v3.26.1
Segment Information
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
Segment Information Segment Information
We report our results through five reportable segments: Sequoia Mortgage Banking, Aspire Mortgage Banking, CoreVest Mortgage Banking, Redwood Investments and Legacy Investments. This segmentation aligns with the results of operations presented to our Chief Operating Decision Maker ("CODM") in reviewing the Company for performance assessment and resource allocation. Our CODM is a group consisting of the Company's Chief Executive Officer, President and Chief Financial Officer.
Our CODM evaluates performance and allocates resources on each respective segment primarily based on segment net income (loss), also referred to as segment contribution, which is also used to assess the annual budget and forecasting process and to consider budget-to-actual variances when allocating capital and personnel to the segments throughout the year.
During the first quarter of 2026, we established Aspire Mortgage Banking as a new reportable segment to separately disclose the financial results of our expanded-credit residential mortgage platform, which was previously included within the Sequoia Mortgage Banking segment. This change reflects the manner in which operations are evaluated by the CODM as well as the increasing scale and distinct operating characteristics of this platform. Aspire Mortgage Banking includes our non-QM loan conduit, which focuses on loans and investments originated under expanded underwriting criteria. This change in segment presentation aligns with how management assesses performance under ASC 280, Segment Reporting, and has been applied retrospectively to all prior periods presented in this Quarterly Report on Form 10-Q. This change had no impact on the consolidated financial statements and all prior-period amounts have been conformed to the current presentation.
The accounting policies applied to the segments are the same as those described in Note 3 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2025. During the first quarter of 2026, we began allocating our preferred stock dividend expense as well as our corporate unsecured financing costs, comprised of interest expense on our unsecured promissory notes, trust preferred securities, convertible debt, and senior notes, to our operating or reportable segments for informational purposes. Corporate and other activities that are not directly attributable to the Company’s operating segments are included in Corporate/Other. This change had no impact on the consolidated financial statements and all prior period amounts were conformed to the current presentation. The "Corporate/Other" column presented below is not a reportable segment and is presented as a reconciling column to the total results for each period.
In the normal course of business, loans are originated or acquired within our mortgage banking segments and may subsequently be transferred to our Redwood Investments segment either as whole loans or through the retention of securities from securitizations that we sponsor and consolidate under GAAP. Our loans are accounted for under the fair value option or at the lower of cost or market value, for which the carrying value approximates fair value. Amounts transferred between segments are accounted for at fair value at the time of transfer. 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, 2025.
The following tables present financial information by segment for the three and six months ended June 30, 2026 and 2025.
Table 4.1 – Business Segment Financial Information
Three Months Ended June 30, 2026
(In Thousands)SequoiaAspireCoreVestRedwood InvestmentsLegacy InvestmentsCorporate/
Other		Total
Interest income$58,354 $18,109 $3,491 $301,749 $3,334 $187 $385,224 
Interest expense(31,080)(14,548)(2,209)(291,579)(13,737)— (353,153)
Net interest income (expense)27,274 3,561 1,282 10,170 (10,403)187 32,071 
Non-interest income
Mortgage banking activities, net, excluding risk management derivatives58,697 (6,039)9,946 — — — 62,604 
Risk management derivatives (losses) gains, net (1)
(45,753)15,238 (18)— — — (30,533)
Total Mortgage banking activities, net12,944 9,199 9,928 — — — 32,071 
Investment fair value changes, net, excluding risk management derivatives— — (38)26,153 (12,314)— 13,801 
Risk management derivatives (losses) gains, net (1)
— — — (36,324)— — (36,324)
Total Investment fair value changes, net— — (38)(10,171)(12,314)— (22,523)
HEI income, net— — — 493 2,305 — 2,798 
Servicing income, net— 30 — 2,618 — — 2,648 
Fee income, net— — 2,496 453 11 — 2,960 
Other income (loss), net— — (182)5,193 974 — 5,985 
Realized gains, net— — — — — — — 
Total non-interest income (loss), net12,944 9,229 12,204 (1,414)(9,024)— 23,939 
General and administrative expenses(6,134)(2,826)(7,679)(853)(15)(20,691)(38,198)
Portfolio management costs— — — (3,436)(3,591)(3)(7,030)
Loan acquisition costs(2,098)(1,067)(2,825)— — — (5,990)
Other expenses— — (2,011)(2,343)(393)— (4,747)
Benefit from (Provision for) income taxes134 (1,419)285 (623)328 150 (1,145)
Net Income (Loss)$32,120 $7,478 $1,256 $1,501 $(23,098)$(20,357)$(1,100)
Dividends on preferred stock(519)(170)(89)(758)(222)— (1,758)
Net Income (Loss) Available (Related) To Common Stockholders (2)
$31,601 $7,308 $1,167 $743 $(23,320)$(20,357)$(2,858)
Total Assets$2,236,378 $835,233 $320,658 $24,322,023 $915,571 $188,268 $28,818,131 
(1)Represents market valuation changes of derivatives that were used to manage risks associated with our Mortgage Banking platforms, Redwood Investments and Legacy Investments. Mortgage banking activities, net, also includes other derivative financial instruments such as loan purchase commitments and interest rate locks.
