Quarterly report pursuant to Section 13 or 15(d)

Segments

v3.21.2
Segments
 6 Months Ended
Jun. 30, 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 June 30, 2021 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 longstanding 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 June 30, 2021:
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 329,157  $ 1,602  $ 330,759  $ —  $ 330,759 
Loan servicing and other fees —  47,652  47,652  —  47,652 
Valuation adjustment of mortgage servicing rights —  (84,789) (84,789) —  (84,789)
Interest income (expense) 3,655  (1,637) 2,018  (1,592) 426 
Other income, net 32  18  50  11  61 
Net revenue 332,844  (37,154) 295,690  (1,581) 294,109 
Expenses
Salaries, incentive compensation and benefits 215,061  7,075  222,136  10,427  232,563 
General and administrative 25,156  3,815  28,971  2,823  31,794 
Occupancy, equipment and communication 12,758  1,026  13,784  878  14,662 
Depreciation and amortization 1,096  222  1,318  290  1,608 
Provision for foreclosure losses —  (442) (442) —  (442)
Income tax expense —  —  —  4,986  4,986 
Net income $ 78,773  $ (48,850) $ 29,923  $ (20,985) $ 8,938 
The following table presents the financial performance and results by segment for the six months ended June 30, 2021:
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 773,954  $ 3,393  $ 777,347  $ —  $ 777,347 
Loan servicing and other fees —  92,851  92,851  —  92,851 
Valuation adjustment of mortgage servicing rights —  (49,046) (49,046) —  (49,046)
Interest income (expense) 6,501  (4,498) 2,003  (2,989) (986)
Other income, net 32  40  72  58  130 
Net revenue 780,487  42,740  823,227  (2,931) 820,296 
Expenses
Salaries, incentive compensation and benefits 465,876  14,288  480,164  19,123  499,287 
General and administrative 47,794  5,671  53,465  5,236  58,701 
Occupancy, equipment and communication 25,931  2,134  28,065  1,429  29,494 
Depreciation and amortization 1,989  412  2,401  861  3,262 
Provision for foreclosure losses —  2,019  2,019  —  2,019 
Income tax expense —  —  —  57,991  57,991 
Net income $ 238,897  $ 18,216  $ 257,113  $ (87,571) $ 169,542 
The following table presents the financial performance and results by segment for the three months ended June 30, 2020:
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 491,657  $ 1,775  $ 493,432  $ —  $ 493,432 
Loan servicing and other fees —  37,778  37,778  —  37,778 
Valuation adjustment of mortgage servicing rights —  (96,161) (96,161) —  (96,161)
Interest income (expense) 4,214  (2,645) 1,569  (2,129) (560)
Other income, net 12  2  14  594  608 
Net revenue 495,883  (59,251) 436,632  (1,535) 435,097 
Expenses
Salaries, incentive compensation and benefits 205,427  6,390  211,817  18,068  229,885 
General and administrative 22,493  1,985  24,478  1,489  25,967 
Occupancy, equipment and communication 12,184  848  13,032  850  13,882 
Depreciation and amortization 1,153  155  1,308  498  1,806 
Provision for foreclosure losses —  (64) (64) —  (64)
Income tax benefit —  —  —  40,646  40,646 
Net income $ 254,626  $ (68,565) $ 186,061  $ (63,086) $ 122,975 
The following table presents the financial performance and results by segment for the six months ended June 30, 2020:
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 730,459  $ 2,834  $ 733,293  $ —  $ 733,293 
Loan servicing and other fees —  76,310  76,310  —  76,310 
Valuation adjustment of mortgage servicing rights —  (204,810) (204,810) —  (204,810)
Interest income (expense) 6,434  (2,608) 3,826  (4,319) (493)
Other income, net 17  3  20  977  997 
Net revenue 736,910  (128,271) 608,639  (3,342) 605,297 
Expenses
Salaries, incentive compensation and benefits 345,433  12,076  357,509  20,389  377,898 
General and administrative 42,017  3,741  45,758  2,434  48,192 
Occupancy, equipment and communication 23,563  1,651  25,214  1,986  27,200 
Depreciation and amortization 2,438  311  2,749  944  3,693 
Provision for foreclosure losses —  1,860  1,860  —  1,860 
Income tax benefit —  —  —  36,465  36,465 
Net income $ 323,459  $ (147,910) $ 175,549  $ (65,560) $ 109,989