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Segment Information (Tables) | 9 Months Ended
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Sep. 30, 2022
Segment Reporting [Abstract] |
Business Segment Financial Information | The following tables present financial information by segment for the three and nine months ended September 30, 2022 and 2021. Table 24.1 – Business Segment Financial Information
|  | Three Months Ended September 30, 2022
(In Thousands) |  | Residential Mortgage Banking |  | Business Purpose Mortgage Banking |  | Investment Portfolio |  | Corporate/ Other |  | Total
Interest income |  | $ | 9,882 |  |  | $ | 9,082 |  |  | $ | 156,882 |  |  | $ | 1,816 |  |  | $ | 177,662 |
Interest expense |  | (8,083) |  |  | (5,971) |  |  | (111,876) |  |  | (16,797) |  |  | (142,727) |
Net interest income |  | 1,799 |  |  | 3,111 |  |  | 45,006 |  |  | (14,981) |  |  | 34,935 |
Non-interest (loss) income |  |  |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | 2,158 |  |  | 14,377 |  |  | — |  |  | — |  |  | 16,535 |
Investment fair value changes, net |  | — |  |  | — |  |  | (61,780) |  |  | 4,083 |  |  | (57,697) |
Other income, net |  | — |  |  | 399 |  |  | 3,906 |  |  | (278) |  |  | 4,027 |
Realized gains, net |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total non-interest income (loss), net |  | 2,158 |  |  | 14,776 |  |  | (57,874) |  |  | 3,805 |  |  | (37,135) |
General and administrative expenses |  | (5,735) |  |  | (18,535) |  |  | (3,502) |  |  | (12,335) |  |  | (40,107) |
Loan acquisition costs |  | (550) |  |  | (1,876) |  |  | — |  |  | — |  |  | (2,426) |
Other expenses |  | — |  |  | (3,891) |  |  | (370) |  |  | — |  |  | (4,261) |
Benefit from (provision for) income taxes |  | 1,688 |  |  | 2,559 |  |  | (5,664) |  |  | — |  |  | (1,417) |
Segment Contribution |  | $ | (640) |  |  | $ | (3,856) |  |  | $ | (22,404) |  |  | $ | (23,511) |  |  |
Net (Loss) |  |  |  |  |  |  |  |  |  | $ | (50,411) |
Non-cash amortization (expense) income, net |  | $ | (185) |  |  | $ | (3,609) |  |  | $ | (3,658) |  |  | $ | (2,843) |  |  | $ | (10,295) |
|  | Nine Months Ended September 30, 2022
(In Thousands) |  | Residential Mortgage Banking |  | Business Purpose Mortgage Banking |  | Investment Portfolio |  | Corporate/ Other |  | Total
Interest income |  | $ | 36,048 |  |  | $ | 22,509 |  |  | $ | 471,932 |  |  | $ | 4,028 |  |  | $ | 534,517 |
Interest expense |  | (23,316) |  |  | (12,797) |  |  | (331,047) |  |  | (38,832) |  |  | (405,992) |
Net interest income |  | 12,732 |  |  | 9,712 |  |  | 140,885 |  |  | (34,804) |  |  | 128,525 |
Non-interest (loss) income |  |  |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | (7,694) |  |  | 10,527 |  |  | — |  |  | — |  |  | 2,833 |
Investment fair value changes, net |  | — |  |  | — |  |  | (165,297) |  |  | 13,508 |  |  | (151,789) |
Other income, net |  | — |  |  | 2,028 |  |  | 15,423 |  |  | (435) |  |  | 17,016 |
Realized gains, net |  | — |  |  | — |  |  | 2,581 |  |  | — |  |  | 2,581 |
