Segment Information

6 Months Ended

Jun. 30, 2021

Note 18 — Segment Information

The summarized statements of operations and balance sheet data, as well as certain other data, by segment are included in the following tables ($ in thousands). Specifically identifiable costs are recorded directly to each business segment. For items not specifically identifiable, costs have been allocated between the business segments using the most meaningful allocation methodologies, which was predominately direct labor costs (i.e., time spent working on each business segment). Such costs include, but are not limited to, compensation and employee related costs, selling and administrative expenses and stock-based compensation.


	Three Months Ended June 30, 2021
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	96,498	$	8,650	$	—	$	105,148
Interest expense		42,748		3,630		—		46,378
Net interest income		53,750		5,020		—		58,770
Other revenue:
Gain on sales, including fee-based services, net		—		40,901		—		40,901
Mortgage servicing rights		—		26,299		—		26,299
Servicing revenue		—		29,982		—		29,982
Amortization of MSRs		—		(14,667)		—		(14,667)
Loss on derivative instruments, net		—		(2,607)		—		(2,607)
Other income, net		1,255		8		—		1,263
Total other revenue		1,255		79,916		—		81,171
Other expenses:
Employee compensation and benefits		11,907		31,793		—		43,700
Selling and administrative		5,248		5,885		—		11,133
Property operating expenses		129		—		—		129
Depreciation and amortization		615		1,173		—		1,788
Provision for loss sharing (net of recoveries)		—		549		—		549
Provision for credit losses (net of recoveries)		(8,333)		518		—		(7,815)
Total other expenses		9,566		39,918		—		49,484
Income before income from equity affiliates and income taxes		45,439		45,018		—		90,457
Income from equity affiliates		4,759		—		—		4,759
Provision for income taxes		(682)		(10,277)		—		(10,959)
Net income		49,516		34,741		—		84,257
Preferred stock dividends		6,414		—		—		6,414
Net income attributable to noncontrolling interest		—		—		8,717		8,717
Net income attributable to common stockholders	$	43,102	$	34,741	$	(8,717)	$	69,126


	Three Months Ended June 30, 2020
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	74,295	$	8,785	$	—	$	83,080
Interest expense		36,739		4,563		—		41,302
Net interest income		37,556		4,222		—		41,778
Other revenue:
Gain on sales, including fee-based services, net		—		26,366		—		26,366
Mortgage servicing rights		—		32,417		—		32,417
Servicing revenue		—		25,397		—		25,397
Amortization of MSRs		—		(11,891)		—		(11,891)
Property operating income		751		—		—		751
Loss on derivative instruments, net		(294)		(7,074)		—		(7,368)
Other income, net		990		59		—		1,049
Total other revenue		1,447		65,274		—		66,721
Other expenses:
Employee compensation and benefits		9,161		25,277		—		34,438
Selling and administrative		3,533		5,073		—		8,606
Property operating expenses		1,035		—		—		1,035
Depreciation and amortization		629		1,332		—		1,961
Provision for loss sharing (net of recoveries)		—		2,395		—		2,395
Provision for credit losses (net of recoveries)		10,558		2,156		—		12,714
Total other expenses		24,916		36,233		—		61,149
Income before extinguishment of debt, income from equity affiliates and income taxes		14,087		33,263		—		47,350
Loss on extinguishment of debt		(1,592)		—		—		(1,592)
Income from equity affiliates		20,408		—		—		20,408
Provision for income taxes		(164)		(11,913)		—		(12,077)
Net income		32,739		21,350		—		54,089
Preferred stock dividends		1,888		—		—		1,888
Net income attributable to noncontrolling interest		—		—		8,110		8,110
Net income attributable to common stockholders	$	30,851	$	21,350	$	(8,110)	$	44,091


