XML 47 R37.htm IDEA: XBRL DOCUMENT v3.22.2.2
Segment Reporting
 9 Months Ended
Sep. 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 SBA securitization activities. The Company also acquires purchased future receivables through its 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 senior secured and convertible notes, allocated employee compensation from the Manager, management and incentive fees paid to the Manager and other general corporate overhead expenses.

​

Prior to the fourth quarter of 2021, the Company reported its activities in the following four business segments: Acquisitions, SBC Originations, Small Business Lending and Residential Mortgage Banking. The Chief Executive Officer, as the CODM, realigned the business segments to incorporate results from the Acquisitions segment in the SBC Lending and Acquisitions segment. The Company believes this to be more closely aligned with the activities for and projections of its business models. The Company has recasted 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 September 30, 2022

​

​

​

​

​

Small

​

Residential

​

​

​

​

​

​

​

​

SBC Lending

​

Business

​

Mortgage

​

Corporate-

​

​

(in thousands)

​

and Acquisitions

​

Lending

​

Banking

​

Other

​

Consolidated

Interest income

​

$

159,307

​

$

24,605

​

$

2,114

​

$

—

​

$

186,026

Interest expense

​

​

(105,560)

​

​

(7,097)

​

​

(2,479)

​

​

(359)

​

​

(115,495)

Net interest income before provision for loan losses

​

$

53,747

​

$

17,508

​

$

(365)

​

$

(359)

​

$

70,531

Provision for loan losses

​

​

(3,231)

​

​

(200)

​

​

—

​

​

—

​

 

(3,431)

Net interest income after provision for loan losses

​

$

50,516

​

$

17,308

​

$

(365)

​

$

(359)

​

$

67,100

Non-interest income

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential mortgage banking activities

​

$

—

​

$

—

​

$

12,053

​

$

—

​

$

12,053

Net realized gain on financial instruments and real estate owned

​

​

13,060

​

​

8,057

​

​

—

​

​

—

​

​

21,117

Net unrealized gain (loss) on financial instruments

​

​

322

​

​

(509)

​

​

16,647

​

​

—

​

​

16,460

Servicing income, net

​

​

1,191

​

​

1,991

​

​

9,007

​

​

—

​

​

12,189

Income on purchased future receivables, net

​

​

—

​

​

1,162

​

​

—

​

​

—

​

​

1,162

Loss on unconsolidated joint ventures

​

​

(603)

​

​

—

​

​

—

​

​

—

​

​

(603)

Other income

​

​

5,476

​

​

10,641

​

​

15

​

​

18

​

​

16,150

Total non-interest income

​

$

19,446

​

$

21,342

​

$

37,722

​

$

18

​

$

78,528

Non-interest expense

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Employee compensation and benefits

​

$

(6,603)

​

$

(12,329)

​

$

(5,274)

​

$

(1,735)

​

$

(25,941)

Allocated employee compensation and benefits from related party

​

​

(175)

​

​

—

​

​

—

​

​

(1,570)

​

 

(1,745)

Variable expenses on residential mortgage banking activities

​

​

—

​

​

—

​

​

(9,061)

​

​

—

​

​

(9,061)

Professional fees

​

​

(1,630)

​

​

(1,426)

​

​

(138)

​

​

(671)

​

 

(3,865)

Management fees – related party

​

​

—

​

​

—

​

​

—

​

​

(5,410)

​

 

(5,410)

Incentive fees – related party

​

​

—

​

​

—

​

​

—

​

​

(949)

​

​

(949)

Loan servicing expense

​

​

(8,226)

​

​

(103)

​

​

(2,368)

​

​

—

​

 

(10,697)

Transaction related expenses

​

​

—

​

​

—

​

​

—

​

​

(1,535)

​

​

(1,535)

Other operating expenses

​

​

(6,208)

​

​

(5,482)

​

​

(2,034)

​

​

(1,672)

​

 

(15,396)

Total non-interest expense

​

$

(22,842)

​

$

(19,340)

​

$

(18,875)

​

$

(13,542)

​

$

(74,599)

Income (loss) before provision for income taxes

​

$

47,120

​

$

19,310

​

$

18,482

​

$

(13,883)

​

$

71,029

Total assets

​

$

10,268,015

​

$

930,577

​

$

459,058

​

$

200,561

​

$

11,858,211

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Nine Months Ended September 30, 2022

​

​

​

​

​

Small

​

Residential

​

​

​

​

​

​

​

​

SBC Lending

​

Business

​

Mortgage

​

Corporate-

​

​

(in thousands)

​

and Acquisitions

​

Lending

​

Banking

​

Other

​

Consolidated

Interest income

​

$

378,077

​

$

79,866

​

$

6,159

​

$

—

​

$

464,102

Interest expense

​

​

(231,338)

​

​

(18,703)

​

​

(6,663)

​

​

(635)

​

​

(257,339)

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

​

$

146,739

​

$

61,163

​

$

(504)

​

$

(635)

