Quarterly report pursuant to Section 13 or 15(d)

SEGMENTS

v3.23.2
SEGMENTS
 6 Months Ended
Jun. 30, 2023
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, 2023 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, 2023:
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 136,499  $ 426  $ 136,925  $ —  $ 136,925 
Gain on reverse mortgage loans held for investment 2,306  —  2,306  —  2,306 
Loan servicing and other fees —  60,249  60,249  (38) 60,211 
Valuation adjustment of mortgage servicing rights —  27,890  27,890  —  27,890 
Interest income (expense) 1,331  10,266  11,597  (2,342) 9,255 
Other income, net 168  49  217  7  224 
Net revenue 140,304  98,880  239,184  (2,373) 236,811 
Expenses
Salaries, incentive compensation and benefits 127,024  7,495  134,519  10,384  144,903 
General and administrative 15,061  2,240  17,301  3,147  20,448 
Occupancy, equipment and communication 16,187  1,223  17,410  992  18,402 
Depreciation and amortization 3,364  218  3,582  79  3,661 
Reversal of foreclosure losses —  (1,044) (1,044) —  (1,044)
Income tax expense —  —  —  13,505  13,505 
Net (loss) income $ (21,332) $ 88,748  $ 67,416  $ (30,480) $ 36,936 
The following table presents the financial performance and results by segment for the six months ended June 30, 2023:    
Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 228,775  $ 801  $ 229,576  $ —  $ 229,576 
Gain on reverse mortgage loans held for investment 2,306  —  2,306  —  2,306 
Loan servicing and other fees —  120,336  120,336  (38) 120,298 
Valuation adjustment of mortgage servicing rights —  (26,981) (26,981) —  (26,981)
Interest income (expense) 2,631  17,676  20,307  (5,069) 15,238 
Other income, net 166  101  267  (8) 259 
Net revenue 233,878  111,933  345,811  (5,115) 340,696 
Expenses
Salaries, incentive compensation and benefits 220,281  15,069  235,350  20,673  256,023 
General and administrative 29,555  5,120  34,675  6,656  41,331 
Occupancy, equipment and communication 31,361  2,481  33,842  1,990  35,832 
Depreciation and amortization 6,763  360  7,123  276  7,399 
Provision for foreclosure losses —  470  470  —  470 
Income tax benefit —  —  —  (100) (100)
Net (loss) income $ (54,082) $ 88,433  $ 34,351  $ (34,610) $ (259)
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