	Six Months Ended June 30, 2021
		Structured		Agency		Other /
		Business		Business		Eliminations (1)		Consolidated
Interest income	$	179,708	$	16,584	$	—	$	196,292
Interest expense		80,972		7,590		—		88,562
Net interest income		98,736		8,994		—		107,730
Other revenue:
Gain on sales, including fee-based services, net		—		69,768		—		69,768
Mortgage servicing rights		—		63,235		—		63,235
Servicing revenue		—		59,721		—		59,721
Amortization of MSRs		—		(28,871)		—		(28,871)
Loss on derivative instruments, net		—		(5,828)		—		(5,828)
Other income, net		1,935		8		—		1,943
Total other revenue		1,935		158,033		—		159,968
Other expenses:
Employee compensation and benefits		23,484		63,190		—		86,674
Selling and administrative		9,761		12,186		—		21,947
Property operating expenses		272		—		—		272
Depreciation and amortization		1,197		2,346		—		3,543
Provision for loss sharing (net of recoveries)		—		2,201		—		2,201
Provision for credit losses (net of recoveries)		(9,362)		472		—		(8,890)
Total other expenses		25,352		80,395		—		105,747
Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes		75,319		86,632		—		161,951
Loss on extinguishment of debt		(1,370)		—		—		(1,370)
Gain on sale of real estate		—		1,228		—		1,228
Income from equity affiliates		27,010		—		—		27,010
Provision for income taxes		(5,665)		(17,786)		—		(23,451)
Net income		95,294		70,074		—		165,368
Preferred stock dividends		8,303		—		—		8,303
Net income attributable to noncontrolling interest		—		—		18,459		18,459
Net income attributable to common stockholders	$	86,991	$	70,074	$	(18,459)	$	138,606


	Six Months Ended June 30, 2020
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	152,772	$	18,834	$	—	$	171,606
Interest expense		80,138		11,146		—		91,284
Net interest income		72,634		7,688		—		80,322
Other revenue:
Gain on sales, including fee-based services, net		—		40,671		—		40,671
Mortgage servicing rights		—		54,351		—		54,351
Servicing revenue		—		50,522		—		50,522
Amortization of MSRs		—		(23,713)		—		(23,713)
Property operating income		2,943		—		—		2,943
Loss on derivative instruments, net		(3,294)		(54,805)		—		(58,099)
Other income, net		2,293		58		—		2,351
Total other revenue		1,942		67,084		—		69,026
Other expenses:
Employee compensation and benefits		20,007		48,683		—		68,690
Selling and administrative		7,983		11,675		—		19,658
Property operating expenses		3,478		—		—		3,478
Depreciation and amortization		1,248		2,660		—		3,908
Provision for loss sharing (net of recoveries)		—		23,932		—		23,932
Provision for credit losses (net of recoveries)		64,448		2,648		—		67,096
Total other expenses		97,164		89,598		—		186,762
Loss before extinguishment of debt, income from equity affiliates and income taxes		(22,588)		(14,826)		—		(37,414)
Loss on extinguishment of debt		(3,546)		—		—		(3,546)
Income from equity affiliates		24,401		—		—		24,401
(Provision for) benefit from income taxes		(248)		2,541		—		2,293
Net loss		(1,981)		(12,285)		—		(14,266)
Preferred stock dividends		3,777		—		—		3,777
Net loss attributable to noncontrolling interest		—		—		(2,824)		(2,824)
Net loss attributable to common stockholders	$	(5,758)	$	(12,285)	$	2,824	$	(15,219)

(1)	Includes income allocated to the noncontrolling interest holders not allocated to the two reportable segments.


	June 30, 2021
	Structured Business		Agency Business		Consolidated
Assets:
Cash and cash equivalents	$	40,353	$	175,305	$	215,658
Restricted cash		233,474		15,616		249,090
Loans and investments, net		7,213,915		—		7,213,915
Loans held-for-sale, net		—		457,647		457,647
Capitalized mortgage servicing rights, net		—		418,653		418,653
Securities held-to-maturity, net		—		114,696		114,696
Investments in equity affiliates		86,253		—		86,253
Goodwill and other intangible assets		12,500		90,606		103,106
Other assets		124,328		77,454		201,782
Total assets	$	7,710,823	$	1,349,977	$	9,060,800

