SEGMENT REPORTING

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

SEGMENT REPORTING

19. SEGMENT REPORTING

The Company has determined that it has three reportable segments based on how the chief operating decision maker reviews and manages the business. These reportable segments include loans, securities, and real estate. The loans segment includes mortgage loan receivables held for investment (balance sheet loans) and mortgage loan receivables held for sale (conduit loans). The securities segment is composed of all of the Company’s activities related to commercial real estate securities, which include investments in CMBS, U.S. Agency Securities, corporate bonds and equity securities. The real estate segment includes net leased properties, office buildings, student housing portfolios, hotels, industrial buildings, a shopping center and condominium units. Corporate/other includes the Company’s investments in joint ventures, other asset management activities and operating expenses.

The Company evaluates performance based on the following financial measures for each segment ($ in thousands):

Year ended December 31, 2020	Loans		Securities		Real Estate (1)		Corporate/Other(2)		Company  Total
Interest income	$	205,640	$	32,904	$	13	$	1,293	239,849
Interest expense	(48,084)		(21,554)		(39,396)		(118,440)		(227,474)
Net interest income (expense)	157,556		11,349		(39,383)		(117,148)		12,375
Provision for (release of) loan loss reserves	(18,277)		2		—		—		(18,275)
Net interest income (expense) after provision for (release of) loan reserves	139,279		11,351		(39,383)		(117,148)		(5,900)
Operating lease income	—		—		100,248		—		100,248
Sale of loans, net	(1,571)		—		—		—		(1,571)
Realized gain (loss) on securities	—		(12,410)		—		—		(12,410)
Unrealized gain (loss) on equity securities	—		(132)		—		—		(132)
Unrealized gain (loss) on Agency interest-only securities	—		263		—		—		263
Realized gain on sale of real estate, net	—		—		32,102		—		32,102
Fee and other income	9,142		403		25		3,084		12,654
Net result from derivative transactions	(11,264)		(4,006)		—		—		(15,270)
Earnings (loss) from investment in unconsolidated joint ventures	—		—		1,821		—		1,821
Gain (loss) on extinguishment of debt	—		—		—		22,250		22,250
Total other income (loss)	(3,693)		(15,882)		134,196		25,334		139,955
Salaries and employee benefits	—		—		—		(58,101)		(58,101)
Operating expenses(3)	3		—		—		(20,297)		(20,294)
Real estate operating expenses	—		—		(28,584)				(28,584)
Fee expense	(6,124)		(236)		(884)		—		(7,244)
Depreciation and amortization	—		—		(38,980)		(99)		(39,079)
Total costs and expenses	(6,121)		(236)		(68,448)		(78,497)		(153,302)
Income tax (expense) benefit	—		—		—		9,789		9,789
Segment profit (loss)	$	129,465	$	(4,767)	$	26,365	$	(160,522)	$	(9,458)
Total assets as of December 31, 2020	$	2,343,070	$	1,058,298	$	1,031,557	$	1,448,303	$	5,881,229

