
Total non-interest income, net |  | (178,606) |  |  | (37,611) |  |  |  |  | (362,388) |  |  | 25,957 |  |  | (552,648) |
General and administrative expenses |  | (12,901) |  |  | (29,977) |  |  |  |  | (4,230) |  |  | (37,724) |  |  | (84,832) |
Loan acquisition costs |  | (1,512) |  |  | (5,630) |  |  |  |  | (567) |  |  | (7) |  |  | (7,716) |
Other expenses |  | (3,309) |  |  | (100,743) |  |  |  |  | 347 |  |  | (581) |  |  | (104,286) |
Benefit from income taxes |  | 7,827 |  |  | 477 |  |  |  |  | 4,775 |  |  | — |  |  | 13,079 |
Segment Contribution |  | $ | (158,657) |  |  | $ | (130,606) |  |  |  |  | $ | (329,640) |  |  | $ | (17,239) |  |  |
Net Loss |  |  |  |  |  |  |  |  |  |  |  | $ | (636,142) |
Non-cash amortization (expense) income, net |  | $ | 602 |  |  | $ | (18,050) |  |  |  |  | $ | 1,105 |  |  | $ | (3,035) |  |  | $ | (19,378) |
Other significant non-cash expense: goodwill impairment |  | $ | — |  |  | $ | (88,675) |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | (88,675) |
|  | Three Months Ended September 30, 2019
(In Thousands) |  | Residential Lending |  | Business Purpose Lending |  |  |  | Third-Party Investments |  | Corporate/ Other |  | Total
Interest income |  | $ | 69,586 |  |  | $ | 5,527 |  |  |  |  | $ | 70,709 |  |  | $ | 4,295 |  |  | $ | 150,117 |
Interest expense |  | (48,798) |  |  | (2,813) |  |  |  |  | (61,541) |  |  | (3,452) |  |  | (116,604) |
Net interest income |  | 20,788 |  |  | 2,714 |  |  |  |  | 9,168 |  |  | 843 |  |  | 33,513 |
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | 5,016 |  |  | 4,499 |  |  |  |  | — |  |  | — |  |  | 9,515 |
Investment fair value changes, net |  | (11,088) |  |  | (1,073) |  |  |  |  | 24,057 |  |  | (452) |  |  | 11,444 |
Other income, net |  | 1,878 |  |  | 1,918 |  |  |  |  | 560 |  |  | — |  |  | 4,356 |
Realized gains, net |  | — |  |  | — |  |  |  |  | 4,714 |  |  | — |  |  | 4,714 |
Total non-interest income, net |  | (4,194) |  |  | 5,344 |  |  |  |  | 29,331 |  |  | (452) |  |  | 30,029 |
General and administrative expenses |  | (5,581) |  |  | (6,028) |  |  |  |  | (676) |  |  | (12,614) |  |  | (24,899) |
Loan acquisition costs |  | (867) |  |  | (756) |  |  |  |  | (180) |  |  | (113) |  |  | (1,916) |
Other expenses |  | — |  |  | (1,900) |  |  |  |  | (395) |  |  | (236) |  |  | (2,531) |
Benefit from (provision for) income taxes |  | 228 |  |  | (8) |  |  |  |  | (106) |  |  | — |  |  | 114 |
Segment Contribution |  | $ | 10,374 |  |  | $ | (634) |  |  |  |  | $ | 37,142 |  |  | $ | (12,572) |  |  |
Net Income |  |  |  |  |  |  |  |  |  |  |  | $ | 34,310 |
Non-cash amortization income (expense), net |  | $ | 2,537 |  |  | $ | (2,107) |  |  |  |  | $ | — |  |  | $ | (1,148) |  |  | $ | (718) |
|  | Nine Months Ended September 30, 2019
(In Thousands) |  | Residential Lending |  | Business Purpose Lending |  |  |  | Third-Party Investments |  | Corporate/ Other |  | Total
Interest income |  | $ | 204,036 |  |  | $ | 12,595 |  |  |  |  | $ | 199,145 |  |  | $ | 13,924 |  |  | $ | 429,700 |
