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v3.23.3

Segment Information (Tables) | 9 Months Ended
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Sep. 30, 2023
Segment Reporting [Abstract] |
Schedule of Business Segment Financial Information | The following tables present financial information by segment for the three and nine months ended September 30, 2023 and 2022. Table 24.1 – Business Segment Financial Information
|  | Three Months Ended September 30, 2023
(In Thousands) |  | Residential Mortgage Banking |  | Business Purpose Mortgage Banking |  | Investment Portfolio |  | Corporate/ Other |  | Total
Interest income |  | $ | 6,063 |  |  | $ | 4,618 |  |  | $ | 162,251 |  |  | $ | 4,142 |  |  | $ | 177,074 |
Interest expense |  | (4,826) |  |  | (3,888) |  |  | (131,303) |  |  | (16,706) |  |  | (156,723) |
Net interest income (expense) |  | 1,237 |  |  | 730 |  |  | 30,948 |  |  | (12,564) |  |  | 20,351 |
Non-interest income (loss) |  |  |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | 8,964 |  |  | 10,476 |  |  | — |  |  | — |  |  | 19,440 |
Investment fair value changes, net |  | — |  |  | — |  |  | (31,315) |  |  | (115) |  |  | (31,430) |
Other income, net |  | — |  |  | 1,278 |  |  | 2,622 |  |  | (1,554) |  |  | 2,346 |
Realized gains, net |  | — |  |  | — |  |  | 26 |  |  | 24 |  |  | 50 |
Total non-interest income (loss), net |  | 8,964 |  |  | 11,754 |  |  | (28,667) |  |  | (1,645) |  |  | (9,594) |
General and administrative expenses |  | (4,521) |  |  | (9,402) |  |  | (1,340) |  |  | (14,434) |  |  | (29,697) |
Portfolio management costs |  | — |  |  | — |  |  | (3,636) |  |  | (25) |  |  | (3,661) |
Loan acquisition costs |  | (395) |  |  | (1,485) |  |  | — |  |  | — |  |  | (1,880) |
Other expenses |  | — |  |  | (3,108) |  |  | (1,525) |  |  | — |  |  | (4,633) |
(Provision for) Benefit from income taxes |  | (813) |  |  | 318 |  |  | (1,457) |  |  | 256 |  |  | (1,696) |
Segment Contribution |  | $ | 4,472 |  |  | $ | (1,193) |  |  | $ | (5,677) |  |  | $ | (28,412) |  |  |
Net (Loss) |  |  |  |  |  |  |  |  |  | $ | (30,810) |
Non-cash amortization (expense), net |  | $ | (266) |  |  | $ | (3,294) |  |  | $ | (1,687) |  |  | $ | (2,099) |  |  | $ | (7,346) |
|  | Nine Months Ended September 30, 2023
(In Thousands) |  | Residential Mortgage Banking |  | Business Purpose Mortgage Banking |  | Investment Portfolio |  | Corporate/ Other |  | Total
Interest income |  | $ | 14,007 |  |  | $ | 13,509 |  |  | $ | 492,514 |  |  | $ | 14,541 |  |  | $ | 534,571 |
Interest expense |  | (13,392) |  |  | (11,599) |  |  | (384,610) |  |  | (52,086) |  |  | (461,687) |
Net interest income (expense) |  | 615 |  |  | 1,910 |  |  | 107,904 |  |  | (37,545) |  |  | 72,884 |
Non-interest income (loss) |  |  |  |  |  |  |  |  |  |
Mortgage banking activities, net |  | 19,390 |  |  | 33,273 |  |  | — |  |  | — |  |  | 52,663 |
Investment fair value changes, net |  | 1,076 |  |  | — |  |  | (34,166) |  |  | (3,063) |  |  | (36,153) |
Other income, net |  | — |  |  | 4,762 |  |  | 8,803 |  |  | (2,505) |  |  | 11,060 |
Realized gains, net |  | — |  |  | — |  |  | 858 |  |  | 246 |  |  | 1,104 |
Total non-interest income (loss), net |  | 20,466 |  |  | 38,035 |  |  | (24,505) |  |  | (5,322) |  |  | 28,674 |
General and administrative expenses |  | (13,065) |  |  | (34,718) |  |  | (3,990) |  |  | (44,284) |  |  | (96,057) |
