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Segment Information
 6 Months Ended
Jun. 30, 2021
Segment Reporting [Abstract]  
Segment Information Segment Information
Redwood operates in three segments: Residential Lending, Business Purpose Lending, and Third-Party Investments. For a full description of our segments, see Part I, Item 1—Business in our Annual Report on Form 10-K for the year ended December 31, 2020.
Segment contribution represents the measure of profit that management uses to assess the performance of our business segments and make resource allocation and operating decisions. Certain corporate expenses not directly assigned or allocated to one of our three segments, as well as activity from certain consolidated Sequoia entities, are included in the Corporate/Other column as reconciling items to our consolidated financial statements. These unallocated corporate expenses primarily include interest expense from our convertible notes and trust preferred securities, indirect general and administrative expenses and other expense.
The following tables present financial information by segment for the three and six months ended June 30, 2021 and 2020.
Table 23.1 – Business Segment Financial Information
Three Months Ended June 30, 2021
(In Thousands)Residential LendingBusiness Purpose LendingThird-Party Investments Corporate/
Other 		 Total
Interest income$33,033 $70,515 $33,972 $1,175 $138,695 
Interest expense(21,056)(54,442)(22,334)(10,233)(108,065)
Net interest income11,977 16,073 11,638 (9,058)30,630 
Non-interest income
Mortgage banking activities, net21,265 33,154 — — 54,419 
Investment fair value changes, net3,927 3,782 42,018 (247)49,480 
Other income, net839 1,017 5 265 2,126 
Realized gains, net6,687 390 1,307 — 8,384 
Total non-interest income (loss), net32,718 38,343 43,330 18 114,409 
General and administrative expenses(7,793)(13,688)(930)(18,183)(40,594)
Loan acquisition costs(1,887)(1,861)— — (3,748)
Other expenses— (3,873)(112)— (3,985)
Provision for income taxes(4,171)(2,182)(334)— (6,687)
Segment Contribution$30,844 $32,812 $53,592 $(27,223)
Net Income$90,025 
Non-cash amortization (expense) income, net$1,339 $(5,584)$185 $(1,955)$(6,015)
Six Months Ended June 30, 2021
(In Thousands)Residential LendingBusiness Purpose LendingThird-Party Investments Corporate/
Other 		 Total
Interest income$60,581 $134,920 $68,962 $2,537 $267,000 
Interest expense(40,093)(104,517)(45,513)(20,494)(210,617)
Net interest income20,488 30,403 23,449 (17,957)56,383 
Non-interest income
Mortgage banking activities, net82,700 54,326 — — 137,026 
Investment fair value changes, net6,673 7,081 81,734 (921)94,567 
Other income, net3,692 1,860 5 412 5,969 
Realized gains, net9,095 498 1,507 — 11,100 
Total non-interest income, net102,160 63,765 83,246 (509)248,662 
General and administrative expenses(21,550)(24,847)(2,061)(35,687)(84,145)
Loan acquisition costs(3,303)(3,913)(87)(4)(7,307)
Other expenses(6)(7,650)(442)17 (8,081)
Provision for income taxes(14,150)(3,503)(577)— (18,230)
Segment Contribution$83,639 $54,255 $103,528 $(54,140)
Net Income$187,282 
Non-cash amortization (expense) income, net$3,005 $(11,441)$41 $(3,850)$(12,245)
Three Months Ended June 30, 2020
(In Thousands)Residential LendingBusiness Purpose LendingThird-Party Investments Corporate/
Other 		 Total
Interest income$36,653 $53,742 $36,811 $2,740 $129,946 
Interest expense(28,762)(36,631)(24,927)(12,346)(102,666)
Net interest income7,891 17,111 11,884 (9,606)27,280 
Non-interest income
Mortgage banking activities, net(8,005)2,023 — — (5,982)
Investment fair value changes, net35,085 40,401 76,972 (230)152,228 
Other income, net230 686 (509)758 1,165 
Realized gains, net205 — 578 25,182 25,965 
Total non-interest income, net27,515 43,110 77,041 25,710 173,376 
General and administrative expenses(3,700)(9,016)(1,986)(13,818)(28,520)
Loan acquisition costs(175)(1,277)(120)— (1,572)
Other expenses— (3,884)(1,065)(134)(5,083)
Benefit from (provision for) income taxes3,323 2,439 (5,799)— (37)