(2)Net Income (Loss) by segment is also referred to as Segment Contribution (Loss).
Six Months Ended June 30, 2026
(In Thousands)SequoiaAspireCoreVestRedwood InvestmentsLegacy InvestmentsCorporate/
Other		Total
Interest income$119,660 $36,517 $7,683 $570,497 $7,334 $452 $742,143 
Interest expense(67,417)(29,314)(4,292)(547,885)(26,447)— (675,355)
Net interest income (expense)52,243 7,203 3,391 22,612 (19,113)452 66,788 
Non-interest income
Mortgage banking activities, net, excluding risk management derivatives116,659 (7,583)16,874 — — — 125,950 
Risk management derivatives (losses) gains, net (1)
(81,664)19,466 283 — — — (61,915)
Total Mortgage banking activities, net34,995 11,883 17,157 — — — 64,035 
Investment fair value changes, net, excluding risk management derivatives— — (303)48,968 (19,789)— 28,876 
Risk management derivatives (losses) gains, net (1)
— — — (74,582)(16)— (74,598)
Total Investment fair value changes, net— — (303)(25,614)(19,805)— (45,722)
HEI income, net— — — 1,068 8,839 — 9,907 
Servicing income, net— 30 — 10,639 — — 10,669 
Fee income (loss), net— — 5,323 645 (122)— 5,846 
Other income, net— — 407 6,091 1,924 — 8,422 
Realized gains, net— — — — — — — 
Total non-interest income (loss), net34,995 11,913 22,584 (7,171)(9,164)— 53,157 
General and administrative expenses(13,183)(5,292)(20,667)(4,237)(31)(44,146)(87,556)
Portfolio management costs— — — (7,591)(8,138)(30)(15,759)
Loan acquisition costs(4,939)(2,113)(5,667)— — — (12,719)
Other expenses— — (4,021)(7,458)(393)— (11,872)
Benefit from (Provision for) income taxes1,379 (1,761)2,346 (1,996)938 452 1,358 
Net Income (Loss)$70,495 $9,950 $(2,034)$(5,841)$(35,901)$(43,272)$(6,603)
Dividends on preferred stock(1,063)(374)(176)(1,416)(479)— (3,508)
Net Income (Loss) Available (Related) To Common Stockholders (2)
$69,432 $9,576 $(2,210)$(7,257)$(36,380)$(43,272)$(10,111)
Total Assets$2,236,378 $835,233 $320,658 $24,322,023 $915,571 $188,268 $28,818,131 
(1)Represents market valuation changes of derivatives that were used to manage risks associated with our mortgage banking operations, Redwood Investments and Legacy Investments. Mortgage banking activities, net, also includes other derivative financial instruments such as loan purchase commitments and interest rate locks.
(2)Net Income (Loss) by segment is also referred to as Segment Contribution (Loss).