Total non-interest (loss) income, net |  | (7,694) |  |  | 12,555 |  |  | (147,293) |  |  | 13,073 |  |  | (129,359) |
General and administrative expenses |  | (17,918) |  |  | (40,076) |  |  | (9,676) |  |  | (39,257) |  |  | (106,927) |
Loan acquisition costs |  | (2,848) |  |  | (7,523) |  |  | — |  |  | — |  |  | (10,371) |
Other expenses |  | 74 |  |  | (10,731) |  |  | (1,157) |  |  | — |  |  | (11,814) |
Benefit from (provision for) income taxes |  | 8,283 |  |  | 9,009 |  |  | (6,808) |  |  | — |  |  | 10,484 |
Segment Contribution |  | $ | (7,371) |  |  | $ | (27,054) |  |  | $ | (24,049) |  |  | $ | (60,988) |  |  |
Net (Loss) |  |  |  |  |  |  |  |  |  | $ | (119,462) |
Non-cash amortization (expense) income, net |  | $ | (699) |  |  | $ | (11,563) |  |  | $ | 4,385 |  |  | $ | (6,428) |  |  | $ | (14,305) |
|  | Three Months Ended September 30, 2021
(In Thousands) |  | Residential Mortgage Banking |  | Business Purpose Mortgage Banking |  | Investment Portfolio |  | Corporate/ Other |  | Total
Interest income |  | $ | 14,712 |  |  | $ | 3,967 |  |  | $ | 125,994 |  |  | $ | 1,049 |  |  | $ | 145,722 |
Interest expense |  | (7,537) |  |  | (2,013) |  |  | (84,049) |  |  | (10,155) |  |  | (103,754) |
Net interest income |  | 7,175 |  |  | 1,954 |  |  | 41,945 |  |  | (9,106) |  |  | 41,968 |
Non-interest income |  |  |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | 32,946 |  |  | 30,217 |  |  | — |  |  | — |  |  | 63,163 |
Investment fair value changes, net |  | — |  |  | — |  |  | 26,324 |  |  | (247) |  |  | 26,077 |
Other income, net |  | — |  |  | 216 |  |  | 1,842 |  |  | 330 |  |  | 2,388 |
Realized gains, net |  | — |  |  | — |  |  | 6,703 |  |  | — |  |  | 6,703 |
Total non-interest income, net |  | 32,946 |  |  | 30,433 |  |  | 34,869 |  |  | 83 |  |  | 98,331 |
General and administrative expenses |  | (7,891) |  |  | (12,017) |  |  | (4,483) |  |  | (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 |  | (10,429) |  |  | (3,485) |  |  | (1,045) |  |  | 19,282 |  |  | 4,323 |
Segment Contribution |  | $ | 19,406 |  |  | $ | 10,837 |  |  | $ | 71,085 |  |  | $ | (13,042) |  |  |
Net Income |  |  |  |  |  |  |  |  |  | $ | 88,286 |
Non-cash amortization (expense) income, net |  | $ | (33) |  |  | $ | (4,224) |  |  | $ | 5,682 |  |  | $ | (1,995) |  |  | $ | (570) |
|  | Nine Months Ended September 30, 2021
(In Thousands) |  | Residential Mortgage Banking |  | Business Purpose Mortgage Banking |  | Investment Portfolio |  | Corporate/ Other |  | Total
Interest income |  | $ | 35,536 |  |  | $ | 9,849 |  |  | $ | 363,751 |  |  | $ | 3,586 |  |  | $ | 412,722 |
Interest expense |  | (19,903) |  |  | (5,134) |  |  | (258,685) |  |  | (30,649) |  |  | (314,371) |
Net interest income |  | 15,633 |  |  | 4,715 |  |  | 105,066 |  |  | (27,063) |  |  | 98,351 |
Non-interest income |  |  |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | 115,646 |  |  | 84,543 |  |  | — |  |  | — |  |  | 200,189 |
Investment fair value changes, net |  | — |  |  | — |  |  | 121,812 |  |  | (1,168) |  |  | 120,644 |
