19. SEGMENT REPORTING

The Company has determined that it has three reportable segments based on how the chief operating decision maker reviews and manages the 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, U.S. Agency Securities, corporate bonds and equity securities. The real estate segment includes net leased properties, office buildings, a student housing portfolio, industrial buildings, a shopping center and condominium units. Corporate/other includes the Company’s 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(1)			Corporate/Other(2)				Company Total

Three months ended March 31, 2019
Interest income	$	73,152		$	13,119		$	8		$	187			$	86,466
Interest expense	(14,756		)	(2,488		)	(8,882		)	(25,122		)		(51,248		)
Net interest income (expense)	58,396			10,631			(8,874		)	(24,935		)		35,218
Provision for loan losses	(300		)	—			—			—				(300		)
Net interest income (expense) after provision for loan losses	58,096			10,631			(8,874		)	(24,935		)		34,918

Operating lease income	—			—			28,921			—				28,921
Sale of loans, net	7,079			—			—			—				7,079
Realized gain (loss) on securities	—			2,865			—			—				2,865
Unrealized gain (loss) on equity securities	—			2,078			—			—				2,078
Unrealized gain (loss) on Agency interest-only securities	—			11			—			—				11
Realized gain on sale of real estate, net	—			—			4			—				4
Impairment of real estate	—			—			(1,350		)	—				(1,350		)
Fee and other income	3,310			403			7			965				4,685
Net result from derivative transactions	(5,198		)	(5,836		)	—			—				(11,034		)
Earnings (loss) from investment in unconsolidated joint ventures	—			—			959			—				959
Gain (loss) on extinguishment of debt	—			—			(1,070		)	—				(1,070		)
Total other income (loss)	5,191			(479		)	27,471			965				33,148

Salaries and employee benefits	—			—			—			(23,574		)		(23,574		)
Operating expenses	—			—			—			(5,403		)	(3)	(5,403		)
Real estate operating expenses	—			—			(5,474		)	—				(5,474		)
Real estate acquisition costs														—
Fee expense	(1,194		)	(100		)	(418		)	—				(1,712		)
Depreciation and amortization	—			—			(10,202		)	(25		)		(10,227		)
Total costs and expenses	(1,194		)	(100		)	(16,094		)	(29,002		)		(46,390		)

Income Tax (expense) benefit	—			—			—			2,854				2,854
Segment profit (loss)	$	62,093		$	10,052		$	2,503		$	(50,118	)		$	24,530

Total assets as of March 31, 2019	$	3,489,582		$	1,619,128		$	1,099,838		$	316,871			$	6,525,419



	Loans			Securities			Real Estate(1)			Corporate/Other(2)				Company Total

Three months ended March 31, 2018
Interest income	$	70,009		$	8,014		$	5		$	178			$	78,206
Interest expense	(13,566		)	(856		)	(7,854		)	(22,437		)		(44,713		)
Net interest income (expense)	56,443			7,158			(7,849		)	(22,259		)		33,493
Provision for loan losses	(3,000		)	—			—			—				(3,000		)
Net interest income (expense) after provision for loan losses	53,443			7,158			(7,849		)	(22,259		)		30,493

Operating lease income	—			—			28,137			—				28,137
Sale of loans, net	4,888			—			—			—				4,888
Realized gain (loss) on securities	—			(1,099		)	—			—				(1,099		)
Unrealized gain (loss) on Agency interest-only securities	—			204			—			—				204
Realized gain on sale of real estate, net	—			—			31,010			—				31,010
Fee and other income	3,063			—			1,782			1,407				6,252
Net result from derivative transactions	6,889			8,070			—			—				14,959
Earnings (loss) from investment in unconsolidated joint ventures	—			—			52			—				52
Gain (loss) on extinguishment of debt	(69		)	—			—			—				(69		)
Total other income (loss)	14,771			7,175			60,981			1,407				84,334

Salaries and employee benefits	—			—			—			(17,096		)		(17,096		)
Operating expenses	86			—			—			(5,634		)	(3)	(5,548		)
Real estate operating expenses	—			—			(8,817		)	—				(8,817		)
Fee expense	(616		)	(110		)	(117		)	—				(843		)
Depreciation and amortization	—			—			(10,804		)	(19		)		(10,823		)
Total costs and expenses	(530		)	(110		)	(19,738		)	(22,749		)		(43,127		)

Income Tax (expense) benefit	—			—			—			(3,902		)		(3,902		)
Segment profit (loss)	$	67,684		$	14,223		$	33,394		$	(47,503	)		$	67,798

Total assets as of December 31, 2018	$	3,482,929		$	1,410,126		$	1,038,376		$	341,441			$	6,272,872


(1)	Includes the Company’s investment in unconsolidated joint ventures that held real estate of $93.8 million and $40.4 million as of March 31, 2019 and December 31, 2018, respectively.

(2)

Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to 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 $61.6 million and $57.9 million as of March 31, 2019 and December 31, 2018, respectively, the Company’s deferred tax asset (liability) of $(0.9) million and $2.3 million as of March 31, 2019 and December 31, 2018, respectively and the Company’s senior unsecured notes of $1.2 billion as of March 31, 2019 and December 31, 2018.


(3)	Includes $2.5 million and $2.9 million of professional fees as of March 31, 2019 and 2018, respectively.