Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 02, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | IMPAC MORTGAGE HOLDINGS INC | |
Entity Central Index Key | 1,000,298 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 12,531,711 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and cash equivalents | $ 19,736 | $ 32,409 |
Restricted cash | 8,280 | 3,474 |
Mortgage loans held-for-sale | 683,687 | 310,191 |
Finance receivables | 56,388 | 36,368 |
Mortgage servicing rights | 54,747 | 36,425 |
Securitized mortgage trust assets | 4,305,071 | 4,594,534 |
Goodwill | 104,938 | 104,938 |
Intangibles assets, net | 27,876 | 29,975 |
Net deferred tax asset | 24,420 | 24,420 |
Other assets | 41,764 | 38,118 |
Total assets | 5,326,907 | 5,210,852 |
LIABILITIES | ||
Warehouse borrowings | 699,377 | 325,616 |
Term financing | 29,755 | 29,716 |
Convertible notes | 24,962 | 44,819 |
Contingent consideration | 49,986 | 48,079 |
Long-term debt | 30,990 | 31,898 |
Securitized mortgage trust liabilities | 4,288,939 | 4,580,326 |
Other liabilities | 49,434 | 35,908 |
Total liabilities | 5,173,443 | 5,096,362 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value; 200,000,000 shares authorized; 12,321,170 and 10,326,520 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively | 125 | 103 |
Additional paid-in capital | 1,124,022 | 1,098,302 |
Net accumulated deficit: | ||
Cumulative dividends declared | (822,520) | (822,520) |
Retained deficit | (148,184) | (161,416) |
Net accumulated deficit | (970,704) | (983,936) |
Total stockholders’ equity | 153,464 | 114,490 |
Total liabilities and stockholders' equity | 5,326,907 | 5,210,852 |
Series B 9.375% redeemable preferred stock | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock | 7 | 7 |
Series C 9.125% redeemable preferred stock | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock | $ 14 | $ 14 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 12,524,961 | 10,326,520 |
Common stock, shares outstanding | 10,326,520 | |
Series A-1 junior participating preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,500,000 | 2,500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series B 9.375% redeemable preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, dividend rate (as a percent) | 9.375% | 9.375% |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 665,592 | |
Preferred stock, shares outstanding | 665,592 | 665,592 |
Series C 9.125% redeemable preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, dividend rate (as a percent) | 9.125% | 9.125% |
Preferred stock, shares authorized | 5,500,000 | 5,500,000 |
Preferred stock, shares issued | 1,405,086 | 1,405,086 |
Preferred stock, shares outstanding | 1,405,086 | 1,405,086 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues: | ||||
Gain on sale of loans, net | $ 78,822 | $ 48,346 | $ 132,691 | $ 85,744 |
Real estate services fees, net | 1,995 | 2,355 | 4,095 | 5,097 |
Servicing income, net | 2,803 | 1,017 | 4,891 | 1,652 |
Loss on mortgage servicing rights | (14,482) | (2,790) | (25,392) | (9,358) |
Other | 75 | 156 | 227 | 293 |
Total revenues | 69,213 | 49,084 | 116,512 | 83,428 |
Expenses: | ||||
Personnel expense | 30,592 | 24,078 | 54,557 | 35,568 |
Business promotion | 11,286 | 8,679 | 20,478 | 8,894 |
General, administrative and other | 8,842 | 7,943 | 16,004 | 13,378 |
Accretion of contingent consideration | 1,759 | 3,046 | 3,653 | 3,046 |
Change in fair value of contingent consideration | 8,412 | (11,326) | 11,354 | (11,326) |
Total expenses | 60,891 | 32,420 | 106,046 | 49,560 |
Operating income (loss): | 8,322 | 16,664 | 10,466 | 33,868 |
Other income (expense): | ||||
Interest income | 67,302 | 67,269 | 136,629 | 139,876 |
Interest expense | (66,469) | (66,310) | (135,897) | (137,860) |
Change in fair value of long-term debt | 1,354 | (1,544) | 1,354 | (8,661) |
Change in fair value of net trust assets, including trust REO gains (losses) | 2,165 | 802 | 1,538 | (74) |
Total other income (expense) | 4,352 | 217 | 3,624 | (6,719) |
Earnings before income taxes | 12,674 | 16,881 | 14,090 | 27,149 |
Income tax expense (benefit) | 423 | 71 | 858 | (23,633) |
Net earnings | $ 12,251 | $ 16,810 | $ 13,232 | $ 50,782 |
Earnings per common share: | ||||
Basic (in dollars per share) | $ 0.99 | $ 1.65 | $ 1.11 | $ 5.13 |
Diluted (in dollars per share) | $ 0.92 | $ 1.33 | $ 1.08 | $ 4.17 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2016 - USD ($) $ in Thousands | Preferred Stock | Common Stock | Additional Paid-In Capital | Cumulative Dividends Declared | Retained Deficit | Total |
