Segment Reporting

9 Months Ended

Sep. 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 nine-month periods ended September 30, 2023 and 2022, and various reconciling items to the Company's results of operations overall.

	Three-Month Period Ended September 30, 2023
(In thousands)	Investment Portfolio Segment		Longbridge Segment		Corporate/ Other		Total
Interest income	$	89,445	$	5,190	$	1,581	$	96,216
Interest expense	(58,045)		(7,540)		(3,117)		(68,702)
Total other income (loss)	(11,969)		31,752		6,437		26,220
Total expenses	3,771		25,319		10,362		39,452
Net Income (Loss) before Income Tax Expense (Benefit) and Earnings (Losses) from Investments in Unconsolidated Entities	15,660		4,083		(5,461)		14,282
Income tax expense (benefit)	—		—		224		224
Earnings (losses) from investments in unconsolidated entities	(978)		—		—		(978)
Net Income (Loss)	14,682		4,083		(5,685)		13,080
Net income (loss) attributable to non-controlling interests	438		(12)		83		509
Dividends on preferred stock	—		—		5,980		5,980
Net Income (Loss) Attributable to Common Stockholders	$	14,244	$	4,095	$	(11,748)	$	6,591
Non-cash items:
Amortization and depreciation expense	$	—	$	149	$	—	$	149

	Three-Month Period Ended September 30, 2022
(In thousands)	Investment Portfolio Segment		Corporate/ Other		Total
Interest income	$	77,887	$	705	$	78,592
Interest expense	(38,121)		(3,959)		(42,080)
Total other income (loss)	(24,514)		(1,834)		(26,348)
Total expenses	7,120		7,343		14,463
Net Income (Loss) before Income Tax Expense (Benefit) and Earnings (Losses) from Investments in Unconsolidated Entities	8,132		(12,431)		(4,299)
Income tax expense (benefit)	—		(81)		(81)
Earnings (losses) from investments in unconsolidated entities	(25,513)		—		(25,513)
Net Income (Loss)	(17,381)		(12,350)		(29,731)
Net income (loss) attributable to non-controlling interests	156		(420)		(264)
Dividends on preferred stock	—		3,823		3,823
Net Income (Loss) Attributable to Common Stockholders	$	(17,537)	$	(15,753)	$	(33,290)

	Nine-Month Period Ended September 30, 2023
(In thousands)	Investment Portfolio Segment		Longbridge Segment		Corporate/ Other		Total
Interest income	$	254,932	$	11,862	$	4,688	$	271,482
Interest expense	(164,388)		(18,003)		(9,361)		(191,752)
Total other income (loss)	12,314		95,779		4,466		112,559
Total expenses	11,140		76,583		32,263		119,986
Net Income (Loss) before Income Tax Expense (Benefit) and Earnings (Losses) from Investments in Unconsolidated Entities	91,718		13,055		(32,470)		72,303
Income tax expense (benefit)	—		—		328		328
Earnings (losses) from investments in unconsolidated entities	(3,403)		—		—		(3,403)
Net Income (Loss)	88,315		13,055		(32,798)		68,572
Net income (loss) attributable to non-controlling interests	2,522		(35)		603		3,090
Dividends on preferred stock	—		—		17,077		17,077
Net Income (Loss) Attributable to Common Stockholders	$	85,793	$	13,090	$	(50,478)	$	48,405
Non-cash items:
Amortization and depreciation expense	$	—	$	859	$	—	$	859

	Nine-Month Period Ended September 30, 2022
(In thousands)	Investment Portfolio Segment		Corporate/ Other		Total
Interest income	$	191,329	$	1,059	$	192,388
Interest expense	(72,432)		(9,689)		(82,121)
Total other income (loss)	(118,832)		(2,566)		(121,398)
Total expenses	20,187		26,945		47,132
Net Income (Loss) before Income Tax Expense (Benefit) and Earnings (Losses) from Investments in Unconsolidated Entities	(20,122)		(38,141)		(58,263)
Income tax expense (benefit)	—		(14,867)		(14,867)
Earnings (losses) from investments in unconsolidated entities	(54,284)		—		(54,284)
Net Income (Loss)	(74,406)		(23,274)		(97,680)
Net income (loss) attributable to non-controlling interests	287		(1,362)		(1,075)
Dividends on preferred stock	—		11,468		11,468
Net Income (Loss) Attributable to Common Stockholders	$	(74,693)	$	(33,380)	$	(108,073)

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

	September 30, 2023
(In thousands)	Investment Portfolio Segment		Longbridge Segment		Corporate/ Other		Total
Total Assets	$	5,443,151	$	8,822,286	$	179,604	$	14,445,041
Total Liabilities	4,246,945		8,565,506		295,173		13,107,624
Total Equity	1,196,206		256,780		(115,569)		1,337,417

	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