Note 3 — Segment Reporting

The Company conducts its business through the following segments: (i) investments in RMBS; (ii) investments in Servicing Related Assets; and (iii) “All Other,” which consists primarily of general and administrative expenses, including fees paid to the Company’s directors and management fees and reimbursements paid to the Manager pursuant to the Management Agreement (See Note 7). For segment reporting purposes, the Company does not allocate interest income on short-term investments or general and administrative expenses.

Summary financial data with respect to the Company’s segments is given below, together with a reconciliation to the same data for the Company as a whole (dollars in thousands):

	Servicing Related Assets			RMBS			All Other			Total
Income Statement
Year Ended December 31, 2018
Interest income	$	99			57,616		$	-		$	57,715
Interest expense		2,314			32,193			2			34,509
Net interest income		(2,215	)		25,423			(2	)		23,206
Servicing fee income		50,776			-			-			50,776
Servicing costs		10,615			-			-			10,615
Net servicing income		40,161			-			-			40,161
Other income		(3,573	)		(10,746	)		-			(14,319	)
Other operating expenses		-			-			9,887			9,887
Provision for corporate business taxes		1,388			-			-			1,388
Net income (loss)	$	32,985		$	14,677		$	(9,889	)	$	37,773
Year Ended December 31, 2017
Interest income	$	523		$	41,526		$	-		$	42,049
Interest expense		506			19,375			-			19,881
Net interest income		17			22,151			-			22,168
Servicing fee income		24,034			-			-			24,034
Servicing costs		5,783			-			-			5,783
Net servicing income		18,251			-			-			18,251
Other income		15,837			523			-			16,360
Other operating expenses		-			-			8,164			8,164
Provision for corporate business taxes		601			-			-			601
Net income (loss)	$	33,504		$	22,674		$	(8,164	)	$	48,014
Year Ended December 31, 2016
Interest income	$	14,129		$	16,593		$	-		$	30,722
Interest expense		1,371			6,437			-			7,808
Net interest income		12,758			10,156			-			22,914
Servicing fee income		7,579			-			-			7,579
Servicing costs		2,562			-			-			2,562
Net servicing income		5,017			-			-			5,017
Other income		(1,516	)		5,516			-			4,000
Other operating expenses		-			-			6,230			6,230
Provision for corporate business taxes		458			-			-			458
Net income (loss)	$	15,801		$	15,672		$	(6,230	)	$	25,243

Balance Sheet
December 31, 2018
Investments	$	294,907	$	1,770,110	$	-	$	2,065,017
Other assets		17,817		38,165		32,278		88,260
Total assets		312,724		1,808,275		32,278		2,153,277
Debt		157,543		1,598,592		-		1,756,135
Other liabilities		7,488		10,440		15,283		33,211
Total liabilities		165,031		1,609,032		15,283		1,789,346
Book value	$	147,693	$	199,243	$	16,995	$	363,931

December 31, 2017
Investments	$	122,806	$	1,840,912	$	-	$	1,963,718
Other assets		8,281		48,631		30,055		86,967
Total assets		131,087		1,889,543		30,055		2,050,685
Debt		39,025		1,666,537		-		1,705,562
Other liabilities		6,575		4,385		11,706		22,666
Total liabilities		45,600		1,670,922		11,706		1,728,228
Book value	$	85,487	$	218,621	$	18,349	$	322,457

December 31, 2016
Investments	$	61,263	$	671,904	$	-	$	733,167
Other assets		8,826		32,495		18,390		59,711
Total assets		70,089		704,399		18,390		792,878
Debt		22,886		594,615		-		617,501
Other liabilities		2,481		9,490		7,397		19,368
Total liabilities		25,367		604,105		7,397		636,869
Book value	$	44,722	$	100,294	$	10,993	$	156,009