Quarterly report pursuant to Section 13 or 15(d)

SEGMENTS

v3.22.2.2
SEGMENTS
 9 Months Ended
Sep. 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 September 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 September 30, 2022:
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 154,319  $ 299  $ 154,618  $ —  $ 154,618 
Loan servicing and other fees —  57,647  57,647  —  57,647 
Valuation adjustment of mortgage servicing rights —  41,764  41,764  —  41,764 
Interest income (expense) 4,388  3,392  7,780  (1,529) 6,251 
Other income, net (32) 979  947  (7) 940 
Net revenue 158,675  104,081  262,756  (1,536) 261,220 
Expenses
Salaries, incentive compensation and benefits 124,909  6,955  131,864  5,508  137,372 
General and administrative 13,706  2,420  16,126  3,286  19,412 
Occupancy, equipment and communication 15,043  1,202  16,245  1,057  17,302 
Depreciation and amortization 3,498  159  3,657  238  3,895 
Reversal of provision for foreclosure losses —  (3,449) (3,449) —  (3,449)
Income tax expense —  —  —  9,321  9,321 
Net income (loss) $ 1,519  $ 96,794  $ 98,313  $ (20,946) $ 77,367 
The following table presents the financial performance and results by segment for the nine months ended September 30, 2022:    
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 599,285  $ 5,944  $ 605,229  $ —  $ 605,229 
Loan servicing and other fees —  165,419  165,419  —  165,419 
Valuation adjustment of mortgage servicing rights —  247,439  247,439  —  247,439 
Interest income (expense) 17,183  (1,233) 15,950  (4,700) 11,250 
Other income, net (57) 1,054  997  185  1,182 
Net revenue 616,411  418,623  1,035,034  (4,515) 1,030,519 
Expenses
Salaries, incentive compensation and benefits 464,368  21,722  486,090  16,803  502,893 
General and administrative 3,455  7,342  10,797  9,356  20,153 
Occupancy, equipment and communication 47,645  3,599  51,244  3,343  54,587 
Depreciation and amortization 10,374  483  10,857  759  11,616 
Reversal of provision for foreclosure losses —  (1,974) (1,974) —  (1,974)
Income tax expense —  —  —  99,615  99,615 
Net income (loss) $ 90,569  $ 387,451  $ 478,020  $ (134,391) $ 343,629 
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 
Reversal of 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 
Reversal of 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