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Segment Information (Tables)

9 Months Ended

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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Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss.

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