Portfolio management costs |  | — |  |  | — |  |  | (10,233) |  |  | (38) |  |  | (10,271) |
Loan acquisition costs |  | (719) |  |  | (3,894) |  |  | — |  |  | — |  |  | (4,613) |
Other expenses |  | — |  |  | (9,323) |  |  | (3,969) |  |  | — |  |  | (13,292) |
(Provision for) Benefit from income taxes |  | (887) |  |  | 2,427 |  |  | (3,135) |  |  | 953 |  |  | (642) |
Segment Contribution |  | $ | 6,410 |  |  | $ | (5,563) |  |  | $ | 62,072 |  |  | $ | (86,236) |  |  |
Net (Loss) |  |  |  |  |  |  |  |  |  | $ | (23,317) |
Non-cash amortization (expense), net |  | $ | (813) |  |  | $ | (10,291) |  |  | $ | (6,167) |  |  | $ | (6,292) |  |  | $ | (23,563) |
|  | 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 (expense) |  | 1,799 |  |  | 3,111 |  |  | 45,006 |  |  | (14,981) |  |  | 34,935 |
Non-interest income (loss) |  |  |  |  |  |  |  |  |  |
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) |  |  | (1,639) |  |  | (12,335) |  |  | (38,244) |
Portfolio management costs |  | — |  |  | — |  |  | (1,863) |  |  | — |  |  | (1,863) |
Loan acquisition costs |  | (550) |  |  | (1,876) |  |  | — |  |  | — |  |  | (2,426) |
Other expenses |  | — |  |  | (3,891) |  |  | (370) |  |  | — |  |  | (4,261) |
Benefit from 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), 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 (expense) |  | 12,732 |  |  | 9,712 |  |  | 140,885 |  |  | (34,804) |  |  | 128,525 |
Non-interest income (loss) |  |  |  |  |  |  |  |  |  |
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 income (loss), net |  | (7,694) |  |  | 12,555 |  |  | (147,293) |  |  | 13,073 |  |  | (129,359) |
General and administrative expenses |  | (17,918) |  |  | (40,076) |  |  | (4,468) |  |  | (39,257) |  |  | (101,719) |
Portfolio management costs |  | — |  |  | — |  |  | (5,208) |  |  | — |  |  | (5,208) |
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), net |  | $ | (699) |  |  | $ | (11,563) |  |  | $ | 4,385 |  |  | $ | (6,428) |  |  | $ | (14,305) |
Schedule of Components of Corporate and Other | The following table presents the components of Corporate/Other for the three and nine months ended September 30, 2023 and 2022. Table 24.2 – Components of Corporate/Other
|  | Three Months Ended September 30,
|  | 2023 |  | 2022
(In Thousands) |  | Legacy Consolidated VIEs (1) |  | Other |  | Total |  | Legacy Consolidated VIEs (1) |  | Other |  | Total
Interest income |  | $ | 2,596 |  |  | $ | 1,546 |  |  | $ | 4,142 |  |  | $ | 1,473 |  |  | $ | 343 |  |  | $ | 1,816 |
Interest expense |  | (2,487) |  |  | (14,219) |  |  | (16,706) |  |  | (1,486) |  |  | (15,311) |  |  | (16,797) |
Net interest income (expense) |  | 109 |  |  | (12,673) |  |  | (12,564) |  |  | (13) |  |  | (14,968) |  |  | (14,981) |
Non-interest income (loss) |  |  |  |  |  |  |  |  |  |  |  |
Investment fair value changes, net |  | (215) |  |  | 100 |  |  | (115) |  |  | (329) |  |  | 4,412 |  |  | 4,083 |
Other income, net |  | — |  |  | (1,554) |  |  | (1,554) |  |  | — |  |  | (278) |  |  | (278) |
Realized gains, net |  | — |  |  | 24 |  |  | 24 |  |  | — |  |  | — |  |  | — |
Total non-interest income (loss), net |  | (215) |  |  | (1,430) |  |  | (1,645) |  |  | (329) |  |  | 4,134 |  |  | 3,805 |
General and administrative expenses |  | — |  |  | (14,434) |  |  | (14,434) |  |  | — |  |  | (12,335) |  |  | (12,335) |
