XML 47 R37.htm IDEA: XBRL DOCUMENT v3.22.2
Segment Reporting
 6 Months Ended
Jun. 30, 2022
Segment Reporting  
Segment Reporting

Note 27. Segment reporting

​

The Company reports its results of operations through the following three business segments: i) SBC Lending and Acquisitions, ii) Small Business Lending and iii) Residential Mortgage Banking. The Company’s organizational structure is based on a number of factors that the Chief Operating Decision Maker (“CODM”), the Chief Executive Officer, uses to evaluate, view, and run its business operations, which includes customer base and nature of loan program types. The segments are based on this organizational structure and the information reviewed by the CODM and management to evaluate segment results.

​

SBC Lending and Acquisitions

The Company originates SBC loans across the full life-cycle of an SBC property including construction, transitional, stabilized and agency channels. As part of this segment, we originate and service multi-family loan products under the Freddie Mac SBL program. SBC originations include construction and permanent financing activities for the preservation and construction of affordable housing, primarily utilizing tax-exempt bonds, through Red Stone. This segment also reflects the impact of SBC securitization activities. The Company acquires performing and non-performing SBC loans and intends to continue to acquire these loans as part of the Company’s business strategy.

​

Small Business Lending

The Company acquires, originates and services loans guaranteed by the SBA under the SBA Section 7(a) Program. This segment also reflects the impact of our SBA securitization activities. The Company also acquires purchased future receivables through our Knight Capital platform.

​

Residential mortgage banking

The Company originates residential mortgage loans eligible to be purchased, guaranteed or insured by Fannie Mae, Freddie Mac, FHA, USDA and VA through retail, correspondent and broker channels.

​

Corporate- Other

Corporate - Other consists primarily of unallocated activities including interest expense relating to our senior secured and convertible notes, allocated employee compensation from our Manager, management and incentive fees paid to our Manager and other general corporate overhead expenses.

​

Prior to the fourth quarter of 2021, we reported our activities in the following four business segments: Acquisitions, SBC Originations, Small Business Lending and Residential Mortgage Banking. Our Chief Executive Officer, as our CODM, realigned our business segments to incorporate results from our Acquisitions segment in our SBC Lending and

Acquisitions segment. We believe this to be more closely aligned with the activities for and projections of our business models. We have recast prior period amounts and segment information to conform to this presentation.

​

Results of business segments and all other. The tables below present reportable business segments, along with remaining unallocated amounts recorded within Corporate- Other.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Three Months Ended June 30, 2022

​

​

​

​

​

Small

​

Residential

​

​

​

​

​

​

​

​

SBC Lending

​

Business

​

Mortgage

​

Corporate-

​

​

(in thousands)

​

and Acquisitions

​

Lending

​

Banking

​

Other

​

Consolidated

Interest income

​

$

122,427

​

$

29,024

​

$

2,220

​

$

—

​

$

153,671

Interest expense

​

​

(72,685)

​

​

(5,916)

​

​

(2,226)

​

​

—

​

​

(80,827)

Net interest income before recovery of (provision for) loan losses

​

$

49,742

​

$

23,108

​

$

(6)

​

$

—

​

$

72,844

Recovery of (provision for) loan losses

​

​

4,609

​

​

(219)

​

​

—

​

​

—

​

 

4,390

Net interest income after recovery of (provision for) loan losses

​

$

54,351

​

$

22,889

​

$

(6)

​

$

—

​

$

77,234

Non-interest income

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential mortgage banking activities

​

$

—

​

$

—

​

$

2,947

​

$

—

​

$

2,947

Net realized gain on financial instruments and real estate owned

​

​

12,034

​

​

9,080

​

​

—

​

​

—

​

​

21,114

Net unrealized gain (loss) on financial instruments

​

​

(2,517)

​

​

(721)

​

​

(15)

​

​

—

​

​

(3,253)