Segment Contribution$34,854 $48,483 $79,955 $2,152 
Net Income$165,444 
Non-cash amortization income (expense), net$(1,265)$(6,391)$312 $(1,619)$(8,963)
Six Months Ended June 30, 2020
(In Thousands)Residential LendingBusiness Purpose LendingThird-Party Investments Corporate/
Other 		 Total
Interest income$97,284 $106,802 $118,007 $5,934 $328,027 
Interest expense(66,324)(68,984)(87,428)(26,601)(249,337)
Net interest income30,960 37,818 30,579 (20,667)78,690 
Non-interest income
Mortgage banking activities, net(31,086)(3,798)— — (34,884)
Investment fair value changes, net(161,550)(101,729)(454,586)(739)(718,604)
Other income, net(267)2,870 732 758 4,093 
Realized gains, net2,001 — 2,634 25,182 29,817 
Total non-interest income, net(190,902)(102,657)(451,220)25,201 (719,578)
General and administrative expenses(8,299)(20,656)(3,521)(24,726)(57,202)
Loan acquisition costs(1,208)(3,970)(373)(7)(5,558)
Other expenses— (96,869)817 (446)(96,498)
Benefit from income taxes8,653 9,021 4,518 — 22,192 
Segment Contribution$(160,796)$(177,313)$(419,200)$(20,645)
Net Loss$(777,954)
Non-cash amortization income (expense), net$(1,053)$(11,316)$1,053 $(1,728)$(13,044)
Other significant non-cash expense: goodwill impairment$— $(88,675)$— $— $(88,675)
The following table presents the components of Corporate/Other for the three and six months ended June 30, 2021 and 2020.

Table 23.2 – Components of Corporate/Other
Three Months Ended June 30,
20212020
(In Thousands)
Legacy Consolidated VIEs (1)
OtherTotal
Legacy Consolidated VIEs (1)
Other Total
Interest income$1,169 $6 $1,175 $2,685 $55 $2,740 
Interest expense(755)(9,478)(10,233)(1,518)(10,828)(12,346)
Net interest income414 (9,472)(9,058)1,167 (10,773)(9,606)
Non-interest income
Investment fair value changes, net(216)(31)(247)(230)— (230)
Other income— 265 265 — 758 758 
Realized gains, net— — — — 25,182 25,182 
Total non-interest income, net(216)234 18 (230)25,940 25,710 
General and administrative expenses— (18,183)(18,183)— (13,818)(13,818)
Other expenses— — — — (134)(134)
Total$198 $(27,421)$(27,223)$937 $1,215 $2,152 
Six Months Ended June 30,
20212020
(In Thousands)
Legacy Consolidated VIEs (1)
OtherTotal
Legacy Consolidated VIEs (1)
Other Total
Interest income$2,517 $20 $2,537 $5,879 $55 $5,934 
Interest expense(1,630)(18,864)(20,494)(4,040)(22,561)(26,601)
Net interest income887 (18,844)(17,957)1,839 (22,506)(20,667)
Non-interest income
Investment fair value changes, net(915)(6)(921)(621)(118)(739)
Other income— 412 412 — 758 758 
Realized gains, net— — — — 25,182 25,182 
Total non-interest income, net(915)406 (509)(621)25,822 25,201 
General and administrative expenses— (35,687)(35,687)— (24,726)(24,726)
Loan acquisition costs— (4)(4)— (7)(7)
Other expenses— 17 17 — (446)(446)
Total$(28)$(54,112)$(54,140)$1,218 $(21,863)$(20,645)
(1)     Legacy consolidated VIEs represent Legacy Sequoia entities that are consolidated for GAAP financial reporting purposes. See Note 4 for further discussion on VIEs.
The following table presents supplemental information by segment at June 30, 2021 and December 31, 2020.
Table 23.3 – Supplemental Segment Information
(In Thousands)Residential LendingBusiness Purpose LendingThird-Party Investments Corporate/
Other		Total
June 30, 2021
Residential loans$3,383,101 $— $2,098,624 $260,875 $5,742,600 
Business purpose loans— 4,408,889 — — 4,408,889 
Multifamily loans— — 485,157 — 485,157 
Real estate securities163,609 — 191,277 — 354,886 
Other investments8,721 13,168 267,851 18,992 308,732 
Intangible assets— 49,119 — — 49,119 
Total assets3,615,860 4,576,139 3,063,094 741,298 11,996,391 
December 31, 2020
Residential loans$1,741,963 $— $2,221,153 $285,935 $4,249,051 
Business purpose loans— 4,136,353 — — 4,136,353 
Multifamily loans— — 492,221 — 492,221 
Real estate securities160,780 — 183,345 — 344,125 
Other investments8,815 21,627 317,282 451 348,175 
Intangible assets— 56,865 — — 56,865 
Total assets1,989,802 4,323,040 3,232,415 809,809 10,355,066