Portfolio management costs |  | — |  |  | (25) |  |  | (25) |  |  | — |  |  | — |  |  | — |
Benefit from income taxes |  | — |  |  | 256 |  |  | 256 |  |  | — |  |  | — |  |  | — |
Total |  | $ | (106) |  |  | $ | (28,306) |  |  | $ | (28,412) |  |  | $ | (342) |  |  | $ | (23,169) |  |  | $ | (23,511) |
|  | Nine Months Ended September 30,
|  | 2023 |  | 2022
(In Thousands) |  | Legacy Consolidated VIEs(1) |  | Other |  | Total |  | Legacy Consolidated VIEs(1) |  | Other |  | Total
Interest income |  | $ | 7,879 |  |  | $ | 6,662 |  |  | $ | 14,541 |  |  | $ | 3,593 |  |  | $ | 435 |  |  | $ | 4,028 |
Interest expense |  | (7,650) |  |  | (44,436) |  |  | (52,086) |  |  | (3,154) |  |  | (35,678) |  |  | (38,832) |
Net interest income (expense) |  | 229 |  |  | (37,774) |  |  | (37,545) |  |  | 439 |  |  | (35,243) |  |  | (34,804) |
Non-interest income (loss) |  |  |  |  |  |  |  |  |  |  |  |
Investment fair value changes, net |  | (319) |  |  | (2,744) |  |  | (3,063) |  |  | (1,379) |  |  | 14,887 |  |  | 13,508 |
Other income, net |  | — |  |  | (2,505) |  |  | (2,505) |  |  | — |  |  | (435) |  |  | (435) |
Realized gains, net |  | — |  |  | 246 |  |  | 246 |  |  | — |  |  | — |  |  | — |
Total non-interest income, net |  | (319) |  |  | (5,003) |  |  | (5,322) |  |  | (1,379) |  |  | 14,452 |  |  | 13,073 |
General and administrative expenses |  | — |  |  | (44,284) |  |  | (44,284) |  |  | — |  |  | (39,257) |  |  | (39,257) |
Portfolio management costs |  | — |  |  | (38) |  |  | (38) |  |  | — |  |  | — |  |  | — |
Benefit from income taxes |  | — |  |  | 953 |  |  | 953 |  |  | — |  |  | — |  |  | — |
Total |  | $ | (90) |  |  | $ | (86,146) |  |  | $ | (86,236) |  |  | $ | (940) |  |  | $ | (60,048) |  |  | $ | (60,988) |
(1) Legacy consolidated VIEs represent Legacy Sequoia entities that are consolidated for GAAP financial reporting purposes. See Note 4 for further discussion on VIEs.
Schedule of Supplemental Information by Segment | The following table presents supplemental information by segment at September 30, 2023 and December 31, 2022. Table 24.3 – Supplemental Segment Information
(In Thousands) |  | Residential Mortgage Banking |  | Business Purpose Mortgage Banking |  |  |  | Investment Portfolio |  | Corporate/ Other |  | Total
September 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |
Residential loans |  | $ | 610,946 |  |  | $ | — |  |  |  |  | $ | 5,086,239 |  |  | $ | 150,152 |  |  | $ | 5,847,337 |
Business purpose loans |  | — |  |  | 102,777 |  |  |  |  | 5,146,553 |  |  | — |  |  | 5,249,330 |
Consolidated Agency multifamily loans |  | — |  |  | — |  |  |  |  | 420,554 |  |  | — |  |  | 420,554 |
Real estate securities |  | 9,054 |  |  | — |  |  |  |  | 120,391 |  |  | — |  |  | 129,445 |
Home equity investments |  | — |  |  | — |  |  |  |  | 431,159 |  |  | 113 |  |  | 431,272 |
Other investments |  | — |  |  | — |  |  |  |  | 284,507 |  |  | 55,854 |  |  | 340,361 |
Goodwill |  | — |  |  | 23,373 |  |  |  |  | — |  |  | — |  |  | 23,373 |
Intangible assets |  | — |  |  | 31,570 |  |  |  |  | — |  |  | — |  |  | 31,570 |
Total assets |  | 659,520 |  |  | 197,974 |  |  |  |  | 11,701,939 |  |  | 461,705 |  |  | 13,021,138 |
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 assets |  | 660,916 |  |  | 487,159 |  |  |  |  | 11,303,991 |  |  | 578,833 |  |  | 13,030,899 |

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