Servicing income, net

​

​

1,431

​

​

4,558

​

​

8,576

​

​

—

​

​

14,565

Income on purchased future receivables, net

​

​

—

​

​

1,859

​

​

—

​

​

—

​

​

1,859

Income on unconsolidated joint ventures

​

​

5,200

​

​

—

​

​

—

​

​

—

​

​

5,200

Other income

​

​

6,338

​

​

1,950

​

​

21

​

​

25

​

​

8,334

Total non-interest income

​

$

22,486

​

$

16,726

​

$

11,529

​

$

25

​

$

50,766

Non-interest expense

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Employee compensation and benefits

​

$

(7,903)

​

$

(10,217)

​

$

(6,906)

​

$

(1,063)

​

$

(26,089)

Allocated employee compensation and benefits from related party

​

​

(180)

​

​

—

​

​

—

​

​

(1,624)

​

 

(1,804)

Variable income (expenses) on residential mortgage banking activities

​

​

—

​

​

—

​

​

4,532

​

​

—

​

​

4,532

Professional fees

​

​

(1,097)

​

​

(1,619)

​

​

(217)

​

​

(918)

​

 

(3,851)

Management fees – related party

​

​

—

​

​

—

​

​

—

​

​

(5,465)

​

 

(5,465)

Loan servicing expense

​

​

(7,912)

​

​

74

​

​

(2,458)

​

​

—

​

 

(10,296)

Transaction related expenses

​

​

—

​

​

—

​

​

—

​

​

(1,372)

​

​

(1,372)

Other operating expenses

​

​

(6,457)

​

​

(4,314)

​

​

(2,175)

​

​

(1,426)

​

 

(14,372)

Total non-interest expense

​

$

(23,549)

​

$

(16,076)

​

$

(7,224)

​

$

(11,868)

​

$

(58,717)

Income (loss) before provision for income taxes

​

$

53,288

​

$

23,539

​

$

4,299

​

$

(11,843)

​

$

69,283

Total assets

​

$

10,296,900

​

$

1,049,763

​

$

454,556

​

$

136,096

​

$

11,937,315

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Six Months Ended June 30, 2022

​

​

​

​

​

Small

​

Residential

​

​

​

​

​

​

​

​

SBC Lending

​

Business

​

Mortgage

​

Corporate-

​

​

(in thousands)

​

and Acquisitions

​

Lending

​

Banking

​

Other

​

Consolidated

Interest income

​

$

218,770

​

$

55,261

​

$

4,045

​

$

—

​

$

278,076

Interest expense

​

​

(125,778)

​

​

(11,606)

​

​

(4,184)

​

​

(276)

​

​

(141,844)

Net interest income before recovery of (provision for) loan losses

​

$

92,992

​

$

43,655

​

$

(139)

​

$

(276)

​

$

136,232

Recovery of (provision for) loan losses

​

​

4,339

​

​

(1,491)

​

​

—

​

​

—

​

 

2,848

Net interest income after recovery of (provision for) loan losses

​

$

97,331

​

$

42,164

​

$

(139)

​

$

(276)

​

$

139,080

Non-interest income

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential mortgage banking activities

​

$

—

​

$

—

​

$

11,371

​

$

—

​

$

11,371

Net realized gain on financial instruments and real estate owned

​

​

12,916

​

​

16,205

​

​

—

​

​

—

​

​

29,121

Net unrealized gain (loss) on financial instruments

​

​

9,912

​

​

(433)

​

​

32,583

​

​

—

​

​

42,062

Servicing income, net

​

​

2,351

​

​

6,051

​

​

16,691

​

​

—

​

​

25,093

Income on purchased future receivables, net

​

​

—

​

​

4,328

​

​

—

​

​

—

​

 

4,328

Income on unconsolidated joint ventures

​

​

11,763

​

​

—

​

​

—

​

​

—

​

​

11,763

Other income

​

​

9,352

​

​

4,821

​

​

45

​

​

617

​

​

14,835

Total non-interest income

​

$

46,294

​

$

30,972

​

$

60,690

​

$

617

​

$

138,573

Non-interest expense

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Employee compensation and benefits

​

$

(18,063)

​

$

(19,735)

​

$

(14,440)

​

$

(1,819)

​

$

(54,057)

Allocated employee compensation and benefits from related party

​

​

(480)

​

​

—

​

​

—

​

​

(4,324)

​

 

(4,804)

Variable income (expenses) on residential mortgage banking activities

​

​

—

​

​

—

​

​

3,553

​

​

—

​

 

