Quarterly report pursuant to Section 13 or 15(d)

Segments

v3.21.2
Segments
 9 Months Ended
Sep. 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 September 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 September 30, 2021:
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 392,672  $ 4,289  $ 396,961  $ —  $ 396,961 
Loan servicing and other fees —  50,248  50,248  —  50,248 
Valuation adjustment of mortgage servicing rights —  (35,535) (35,535) —  (35,535)
Interest income (expense) 4,746  (1,819) 2,927  (1,585) 1,342 
Other income, net (32) 7  (25) (34) (59)
Net revenue 397,386  17,190  414,576  (1,619) 412,957 
Expenses
Salaries, incentive compensation and benefits 256,728  6,343  263,071  7,823  270,894 
General and administrative 21,507  1,941  23,448  1,359  24,807 
Occupancy, equipment and communication 15,107  959  16,066  1,948  18,014 
Depreciation and amortization 3,564  166  3,730  377  4,107 
Provision for foreclosure losses —  (2,325) (2,325) —  (2,325)
Income tax expense —  —  —  25,364  25,364 
Net income (loss) $ 100,480  $ 10,106  $ 110,586  $ (38,490) $ 72,096 
The following table presents the financial performance and results by segment for the nine months ended September 30, 2021:
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 1,166,626  $ 7,682  $ 1,174,308  $ —  $ 1,174,308 
Loan servicing and other fees —  143,099  143,099  —  143,099 
Valuation adjustment of mortgage servicing rights —  (84,581) (84,581) —  (84,581)
Interest income (expense) 11,247  (6,317) 4,930  (4,574) 356 
Other income, net —  47  47  24  71 
Net revenue 1,177,873  59,930  1,237,803  (4,550) 1,233,253 
Expenses
Salaries, incentive compensation and benefits 722,604  20,631  743,235  26,946  770,181 
General and administrative 69,301  7,612  76,913  6,595  83,508 
Occupancy, equipment and communication 41,038  3,093  44,131  3,377  47,508 
Depreciation and amortization 5,553  578  6,131  1,238  7,369 
Provision for foreclosure losses —  (306) (306) —  (306)
Income tax expense —  —  —  83,355  83,355 
Net income (loss) $ 339,377  $ 28,322  $ 367,699  $ (126,061) $ 241,638 
The following table presents the financial performance and results by segment for the three months ended September 30, 2020:
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 563,162  $ 1,847  $ 565,009  $ —  $ 565,009 
Loan servicing and other fees —  40,159  40,159  —  40,159 
Valuation adjustment of mortgage servicing rights —  (41,006) (41,006) —  (41,006)
Interest income (expense) 3,840  (2,389) 1,451  (2,034) (583)
Other income, net 15  (3) 12  (47) (35)
Net revenue 567,017  (1,392) 565,625  (2,081) 563,544 
Expenses
Salaries, incentive compensation and benefits 244,442  6,260  250,702  22,858  273,560 
General and administrative 22,517  2,186  24,703  2,552  27,255 
Occupancy, equipment and communication 11,313  1,145  12,458  1,857  14,315 
Depreciation and amortization 1,328  18  1,346  476  1,822 
Provision for foreclosure losses —  547  547  —  547 
Income tax expense —  —  —  64,223  64,223 
Net income (loss) $ 287,417  $ (11,548) $ 275,869  $ (94,047) $ 181,822 
The following table presents the financial performance and results by segment for the nine months ended September 30, 2020:
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 1,293,621  $ 4,681  $ 1,298,302  $ —  $ 1,298,302 
Loan servicing and other fees —  116,469  116,469  —  116,469 
Valuation adjustment of mortgage servicing rights —  (245,816) (245,816) —  (245,816)
Interest income (expense) 10,274  (4,997) 5,277  (6,352) (1,075)
Other income, net 32  —  32  (71) (39)
Net revenue 1,303,927  (129,663) 1,174,264  (6,423) 1,167,841 
Expenses
Salaries, incentive compensation and benefits 589,875  18,336  608,211  42,247  650,458 
General and administrative 64,534  5,927  70,461  4,986  75,447 
Occupancy, equipment and communication 34,876  2,796  37,672  3,843  41,515 
Depreciation and amortization 3,766  329  4,095  1,420  5,515 
Provision for foreclosure losses —  2,407  2,407  —  2,407 
Income tax expense —  —  —  100,688  100,688 
Net income (loss) $ 610,876  $ (159,458) $ 451,418  $ (159,607) $ 291,811