Segment Information

9 Months Ended

Sep. 30, 2022

Segment Information

Segment Information

Note 18 — Segment Information

The summarized statements of income 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 September 30, 2022
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	249,539	$	10,239	$	—	$	259,778
Interest expense		157,325		3,127		—		160,452
Net interest income		92,214		7,112		—		99,326
Other revenue:
Gain on sales, including fee-based services, net		—		14,360		—		14,360
Mortgage servicing rights		—		19,408		—		19,408
Servicing revenue		—		37,526		—		37,526
Amortization of MSRs		—		(14,782)		—		(14,782)
Property operating income		445		—		—		445
Loss on derivative instruments, net		—		(15,909)		—		(15,909)
Other income, net		1,763		(7,777)		—		(6,014)
Total other revenue		2,208		32,826		—		35,034
Other expenses:
Employee compensation and benefits		13,342		25,469		—		38,811
Selling and administrative		5,961		7,264		—		13,225
Property operating expenses		366		—		—		366
Depreciation and amortization		906		1,172		—		2,078
Provision for loss sharing (net of recoveries)		—		412		—		412
Provision for credit losses (net of recoveries)		2,206		68		—		2,274
Total other expenses		22,781		34,385		—		57,166
Income before extinguishment of debt, income from equity affiliates and income taxes		71,641		5,553		—		77,194
Loss on extinguishment of debt		(3,262)		—		—		(3,262)
Income from equity affiliates		4,748		—		—		4,748
Benefit from income taxes		319		55		—		374
Net income		73,446		5,608		—		79,054
Preferred stock dividends		10,342		—		—		10,342
Net income attributable to noncontrolling interest		—		—		6,002		6,002
Net income attributable to common stockholders	$	63,104	$	5,608	$	(6,002)	$	62,710

	Three Months Ended September 30, 2021
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	114,710	$	10,770	$	—	$	125,480
Interest expense		50,823		4,737		—		55,560
Net interest income		63,887		6,033		—		69,920
Other revenue:
Gain on sales, including fee-based services, net		—		16,334		—		16,334
Mortgage servicing rights		—		32,453		—		32,453
Servicing revenue		—		34,960		—		34,960
Amortization of MSRs		—		(14,872)		—		(14,872)
Loss on derivative instruments, net		—		(1,492)		—		(1,492)
Other income, net		2,168		27		—		2,195
Total other revenue		2,168		67,410		—		69,578
Other expenses:
Employee compensation and benefits		14,082		27,891		—		41,973
Selling and administrative		5,718		6,039		—		11,757
Property operating expenses		149		—		—		149
Depreciation and amortization		634		1,173		—		1,807
Provision for loss sharing (net of recoveries)		—		(3,272)		—		(3,272)
Provision for credit losses (net of recoveries)		(3,445)		(354)		—		(3,799)
Total other expenses		17,138		31,477		—		48,615
Income before income from equity affiliates and income taxes		48,917		41,966		—		90,883
Income from equity affiliates		5,086		—		—		5,086
Provision for income taxes		(622)		(9,283)		—		(9,905)
Net income		53,381		32,683		—		86,064
Preferred stock dividends		4,913		—		—		4,913
Net income attributable to noncontrolling interest		—		—		8,347		8,347
Net income attributable to common stockholders	$	48,468	$	32,683	$	(8,347)	$	72,804

