Annual report pursuant to Section 13 and 15(d)

Segments

v3.21.1
Segments
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Segments

NOTE 21 - SEGMENTS

ASC 280, Segment Reporting, establishes the standards for reporting information about segments in financial statements. In applying the criteria set forth in that guidance, the Company has determined that it has two reportable segments — Origination and Servicing.

Origination — The Company operates its loan origination business in approximately forty-eight states. Its licensed sales professionals and support staff cultivate deep relationships with referral partners and clients and provide a customized approach to the loan transaction whether it is a purchase or refinance. The origination segment is primarily responsible for loan origination, acquisition and sale activities.

Servicing — The Company services loans out of its corporate office in San Diego, California. Properties of the loans serviced by the Company are disbursed throughout the United States and as of December 31, 2020 the Company serviced at least one loan in forty-eight different states. The servicing segment provides a steady stream of cash flow to support the origination segment and more importantly it allows for the Company to build long standing client relationships that drive repeat and referral business back to the origination segment to recapture the client’s next mortgage transaction. The servicing segment is primarily responsible for the servicing activities of all loans in the Company’s servicing portfolio which includes, but is not limited to, collection and remittance of loan payments, managing borrower’s impound accounts for taxes and insurance, loan payoffs, loss mitigation and foreclosure activities.

The Company does not allocate assets to its reportable segments as they are not included in the review performed by the Chief Operating Decision Maker for purposes of assessing segment performance and allocating resources. The balance sheet is managed on a consolidated basis and is not used in the context of segment reporting.

The Company also does not allocate certain corporate expenses, which are represented by All Other in the tables below.

The following table presents the financial performance and results by segment for the year ended December 31, 2020:

 

 

 

Origination

 

 

Servicing

 

 

Total

Segments

 

 

All Other

 

 

Total

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan origination fees and gain on sale of loans, net

 

$

1,753,517

 

 

$

6,354

 

 

$

1,759,871

 

 

$

—

 

 

$

1,759,871

 

Loan servicing and other fees

 

 

—

 

 

 

160,237

 

 

 

160,237

 

 

 

—

 

 

 

160,237

 

Valuation adjustment of mortgage servicing rights

 

 

—

 

 

 

(296,307

)

 

 

(296,307

)

 

 

—

 

 

 

(296,307

)

Interest income (expense)

 

 

13,993

 

 

 

(8,068

)

 

 

5,925

 

 

 

(8,444

)

 

 

(2,519

)

Other income, net

 

 

25

 

 

 

133

 

 

 

158

 

 

 

607

 

 

 

765

 

Net revenue

 

 

1,767,535

 

 

 

(137,651

)

 

 

1,629,884

 

 

 

(7,837

)

 

 

1,622,047

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, incentive compensation and benefits

 

 

864,322

 

 

 

25,075

 

 

 

889,397

 

 

 

64,361

 

 

 

953,758

 

General and administrative

 

 

84,999

 

 

 

9,270

 

 

 

94,269

 

 

 

7,679

 

 

 

101,948

 

Occupancy, equipment and communication

 

 

48,233

 

 

 

3,524

 

 

 

51,757

 

 

 

5,313

 

 

 

57,070

 

Depreciation and amortization

 

 

4,644

 

 

 

777

 

 

 

5,421

 

 

 

2,080

 

 

 

7,501

 

Provision for foreclosure losses

 

 

—

 

 

 

7,700

 

 

 

7,700

 

 

 

—

 

 

 

7,700

 

Income tax expense

 

 

—

 

 

 

—

 

 

 

—

 

 

 

123,493

 

 

 

123,493

 

Net income (loss)

 

$

765,337

 

 

$

(183,997

)

 

$

581,340

 

 

$

(210,763

)

 

$

370,577

 

 

The following table presents the financial performance and results by segment for the year ended December 31, 2019:

 

 

 

Origination

 

 

Servicing

 

 

Total

Segments

 

 

All Other

 

 

Total

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan origination fees and gain on sale of loans, net

 

$

817,293

 

 

$

3,521

 

 

$

820,814

 

 

$

—

 

 

$

820,814

 

Loan servicing and other fees

 

 

—

 

 

 

142,705

 

 

 

142,705

 

 

 

—

 

 

 

142,705

 

Valuation adjustment of mortgage servicing rights

 

 

—

 

 

 

(255,219

)

 

 

(255,219

)

 

 

—

 

 

 

(255,219

)

Interest income (expense)

 

 

9,702

 

 

 

2,674

 

 

 

12,376

 

 

 

(8,980

)

 

 

3,396

 

Other income, net

 

 

38

 

 

 

—

 

 

 

38

 

 

 

1,155

 

 

 

1,193

 

Net revenue

 

 

827,033

 

 

 

(106,319

)

 

 

720,714

 

 

 

(7,825

)

 

 

712,889

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, incentive compensation and benefits

 

 

548,056

 

 

 

15,538

 

 

 

563,594

 

 

 

14,576

 

 

 

578,170

 

General and administrative

 

 

43,028

 

 

 

10,307

 

 

 

53,335

 

 

 

10,648

 

 

 

63,983

 

Occupancy, equipment and communication

 

 

48,115

 

 

 

2,078

 

 

 

50,193

 

 

 

3,485

 

 

 

53,678

 

Depreciation and amortization

 

 

6,417

 

 

 

326

 

 

 

6,743

 

 

 

590

 

 

 

7,333

 

Provision for foreclosure losses

 

 

—

 

 

 

3,895

 

 

 

3,895

 

 

 

—

 

 

 

3,895

 

Income tax expense

 

 

—

 

 

 

—

 

 

 

—

 

 

 

253

 

 

 

253

 

Net income (loss)

 

$

181,417

 

 

$

(138,463

)

 

 

42,954

 

 

$

(37,377

)

 

$

5,577