Quarterly report pursuant to Section 13 or 15(d)

Segments

v3.22.2
Segments
 6 Months Ended
Jun. 30, 2022
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, 2022 the Company serviced at least one loan in forty-nine 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 June 30, 2022:
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 206,445  $ 1,527  $ 207,972  $ —  $ 207,972 
Loan servicing and other fees —  54,595  54,595  —  54,595 
Valuation adjustment of mortgage servicing rights —  21,074  21,074  —  21,074 
Interest income (expense) 5,678  (358) 5,320  (1,446) 3,874 
Other income, net (25) 56  31  (9) 22 
Net revenue 212,098  76,894  288,992  (1,455) 287,537 
Expenses
Salaries, incentive compensation and benefits 165,133  7,509  172,642  5,550  178,192 
General and administrative 1,460  2,254  3,714  2,657  6,371 
Occupancy, equipment and communication 16,495  1,293  17,788  1,185  18,973 
Depreciation and amortization 3,395  162  3,557  251  3,808 
Provision for foreclosure losses —  1,796  1,796  —  1,796 
Income tax expense —  —  —  20,108  20,108 
Net income (loss) $ 25,615  $ 63,880  $ 89,495  $ (31,206) $ 58,289 
The following table presents the financial performance and results by segment for the six months ended June 30, 2022:
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 444,966  $ 5,645  $ 450,611  $ —  $ 450,611 
Loan servicing and other fees —  107,772  107,772  —  107,772 
Valuation adjustment of mortgage servicing rights —  205,675  205,675  —  205,675 
Interest income (expense) 12,795  (4,625) 8,170  (3,171) 4,999 
Other income, net (25) 75  50  192  242 
Net revenue 457,736  314,542  772,278  (2,979) 769,299 
Expenses
Salaries, incentive compensation and benefits 339,459  14,767  354,226  11,295  365,521 
General and administrative (10,251) 4,922  (5,329) 6,070  741 
Occupancy, equipment and communication 32,602  2,397  34,999  2,286  37,285 
Depreciation and amortization 6,876  324  7,200  521  7,721 
Provision for foreclosure losses —  1,475  1,475  —  1,475 
Income tax expense —  —  —  90,294  90,294 
Net income (loss) $ 89,050  $ 290,657  $ 379,707  $ (113,445) $ 266,262 
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 benefit —  —  —  4,986  4,986 
Net income (loss) $ 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 benefit —  —  —  57,991  57,991 
Net income (loss) $ 238,897  $ 18,216  $ 257,113  $ (87,571) $ 169,542