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Segment Information
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
Segment Information Segment Information
Redwood operates in three segments: Residential Consumer Mortgage Banking, Residential Investor Mortgage Banking and Investment Portfolio. In the fourth quarter of 2023, we updated the names of two of our segments: Residential Mortgage Banking was changed to Residential Consumer Mortgage Banking; and Business Purpose Mortgage Banking was changed to Residential Investor Mortgage Banking. No changes were made to the composition of the segments. 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 Item 1—Business in this Annual Report on Form 10-K.
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 at certain consolidated Legacy Sequoia Securitization entities, are included in the Corporate/Other column as reconciling items to our consolidated financial statements. These unallocated corporate expenses primarily include interest expense for our convertible notes and trust preferred securities (and in 2023 and 2022, realized gains from the repurchase of convertible notes), indirect general and administrative expenses and other expense. In the normal course of business, loans are originated and acquired at our mortgage banking segments and may subsequently be transferred to our investment portfolio segment either as whole loans or through the retention of securities from securitizations we sponsor and consolidate under GAAP. All of our loans are accounted for under the fair value option and amounts transferred between segments are accounted for at fair value at the time of transfer.
The following tables present financial information by segment for the years ended December 31, 2023, 2022, and 2021.
Table 24.1 – Business Segment Financial Information
Year Ended December 31, 2023
(In Thousands)Residential Consumer Mortgage BankingResidential Investor Mortgage BankingInvestment Portfolio Corporate/
Other 		 Total
Interest income$25,404 $15,896 $665,152 $18,010 $724,462 
Interest expense(24,114)(13,078)(526,547)(67,780)(631,519)
Net interest income (expense)1,290 2,818 138,605 (49,770)92,943 
Non-interest income (loss)
Mortgage banking activities, net27,782 39,604 — — 67,386 
Investment fair value changes, net1,076 — (42,322)(3,154)(44,400)
HEI income, net— — 35,117 — 35,117 
Other income, net— 5,613 10,361 (3,088)12,886 
Realized gains, net— — 858 841 1,699 
Total non-interest income (loss), net28,858 45,217 4,014 (5,401)72,688 
General and administrative expenses (17,171)(44,547)(5,638)(60,939)(128,295)
Portfolio management costs— — (14,516)(55)(14,571)
Loan acquisition costs(1,266)(5,900)— — (7,166)
Other expenses (1)
— (12,442)(5,796)2,000 (16,238)
(Provision for) benefit from income taxes(1,659)2,279 (2,946)691 (1,635)
Segment Contribution$10,052 $(12,575)$113,723 $(113,474)
Net (Loss)$(2,274)
Non-cash amortization (expense) income, net$(1,097)$(13,610)$(8,657)$(8,176)$(31,540)
(1)Corporate/other includes contra-expense from reversal of litigation reserve. See Note 17 for additional detail.
Table 24.1 – Business Segment Financial Information (continued)
Year Ended December 31, 2022
(In Thousands)Residential Consumer Mortgage BankingResidential Investor Mortgage BankingInvestment PortfolioCorporate/
Other		 Total
Interest income$45,202 $28,674 $627,134 $6,844 $707,854 
Interest expense(32,735)(18,041)(445,154)(56,470)(552,400)
Net interest income (expense)12,467 10,633 181,980 (49,626)155,454 
Non-interest (loss) income
Mortgage banking activities, net(21,282)7,623 — — (13,659)
Investment fair value changes, net— — (193,862)15,590 (178,272)
HEI income, net— — 2,714 — 2,714 
Other income, net— 3,509 18,596 (901)21,204 
Realized gains, net— — 3,174 2,160 5,334 
