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Segment Information (Tables) | 9 Months Ended
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Sep. 30, 2021
Segment Reporting [Abstract] |
Business Segment Financial Information | The following tables present financial information by segment for the three and nine months ended September 30, 2021 and 2020. Table 23.1 – Business Segment Financial Information
|  | Three Months Ended September 30, 2021
(In Thousands) |  | Residential Lending |  | Business Purpose Lending |  | Third-Party Investments |  | Corporate/ Other |  | Total
Interest income |  | $ | 44,220 |  |  | $ | 67,235 |  |  | $ | 33,218 |  |  | $ | 1,049 |  |  | $ | 145,722 |
Interest expense |  | (25,395) |  |  | (46,834) |  |  | (21,370) |  |  | (10,155) |  |  | (103,754) |
Net interest income |  | 18,825 |  |  | 20,401 |  |  | 11,848 |  |  | (9,106) |  |  | 41,968 |
Non-interest income |  |  |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | 32,946 |  |  | 30,217 |  |  | — |  |  | — |  |  | 63,163 |
Investment fair value changes, net |  | 2,285 |  |  | 3,470 |  |  | 20,569 |  |  | (247) |  |  | 26,077 |
Other income, net |  | 874 |  |  | 1,184 |  |  | — |  |  | 330 |  |  | 2,388 |
Realized gains, net |  | 6,389 |  |  | 314 |  |  | — |  |  | — |  |  | 6,703 |
Total non-interest income (loss), net |  | 42,494 |  |  | 35,185 |  |  | 20,569 |  |  | 83 |  |  | 98,331 |
General and administrative expenses |  | (8,989) |  |  | (13,987) |  |  | (1,415) |  |  | (23,301) |  |  | (47,692) |
Loan acquisition costs |  | (2,395) |  |  | (2,175) |  |  | (51) |  |  | — |  |  | (4,621) |
Other expenses |  | — |  |  | (3,873) |  |  | (150) |  |  | — |  |  | (4,023) |
(Provision for) benefit from income taxes |  | (11,139) |  |  | (3,485) |  |  | (335) |  |  | 19,282 |  |  | 4,323 |
Segment Contribution |  | $ | 38,796 |  |  | $ | 32,066 |  |  | $ | 30,466 |  |  | $ | (13,042) |  |  |
Net Income |  |  |  |  |  |  |  |  |  | $ | 88,286 |
Non-cash amortization (expense) income, net |  | $ | 5,862 |  |  | $ | (4,713) |  |  | $ | 276 |  |  | $ | (1,995) |  |  | $ | (570) |
|  | Nine Months Ended September 30, 2021
(In Thousands) |  | Residential Lending |  | Business Purpose Lending |  | Third-Party Investments |  | Corporate/ Other |  | Total
Interest income |  | $ | 104,801 |  |  | $ | 202,155 |  |  | $ | 102,180 |  |  | $ | 3,586 |  |  | $ | 412,722 |
Interest expense |  | (65,488) |  |  | (151,351) |  |  | (66,883) |  |  | (30,649) |  |  | (314,371) |
Net interest income |  | 39,313 |  |  | 50,804 |  |  | 35,297 |  |  | (27,063) |  |  | 98,351 |
Non-interest income |  |  |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | 115,646 |  |  | 84,543 |  |  | — |  |  | — |  |  | 200,189 |
Investment fair value changes, net |  | 8,958 |  |  | 10,551 |  |  | 102,303 |  |  | (1,168) |  |  | 120,644 |
Other income, net |  | 4,566 |  |  | 3,044 |  |  | 5 |  |  | 742 |  |  | 8,357 |
Realized gains, net |  | 15,484 |  |  | 812 |  |  | 1,507 |  |  | — |  |  | 17,803 |
Total non-interest income, net |  | 144,654 |  |  | 98,950 |  |  | 103,815 |  |  | (426) |  |  | 346,993 |
