Annual report pursuant to Section 13 and 15(d)

SEGMENTS

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SEGMENTS
 12 Months Ended
Dec. 31, 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 December 31, 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 year ended December 31, 2022:
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 697,822  $ 5,852  $ 703,674  $ —  $ 703,674 
Loan servicing and other fees —  223,403  223,403  —  223,403 
Valuation adjustment of mortgage servicing rights —  217,551  217,551  —  217,551 
Interest income (expense) 20,115  5,465  25,580  (6,676) 18,904 
Other income, net (57) 1,146  1,089  200  1,289 
Net revenue 717,880  453,417  1,171,297  (6,476) 1,164,821 
Expenses
Salaries, incentive compensation and benefits 562,194  29,001  591,195  27,990  619,185 
General and administrative 15,249  9,657  24,906  13,179  38,085 
Occupancy, equipment and communication 62,556  4,819  67,375  4,332  71,707 
Depreciation and amortization 13,889  654  14,543  982  15,525 
Provision for foreclosure losses —  300  300  —  300 
Income tax expense —  —  —  91,389  91,389 
Net income (loss) $ 63,992  $ 408,986  $ 472,978  $ (144,348) $ 328,630 
The following table presents the financial performance and results by segment for the year ended December 31, 2021:
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 1,468,465  $ 12,051  $ 1,480,516  $ —  $ 1,480,516 
Loan servicing and other fees —  194,759  194,759  —  194,759 
Valuation adjustment of mortgage servicing rights —  (101,572) (101,572) —  (101,572)
Interest income (expense) 16,582  (7,882) 8,700  (6,180) 2,520 
Other income, net (4) 110  106  (19) 87 
Net revenue 1,485,043  97,466  1,582,509  (6,199) 1,576,310 
Expenses
Salaries, incentive compensation and benefits 953,772  27,697  981,469  38,321  1,019,790 
General and administrative 71,480  9,722  81,202  10,089  91,291 
Occupancy, equipment and communication 57,718  4,196  61,914  5,414  67,328 
Depreciation and amortization 9,319  742  10,061  1,427  11,488 
Reversal of provision for foreclosure losses —  (518) (518) —  (518)
Income tax expense —  —  —  103,149  103,149 
Net income (loss) $ 392,754  $ 55,627  $ 448,381  $ (164,599) $ 283,782