Liabilities:
Debt obligations	$	6,356,490	$	391,790	$	6,748,280
Allowance for loss-sharing obligations		—		65,645		65,645
Other liabilities		178,934		111,174		290,108
Total liabilities	$	6,535,424	$	568,609	$	7,104,033


	December 31, 2020
Assets:
Cash and cash equivalents	$	172,568	$	166,960	$	339,528
Restricted cash		188,226		9,244		197,470
Loans and investments, net		5,285,868		—		5,285,868
Loans held-for-sale, net		—		986,919		986,919
Capitalized mortgage servicing rights, net		—		379,974		379,974
Securities held-to-maturity, net		—		95,524		95,524
Investments in equity affiliates		74,274		—		74,274
Goodwill and other intangible assets		12,500		92,951		105,451
Other assets		142,844		53,134		195,978
Total assets	$	5,876,280	$	1,784,706	$	7,660,986

Liabilities:
Debt obligations	$	4,872,626	$	952,038	$	5,824,664
Allowance for loss-sharing obligations		—		64,303		64,303
Other liabilities		203,554		85,780		289,334
Total liabilities	$	5,076,180	$	1,102,121	$	6,178,301


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Origination Data:
Structured Business
Bridge loans (1)	$	1,800,688		$	298,934		$	2,806,376		$	1,084,056
Mezzanine loans		38,257			1,547			94,257			15,722
Preferred equity investments		—			—			—			23,500
Other loans (2)		—			—			26,238			33,432
Total new loan originations	$	1,838,945		$	300,481		$	2,926,871		$	1,156,710

(1) The three and six months ended June 30, 2021 includes 25 and 43 SFR loans with a UPB of $70.9 million and $114.2 million, respectively. During the three and six months ended June 30, 2021, we committed to fund one and four SFR build-to-rent bridge loans totaling $40.0 million and $138.4 million, respectively.
(2) The six months ended June 30, 2021 and 2020 includes 1 and 7 SFR permanent loans with a UPB of $26.2 million and $32.3 million, respectively.

Loan payoffs / paydowns	$	662,940		$	159,174		$	895,968		$	434,466

Agency Business
Origination Volumes by Investor:
Fannie Mae	$	637,494		$	1,140,181		$	1,701,477		$	1,722,154
Private Label		377,184			49,122			529,638			331,467
Freddie Mac		155,914			135,720			270,631			335,431
FHA		130,764			75,533			197,244			93,476
SFR - Fixed Rate		11,996			—			11,996			—
Total	$	1,313,352		$	1,400,556		$	2,710,986		$	2,482,528
Total loan commitment volume	$	1,194,344		$	1,206,723		$	2,654,479		$	2,473,941

Loan Sales Data:
Agency Business
Fannie Mae	$	722,499		$	1,063,923		$	2,159,865		$	1,817,967
Private Label		449,890			727,154			449,890			727,154
FHA		163,602			30,124			230,005			53,437
Freddie Mac		134,122			171,688			408,946			351,391
SFR - Fixed Rate		11,996			—			75,294			—
Total	$	1,482,109		$	1,992,889		$	3,324,000		$	2,949,949
Sales margin (fee-based services as a % of loan sales)		2.76	%		1.32	%		2.10	%		1.38	%
MSR rate (MSR income as a % of loan commitments)		2.20	%		2.69	%		2.38	%		2.20	%


	June 30, 2021
			Wtd. Avg. Servicing	Wtd. Avg. Life of
	UPB of Servicing		Fee Rate	Servicing Portfolio
Key Servicing Metrics for Agency Business:	Portfolio		(basis points)	(in years)
Fannie Mae	$	19,191,969	53.2	8.3
Freddie Mac		4,708,457	28.5	9.8
Private Label		1,176,627	20.0	9.0
FHA		882,899	15.7	21.0
SFR - Fixed Rate		75,103	20.0	5.9
Total	$	26,035,055	45.9	9.0


	December 31, 2020
Fannie Mae	$	18,268,268	52.3	8.2
Freddie Mac		4,881,080	27.9	9.9
FHA		752,116	16.3	20.3
Private Label		726,992	20.0	8.7
Total	$	24,628,456	45.4	8.9

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details