Segment Reporting

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Segment Reporting Disclosure

Segment Reporting

On October 3, 2022, the Company completed the acquisition of a controlling interest in Longbridge, a reverse mortgage loan originator and servicer. As a result of the Longbridge Transaction, the Company determined that it has two reportable segments, the Investment Portfolio Segment and the Longbridge Segment, for each of which the chief operating decision maker receives and reviews separate financial information. As discussed in Note 1, the Investment Portfolio Segment includes a diverse array of the Company's financial assets, as well as associated financing, hedging, and various allocable expenses. The Longbridge Segment consists of the stand-alone origination and servicing business of Longbridge, including associated financial assets, financing, hedging, and allocated expenses. The Longbridge segment may also include certain reverse mortgage loans and reverse MSRs that are owned by subsidiaries of the Company other than Longbridge, along with their related assets, liabilities, and hedging instruments.

Income and expense items that are not directly allocated to either segment are included in Corporate/Other as reconciling items to our consolidated financial statements. These unallocated items include: (i) all income and expense items related to the Company's Senior Notes and preferred stock outstanding, including any hedges related thereto; (ii) management and incentive fees; (iii) income tax expense (benefit); (iv) certain compensation and benefits expenses, professional fees, administrative and custody fees, non-cash equity compensation; and (v) interest income (expense) on cash margin.

Prior to the consolidation of Longbridge, the Company had one reportable segment; the Company has conformed prior periods to present items of income and expense shown in Corporate/Other.

The following tables present the Company's results of operations by reportable segment for the three- and six-month periods ended June 30, 2023 and 2022, and various reconciling items to the Company's results of operations overall.

	Three-Month Period Ended June 30, 2023
(In thousands)	Investment Portfolio Segment		Longbridge Segment		Corporate/ Other		Total
Interest income	$	83,118	$	3,779	$	1,195	$	88,092
Interest expense	(54,207)		(6,117)		(3,109)		(63,433)
Total other income (loss)	13,352		30,630		(9,319)		34,663
Total expenses	3,865		25,816		12,951		42,632
Net Income (Loss) before Income Tax Expense (Benefit) and Earnings (Losses) from Investments in Unconsolidated Entities	38,398		2,476		(24,184)		16,690
Income tax expense (benefit)	—		—		83		83
Earnings (losses) from investments in unconsolidated entities	(5,868)		—		—		(5,868)
Net Income (Loss)	32,530		2,476		(24,267)		10,739
Net income (loss) attributable to non-controlling interests	1,847		(25)		39		1,861
Dividends on preferred stock	—		—		5,980		5,980
Net Income (Loss) Attributable to Common Stockholders	$	30,683	$	2,501	$	(30,286)	$	2,898
Non-cash items:
Amortization and depreciation expense	$	—	$	352	$	—	$	352

	Three-Month Period Ended June 30, 2022
(In thousands)	Investment Portfolio Segment		Corporate/ Other		Total
Interest income	$	62,387	$	335	$	62,722
Interest expense	(21,620)		(4,404)		(26,024)
Total other income (loss)	(72,547)		2,940		(69,607)
Total expenses	5,315		7,787		13,102
Net Income (Loss) before Income Tax Expense (Benefit) and Earnings (Losses) from Investments in Unconsolidated Entities	(37,095)		(8,916)		(46,011)
Income tax expense (benefit)	—		(7,825)		(7,825)
Earnings (losses) from investments in unconsolidated entities	(23,265)		—		(23,265)
Net Income (Loss)	(60,360)		(1,091)		(61,451)
Net income (loss) attributable to non-controlling interests	429		(820)		(391)
Dividends on preferred stock	—		3,821		3,821
Net Income (Loss) Attributable to Common Stockholders	$	(60,789)	$	(4,092)	$	(64,881)

	Six-Month Period Ended June 30, 2023
(In thousands)	Investment Portfolio Segment		Longbridge Segment		Corporate/ Other		Total
Interest income	$	165,487	$	6,672	$	3,107	$	175,266
Interest expense	(106,343)		(10,463)		(6,244)		(123,050)
Total other income (loss)	24,281		64,028		(1,971)		86,338
Total expenses	7,369		51,263		21,902		80,534
Net Income (Loss) before Income Tax Expense (Benefit) and Earnings (Losses) from Investments in Unconsolidated Entities	76,056		8,974		(27,010)		58,020
Income tax expense (benefit)	—		—		104		104
Earnings (losses) from investments in unconsolidated entities	(2,424)		—		—		(2,424)
Net Income (Loss)	73,632		8,974		(27,114)		55,492
Net income (loss) attributable to non-controlling interests	2,085		(23)		519		2,581
Dividends on preferred stock	—		—		11,097		11,097
Net Income (Loss) Attributable to Common Stockholders	$	71,547	$	8,997	$	(38,730)	$	41,814
Non-cash items:
Amortization and depreciation expense	$	—	$	710	$	—	$	710

	Six-Month Period Ended June 30, 2022
(In thousands)	Investment Portfolio Segment		Corporate/ Other		Total
Interest income	$	113,442	$	354	$	113,796
Interest expense	(34,299)		(5,742)		(40,041)
Total other income (loss)	(94,318)		(731)		(95,049)
Total expenses	13,067		19,602		32,669
Net Income (Loss) before Income Tax Expense (Benefit) and Earnings (Losses) from Investments in Unconsolidated Entities	(28,242)		(25,721)		(53,963)
Income tax expense (benefit)	—		(14,785)		(14,785)
Earnings (losses) from investments in unconsolidated entities	(28,771)		—		(28,771)
Net Income (Loss)	(57,013)		(10,936)		(67,949)
Net income (loss) attributable to non-controlling interests	131		(942)		(811)
Dividends on preferred stock	—		7,645		7,645
Net Income (Loss) Attributable to Common Stockholders	$	(57,144)	$	(17,639)	$	(74,783)

The following tables present our balance sheet by reportable segment as of June 30, 2023 and December 31, 2022, which reconciles to the Company's financial position overall.

	June 30, 2023
(In thousands)	Investment Portfolio Segment		Longbridge Segment		Corporate/ Other		Total
Total Assets	$	5,475,115	$	8,632,657	$	195,093	$	14,302,865
Total Liabilities	4,239,262		8,439,949		278,997		12,958,208
Total Equity	1,235,853		192,708		(83,904)		1,344,657

	December 31, 2022
(In thousands)	Investment Portfolio Segment		Longbridge Segment		Corporate/ Other		Total
Total Assets	$	5,635,657	$	8,227,509	$	222,720	$	14,085,886
Total Liabilities	4,499,669		8,092,313		273,018		12,865,000
Total Equity	1,135,988		135,196		(50,298)		1,220,886