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Segment Information
 6 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
Segment Information Segment Information
Redwood operates in three segments: Residential Mortgage Banking, Business Purpose Mortgage Banking and Investment Portfolio. The accounting policies of the reportable segments are the same as those described in Note 3 — Summary of Significant Accounting Policies. 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, 2022.
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, 2023 and 2022.
Table 24.1 – Business Segment Financial Information
Three Months Ended June 30, 2023
(In Thousands)Residential Mortgage BankingBusiness Purpose Mortgage BankingInvestment PortfolioCorporate/
Other		Total
Interest income$2,434 $4,397 $166,603 $5,547 $178,981 
Interest expense(1,700)(3,673)(129,855)(17,657)(152,885)
Net interest income (expense)734 724 36,748 (12,110)26,096 
Non-interest income (loss)
Mortgage banking activities, net7,061 9,491 — — 16,552 
Investment fair value changes, net— — (1,837)(2,759)(4,596)
Other income, net— 1,076 4,013 (931)4,158 
Realized gains, net— — 949 107 1,056 
Total non-interest income (loss), net7,061 10,567 3,125 (3,583)17,170 
General and administrative expenses(3,738)(11,638)(1,241)(14,188)(30,805)
Portfolio management costs— — (3,087)(13)(3,100)
Loan acquisition costs(149)(1,295)— — (1,444)
Other expenses— (3,107)(1,868)— (4,975)
(Provision for) Benefit from income taxes(707)1,406 (1,465)697 (69)
Segment Contribution$3,201 $(3,343)$32,212 $(29,197)
Net income$2,873 
Non-cash amortization (expense), net$(292)$(3,333)$(1,857)$(2,086)$(7,568)
Six Months Ended June 30, 2023
(In Thousands)Residential Mortgage BankingBusiness Purpose Mortgage BankingInvestment PortfolioCorporate/
Other		Total
Interest income$7,944 $8,891 $330,263 $10,399 $357,497 
Interest expense(8,566)(7,711)(253,307)(35,380)(304,964)
Net interest income (expense)(622)1,180 76,956 (24,981)52,533 
Non-interest income (loss)
Mortgage banking activities, net10,426 22,797 — — 33,223 
Investment fair value changes, net1,076 — (2,851)(2,948)(4,723)
Other income, net— 3,484 6,181 (951)8,714 
Realized gains, net— — 832 222 1,054 
Total non-interest income (loss), net11,502 26,281 4,162 (3,677)38,268 
General and administrative expenses(8,544)(25,316)(2,650)(29,850)(66,360)
Portfolio management costs— — (6,597)(13)(6,610)
Loan acquisition costs(324)(2,409)— — (2,733)
Other expenses— (6,215)(2,444)— (8,659)
(Provision for) Benefit from income taxes(74)2,109 (1,678)697 1,054 
Segment Contribution$1,938 $(4,370)$67,749 $(57,824)
Net Income$7,493 
Non-cash amortization (expense), net$(547)$(7,035)$(4,690)$(4,193)$(16,465)
Three Months Ended June 30, 2022
(In Thousands)Residential Mortgage BankingBusiness Purpose Mortgage BankingInvestment PortfolioCorporate/
Other		Total
Interest income$13,199 $8,586 $144,478 $1,192 $167,455 
Interest expense(8,297)(4,258)(102,589)(11,823)(126,967)
Net interest income (expense)4,902 4,328 41,889 (10,631)40,488 
Non-interest income (loss)
Mortgage banking activities, net(17,787)(12,230)— — (30,017)
Investment fair value changes, net— — (98,111)10,139 (87,972)
Other income, net— 1,054 6,235 (283)7,006 
Realized gains, net— — — — — 
Total non-interest income (loss), net(17,787)(11,176)(91,876)9,856 (110,983)
General and administrative expenses(6,082)(11,069)(1,274)(11,774)(30,199)
Portfolio management costs— — (1,767)— (1,767)
Loan acquisition costs(881)(2,599)— — (3,480)
Other expenses74 (3,306)(236)— (3,468)
Benefit from income taxes5,588 3,169 686 — 9,443 
Segment Contribution$(14,186)$(20,653)$(52,578)$(12,549)
Net (Loss)$(99,966)
Non-cash amortization (expense), net$(760)$(3,480)$(1,450)$(2,137)$(7,827)
Six Months Ended June 30, 2022
(In Thousands)Residential Mortgage BankingBusiness Purpose Mortgage BankingInvestment PortfolioCorporate/
Other		Total
Interest income$26,166 $13,427 $315,050 $2,212 $356,855 
Interest expense(15,233)(6,826)(219,171)(22,035)(263,265)
Net interest income (expense)10,933 6,601 95,879 (19,823)93,590 
Non-interest income (loss)
Mortgage banking activities, net(9,852)(3,850)— — (13,702)
Investment fair value changes, net— — (103,517)9,425 (94,092)
Other income, net— 1,629 11,517 (157)12,989 
Realized gains, net— — 2,581 — 2,581 
Total non-interest income (loss), net(9,852)(2,221)(89,419)9,268 (92,224)
General and administrative expenses(12,183)(21,541)(2,829)(26,922)(63,475)
Portfolio management costs— — (3,345)— (3,345)
Loan acquisition costs(2,298)(5,647)— — (7,945)
Other expenses74 (6,840)(787)— (7,553)
Benefit from (provision for) income taxes6,595 6,450 (1,144)— 11,901 
Segment Contribution$(6,731)$(23,198)$(1,645)$(37,477)
Net (Loss)$(69,051)
Non-cash amortization (expense), net$(298)$(7,370)$(9,644)$(4,170)$(21,482)
The following table presents the components of Corporate/Other for the three and six months ended June 30, 2023 and 2022.