	Nine Months Ended September 30, 2022
	Structured		Agency		Other /
	Business		Business		Eliminations (1)		Consolidated
Interest income	$	597,847	$	29,957	$	—	$	627,804
Interest expense		338,692		11,387		—		350,079
Net interest income		259,155		18,570		—		277,725
Other revenue:
Gain on sales, including fee-based services, net		—		32,526		—		32,526
Mortgage servicing rights		—		52,287		—		52,287
Servicing revenue		—		109,045		—		109,045
Amortization of MSRs		—		(44,532)		—		(44,532)
Property operating income		1,031		—		—		1,031
Gain on derivative instruments, net		—		10,083		—		10,083
Other income, net		(4,370)		(11,691)		—		(16,061)
Total other revenue		(3,339)		147,718		—		144,379
Other expenses:
Employee compensation and benefits		42,694		77,042		—		119,736
Selling and administrative		19,799		21,161		—		40,960
Property operating expenses		1,443		—		—		1,443
Depreciation and amortization		2,574		3,518		—		6,092
Provision for loss sharing (net of recoveries)		—		(2,199)		—		(2,199)
Provision for credit losses (net of recoveries)		9,363		337		—		9,700
Total other expenses		75,873		99,859		—		175,732
Income before extinguishment of debt, income from equity affiliates and income taxes		179,943		66,429		—		246,372
Loss on extinguishment of debt		(4,612)		—		—		(4,612)
Income from equity affiliates		18,507		—		—		18,507
Provision for income taxes		(1,368)		(11,798)		—		(13,166)
Net income		192,470		54,631		—		247,101
Preferred stock dividends		30,612		—		—		30,612
Net income attributable to noncontrolling interest		—		—		19,811		19,811
Net income attributable to common stockholders	$	161,858	$	54,631	$	(19,811)	$	196,678

	Nine Months Ended September 30, 2021
		Structured		Agency		Other /
		Business		Business		Eliminations (1)		Consolidated
Interest income	$	294,418	$	27,354	$	—	$	321,772
Interest expense		131,795		12,327		—		144,122
Net interest income		162,623		15,027		—		177,650
Other revenue:
Gain on sales, including fee-based services, net		—		86,102		—		86,102
Mortgage servicing rights		—		95,688		—		95,688
Servicing revenue		—		94,683		—		94,683
Amortization of MSRs		—		(43,744)		—		(43,744)
Loss on derivative instruments, net		—		(7,320)		—		(7,320)
Other income, net		4,105		35		—		4,140
Total other revenue		4,105		225,444		—		229,549
Other expenses:
Employee compensation and benefits		37,566		91,081		—		128,647
Selling and administrative		15,477		18,230		—		33,707
Property operating expenses		421		—		—		421
Depreciation and amortization		1,832		3,517		—		5,349
Provision for loss sharing (net of recoveries)		—		(1,070)		—		(1,070)
Provision for credit losses (net of recoveries)		(12,807)		118		—		(12,689)
Total other expenses		42,489		111,876		—		154,365
Income before extinguishment of debt, sale of real estate, income from equity affiliates and income taxes		124,239		128,595		—		252,834
Loss on extinguishment of debt		(1,370)		—		—		(1,370)
Gain on sale of real estate		—		1,228		—		1,228
Income from equity affiliates		32,095		—		—		32,095
Provision for income taxes		(6,288)		(27,068)		—		(33,356)
Net income		148,676		102,755		—		251,431
Preferred stock dividends		13,216		—		—		13,216
Net income attributable to noncontrolling interest		—		—		26,806		26,806
Net income attributable to common stockholders	$	135,460	$	102,755	$	(26,806)	$	211,409

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

	September 30, 2022
	Structured Business		Agency Business		Consolidated
Assets:
Cash and cash equivalents	$	119,793	$	269,858	$	389,651
Restricted cash		903,587		18,944		922,531
Loans and investments, net		14,791,426		—		14,791,426
Loans held-for-sale, net		—		543,876		543,876
Capitalized mortgage servicing rights, net		—		403,886		403,886
Securities held-to-maturity, net		—		157,818		157,818
Investments in equity affiliates		84,047		—		84,047
Goodwill and other intangible assets		12,500		84,742		97,242
Other assets and due from related party		293,252		78,400		371,652
Total assets	$	16,204,605	$	1,557,524	$	17,762,129
Liabilities:
Debt obligations	$	13,866,114	$	511,514	$	14,377,628
Allowance for loss-sharing obligations		—		53,511		53,511
Other liabilities and due to related parties		253,390		123,594		376,984
Total liabilities	$	14,119,504	$	688,619	$	14,808,123