3,553

Professional fees

​

​

(3,498)

​

​

(3,087)

​

​

(481)

​

​

(1,911)

​

 

(8,977)

Management fees – related party

​

​

—

​

​

—

​

​

—

​

​

(8,661)

​

 

(8,661)

Loan servicing expense

​

​

(13,787)

​

​

(428)

​

​

(5,001)

​

​

—

​

 

(19,216)

Transaction related expenses

​

​

—

​

​

—

​

​

—

​

​

(7,071)

​

​

(7,071)

Other operating expenses

​

​

(11,833)

​

​

(8,101)

​

​

(4,199)

​

​

(2,892)

​

 

(27,025)

Total non-interest expense

​

$

(47,661)

​

$

(31,351)

​

$

(20,568)

​

$

(26,678)

​

$

(126,258)

Income (loss) before provision for income taxes

​

$

95,964

​

$

41,785

​

$

39,983

​

$

(26,337)

​

$

151,395

Total assets

​

$

10,296,900

​

$

1,049,763

​

$

454,556

​

$

136,096

​

$

11,937,315

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Three Months Ended June 30, 2021

​

​

​

​

​

Small

​

Residential

​

​

​

​

​

​

​

​

SBC Lending

​

Business

​

Mortgage

​

Corporate-

​

​

(in thousands)

​

and Acquisitions

​

Lending

​

Banking

​

Other

​

Consolidated

Interest income

​

$

64,880

​

$

36,133

​

$

2,034

​

$

—

​

$

103,047

Interest expense

​

​

(39,140)

​

​

(13,980)

​

​

(2,295)

​

​

—

​

​

(55,415)

Net interest income before provision for loan losses

​

$

25,740

​

$

22,153

​

$

(261)

​

$

—

​

$

47,632

Provision for loan losses

​

​

(4,723)

​

​

(794)

​

​

—

​

​

—

​

 

(5,517)

Net interest income after provision for loan losses

​

$

21,017

​

$

21,359

​

$

(261)

​

$

—

​

$

42,115

Non-interest income

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential mortgage banking activities

​

$

—

​

$

—

​

$

36,690

​

$

—

​

$

36,690

Net realized gain on financial instruments and real estate owned

​

​

2,620

​

​

14,563

​

​

—

​

​

—

​

​

17,183

Net unrealized gain (loss) on financial instruments

​

​

6,843

​

​

2,467

​

​

(4,698)

​

​

—

​

​

4,612

Servicing income, net

​

​

796

​

​

3,666

​

​

7,466

​

​

—

​

​

11,928

Income on purchased future receivables, net

​

​

—

​

​

2,779

​

​

—

​

​

—

​

​

2,779

Income on unconsolidated joint ventures

​

​

3,361

​

​

—

​

​

—

​

​

—

​

​

3,361

Other income (loss)

​

​

2,753

​

​

(3,550)

​

​

38

​

​

71

​

​

(688)

Total non-interest income

​

$

16,373

​

$

19,925

​

$

39,496

​

$

71

​

$

75,865

Non-interest expense

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Employee compensation and benefits

​

$

(4,294)

​

$

(9,335)

​

$

(10,127)

​

$

(514)

​

 $

(24,270)

Allocated employee compensation and benefits from related party

​

​

(331)

​

​

—

​

​

—

​

​

(2,968)

​

 

(3,299)

Variable expenses on residential mortgage banking activities

​

​

—

​

​

—

​

​

(21,421)

​

​

—

​

​

(21,421)

Professional fees

​

​

(993)

​

​

(704)

​

​

(144)

​

​

(1,031)

​

 

(2,872)

Management fees – related party

​

​

—

​

​

—

​

​

—

​

​

(2,626)

​

 

(2,626)

Incentive fees – related party

​

​

—

​

​

—

​

​

—

​

​

(286)

​

 

(286)

Loan servicing expense

​

​

(4,621)

​

​

(144)

​

​

(2,086)

​

​

—

​

 

(6,851)

Transaction related expenses

​

​

—

​

​

—

​

​

—

​

​

(1,266)

​

​

(1,266)