Interest expense |  | (145,795) |  |  | (6,590) |  |  |  |  | (168,167) |  |  | (11,548) |  |  | (332,100) |
Net interest income |  | 58,241 |  |  | 6,005 |  |  |  |  | 30,978 |  |  | 2,376 |  |  | 97,600 |
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | 31,202 |  |  | 9,782 |  |  |  |  | — |  |  | — |  |  | 40,984 |
Investment fair value changes, net |  | (20,910) |  |  | (1,833) |  |  |  |  | 58,492 |  |  | (1,008) |  |  | 34,741 |
Other income, net |  | 6,317 |  |  | 4,213 |  |  |  |  | 600 |  |  | 2,710 |  |  | 13,840 |
Realized gains, net |  | 7,728 |  |  | — |  |  |  |  | 10,499 |  |  | — |  |  | 18,227 |
Total non-interest income, net |  | 24,337 |  |  | 12,162 |  |  |  |  | 69,591 |  |  | 1,702 |  |  | 107,792 |
General and administrative expenses |  | (17,591) |  |  | (13,452) |  |  |  |  | (2,239) |  |  | (37,440) |  |  | (70,722) |
Loan acquisition costs |  | (2,859) |  |  | (2,017) |  |  |  |  | (503) |  |  | (128) |  |  | (5,507) |
Other expenses |  | — |  |  | (4,432) |  |  |  |  | (864) |  |  | (725) |  |  | (6,021) |
(Provision for) benefit from income taxes |  | (1,757) |  |  | 25 |  |  |  |  | (1,370) |  |  | — |  |  | (3,102) |
Segment Contribution |  | $ | 60,371 |  |  | $ | (1,709) |  |  |  |  | $ | 95,593 |  |  | $ | (34,215) |  |  |
Net Income |  |  |  |  |  |  |  |  |  |  |  | $ | 120,040 |
Non-cash amortization income (expense), net |  | $ | 6,780 |  |  | $ | (4,907) |  |  |  |  | $ | (824) |  |  | $ | (1,939) |  |  | $ | (890) |
Components of Corporate and Other | The following table presents the components of Corporate/Other for the three and nine months ended September 30, 2020 and 2019. Table 23.2 – Components of Corporate/Other
|  | Three Months Ended September 30,
|  | 2020 |  | 2019
(In Thousands) |  | Legacy Consolidated VIEs (1) |  | Other |  | Total |  | Legacy Consolidated VIEs (1) |  | Other |  | Total
Interest income |  | $ | 1,795 |  |  | $ | 9 |  |  | $ | 1,804 |  |  | $ | 4,295 |  |  | $ | — |  |  | $ | 4,295 |
Interest expense |  | (1,058) |  |  | (3,251) |  |  | (4,309) |  |  | (3,452) |  |  | — |  |  | (3,452) |
Net interest income |  | 737 |  |  | (3,242) |  |  | (2,505) |  |  | 843 |  |  | — |  |  | 843 |
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |
Investment fair value changes, net |  | (81) |  |  | (97) |  |  | (178) |  |  | (407) |  |  | (45) |  |  | (452) |
Other income |  | — |  |  | 934 |  |  | 934 |  |  | — |  |  | — |  |  | — |
Total non-interest income, net |  | (81) |  |  | 837 |  |  | 756 |  |  | (407) |  |  | (45) |  |  | (452) |
General and administrative expenses |  | — |  |  | (12,998) |  |  | (12,998) |  |  | — |  |  | (12,614) |  |  | (12,614) |
Loan acquisition costs |  | — |  |  | — |  |  | — |  |  | — |  |  | (113) |  |  | (113) |
Other expenses |  | — |  |  | (135) |  |  | (135) |  |  | — |  |  | (236) |  |  | (236) |
Total |  | $ | 656 |  |  | $ | (15,538) |  |  | $ | (14,882) |  |  | $ | 436 |  |  | $ | (13,008) |  |  | $ | (12,572) |
|  | Nine Months Ended September 30,
|  | 2020 |  | 2019
(In Thousands) |  | Legacy Consolidated VIEs (1) |  | Other |  | Total |  | Legacy Consolidated VIEs (1) |  | Other |  | Total