Other income, net |  | — |  |  | 494 |  |  | 7,121 |  |  | 742 |  |  | 8,357 |
Realized gains, net |  | — |  |  | — |  |  | 17,803 |  |  | — |  |  | 17,803 |
Total non-interest income (loss), net |  | 115,646 |  |  | 85,037 |  |  | 146,736 |  |  | (426) |  |  | 346,993 |
General and administrative expenses |  | (27,478) |  |  | (34,567) |  |  | (10,804) |  |  | (58,988) |  |  | (131,837) |
Loan acquisition costs |  | (5,686) |  |  | (5,528) |  |  | (710) |  |  | (4) |  |  | (11,928) |
Other expenses |  | (6) |  |  | (11,523) |  |  | (592) |  |  | 17 |  |  | (12,104) |
Provision for income taxes |  | (23,640) |  |  | (6,988) |  |  | (2,561) |  |  | 19,282 |  |  | (13,907) |
Segment Contribution |  | $ | 74,469 |  |  | $ | 31,146 |  |  | $ | 237,135 |  |  | $ | (67,182) |  |  |
Net Income |  |  |  |  |  |  |  |  |  | $ | 275,568 |
Non-cash amortization income (expense), net |  | $ | 8,867 |  |  | $ | (16,154) |  |  | $ | 317 |  |  | $ | (5,845) |  |  | $ | (12,815) |
Components of Corporate and Other | The following table presents the components of Corporate/Other for the three and nine months ended September 30, 2022 and 2021. Table 24.2 – Components of Corporate/Other
|  | Three Months Ended September 30,
|  | 2022 |  | 2021
(In Thousands) |  | Legacy Consolidated VIEs (1) |  | Other |  | Total |  | Legacy Consolidated VIEs (1) |  | Other |  | Total
Interest income |  | $ | 1,473 |  |  | $ | 343 |  |  | $ | 1,816 |  |  | $ | 1,042 |  |  | $ | 7 |  |  | $ | 1,049 |
Interest expense |  | (1,486) |  |  | (15,311) |  |  | (16,797) |  |  | (641) |  |  | (9,514) |  |  | (10,155) |
Net interest income |  | (13) |  |  | (14,968) |  |  | (14,981) |  |  | 401 |  |  | (9,507) |  |  | (9,106) |
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |
Investment fair value changes, net |  | (329) |  |  | 4,412 |  |  | 4,083 |  |  | (247) |  |  | — |  |  | (247) |
Other income |  | — |  |  | (278) |  |  | (278) |  |  | — |  |  | 330 |  |  | 330 |
Total non-interest income, net |  | (329) |  |  | 4,134 |  |  | 3,805 |  |  | (247) |  |  | 330 |  |  | 83 |
General and administrative expenses |  | — |  |  | (12,335) |  |  | (12,335) |  |  | — |  |  | (23,301) |  |  | (23,301) |
Loan acquisition costs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Other expenses |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Provision for income taxes |  | — |  |  | — |  |  | — |  |  | — |  |  | 19,282 |  |  | 19,282 |
Total |  | $ | (342) |  |  | $ | (23,169) |  |  | $ | (23,511) |  |  | $ | 154 |  |  | $ | (13,196) |  |  | $ | (13,042) |
|  | Nine Months Ended September 30,
|  | 2022 |  | 2021
(In Thousands) |  | Legacy Consolidated VIEs(1) |  | Other |  | Total |  | Legacy Consolidated VIEs(1) |  | Other |  | Total
Interest income |  | $ | 3,593 |  |  | $ | 435 |  |  | $ | 4,028 |  |  | $ | 3,559 |  |  | $ | 27 |  |  | $ | 3,586 |
Interest expense |  | (3,154) |  |  | (35,678) |  |  | (38,832) |  |  | (2,271) |  |  | (28,378) |  |  | (30,649) |