Year ended December 31, 2019	Loans		Securities		Real Estate (1)		Corporate/Other(2)		Company  Total
Interest income	$	270,239	$	58,880	$	32	$	1,084	$	330,235
Interest expense	(50,293)		(19,248)		(37,226)		(97,586)		(204,353)
Net interest income (expense)	219,946		39,632		(37,194)		(96,502)		125,882
Provision for (release of) loan loss reserves	(2,600)		—		—		—		(2,600)
Net interest income (expense) after provision for (release of) loan reserves	217,346		39,632		(37,194)		(96,502)		123,282
Operating lease income	—		—		106,366		—		106,366
Sale of loans, net	54,758		—		—		—		54,758
Realized gain (loss) on securities	—		14,911		—		—		14,911
Unrealized gain (loss) on equity securities	—		1,737		—		—		1,737
Unrealized gain (loss) on Agency interest-only securities	—		84		—		—		84
Realized gain on sale of real estate, net	—		—		1,392		—		1,392
Impairment of real estate	—		—		(1,350)		—		(1,350)
Fee and other income	19,188		1,592		8		3,615		24,403
Net result from derivative transactions	(16,160)		(13,851)		—		—		(30,011)
Earnings (loss) from investment in unconsolidated joint ventures	—		—		3,432		—		3,432
Gain (loss) on extinguishment of debt	—		—		(1,070)		—		(1,070)
Total other income (loss)	57,786		4,473		108,778		3,615		174,652
Salaries and employee benefits	—		—		—		(67,768)		(67,768)
Operating expenses(3)	—		—		—		(22,595)		(22,595)
Real estate operating expenses	—		—		(23,323)		—		(23,323)
Fee expense	(4,602)		(350)		(1,138)		—		(6,090)
Depreciation and amortization	—		—		(38,412)		(99)		(38,511)
Total costs and expenses	(4,602)		(350)		(62,873)		(90,462)		(158,287)
Income tax (expense) benefit	—		—		—		(2,646)		(2,646)
Segment profit (loss)	$	270,530	$	43,755	$	8,711	$	(185,995)	$	137,001
Total assets as of December 31, 2019	$	3,358,861	$	1,721,305	$	1,096,514	$	492,472	$	6,669,152

Year ended December 31, 2018	Loans		Securities		Real Estate (1)		Corporate/Other(2)		Company  Total
Interest income	$	310,149	$	34,217	$	24	$	426	$	344,816
Interest expense	(62,474)		(4,617)		(34,739)		(92,461)		(194,291)
Net interest income (expense)	247,675		29,600		(34,715)		(92,035)		150,525
Provision for (release of) loan loss reserves	(13,900)		—		—		—		(13,900)
Net interest income (expense) after provision for (release of) loan reserves	233,775		29,600		(34,715)		(92,035)		136,625
Operating lease income	—		—		106,177		—		106,177
Sale of loans, net	16,511		—		—		—		16,511
Realized gain (loss) on securities	—		(5,808)		—		—		(5,808)
Unrealized gain (loss) on equity securities	—		(1,605)		—		—		(1,605)
Unrealized gain (loss) on Agency interest-only securities	—		555		—		—		555
Realized gain on sale of real estate, net	—		—		95,881		—		95,881
Fee and other income	16,490		—		3,416		6,379		26,285
Net result from derivative transactions	10,467		5,459		—		—		15,926
Earnings (loss) from investment in unconsolidated joint ventures	—		—		790		—		790
Gain (loss) on extinguishment of debt	(69)		—		(4,323)		—		(4,392)
Total other income (loss)	43,399		(1,399)		201,941		6,379		250,320
Salaries and employee benefits	—		—		—		(60,117)		(60,117)
Operating expenses(3)	—		—		—		(21,696)		(21,696)
Real estate operating expenses	—		—		(29,799)				(29,799)
Fee expense	(4,040)		(398)		(617)		—		(5,055)
Depreciation and amortization	—		—		(41,884)		(75)		(41,959)
Total costs and expenses	(4,040)		(398)		(72,300)		(81,888)		(158,626)
Income tax (expense) benefit	—		—		—		(6,643)		(6,643)
Segment profit (loss)	$	273,134	$	27,803	$	94,926	$	(174,187)	$	221,676
Total assets as of December 31, 2018	$	3,482,929	$	1,410,126	$	1,038,376	$	341,441	$	6,272,872

(1)Includes the Company’s investment in unconsolidated joint ventures that held real estate of $46.3 million and $48.4 million as of December 31, 2020 and 2019, respectively.

(2)Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to consolidated Company totals. This segment also includes the Company’s investment in unconsolidated joint ventures and strategic investments that are not related to the other reportable segments above, including the Company’s investment in FHLB stock of $31.0 million and $61.6 million as of December 31, 2020 and 2019, respectively, and the Company’s senior unsecured notes of $1.6 billion and $1.2 billion as of December 31, 2020 and 2019, respectively.