Segment Information (Tables)

3 Months Ended

Mar. 31, 2019

The following tables present financial information by segment for the three months ended March 31, 2019 and 2018.

Table 23.1 – Business Segment Financial Information



	Three Months Ended March 31, 2019
(In Thousands)	Investment Portfolio			Mortgage Banking			Corporate/ Other			Total
Interest income	$	115,452		$	10,377		$	5,212		$	131,041
Interest expense	(77,887		)	(5,564		)	(15,825		)	(99,276		)
Net interest income (loss)	37,565			4,813			(10,613		)	31,765
Non-interest income
Mortgage banking activities, net	—			12,309			—			12,309
Investment fair value changes, net	20,556			—			(397		)	20,159
Other income (expense), net	1,221			(167		)	2,533			3,587
Realized gains, net	10,686			—			—			10,686
Total non-interest income, net	32,463			12,142			2,136			46,741
Direct operating expenses	(2,661		)	(8,104		)	(12,394		)	(23,159		)
Provision for income taxes	(342		)	(541		)	—			(883		)
Segment Contribution	$	67,025		$	8,310		$	(20,871	)
Net Income										$	54,464
Non-cash amortization income (expense), net	$	2,368		$	(723	)	$	(1,300	)	$	345



	Three Months Ended March 31, 2018
(In Thousands)	Investment Portfolio			Mortgage Banking			Corporate/ Other			Total
Interest income	$	58,757		$	12,897		$	4,965		$	76,619
Interest expense	(19,863		)	(6,137		)	(15,514		)	(41,514		)
Net interest income (loss)	38,894			6,760			(10,549		)	35,105
Non-interest income
Mortgage banking activities, net	—			26,576			—			26,576
Investment fair value changes, net	1,590			—			19			1,609
Other income, net	2,118			—			—			2,118
Realized gains, net	9,363			—			—			9,363
Total non-interest income, net	13,071			26,576			19			39,666
Direct operating expenses	(2,007		)	(8,632		)	(12,391		)	(23,030		)
Provision for income taxes	(888		)	(4,008		)	—			(4,896		)
Segment Contribution	$	49,070		$	20,696		$	(22,921	)
Net Income										$	46,845
Non-cash amortization income (expense), net	$	4,617		$	(22	)	$	(954	)	$	3,641

The following table presents the components of Corporate/Other for the three months ended March 31, 2019 and 2018.

Table 23.2 – Components of Corporate/Other



	Three Months Ended March 31,
	2019									2018
(In Thousands)	Legacy Consolidated VIEs ⁽¹⁾			Other			Total			Legacy Consolidated VIEs ⁽¹⁾			Other			Total
Interest income	$	4,853		$	359		$	5,212		$	4,812		$	153		$	4,965
Interest expense	(4,115		)	(11,710		)	(15,825		)	(3,852		)	(11,662		)	(15,514		)
Net interest income (loss)	738			(11,351		)	(10,613		)	960			(11,509		)	(10,549		)
Non-interest income
Investment fair value changes, net	(374		)	(23		)	(397		)	(8		)	27			19
Other income	—			2,533			2,533			—			—			—
Total non-interest income, net	(374		)	2,510			2,136			(8		)	27			19
Direct operating expenses	—			(12,394		)	(12,394		)	—			(12,391		)	(12,391		)
Total	$	364		$	(21,235	)	$	(20,871	)	$	952		$	(23,873	)	$	(22,921	)


(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 March 31, 2019 and December 31, 2018.

Table 23.3 – Supplemental Segment Information



(In Thousands)	Investment Portfolio		Mortgage Banking		Corporate/ Other		Total
March 31, 2019
Residential loans	$	5,988,583	$	797,073	$	488,645	$	7,274,301
Business purpose residential loans	103,916		56,696		—		160,612
Multifamily loans	2,175,899		—		—		2,175,899
Real estate securities	1,543,152		—		—		1,543,152
Other investments	411,853		2,345		—		414,198
Goodwill and intangible assets	—		52,895		—		52,895
Total assets	10,444,279		942,596		806,484		12,193,359

December 31, 2018
Residential loans	$	5,685,983	$	1,048,801	$	519,958	$	7,254,742
Business purpose residential loans	112,798		28,460		—		141,258
Multifamily loans	2,144,598		—		—		2,144,598
Real estate securities	1,452,494		—		—		1,452,494
Other investments	427,764		—		10,754		438,518
Total assets	10,093,993		1,103,090		740,323		11,937,406