Basis of Presentation (Tables)

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Finite-Lived Intangible Assets

The amortization period for each of these assets and the activity for the nine months ended September 30, 2020 is summarized in the table below.

Table 2.1 – Intangible Assets – Activity

	Carrying Value at December 31, 2019		Additions		Amortization Expense		Carrying Value at September 30, 2020		Weighted Average Amortization Period (in years)
(Dollars in Thousands)
Borrower network	$	43,952	$	—	$	(4,854)	$	39,098	7
Broker network	15,083		—		(2,715)		12,368		5
Non-compete agreements	8,236		—		(2,375)		5,861		3
Tradenames	3,472		—		(1,000)		2,472		3
Developed technology	1,613		—		(675)		938		2
Loan administration fees on existing loan assets	433		—		(433)		—		1
Total	$	72,789	$	—	$	(12,052)	$	60,737	6

Finite-lived Intangible Assets Amortization Expense

All of our intangible assets are amortized on a straight-line basis. Estimated future amortization expense is summarized in the table below.

Table 2.2 – Intangible Asset Amortization Expense by Year

(In Thousands)	September 30, 2020
2020 (3 months)	$	3,873
2021	15,304
2022	12,800
2023	10,091
2024	7,073
2025 and thereafter	11,596
Total Future Intangible Asset Amortization	$	60,737

Pro Forma Information

The following unaudited pro forma financial information presents Net interest income, Non-interest income, and Net income of Redwood, 5 Arches, and CoreVest combined, for the three and nine months ended September 30, 2019, as if the acquisitions occurred as of January 1, 2018. These pro forma amounts have been adjusted to include the amortization of intangible assets and acquisition-related compensation expense for both periods, and to exclude the income statement impacts related to our equity method investment in 5 Arches. The unaudited pro forma financial information is not intended to represent or be indicative of the consolidated financial results of operations that would have been reported if the acquisitions had been completed as of January 1, 2018 and should not be taken as indicative of our future consolidated results of operations.

Table 2.3 – Unaudited Pro Forma Financial Information

	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
(In Thousands)
Supplementary pro forma information:
Net interest income	$	45,702	$	133,446
Non-interest income	38,177		116,649
Net income	46,609		140,790