Total non-interest (loss) income, net(21,282)11,132 (169,378)16,849 (162,679)
General and administrative expenses (22,566)(56,557)(6,036)(55,749)(140,908)
Portfolio management costs— — (7,951)— (7,951)
Loan acquisition costs(3,085)(8,681)— — (11,766)
Other expenses74 (13,969)(1,695)— (15,590)
Benefit from (provision for) income taxes12,814 13,157 (6,051)— 19,920 
Segment Contribution$(21,578)$(44,285)$(9,131)$(88,526)
Net (Loss)$(163,520)
Non-cash amortization (expense) income, net$(1,075)$(15,071)$2,507 $(8,289)$(21,928)
Table 24.1 – Business Segment Financial Information (continued)
Year Ended December 31, 2021
(In Thousands)Residential Consumer Mortgage BankingResidential Investor Mortgage BankingInvestment PortfolioCorporate/
Other		 Total
Interest income$48,953 $14,054 $507,173 $4,746 $574,926 
Interest expense(26,963)(7,230)(351,635)(40,921)(426,749)
Net interest income (expense)21,990 6,824 155,538 (36,175)148,177 
Non-interest income (loss)
Mortgage banking activities, net127,151 108,593 — — 235,744 
Investment fair value changes, net— — 116,189 (1,565)114,624 
HEI income, net— — 13,425 — 13,425 
Other income, net— 1,046 10,021 951 12,018 
Realized gains, net— — 17,993 — 17,993 
Total non-interest income (loss), net127,151 109,639 157,628 (614)393,804 
General and administrative expenses(33,574)(46,586)(7,992)(77,066)(165,218)
Portfolio management costs— — (5,758)— (5,758)
Loan acquisition costs(7,480)(8,100)(635)(4)(16,219)
Other expense104 (15,127)(1,689)17 (16,695)
(Provision for) benefit from income taxes(25,777)(8,122)(3,862)19,283 (18,478)
Segment Contribution$82,414 $38,528 $293,230 $(94,559)
Net Income$319,613 
Non-cash amortization income (expense), net$(82)$(16,452)$(20,781)$(7,878)$(45,193)
The following table presents the components of Corporate/Other for the years ended December 31, 2023, 2022, and 2021.
Table 24.2 – Components of Corporate/Other
Years Ended December 31,
202320222021
(In Thousands)
Legacy Consolidated VIEs (1)
OtherTotal
Legacy Consolidated VIEs (1)
Other Total
Legacy Consolidated VIEs (1)
Other Total
Interest income$10,326 $7,684 $18,010 $5,672 $1,172 $6,844 $4,709 $37 $4,746 
Interest expense(9,980)(57,800)(67,780)(5,206)(51,264)(56,470)(3,040)(37,881)(40,921)
Net interest income (expense)346 (50,116)(49,770)466 (50,092)(49,626)1,669 (37,844)(36,175)
Non-interest income (loss)
Investment fair value changes, net(160)(2,994)(3,154)(1,302)16,892 15,590 (1,558)(7)(1,565)
Other income, net— (3,088)(3,088)— (901)(901)— 951 951 
Realized gains, net— 841 841 — 2,160 2,160 — — — 
Total non-interest (loss) income, net(160)(5,241)(5,401)(1,302)18,151 16,849 (1,558)944 (614)
General and administrative expenses— (60,939)(60,939)— (55,749)(55,749)— (77,066)(77,066)
Portfolio management costs— (55)(55)— — — — — — 
Loan acquisition costs— — — — — — — (4)(4)
Other expenses— 2,000 2,000 — — — — 17 17 
Benefit from income taxes— 691 691 — — — — 19,283 19,283 
Total$186 $(113,660)$(113,474)$(836)$(87,690)$(88,526)$111 $(94,670)$(94,559)
(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 December 31, 2023 and 2022.
Table 24.3 – Supplemental Segment Information
(In Thousands)Residential Consumer Mortgage BankingResidential Investor Mortgage BankingInvestment Portfolio Corporate/
Other		Total
December 31, 2023
Residential loans$911,192 $— $5,999,706 $139,739 $7,050,637 
Business purpose loans— 180,250 5,040,048 — 5,220,298 
Consolidated Agency multifamily loans— — 425,285 — 425,285 
Real estate securities4,995 — 122,802 — 127,797 
Home equity investments— — 550,323 113 550,436 
Other investments— — 287,822 56,108 343,930 
Goodwill— 23,373 — — 23,373 
Intangible assets— 28,462 — — 28,462 
Total assets971,535 293,225 12,718,201 521,366 14,504,327 
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