Other Assets and Liabilities

3 Months Ended

Mar. 31, 2021

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other assets at March 31, 2021 and December 31, 2020 are summarized in the following table.

Table 12.1 – Components of Other Assets


(In Thousands)	March 31, 2021		December 31, 2020
Accrued interest receivable	$	40,097	$	39,445
Investment receivable	37,102		43,176
Margin receivable	16,283		4,758
REO	15,829		8,413
Operating lease right-of-use assets	14,227		15,012
Fixed assets and leasehold improvements (1)	5,153		4,203

FHLBC stock	5,000		5,000
Pledged collateral	—		1,177



Other	8,047		9,404
Total Other Assets	$	141,738	$	130,588

(1)Fixed assets and leasehold improvements had a basis of $12 million and accumulated depreciation of $7 million at March 31, 2021.

Accrued expenses and other liabilities at March 31, 2021 and December 31, 2020 are summarized in the following table.

Table 12.2 – Components of Accrued Expenses and Other Liabilities


(In Thousands)	March 31, 2021		December 31, 2020
Margin payable	$	84,306	$	14,728
Accrued interest payable	32,167		34,858

Accrued compensation	27,941		24,393
Accrued income taxes payable	17,174		5,614
Payable to minority partner	16,222		16,941
Operating lease liabilities	15,885		16,687
Current accounts payable	15,712		6,455
Guarantee obligations	9,238		10,039

Residential loan and MSR repurchase reserve	8,731		8,631
Bridge loan holdbacks	5,443		5,708


Accrued operating expenses	4,222		5,509

Deferred consideration	—		14,579
Other	7,233		15,198
Total Accrued Expenses and Other Liabilities	$	244,274	$	179,340

Deferred Consideration

The deferred consideration presented in the table above is related to our acquisition of 5 Arches in 2019. During the three months ended March 31, 2021, we distributed 806,068 shares of Redwood common stock and paid $1 million in cash in full settlement of the remaining deferred consideration associated with this acquisition.

REO

The following table summarizes the activity and carrying values of REO assets held at Redwood and at consolidated Legacy Sequoia, Freddie Mac SLST, and CAFL entities during the three months ended March 31, 2021.

Table 12.3 – REO Activity


	Three Months Ended March 31, 2021
(In Thousands)	Redwood Bridge		Legacy Sequoia		Freddie Mac SLST		CAFL		Total
Balance at beginning of period	$	4,600	$	638	$	646	$	2,529	$	8,413
Transfers to REO	1,483		—		1,276		11,924		14,683
Liquidations (1)	(4,880)		(40)		(91)		(1,909)		(6,920)
Changes in fair value, net	282		(2)		28		(655)		(347)
Balance at End of Period	$	1,485	$	596	$	1,859	$	11,889	$	15,829

(1)For the three months ended March 31, 2021, REO liquidations resulted in $0.3 million of realized losses, which were recorded in Investment fair value changes, net on our consolidated statements of income (loss).

The following table provides the detail of REO assets at Redwood and at consolidated Legacy Sequoia, Freddie Mac SLST, and CAFL entities at March 31, 2021 and December 31, 2020.

Table 12.4 – REO Assets


Number of REO assets	Redwood Bridge	Legacy Sequoia	Freddie Mac SLST	CAFL	Total
At March 31, 2021	2	2	20	2	26
At December 31, 2020	3	3	9	2	17

Refer to our Annual Report on Form 10-K for the year ended December 31, 2020 for additional descriptions of our other assets and liabilities.