General and administrative expenses |  | (30,539) |  |  | (38,834) |  |  | (3,476) |  |  | (58,988) |  |  | (131,837) |
Loan acquisition costs |  | (5,698) |  |  | (6,088) |  |  | (138) |  |  | (4) |  |  | (11,928) |
Other expenses |  | (6) |  |  | (11,523) |  |  | (592) |  |  | 17 |  |  | (12,104) |
(Provision for) benefit from income taxes |  | (25,289) |  |  | (6,988) |  |  | (912) |  |  | 19,282 |  |  | (13,907) |
Segment Contribution |  | $ | 122,435 |  |  | $ | 86,321 |  |  | $ | 133,994 |  |  | $ | (67,182) |  |  |
Net Income |  |  |  |  |  |  |  |  |  | $ | 275,568 |
Non-cash amortization (expense) income, net |  | $ | 8,867 |  |  | $ | (16,154) |  |  | $ | 317 |  |  | $ | (5,845) |  |  | $ | (12,815) |
|  | 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 |  | (21,401) |  |  | (44,159) |  |  | (24,238) |  |  | (10,613) |  |  | (100,411) |
Net interest income |  | 5,271 |  |  | 11,771 |  |  | 13,338 |  |  | (8,809) |  |  | 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 |  | $ | 8,526 |  |  | $ | 53,418 |  |  | $ | 101,054 |  |  | $ | (21,186) |  |  |
Net Income |  |  |  |  |  |  |  |  |  | $ | 141,812 |
Non-cash amortization income (expense), 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 |  | (87,725) |  |  | (113,143) |  |  | (111,666) |  |  | (37,214) |  |  | (349,748) |
Net interest income |  | 36,231 |  |  | 49,589 |  |  | 43,917 |  |  | (29,476) |  |  | 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 |  | $ | (152,270) |  |  | $ | (123,895) |  |  | $ | (318,146) |  |  | $ | (41,831) |  |  |
Net Loss |  |  |  |  |  |  |  |  |  | $ | (636,142) |
Non-cash amortization income (expense), net |  | $ | 732 |  |  | $ | (18,035) |  |  | $ | 1,170 |  |  | $ | (3,244) |  |  | $ | (19,377) |
Other significant non-cash expense: goodwill impairment |  | $ | — |  |  | $ | (88,675) |  |  | $ | — |  |  | $ | — |  |  | $ | (88,675) |
Components of Corporate and Other | The following table presents the components of Corporate/Other for the three and nine months ended September 30, 2021 and 2020. Table 23.2 – Components of Corporate/Other
|  | Three Months Ended September 30,
|  | 2021 |  | 2020
(In Thousands) |  | Legacy Consolidated VIEs (1) |  | Other |  | Total |  | Legacy Consolidated VIEs (1) |  | Other |  | Total
Interest income |  | $ | 1,042 |  |  | $ | 7 |  |  | $ | 1,049 |  |  | $ | 1,795 |  |  | $ | 9 |  |  | $ | 1,804 |
Interest expense |  | (641) |  |  | (9,514) |  |  | (10,155) |  |  | (1,059) |  |  | (9,554) |  |  | (10,613) |
Net interest income |  | 401 |  |  | (9,507) |  |  | (9,106) |  |  | 736 |  |  | (9,545) |  |  | (8,809) |
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |
Investment fair value changes, net |  | (247) |  |  | — |  |  | (247) |  |  | (81) |  |  | (97) |  |  | (178) |
Other income |  | — |  |  | 330 |  |  | 330 |  |  | — |  |  | 934 |  |  | 934 |
Total non-interest income, net |  | (247) |  |  | 330 |  |  | 83 |  |  | (81) |  |  | 837 |  |  | 756 |
General and administrative expenses |  | — |  |  | (23,301) |  |  | (23,301) |  |  | — |  |  | (12,998) |  |  | (12,998) |
Other expenses |  | — |  |  | — |  |  | — |  |  | — |  |  | (135) |  |  | (135) |
Provision for income taxes |  | — |  |  | 19,282 |  |  | 19,282 |  |  | — |  |  | — |  |  | — |