Balance at Dec. 31, 2015 | $ 21 | $ 103 | $ 1,098,302 | $ (822,520) | $ (161,416) | $ 114,490 |
Balance (in shares) at Dec. 31, 2015 | 2,070,678 | 10,326,520 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Proceeds and tax benefit from exercise of stock options | 9 | 9 | ||||
Proceeds and tax benefit from exercise of stock options (in shares) | 3,941 | |||||
Stock based compensation | 890 | 890 | ||||
Common stock issuance | $ 4 | 4,839 | 4,843 | |||
Common stock issuance (in shares) | 355,420 | |||||
Convertible note share issuance | $ 18 | 19,982 | 20,000 | |||
Convertible note share issuance (in shares) | 1,839,080 | |||||
Net earnings | 13,232 | 13,232 | ||||
Balance at Jun. 30, 2016 | $ 21 | $ 125 | $ 1,124,022 | $ (822,520) | $ (148,184) | $ 153,464 |
Balance (in shares) at Jun. 30, 2016 | 2,070,678 | 12,524,961 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) shares in Thousands, $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net earnings | $ 13,232 | $ 50,782 |
Loss on sale of mortgage servicing rights | 3,079 | 5,722 |
Change in fair value of mortgage servicing rights | 23,824 | 3,636 |
Gain on sale of mortgage loans | (110,812) | (28,551) |
Change in fair value of mortgage loans held-for-sale | (14,272) | (2,352) |
Change in fair value of derivatives lending, net | (8,878) | (7,800) |
Provision for repurchases | 851 | 1,320 |
Origination of mortgage loans held-for-sale | (5,596,617) | (5,016,473) |
Sale and principal reduction on mortgage loans held-for-sale | 5,297,286 | 4,842,835 |
Losses from REO | 4,531 | 2,463 |
Change in fair value of net trust assets, excluding REO | (7,434) | (4,583) |
Change in fair value of long-term debt | (1,354) | 8,661 |
Accretion of interest income and expense | 65,211 | 76,555 |
Change in REO impairment reserve | 1,402 | |
Amortization of intangible and other assets | 2,385 | 1,192 |
Accretion of contingent consideration | 3,653 | 3,046 |
Change in fair value of contingent consideration | 11,354 | (11,326) |
Amortization of debt issuance costs and discount on note payable | 282 | 137 |
Stock-based compensation | 890 | 513 |
Impairment of deferred charge | 615 | 633 |
Change in deferred tax assets | (24,420) | |
Net change in restricted cash | (4,806) | (1,420) |
Net change in other assets and liabilities | 17,219 | 9,733 |
Net cash used in operating activities | (299,761) | (88,295) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Net change in securitized mortgage collateral | 287,746 | 302,662 |
(Repayments of) proceeds from the sale of mortgage servicing rights | 5,694 | 23,550 |
Finance receivable advances to customers | (385,969) | (337,468) |
Repayments of finance receivables | 365,949 | 291,513 |
Net change in mortgages held-for-investment | 44 | 45 |
Purchase of premises and equipment | (82) | 249 |
Net principal change on investment securities available-for-sale | 47 | 58 |
Acquisition of CashCall Mortgage | (5,000) | |
Proceeds from the sale of REO | 22,940 | 14,685 |
Net cash provided by investing activities | 296,369 | 290,294 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 4,843 | |
Issuance of convertible notes | 25,000 | |
Issuance of term financing | 30,000 | |
Repayment of warehouse borrowings | (5,043,856) | (4,684,407) |
Borrowings under warehouse agreement | 5,417,617 | 4,880,211 |
Repayment of line of credit | (11,000) | |
Borrowings under line of credit | 7,000 | |
Repayment of short-term borrowing | (15,000) | |
Short-term borrowing | 15,000 | |
Repayment of securitized mortgage borrowings | (374,519) | (393,204) |
Payment of acquisition related contingent consideration | (13,100) | (24,905) |
Principal payments on short-term debt | (6,000) | |
Principal payments on capital lease | (275) | (401) |
Debt issuance costs | (500) | |
Proceeds from exercise of stock options | 9 | 286 |
Net cash provided by financing activities | (9,281) | (177,920) |
Net change in cash and cash equivalents | (12,673) | 24,079 |
Cash and cash equivalents at beginning of period | 32,409 | 10,073 |
Cash and cash equivalents at end of period | 19,736 | 34,152 |
NON-CASH TRANSACTIONS: | ||
Transfer of securitized mortgage collateral to real estate owned | 21,938 | 18,736 |
Mortgage servicing rights retained from loan sales and issuance of mortgage backed securities | 50,919 | 52,734 |
Common stock issued upon conversion of debt | 20,000 | |
Acquisition of equipment purchased through capital lease | $ 551 | 413 |
Goodwill assets related to CashCall acquisition | 104,586 | |
Intangible assets related to CashCall acquisition | 33,122 | |
