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SEGMENT REPORTING
 3 Months Ended
Mar. 31, 2014
SEGMENT REPORTING  
SEGMENT REPORTING

18.                    SEGMENT REPORTING

 

The Company has determined that it has three reportable segments based on how management reviews and manages its business.  These reportable segments include Loans, Securities, and Real Estate.  The Loans segment includes mortgage loan receivables held for investment (balance sheet loans) and mortgage loan receivables held for sale (conduit loans).  The Securities segment is composed of all of the Company’s activities related to commercial real estate securities, which include investments in CMBS and U.S. Agency Securities.  The Real Estate segment includes selected net lease and other real estate assets.  Corporate/Other includes our investments in joint ventures, other asset management activities and operating expenses.

 

The Company evaluates performance based on the following financial measures for each segment ($ in thousands):

 

 

 

Loans

 

Securities

 

Real Estate

 

Corporate/Other(1)

 

Company Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31, 2014

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

20,309

 

$

16,505

 

$

—

 

$

8

 

$

36,822

 

Interest expense

 

(2,188

)

(1,265

)

(3,331

)

(8,057

)

(14,841

)

Net interest income (expense)

 

18,121

 

15,240

 

(3,331

)

(8,049

)

21,981

 

Provision for loan losses

 

(150

)

—

 

—

 

—

 

(150

)

Net interest income (expense) after provision for loan losses

 

17,971

 

15,240

 

(3,331

)

(8,049

)

21,831

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease income

 

—

 

—

 

13,213

 

—

 

13,213

 

Tenant recoveries

 

—

 

—

 

2,080

 

—

 

2,080

 

Sale of loans, net

 

41,303

 

—

 

—

 

—

 

41,303

 

Gain on securities

 

—

 

1,809

 

—

 

—

 

1,809

 

Sale of real estate, net

 

347

 

—

 

6,346

 

—

 

6,693

 

Fee income

 

665

 

91

 

—

 

1,553

 

2,309

 

Net result from derivative transactions

 

(10,742

)

(15,544

)

—

 

—

 

(26,287

)

Earnings from investment in unconsolidated joint ventures

 

—

 

—

 

348

 

—

 

348

 

Unrealized gain (loss) on Agency interest-only securities, net

 

—

 

(1,034

)

—

 

—

 

(1,034

)

Total other income

 

31,573

 

(14,678

)

21,987

 

1,553

 

40,434

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

(6,300

)

—

 

—

 

(13,703

)

(20,003

)

Operating expenses

 

41

 

—

 

—

 

(3,082

)

(3,041

)

Real estate operating expenses

 

—

 

—

 

(7,602

)

—

 

(7,602

)

Fee expense

 

(303

)

(22

)

(17

)

(160

)

(502

)

Depreciation and amortization

 

—

 

—

 

(7,290

)

(137

)

(7,427

)

Total costs and expenses

 

(6,562

)

(22

)

(14,909

)

(17,082

)

(38,575

)

 

 

 

 

 

 

 

 

 

 

 

 

Tax expense

 

—

 

—

 

—

 

(5,289

)

(5,289

)

Segment profit (loss)

 

$

42,982

 

$

540

 

$

3,747

 

$

(28,867

)

$

18,401

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets as of March 31, 2014

 

$

837,087

 

$

1,750,040

 

$

603,753

 

$

299,367

 

$

3,490,247

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31, 2013

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

18,712

 

$

14,555

 

$

—

 

$

(2,005

)

$

31,261

 

Interest expense

 

(1,876

)

(1,329

)

(1,080

)

(6,922

)

(11,207

)

Net interest income (expense)

 

16,835

 

13,225

 

(1,080

)

(8,927

)

20,054

 

Provision for loan losses

 

(150

)

—

 

—

 

—

 

(150

)

Net interest income (expense) after provision for loan losses

 

16,685

 

13,225

 

(1,080

)

(8,927

)

19,904

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating lease income

 

—

 

—

 

6,484

 

—

 

6,484

 

Tenant recoveries

 

—

 

—

 

—

 

—

 

—

 

Sale of loans, net

 

82,868

 

—

 

—

 

140

 

83,007

 

Gain on securities

 

—

 

2,565

 

—

 

—

 

2,565

 

Sale of real estate, net

 

(186

)

—

 

3,884

 

—

 

3,698

 

Fee income

 

993

 

—

 

167

 

278

 

1,439

 

Net result from derivative transactions

 

(117

)

2,387

 

—

 

—

 

2,270

 

Earnings from investment in unconsolidated joint ventures

 

—

 

—

 

—

 

394

 

394

 

Unrealized gain (loss) on Agency interest-only securities, net

 

—

 

(250

)

—

 

—

 

(250

)

Total other income

 

83,558

 

4,702

 

10,535

 

812

 

99,607

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

(11,300

)

—

 

—

 

(8,412

)

(19,712

)

Operating expenses

 

50

 

—

 

—

 

(2,322

)

(2,273

)

Real estate operating expenses

 

—

 

—

 

(2,880

)

—

 

(2,880

)

Fee expense

 

(846

)

(17

)

(451

)

(90

)

(1,404

)

Depreciation and amortization

 

—

 

—

 

(2,987

)

(137

)

(3,124

)

Total costs and expenses

 

(12,097

)

(17

)

(6,318

)

(10,961

)

(29,393

)

 

 

 

 

 

 

 

 

 

 

 

 

Tax expense

 

—

 

—

 

(232

)

(1,836

)

(2,068

)

Segment profit (loss)

 

$

88,146

 

$

17,910

 

$

2,905

 

$

(20,911

)

$

88,050

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets as of March 31, 2013

 

$

904,106

 

$

1,057,343

 

$

395,678

 

$

184,367

 

$

2,541,494

 

 

Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to combined consolidated Company totals.  This caption also includes the Company’s investment in unconsolidated joint ventures and strategic investments that are not related to the other reportable segments above, including the Company’s investment in FHLB stock of $50.4 million as of March 31, 2014.