Quarterly report pursuant to Section 13 or 15(d)

Segments

v3.21.1
Segments
 3 Months Ended
Mar. 31, 2021
Segment Reporting [Abstract]  
Segments 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 throughout the United 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 March 31, 2021 the Company serviced at least one loan in forty-seven 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 three months ended March 31, 2021:
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net
 $ 444,797  $ 1,792  $ 446,589  $ —  $ 446,589 
Loan servicing and other fees —  45,199  45,199  —  45,199 
Valuation adjustment of mortgage servicing rights
 —  35,743  35,743  —  35,743 
Interest income (expense) 2,846  (2,861) (15) (1,398) (1,413)
Other income, net —  22  22  47  69 
Net revenue 447,643  79,895  527,538  (1,351) 526,187 
Expenses
Salaries, incentive compensation and benefits
 250,815  7,213  258,028  8,696  266,724 
General and administrative 22,638  1,856  24,494  2,412  26,906 
Occupancy, equipment and communication 13,173  1,108  14,281  551  14,832 
Depreciation and amortization 893  190  1,083  571  1,654 
Provision for foreclosure losses —  2,462  2,462  —  2,462 
Income tax expense —  —  —  53,005  53,005 
Net income (loss) $ 160,124  $ 67,066  $ 227,190  $ (66,586) $ 160,604 
The following table presents the financial performance and results by segment for the three months ended March 31, 2020:
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net
 $ 238,802  $ 1,059  $ 239,861  $ —  $ 239,861 
Loan servicing and other fees —  38,532  38,532  —  38,532 
Valuation adjustment of mortgage servicing rights
 —  (108,649) (108,649) —  (108,649)
Interest income (expense) 2,220  37  2,257  (2,190) 67 
Other income, net 5  1  6  383  389 
Net revenue 241,027  (69,020) 172,007  (1,807) 170,200 
Expenses
Salaries, incentive compensation and benefits
 140,006  5,686  145,692  2,321  148,013 
General and administrative 19,524  1,756  21,280  945  22,225 
Occupancy, equipment and communication 11,379  803  12,182  1,136  13,318 
Depreciation and amortization 1,285  156  1,441  446  1,887 
Provision for foreclosure losses —  1,924  1,924  —  1,924 
Income tax benefit —  —  —  (4,181) (4,181)
Net income (loss) $ 68,833  $ (79,345) $ (10,512) $ (2,474) $ (12,986)