Other operating expenses

​

​

(6,642)

​

​

(7,405)

​

​

(2,213)

​

​

(930)

​

 

(17,190)

Total non-interest expense

​

$

(16,881)

​

$

(17,588)

​

$

(35,991)

​

$

(9,621)

​

$

(80,081)

Income (loss) before provision for income taxes

​

$

20,509

​

$

23,696

​

$

3,244

​

$

(9,550)

​

$

37,899

Total assets

​

$

5,275,662

​

$

2,860,365

​

$

588,435

​

$

252,430

​

$

8,976,892

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Six Months Ended June 30, 2021

​

​

​

​

​

Small

​

Residential

​

​

​

​

​

​

​

​

SBC Lending

​

Business

​

Mortgage

​

Corporate-

​

​

(in thousands)

​

and Acquisitions

​

Lending

​

Banking

​

Other

​

Consolidated

Interest income

​

$

120,775

​

$

51,565

​

$

4,078

​

$

—

​

$

176,418

Interest expense

​

​

(76,357)

​

​

(23,187)

​

​

(4,623)

​

​

(2,009)

​

​

(106,176)

Net interest income before provision for loan losses

​

$

44,418

​

$

28,378

​

$

(545)

​

$

(2,009)

​

$

70,242

Provision for loan losses

​

​

(5,070)

​

​

(439)

​

​

—

​

​

—

​

 

(5,509)

Net interest income after provision for loan losses

​

$

39,348

​

$

27,939

​

$

(545)

​

$

(2,009)

​

$

64,733

Non-interest income

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential mortgage banking activities

​

$

—

​

$

—

​

$

78,099

​

$

—

​

$

78,099

Net realized gain on financial instruments and real estate owned

​

​

6,566

​

​

19,463

​

​

—

​

​

—

​

​

26,029

Net unrealized gain (loss) on financial instruments

​

​

11,970

​

​

2,981

​

​

10,657

​

​

—

​

​

25,608

Servicing income, net

​

​

1,522

​

​

11,469

​

​

14,572

​

​

—

​

​

27,563

Income on purchased future receivables, net

​

​

—

​

​

5,096

​

​

—

​

​

—

​

 

5,096

Income on unconsolidated joint ventures

​

​

2,552

​

​

—

​

​

—

​

​

—

​

​

2,552

Other income (loss)

​

​

4,897

​

​

(5,150)

​

​

53

​

​

83

​

​

(117)

Total non-interest income

​

$

27,507

​

$

33,859

​

$

103,381

​

$

83

​

$

164,830

Non-interest expense

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Employee compensation and benefits

​

$

(6,546)

​

$

(15,381)

​

$

(23,715)

​

$

(1,405)

​

$

(47,047)

Allocated employee compensation and benefits from related party

​

​

(543)

​

​

—

​

​

—

​

​

(4,879)

​

 

(5,422)

Variable expenses on residential mortgage banking activities

​

​

—

​

​

—

​

​

(36,906)

​

​

—

​

 

(36,906)

Professional fees

​

​

(1,838)

​

​

(1,348)

​

​

(395)

​

​

(2,273)

​

 

(5,854)

Management fees – related party

​

​

—

​

​

—

​

​

—

​

​

(5,319)

​

 

(5,319)

Incentive fees – related party

​

​

—

​

​

—

​

​

—

​

​

(286)

​

 

(286)

Loan servicing expense

​

​

(8,463)

​

​

(42)

​

​

(4,450)

​

​

—

​

 

(12,955)

Transaction related expenses

​

​

—

​

​

—

​

​

—

​

​

(7,573)

​

​

(7,573)

Other operating expenses

​

​

(11,599)

​

​

(15,070)

​

​

(4,417)

​

​

(1,588)

​

 

(32,674)

Total non-interest expense

​

$

(28,989)

​

$

(31,841)

​

$

(69,883)

​

$

(23,323)

​

$

(154,036)

Income (loss) before provision for income taxes

​

$

37,866

​

$

29,957

​

$

32,953

​

$

(25,249)

​

$

75,527

Total assets

​

$

5,275,662

​

$

2,860,365

​

$

588,435

​

$

252,430

​

$

8,976,892

​