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Segment Information
 9 Months Ended
Sep. 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 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 BankingBusiness Purpose Mortgage BankingInvestment PortfolioCorporate/
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, net8,964 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), net8,964 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 BankingBusiness Purpose Mortgage BankingInvestment PortfolioCorporate/
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, net19,390 33,273 — — 52,663 
Investment fair value changes, net1,076 — (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), net20,466 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 BankingBusiness Purpose Mortgage BankingInvestment PortfolioCorporate/
Other		Total
Interest income$9,882 $9,082 $156,882 $1,816 $177,662 
Interest expense(8,083)(5,971)(111,876)(16,797)(142,727)
Net interest income (expense)1,799 3,111 45,006 (14,981)34,935 
Non-interest income (loss)
Mortgage banking activities, net2,158 14,377 — — 16,535 
Investment fair value changes, net— — (61,780)4,083 (57,697)
Other income, net— 399 3,906 (278)4,027 
Realized gains, net— — — — — 
Total non-interest income (loss), net2,158 14,776 (57,874)3,805 (37,135)
General and administrative expenses(5,735)(18,535)(1,639)(12,335)(38,244)
Portfolio management costs— — (1,863)— (1,863)
Loan acquisition costs(550)(1,876)— — (2,426)
Other expenses— (3,891)(370)— (4,261)
Benefit from income taxes1,688 2,559 (5,664)— (1,417)
Segment Contribution$(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 BankingBusiness Purpose Mortgage BankingInvestment PortfolioCorporate/
Other		Total
Interest income$36,048 $22,509 $471,932 $4,028 $534,517 
Interest expense(23,316)(12,797)(331,047)(38,832)(405,992)
Net interest income (expense)12,732 9,712 140,885 (34,804)128,525 
Non-interest income (loss)
Mortgage banking activities, net(7,694)10,527 — — 2,833 
Investment fair value changes, net— — (165,297)13,508 (151,789)
Other income, net— 2,028 15,423 (435)17,016 
Realized gains, net— — 2,581 — 2,581 
Total non-interest income (loss), net(7,694)12,555 (147,293)13,073 (129,359)
General and administrative expenses(17,918)(40,076)(4,468)(39,257)(101,719)
Portfolio management costs— — (5,208)— (5,208)
Loan acquisition costs(2,848)(7,523)— — (10,371)
Other expenses74 (10,731)(1,157)— (11,814)
Benefit from (provision for) income taxes8,283 9,009 (6,808)— 10,484 
Segment Contribution$(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)
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,
20232022
(In Thousands)
Legacy Consolidated VIEs (1)
OtherTotal
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,
20232022
(In Thousands)
Legacy Consolidated VIEs(1)
OtherTotal
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.    
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 BankingBusiness Purpose Mortgage BankingInvestment 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 securities9,054 — 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 assets659,520 197,974 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 assets660,916 487,159 11,303,991 578,833 13,030,899