Net interest income |  | 439 |  |  | (35,243) |  |  | (34,804) |  |  | 1,288 |  |  | (28,351) |  |  | (27,063) |
Non-interest income |  |  |  |  |  |  |  |  |  |  |  |
Investment fair value changes, net |  | (1,379) |  |  | 14,887 |  |  | 13,508 |  |  | (1,162) |  |  | (6) |  |  | (1,168) |
Other income |  | — |  |  | (435) |  |  | (435) |  |  | — |  |  | 742 |  |  | 742 |
Total non-interest income, net |  | (1,379) |  |  | 14,452 |  |  | 13,073 |  |  | (1,162) |  |  | 736 |  |  | (426) |
General and administrative expenses |  | — |  |  | (39,257) |  |  | (39,257) |  |  | — |  |  | (58,988) |  |  | (58,988) |
Loan acquisition costs |  | — |  |  | — |  |  | — |  |  | — |  |  | (4) |  |  | (4) |
Other expenses |  | — |  |  | — |  |  | — |  |  | — |  |  | 17 |  |  | 17 |
Provision for income taxes |  | — |  |  | — |  |  | — |  |  | — |  |  | 19,282 |  |  | 19,282 |
Total |  | $ | (940) |  |  | $ | (60,048) |  |  | $ | (60,988) |  |  | $ | 126 |  |  | $ | (67,308) |  |  | $ | (67,182) |
(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, 2022 and December 31, 2021. Table 24.3 – Supplemental Segment Information
(In Thousands) |  | Residential Mortgage Banking |  | Business Purpose Mortgage Banking |  |  |  | Investment Portfolio |  | Corporate/ Other |  | Total
September 30, 2022 |  |  |  |  |  |  |  |  |  |  |  |
Residential loans |  | $ | 676,458 |  |  | $ | — |  |  |  |  | $ | 4,877,938 |  |  | $ | 198,160 |  |  | $ | 5,752,556 |
Business purpose loans |  | — |  |  | 337,238 |  |  |  |  | 4,919,980 |  |  | — |  |  | 5,257,218 |
Consolidated Agency multifamily loans |  | — |  |  | — |  |  |  |  | 427,458 |  |  | — |  |  | 427,458 |
Real estate securities |  | — |  |  | — |  |  |  |  | 259,212 |  |  | — |  |  | 259,212 |
Home equity investments |  | — |  |  | — |  |  |  |  | 340,437 |  |  | — |  |  | 340,437 |
Other investments |  | — |  |  | — |  |  |  |  | 341,155 |  |  | 71,607 |  |  | 412,762 |
Goodwill |  | — |  |  | 23,373 |  |  |  |  | — |  |  | — |  |  | 23,373 |
Intangible assets |  | — |  |  | 44,130 |  |  |  |  | — |  |  | — |  |  | 44,130 |
Total assets |  | 738,301 |  |  | 473,748 |  |  |  |  | 11,301,836 |  |  | 632,062 |  |  | 13,145,947 |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |
Residential loans |  | $ | 1,673,235 |  |  | $ | — |  |  |  |  | $ | 5,688,742 |  |  | $ | 230,455 |  |  | $ | 7,592,432 |
Business purpose loans |  | — |  |  | 347,860 |  |  |  |  | 4,443,129 |  |  | — |  |  | 4,790,989 |
Consolidated Agency multifamily loans |  | — |  |  | — |  |  |  |  | 473,514 |  |  | — |  |  | 473,514 |
Real estate securities |  | 4,927 |  |  | — |  |  |  |  | 372,484 |  |  | — |  |  | 377,411 |
Home equity investments |  | — |  |  | — |  |  |  |  | 192,740 |  |  | — |  |  | 192,740 |
Other investments |  | — |  |  | — |  |  |  |  | 413,527 |  |  | 35,702 |  |  | 449,229 |
Intangible assets |  | — |  |  | 41,561 |  |  |  |  | — |  |  | — |  |  | 41,561 |
Total assets |  | 1,716,285 |  |  | 464,967 |  |  |  |  | 11,770,486 |  |  | 755,206 |  |  | 14,706,944 |

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