Table 24.2 – Components of Corporate/Other
Three Months Ended June 30,
20232022
(In Thousands)
Legacy Consolidated VIEs (1)
OtherTotal
Legacy Consolidated VIEs (1)
Other Total
Interest income$2,740 $2,807 $5,547 $1,108 $84 $1,192 
Interest expense(2,659)(14,998)(17,657)(967)(10,856)(11,823)
Net interest income (expense)81 (12,191)(12,110)141 (10,772)(10,631)
Non-interest income (loss)
Investment fair value changes, net(10)(2,749)(2,759)(336)10,475 10,139 
Other income, net— (931)(931)— (283)(283)
Realized gains, net— 107 107 — — — 
Total non-interest income (loss), net(10)(3,573)(3,583)(336)10,192 9,856 
General and administrative expenses— (14,188)(14,188)— (11,774)(11,774)
Portfolio management costs — (13)(13)— — — 
Benefit from income taxes— 697 697 — — — 
Total$71 $(29,268)$(29,197)$(195)$(12,354)$(12,549)
Six Months Ended June 30,
20232022
(In Thousands)
Legacy Consolidated VIEs(1)
OtherTotal
Legacy Consolidated VIEs(1)
Other Total
Interest income$5,283 $5,116 $10,399 $2,120 $92 $2,212 
Interest expense(5,163)(30,217)(35,380)(1,668)(20,367)(22,035)
Net interest income (expense)120 (25,101)(24,981)452 (20,275)(19,823)
Non-interest income (loss)
Investment fair value changes, net(104)(2,844)(2,948)(1,050)10,475 9,425 
Other income, net— (951)(951)— (157)(157)
Realized gains, net— 222 222 — — — 
Total non-interest income, net(104)(3,573)(3,677)(1,050)10,318 9,268 
General and administrative expenses— (29,850)(29,850)— (26,922)(26,922)
Portfolio management costs— (13)(13)— — — 
Benefit from income taxes— 697 697 — — — 
Total$16 $(57,840)$(57,824)$(598)$(36,879)$(37,477)

(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, 2023 and December 31, 2022.
Table 24.3 – Supplemental Segment Information
(In Thousands)Residential Mortgage BankingBusiness Purpose Mortgage BankingInvestment Portfolio Corporate/
Other		Total
June 30, 2023
Residential loans$196,737 $— $5,095,940 $163,222 $5,455,899 
Business purpose loans— 282,836 4,943,887 — 5,226,723 
Consolidated Agency multifamily loans— — 420,096 — 420,096 
Real estate securities9,752 — 157,067 — 166,819 
Home equity investments— — 427,307 — 427,307 
Other investments— — 300,670 54,867 355,537 
Goodwill— 23,373 — — 23,373 
Intangible assets— 34,677 — — 34,677 
Total assets221,282 380,404 11,559,826 635,222 12,796,734 
December 31, 2022
Residential loans$628,160 $— $4,800,096 $184,932 $5,613,188 
Business purpose loans— 364,073 4,968,513 — 5,332,586 
Consolidated Agency multifamily loans— — 424,551 — 424,551 
Real estate securities— — 240,475 — 240,475 
Home equity investments— — 403,462 — 403,462 
Other investments— — 334,420 56,518 390,938 
Goodwill— 23,373 — — 23,373 
Intangible assets— 40,892 — — 40,892 
Total assets660,916 487,159 11,303,991 578,833 13,030,899