Total |  | $ | 154 |  |  | $ | (13,196) |  |  | $ | (13,042) |  |  | $ | 655 |  |  | $ | (21,841) |  |  | $ | (21,186) |
|  | Nine Months Ended September 30,
|  | 2021 |  | 2020
(In Thousands) |  | Legacy Consolidated VIEs (1) |  | Other |  | Total |  | Legacy Consolidated VIEs (1) |  | Other |  | Total
Interest income |  | $ | 3,559 |  |  | $ | 27 |  |  | $ | 3,586 |  |  | $ | 7,674 |  |  | $ | 64 |  |  | $ | 7,738 |
Interest expense |  | (2,271) |  |  | (28,378) |  |  | (30,649) |  |  | (5,099) |  |  | (32,115) |  |  | (37,214) |
Net interest income |  | 1,288 |  |  | (28,351) |  |  | (27,063) |  |  | 2,575 |  |  | (32,051) |  |  | (29,476) |
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |
Investment fair value changes, net |  | (1,162) |  |  | (6) |  |  | (1,168) |  |  | (702) |  |  | (215) |  |  | (917) |
Other income |  | — |  |  | 742 |  |  | 742 |  |  | — |  |  | 1,692 |  |  | 1,692 |
Realized gains, net |  | — |  |  | — |  |  | — |  |  | — |  |  | 25,182 |  |  | 25,182 |
Total non-interest income, net |  | (1,162) |  |  | 736 |  |  | (426) |  |  | (702) |  |  | 26,659 |  |  | 25,957 |
General and administrative expenses |  | — |  |  | (58,988) |  |  | (58,988) |  |  | — |  |  | (37,724) |  |  | (37,724) |
Loan acquisition costs |  | — |  |  | (4) |  |  | (4) |  |  | — |  |  | (7) |  |  | (7) |
Other expenses |  | — |  |  | 17 |  |  | 17 |  |  | — |  |  | (581) |  |  | (581) |
Provision for income taxes |  | — |  |  | 19,282 |  |  | 19,282 |  |  | — |  |  | — |  |  | — |
Total |  | $ | 126 |  |  | $ | (67,308) |  |  | $ | (67,182) |  |  | $ | 1,873 |  |  | $ | (43,704) |  |  | $ | (41,831) |
(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, 2021 and December 31, 2020. Table 23.3 – Supplemental Segment Information
(In Thousands) |  | Residential Lending |  | Business Purpose Lending |  |  |  | Third-Party Investments |  | Corporate/ Other |  | Total
September 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |
Residential loans |  | $ | 3,974,829 |  |  | $ | — |  |  |  |  | $ | 1,999,405 |  |  | $ | 242,234 |  |  | $ | 6,216,468 |
Business purpose loans |  | — |  |  | 4,693,555 |  |  |  |  | — |  |  | — |  |  | 4,693,555 |
Multifamily loans |  | — |  |  | — |  |  |  |  | 482,791 |  |  | — |  |  | 482,791 |
Real estate securities |  | 150,368 |  |  | — |  |  |  |  | 202,918 |  |  | — |  |  | 353,286 |
Other investments |  | 12,389 |  |  | 6,767 |  |  |  |  | 379,102 |  |  | 24,108 |  |  | 422,366 |
Intangible assets |  | — |  |  | 45,246 |  |  |  |  | — |  |  | — |  |  | 45,246 |
Total assets |  | 4,219,950 |  |  | 4,860,226 |  |  |  |  | 3,088,815 |  |  | 903,723 |  |  | 13,072,714 |
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 securities |  | 160,780 |  |  | — |  |  |  |  | 183,345 |  |  | — |  |  | 344,125 |
Other investments |  | 8,815 |  |  | 21,627 |  |  |  |  | 317,282 |  |  | 451 |  |  | 348,175 |
Intangible assets |  | — |  |  | 56,865 |  |  |  |  | — |  |  | — |  |  | 56,865 |
Total assets |  | 1,989,802 |  |  | 4,323,040 |  |  |  |  | 3,232,415 |  |  | 809,809 |  |  | 10,355,066 |

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