Interest income |  | $ | 7,675 |  |  | $ | 63 |  |  | $ | 7,738 |  |  | $ | 13,924 |  |  | $ | — |  |  | $ | 13,924 |
Interest expense |  | (5,098) |  |  | (7,524) |  |  | (12,622) |  |  | (11,548) |  |  | — |  |  | (11,548) |
Net interest income |  | 2,577 |  |  | (7,461) |  |  | (4,884) |  |  | 2,376 |  |  | — |  |  | 2,376 |
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |
Investment fair value changes, net |  | (702) |  |  | (215) |  |  | (917) |  |  | (904) |  |  | (104) |  |  | (1,008) |
Other income |  | — |  |  | 1,692 |  |  | 1,692 |  |  | — |  |  | 2,710 |  |  | 2,710 |
Realized gains, net |  | — |  |  | 25,182 |  |  | 25,182 |  |  | — |  |  | — |  |  | — |
Total non-interest income, net |  | (702) |  |  | 26,659 |  |  | 25,957 |  |  | (904) |  |  | 2,606 |  |  | 1,702 |
General and administrative expenses |  | — |  |  | (37,724) |  |  | (37,724) |  |  | — |  |  | (37,440) |  |  | (37,440) |
Loan acquisition costs |  | — |  |  | (7) |  |  | (7) |  |  | — |  |  | (128) |  |  | (128) |
Other expenses |  | — |  |  | (581) |  |  | (581) |  |  | — |  |  | (725) |  |  | (725) |
Total |  | $ | 1,875 |  |  | $ | (19,114) |  |  | $ | (17,239) |  |  | $ | 1,472 |  |  | $ | (35,687) |  |  | $ | (34,215) |
(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, 2020 and December 31, 2019. Table 23.3 – Supplemental Segment Information
(In Thousands) |  | Residential Lending |  | Business Purpose Lending |  |  |  | Third-Party Investments |  | Corporate/ Other |  | Total
September 30, 2020 |  |  |  |  |  |  |  |  |  |  |  |
Residential loans |  | $ | 1,941,489 |  |  | $ | — |  |  |  |  | $ | 2,256,682 |  |  | $ | 296,765 |  |  | $ | 4,494,936 |
Business purpose residential loans |  | — |  |  | 3,956,101 |  |  |  |  | — |  |  | — |  |  | 3,956,101 |
Multifamily loans |  | — |  |  | — |  |  |  |  | 491,415 |  |  | — |  |  | 491,415 |
Real estate securities |  | 146,608 |  |  | — |  |  |  |  | 204,727 |  |  | — |  |  | 351,335 |
Other investments |  | 14,878 |  |  | 25,713 |  |  |  |  | 344,037 |  |  | — |  |  | 384,628 |
Goodwill and intangible assets |  | — |  |  | 60,737 |  |  |  |  | — |  |  | — |  |  | 60,737 |
Total assets |  | 2,148,643 |  |  | 4,134,913 |  |  |  |  | 3,315,039 |  |  | 803,817 |  |  | 10,402,412 |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |
Residential loans |  | $ | 4,939,745 |  |  | $ | — |  |  |  |  | $ | 2,367,215 |  |  | $ | 407,890 |  |  | $ | 7,714,850 |
Business purpose residential loans |  | — |  |  | 3,506,743 |  |  |  |  | — |  |  | — |  |  | 3,506,743 |
Multifamily loans |  | — |  |  | — |  |  |  |  | 4,408,524 |  |  | — |  |  | 4,408,524 |
Real estate securities |  | 229,074 |  |  | — |  |  |  |  | 870,800 |  |  | — |  |  | 1,099,874 |
Other investments |  | 42,224 |  |  | 21,002 |  |  |  |  | 294,904 |  |  | — |  |  | 358,130 |
Goodwill and intangible assets |  | — |  |  | 161,464 |  |  |  |  | — |  |  | — |  |  | 161,464 |
Total assets |  | 5,410,540 |  |  | 3,786,641 |  |  |  |  | 8,028,946 |  |  | 769,313 |  |  | 17,995,440 |

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