	December 31, 2021
Assets:
Cash and cash equivalents	$	142,771	$	261,809	$	404,580
Restricted cash		468,013		18,677		486,690
Loans and investments, net		11,981,048		—		11,981,048
Loans held-for-sale, net		—		1,093,609		1,093,609
Capitalized mortgage servicing rights, net		—		422,734		422,734
Securities held-to-maturity, net		—		140,484		140,484
Investments in equity affiliates		89,676		—		89,676
Goodwill and other intangible assets		12,500		88,260		100,760
Other assets and due from related party		285,600		68,664		354,264
Total assets	$	12,979,608	$	2,094,237	$	15,073,845
Liabilities:
Debt obligations	$	11,100,429	$	956,272	$	12,056,701
Allowance for loss-sharing obligations		—		56,064		56,064
Other liabilities and due to related parties		278,726		132,370		411,096
Total liabilities	$	11,379,155	$	1,144,706	$	12,523,861

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Origination Data:
Structured Business
Bridge loans (1)	$	756,695		$	2,383,346		$	5,625,010		$	5,189,722
Mezzanine / Preferred Equity		17,970			91,307			26,109			185,564
SFR - Permanent loans		—			—			—			26,238
Total new loan originations	$	774,665		$	2,474,653		$	5,651,119		$	5,401,524
(1) The three and nine months ended September 30, 2022 includes 31 and 102 SFR loans with a UPB of $163.8 million and $452.2 million, respectively. The three and nine months ended September 30, 2021 includes 25 and 68 SFR loans with a UPB of $105.3 million and $219.5 million, respectively. During the three and nine months ended September 30, 2022, we committed to fund SFR loans totaling $457.6 million and $726.1 million, respectively. During the three and nine months ended September 30, 2021, we committed to fund SFR loans totaling $17.6 million and $156.0 million, respectively.
Loan runoff	$	911,790		$	567,858		$	2,700,748		$	1,463,826
Agency Business
Origination Volumes by Investor:
Fannie Mae	$	629,610		$	719,730		$	1,744,739		$	2,421,206
Freddie Mac		350,980			307,664			1,057,743			578,295
Private Label		35,671			625,176			191,913			1,154,814
FHA		78,382			84,430			168,736			281,674
SFR - Fixed Rate		16,678			67,227			55,883			79,223
Total	$	1,111,321		$	1,804,227		$	3,219,014		$	4,515,212
Total loan commitment volume	$	1,464,235		$	1,856,474		$	3,623,649		$	4,510,953
Agency Business Loan Sales Data:
Fannie Mae	$	700,690		$	660,693		$	1,936,282		$	2,820,558
Freddie Mac		288,029			238,880			1,009,557			647,827
Private Label		14,567			—			515,086			449,890
FHA		35,838			78,188			182,755			308,193
SFR - Fixed Rate		43,012			29,197			55,874			104,491
Total	$	1,082,136		$	1,006,958		$	3,699,554		$	4,330,959
Sales margin (fee-based services as a % of loan sales) (1)		1.33	%		1.62	%		1.34	%		1.99	%
MSR rate (MSR income as a % of loan commitments)		1.33	%		1.75	%		1.44	%		2.12	%

(1)  The nine months ended September 30, 2022 includes $17.1 million of gains recognized on our Swaps related to the Private Label loans sold in the three months ended March 31, 2022, which is included as a component of (loss) gain on derivative instruments, net in the consolidated statements of income.

	September 30, 2022
			Wtd. Avg. Servicing	Wtd. Avg. Life of
	Servicing		Fee Rate	Servicing Portfolio
Key Servicing Metrics for Agency Business:	Portfolio UPB		(basis points)	(years)
Fannie Mae	$	18,331,457	52.1	8.3
Freddie Mac		4,979,612	26.0	9.5
Private Label		2,075,791	20.0	8.2
FHA		1,136,684	14.9	19.8
Bridge		299,696	12.5	2.3
SFR - Fixed Rate		241,887	20.0	6.2
Total	$	27,065,127	42.4	8.9

	December 31, 2021
Fannie Mae	$	19,127,397	53.5	8.0
Freddie Mac		4,943,905	27.1	9.3
Private Label		1,711,326	20.0	8.3
FHA		985,063	15.4	21.0
SFR - Fixed Rate		191,698	20.0	6.5
Total	$	26,959,389	44.9	8.8