General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses

9 Months Ended

Sep. 30, 2020

Other Income and Expenses [Abstract]

General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses

General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses

Components of our general and administrative, and other expenses for the three and nine months ended September 30, 2020 and 2019 are presented in the following table.

Table 21.1 – Components of General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses

	Three Months Ended September 30,				Nine Months Ended September 30,
(In Thousands)	2020		2019		2020		2019
General and Administrative Expenses
Fixed compensation expense	$	10,103	$	9,391	$	36,605	$	26,740
Variable compensation expense	5,882		3,489		9,171		11,356
Equity compensation expense	2,639		3,155		7,896		10,132
Acquisition-related equity compensation expense (1)	1,212		—		3,636		—
Systems and consulting	2,145		3,230		7,752		7,594
Office costs	1,859		1,517		5,854		4,406
Accounting and legal	1,601		1,767		6,605		3,852
Corporate costs	831		482		2,128		1,701
Other operating expenses	1,358		1,868		5,185		4,941
Total General and Administrative Expenses	27,630		24,899		84,832		70,722
Loan Acquisition Costs
Commissions	879		659		3,027		1,432
Underwriting costs	771		1,074		3,289		3,184
Transfer and holding costs	508		183		1,400		891
Total Loan Acquisition Costs	2,158		1,916		7,716		5,507
Other Expenses
Goodwill impairment expense	—		—		88,675		—
Amortization of purchase-related intangible assets	3,873		1,897		12,052		4,608
Contingent consideration expense (2)	135		236		581		547
Other	3,780		398		2,978		866
Total Other Expenses	7,788		2,531		104,286		6,021
Total General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses	$	37,576	$	29,346	$	196,834	$	82,250

(1)Acquisition-related equity compensation expense relates to 588,260 shares of restricted stock that were issued to members of CoreVest management as a component of the consideration paid to them for our purchase of their interests in CoreVest. The grant date fair value of these restricted stock awards was $10 million, which will be recognized as compensation expense over the two-year vesting period on a straight-line basis in accordance with GAAP.

(2)Contingent consideration expense relates to the acquisition of 5 Arches during 2019. Refer to Note 2 for additional detail.

Variable Compensation Expense

During the three months ended September 30, 2020, $8 million of cash-based retention awards were granted to certain executive and non-executive employees that will vest and be paid over the next three years, subject to continued employment through the vesting periods from 2021 through 2023. Additionally, during the three months ended September 30, 2020, Long-Term Relative TSR Performance Vesting Cash Awards ("Cash Performance Awards") with an aggregate granted award value of $2 million, were granted to certain executive and non-executive employees that will vest between 0% to 400% of granted award value based on a relative total stockholder return measure, and are contingent on continued employment over a three-year service period.

The value of the cash-based retention awards is being amortized into expense on a straight-line basis over each award's respective vesting period. The Cash Performance Awards are amortized on a straight-line basis over three years, however, are remeasured at fair value each quarter-end and the cumulative straight-line expense is trued-up in respect to their updated value. For both the three and nine months ended September 30, 2020, variable compensation expense included $3 million in aggregate, related to the cash-based retention awards and the Cash Performance awards.