​

$

206,763

Recovery of (provision for) loan losses

​

​

1,108

​

​

(1,691)

​

​

—

​

​

—

​

 

(583)

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

​

$

147,847

​

$

59,472

​

$

(504)

​

$

(635)

​

$

206,180

Non-interest income

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential mortgage banking activities

​

$

—

​

$

—

​

$

23,424

​

$

—

​

$

23,424

Net realized gain on financial instruments and real estate owned

​

​

25,976

​

​

24,262

​

​

—

​

​

—

​

​

50,238

Net unrealized gain (loss) on financial instruments

​

​

10,234

​

​

(942)

​

​

49,230

​

​

—

​

​

58,522

Servicing income, net

​

​

3,542

​

​

8,042

​

​

25,698

​

​

—

​

​

37,282

Income on purchased future receivables, net

​

​

—

​

​

5,490

​

​

—

​

​

—

​

 

5,490

Income on unconsolidated joint ventures

​

​

11,160

​

​

—

​

​

—

​

​

—

​

​

11,160

Other income

​

​

14,828

​

​

15,462

​

​

60

​

​

635

​

​

30,985

Total non-interest income

​

$

65,740

​

$

52,314

​

$

98,412

​

$

635

​

$

217,101

Non-interest expense

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Employee compensation and benefits

​

$

(24,666)

​

$

(32,064)

​

$

(19,714)

​

$

(3,554)

​

$

(79,998)

Allocated employee compensation and benefits from related party

​

​

(655)

​

​

—

​

​

—

​

​

(5,894)

​

 

(6,549)

Variable expenses on residential mortgage banking activities

​

​

—

​

​

—

​

​

(5,508)

​

​

—

​

 

(5,508)

Professional fees

​

​

(5,128)

​

​

(4,513)

​

​

(619)

​

​

(2,582)

​

 

(12,842)

Management fees – related party

​

​

—

​

​

—

​

​

—

​

​

(14,071)

​

 

(14,071)

Incentive fees – related party

​

​

—

​

​

—

​

​

—

​

​

(949)

​

​

(949)

Loan servicing expense

​

​

(22,013)

​

​

(531)

​

​

(7,369)

​

​

—

​

 

(29,913)

Transaction related expenses

​

​

—

​

​

—

​

​

—

​

​

(8,606)

​

​

(8,606)

Other operating expenses

​

​

(18,041)

​

​

(13,583)

​

​

(6,233)

​

​

(4,564)

​

 

(42,421)

Total non-interest expense

​

$

(70,503)

​

$

(50,691)

​

$

(39,443)

​

$

(40,220)

​

$

(200,857)

Income (loss) before provision for income taxes

​

$

143,084

​

$

61,095

​

$

58,465

​

$

(40,220)

​

$

222,424

Total assets

​

$

10,268,015

​

$

930,577

​

$

459,058

​

$

200,561

​

$

11,858,211

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Three Months Ended September 30, 2021

​

​

​

​

​

Small

​

Residential

​

​

​

​

​

​

​

​

SBC Lending

​

Business

​

Mortgage

​

Corporate-

​

​

(in thousands)

​

and Acquisitions

​

Lending

​

Banking

​

Other

​

Consolidated

Interest income

​

$

74,184

​

$

28,739

​

$

2,213

​

$

—

​

$

105,136

Interest expense

​

​

(41,251)

​

​

(6,511)

​

​

(2,374)

​

​

—

​

​

(50,136)

Net interest income before provision for loan losses

​

$

32,933

​

$

22,228

​

$

(161)

​

$

—

​

$

55,000

Provision for loan losses

​

​

(1,557)

​

​

(22)

​

​

—

​

​

—

​

 

(1,579)

Net interest income after provision for loan losses

​

$

31,376

​

$

22,206

​

$

(161)

​

$

—

​

$

53,421

Non-interest income

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential mortgage banking activities

​

$

—

​

$

—

​

$

37,270

​

$

—

​

$

37,270

Net realized gain on financial instruments and real estate owned

​

​

8,891

​

​

14,319

​

​

—

​

​

—

​

​

23,210

Net unrealized gain on financial instruments

​

​

5,467

​

​

74

​

​

147

​

​

—

​

​

5,688

Servicing income, net

​

​

998

​

​

1,497

​

​

7,748

​

​

—

​

​

10,243

Income on purchased future receivables, net

​

​

—

​

​

2,838

​

​

—

​

​

—

​

​

2,838

Income on unconsolidated joint ventures

​

​

3,548

​

​

—

​

​

—

​

​

—

​

​

3,548

Other income

​

​

3,945

​

​

1,696

​

​

31

​

​

2

​

​

5,674

Total non-interest income

​

$

22,849

​

$

20,424

​

$

45,196

​

$

2

​

$

88,471

Non-interest expense

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Employee compensation and benefits

​

$

(7,034)

​

$

(10,716)

​

$

(5,399)

​

$

(1,388)

​

$

(24,537)

Allocated employee compensation and benefits from related party

​

​

(383)

​

​

—

​

​

—

​

​

(3,421)