Three Months Ended June 30, 2025
(In Thousands)SequoiaAspireCoreVestRedwood InvestmentsLegacy InvestmentsCorporate/
Other		Total
Interest income$35,503 $1,518 $3,737 $219,744 $23,449 $385 $284,336 
Interest expense(24,915)(1,587)(2,841)(202,280)(38,879)— (270,502)
Net interest income (expense)10,588 (69)896 17,464 (15,430)385 13,834 
Non-interest income (loss)
Mortgage banking activities, net, excluding risk management derivatives(23,756)1,124 15,354 — — — (7,278)
Risk management derivatives gains (losses), net (1)
48,069 (1,041)1,107 — — — 48,135 
Total Mortgage banking activities, net24,313 83 16,461 — — — 40,857 
Investment fair value changes, net, excluding risk management derivatives— — — (26,958)(74,606)(132)(101,696)
Risk management derivatives gains (losses), net (1)
— — — 17,960 (968)— 16,992 
Total Investment fair value changes, net— — — (8,998)(75,574)(132)(84,704)
HEI income (loss), net— — — 126 (13,025)— (12,899)
Servicing income, net— — — 1,608 — — 1,608 
Fee income (loss), net— — 2,782 412 (985)— 2,209 
Other income (loss), net— — 715 394 — (757)352 
Realized gains, net— — — 640 — — 640 
Total non-interest income (loss), net24,313 83 19,958 (5,818)(89,584)(889)(51,937)
General and administrative expenses(6,015)(1,190)(10,218)(1,528)(57)(17,975)(36,983)
Portfolio management costs— — — (2,594)(7,434)— (10,028)
Loan acquisition costs(1,267)— (3,514)— — — (4,781)
Other expenses— — (2,203)(1,832)— — (4,035)
(Provision for) Benefit from income taxes(9,310)21 278 1,567 2,535 347 (4,562)
Net Income (Loss)$18,309 $(1,155)$5,197 $7,259 $(109,970)$(18,132)$(98,492)
Dividends on preferred stock(483)(28)(101)(500)(645)— (1,757)
Net Income (Loss) Available (Related) To Common Stockholders (2)
$17,826 $(1,183)$5,096 $6,759 $(110,615)$(18,132)$(100,249)
Total Assets$1,551,366 $137,751 $301,743 $15,982,357 $2,953,731 $406,072 $21,333,020 
(1)Represents market valuation changes of derivatives that were used to manage risks associated with our Mortgage Banking platforms, Redwood Investments and Legacy Investments. Mortgage banking activities, net, also includes other derivative financial instruments such as loan purchase commitments and interest rate locks.
(2)Net Income (Loss) by segment is also referred to as Segment Contribution (Loss).
Six Months Ended June 30, 2025
(In Thousands)SequoiaAspireCoreVestRedwood InvestmentsLegacy InvestmentsCorporate/
Other		Total
Interest income$67,142 $1,562 $8,131 $421,313 $57,601 $681 $556,430 
Interest expense(41,933)(1,814)(5,851)(387,325)(77,731)— (514,654)
Net interest income (expense)25,209 (252)2,280 33,988 (20,130)681 41,776 
Non-interest income (loss)
Mortgage banking activities, net, excluding risk management derivatives(22,624)1,356 29,201 — — — 7,933 
Risk management derivatives gains (losses), net (1)
68,856 (1,041)(1,838)— — — 65,977 
Total Mortgage banking activities, net46,232 315 27,363 — — — 73,910 
Investment fair value changes, net, excluding risk management derivatives— — — (49,626)(77,677)(212)(127,515)
Risk management derivatives gains (losses), net (1)
— — — 44,251 (6,628)— 37,623 
Total Investment fair value changes, net— — — (5,375)(84,305)(212)(89,892)
HEI income (loss), net— — — 181 (2,914)— (2,733)
Servicing income, net— — — 5,015 — — 5,015 
Fee income (loss), net— — 5,861 554 (1,855)— 4,560 
Other income (loss), net— — 2,397 764 — (1,259)1,902 
Realized gains, net— — — 1,207 — — 1,207 
Total non-interest income (loss), net46,232 315 35,621 2,346 (89,074)(1,471)(6,031)
General and administrative expenses(11,433)(2,118)(20,815)(2,877)(73)(37,138)(74,454)
Portfolio management costs— — — (4,654)(11,865)— (16,519)
Loan acquisition costs(2,338)— (6,011)— — — (8,349)
Other expenses— — (4,405)(3,539)— — (7,944)
(Provision for) Benefit from income taxes(16,502)(49)927 1,871 2,535 394 (10,824)
Net Income (Loss)$41,168 $(2,104)$7,597 $27,135 $(118,607)$(37,534)$(82,345)
Dividends on preferred stock(889)(45)(168)(1,051)(1,354)— (3,507)
Net Income (Loss) Available (Related) To Common Stockholders (2)
$40,279 $(2,149)$7,429 $26,084 $(119,961)$(37,534)$(85,852)
Total Assets$1,551,366 $137,751 $301,743 $15,982,357 $2,953,731 $406,072 $21,333,020 
(1)Represents market valuation changes of derivatives that were used to manage risks associated with our mortgage banking operations and Legacy Investments. Mortgage banking activities, net, also includes other derivative financial instruments such as loan purchase commitments and interest rate locks.
(2)Net Income (Loss) by segment is also referred to as Segment Contribution (Loss).