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INTEREST INCOME AND INTEREST EXPENSE | 9 Months Ended
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Sep. 30, 2019
Banking and Thrift, Interest [Abstract] |
INTEREST INCOME AND INTEREST EXPENSE |
15. INTEREST INCOME AND INTEREST EXPENSE
Refer to the note titled “Significant Accounting Policies” for details surrounding the Company’s accounting policy related to net interest income on securities and loans. The following table summarizes the interest income recognition methodology for Residential Securities:
| Interest Income Methodology
Agency |
Fixed-rate pass-through (1) | Effective yield (3)
Adjustable-rate pass-through (1) | Effective yield (3)
Multifamily (1) | Contractual Cash Flows
CMO (1) | Effective yield (3)
Reverse mortgages (2) | Prospective
Interest-only (2) | Prospective
Residential credit |
CRT (2) | Prospective
Alt-A (2) | Prospective
Prime (2) | Prospective
Subprime (2) | Prospective
NPL/RPL (2) | Prospective
Prime jumbo (2) | Prospective
Prime jumbo interest-only (2) | Prospective
(1) Changes in fair value are recognized in Other comprehensive income (loss) on the accompanying Consolidated Statements of Comprehensive Income (Loss). (2) Changes in fair value are recognized in Net unrealized gains (losses) on instruments measured at fair value through earnings on the accompanying Consolidated Statements of Comprehensive Income (Loss). (3) Effective yield is recalculated for differences between estimated and actual prepayments and the amortized cost is adjusted as if the new effective yield had been applied since inception.
The following presents the components of the Company’s interest income and interest expense for the three and nine months ended September 30, 2019 and September 30, 2018.
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
Interest income | (dollars in thousands)
Residential Securities | $ | 784,228 |  |  | $ | 680,037 |  |  | $ | 2,271,893 |  |  | $ | 2,122,375 |
Residential mortgage loans (1) | 37,673 |  |  | 21,184 |  |  | 102,689 |  |  | 55,557 |
Commercial investment portfolio (1) (2) | 87,946 |  |  | 97,531 |  |  | 281,029 |  |  | 249,331 |
U.S. Treasury securities | — |  |  | 160 |  |  | — |  |  | 160 |
Reverse repurchase agreements | 9,452 |  |  | 17,684 |  |  | 57,472 |  |  | 45,466 |
Total interest income | $ | 919,299 |  |  | $ | 816,596 |  |  | $ | 2,713,083 |  |  | $ | 2,472,889 |
Interest expense |  |  |  |  |  |  |  |  |
Repurchase agreements | 699,838 |  |  | 445,535 |  |  | 1,962,999 |  |  | 1,177,384 |
Debt issued by securitization vehicles | 34,524 |  |  | 29,391 |  |  | 102,882 |  |  | 63,244 |
Other | 32,543 |  |  | 26,047 |  |  | 98,936 |  |  | 70,458 |
Total interest expense | 766,905 |  |  | 500,973 |  |  | 2,164,817 |  |  | 1,311,086 |
Net interest income | $ | 152,394 |  |  | $ | 315,623 |  |  | $ | 548,266 |  |  | $ | 1,161,803 |
(1) Includes assets transferred or pledged to securitization vehicles. (2) Includes commercial real estate debt and preferred equity and corporate debt.

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- References No definition available. + Details
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- Definition The entire disclosure for interest income and interest expense for enterprises that derive a significant portion of their revenue from interest collected on investments, loans, and securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 220 -Section S99 -Paragraph 1 -Subparagraph (SX 210.9-04.1-12) -URI http://asc.fasb.org/extlink&oid=114873765&loc=SL114874048-224260 + Details
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