​

 

(3,804)

Variable expenses on residential mortgage banking activities

​

​

—

​

​

—

​

​

(24,380)

​

​

—

​

​

(24,380)

Professional fees

​

​

(1,193)

​

​

(582)

​

​

(1,534)

​

​

(3,591)

​

 

(6,900)

Management fees – related party

​

​

—

​

​

—

​

​

—

​

​

(2,742)

​

 

(2,742)

Incentive fees – related party

​

​

—

​

​

—

​

​

—

​

​

(2,775)

​

 

(2,775)

Loan servicing expense

​

​

(4,334)

​

​

(426)

​

​

(3,364)

​

​

—

​

 

(8,124)

Transaction related expenses

​

​

—

​

​

—

​

​

—

​

​

(2,629)

​

​

(2,629)

Other operating expenses

​

​

(5,077)

​

​

(4,139)

​

​

(1,908)

​

​

(1,802)

​

 

(12,926)

Total non-interest expense

​

$

(18,021)

​

$

(15,863)

​

$

(36,585)

​

$

(18,348)

​

$

(88,817)

Income (loss) before provision for income taxes

​

$

36,204

​

$

26,767

​

$

8,450

​

$

(18,346)

​

$

53,075

Total assets

​

$

5,796,326

​

$

2,462,862

​

$

570,236

​

$

434,974

​

$

9,264,398

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Nine Months Ended September 30, 2021

​

​

​

​

​

Small

​

Residential

​

​

​

​

​

​

​

​

SBC Lending

​

Business

​

Mortgage

​

Corporate-

​

​

(in thousands)

​

and Acquisitions

​

Lending

​

Banking

​

Other

​

Consolidated

Interest income

​

$

194,959

​

$

80,304

​

$

6,291

​

$

—

​

$

281,554

Interest expense

​

​

(117,608)

​

​

(29,698)

​

​

(6,997)

​

​

(2,009)

​

​

(156,312)

Net interest income before provision for loan losses

​

$

77,351

​

$

50,606

​

$

(706)

​

$

(2,009)

​

$

125,242

Provision for loan losses

​

​

(6,627)

​

​

(461)

​

​

—

​

​

—

​

 

(7,088)

Net interest income after provision for loan losses

​

$

70,724

​

$

50,145

​

$

(706)

​

$

(2,009)

​

$

118,154

Non-interest income

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential mortgage banking activities

​

$

—

​

$

—

​

$

115,369

​

$

—

​

$

115,369

Net realized gain on financial instruments and real estate owned

​

​

15,457

​

​

33,782

​

​

—

​

​

—

​

​

49,239

Net unrealized gain on financial instruments

​

​

17,437

​

​

3,055

​

​

10,804

​

​

—

​

​

31,296

Servicing income, net

​

​

2,520

​

​

12,966

​

​

22,320

​

​

—

​

​

37,806

Income on purchased future receivables, net

​

​

—

​

​

7,934

​

​

—

​

​

—

​

 

7,934

Income on unconsolidated joint ventures

​

​

6,100

​

​

—

​

​

—

​

​

—

​

​

6,100

Other income (loss)

​

​

8,842

​

​

(3,454)

​

​

84

​

​

85

​

​

5,557

Total non-interest income

​

$

50,356

​

$

54,283

​

$

148,577

​

$

85

​

$

253,301

Non-interest expense

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Employee compensation and benefits

​

$

(13,580)

​

$

(26,097)

​

$

(29,114)

​

$

(2,793)

​

$

(71,584)

Allocated employee compensation and benefits from related party

​

​

(926)

​

​

—

​

​

—

​

​

(8,300)

​

 

(9,226)

Variable expenses on residential mortgage banking activities

​

​

—

​

​

—

​

​

(61,286)

​

​

—

​

 

(61,286)

Professional fees

​

​

(3,031)

​

​

(1,930)

​

​

(1,929)

​

​

(5,864)

​

 

(12,754)

Management fees – related party

​

​

—

​

​

—

​

​

—

​

​

(8,061)

​

 

(8,061)

Incentive fees – related party

​

​

—

​

​

—

​

​

—

​

​

(3,061)

​

 

(3,061)

Loan servicing expense

​

​

(12,797)

​

​

(468)

​

​

(7,814)

​

​

—

​

 

(21,079)

Transaction related expenses

​

​

—

​

​

—

​

​

—

​

​

(10,202)

​

​

(10,202)

Other operating expenses

​

​

(16,676)

​

​

(19,209)

​

​

(6,325)

​

​

(3,390)

​

 

(45,600)

Total non-interest expense

​

$

(47,010)

​

$

(47,704)

​

$

(106,468)

​

$

(41,671)

​

$

(242,853)

Income (loss) before provision for income taxes

​

$

74,070

​

$

56,724

​

$

41,403

​

$

(43,595)

​

$

128,602

Total assets

​

$

5,796,326

​

$

2,462,862

​

$

570,236

​

$

434,974

​

$

9,264,398

​