Contingent consideration liability related to CashCall acquisition | $ 124,592 | |
Common stock issued related to CashCall acquisition | 6,150 |
Summary of Business and Financi
Summary of Business and Financial Statement Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Summary of Business and Financial Statement Presentation | |
Summary of Business and Financial Statement Presentation | Note 1.—Summary of Business and Financial Statement Presentation Business Summary Impac Mortgage Holdings, Inc. (the Company or IMH) is a Maryland corporation incorporated in August 1995 and has the following wholly-owned subsidiaries: Integrated Real Estate Service Corporation (IRES), Impac Mortgage Corp. (IMC), IMH Assets Corp. (IMH Assets) and Impac Funding Corporation (IFC). The Company’s operations include the mortgage lending operations and real estate services conducted by IRES and IMC and the long-term mortgage portfolio (residual interests in securitizations reflected as net trust assets and liabilities in the consolidated balance sheets) conducted by IMH. Beginning in the first quarter of 2015, the mortgage lending operations include the activities of the CashCall Mortgage operations (CCM) (See Note 2. – Acquisition of CashCall Mortgage. ) Financial Statement Presentation The accompanying unaudited consolidated financial statements of IMH and its subsidiaries (as defined above) have been prepared in accordance with Accounting Principles Generally Accepted in the United States of America (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for the three months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. These interim period condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the United States Securities and Exchange Commission (SEC). All significant inter-company balances and transactions have been eliminated in consolidation. In addition, certain amounts in the prior periods’ consolidated financial statements have been reclassified to conform to the current period presentation. Management has made a number of material estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period to prepare these consolidated financial statements in conformity with GAAP. Material estimates subject to change include the fair value estimates of assets acquired and liabilities assumed in the acquisition of CCM as discussed in Note 2. — Acquisition of CashCall Mortgage. Additionally, other items affected by such estimates and assumptions include the valuation of trust assets and trust liabilities, contingencies, the estimated obligation of repurchase liabilities related to sold loans, the valuation of long-term debt, mortgage servicing rights, mortgage loans held-for-sale and derivative instruments, including interest rate lock commitments (IRLC). Actual results could differ from those estimates and assumptions. Recent Accounting Pronouncements In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-03, “Interest—Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs”, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. For public business entities, the ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Entities should apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, entities are required to comply with the applicable disclosures for a change in an accounting principle. In August 2015, ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, was issued to address ASU 2015-03 as it relates to line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line of credit arrangement. We adopted this change retrospectively on January 1, 2016 , which resulted in a $465 thousand reclassification from other assets to Term Financing and Convertible Notes on December 31, 2015. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting ". ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements. |
Acquisition of CashCall Mortgag
Acquisition of CashCall Mortgage | 6 Months Ended |
Jun. 30, 2016 | |
Acquisition of CashCall Mortgage | |
Acquisition of CashCall Mortgage | Note 2.—Acquisition of CashCall Mortgage On January 6, 2015, the Company entered into an Asset Purchase Agreement (the Asset Purchase Agreement) with CashCall, Inc. (CashCall), an unrelated entity, pursuant to which the Company agreed to purchase certain assets of CashCall’s residential mortgage operations. Upon closing, which occurred on March 31, 2015, CashCall’s mortgage operations began to operate as a separate division of IMC under the name CashCall Mortgage (CCM). Pursuant to the Asset Purchase Agreement, and subject to the terms and conditions contained therein, the purchase price consists of a fixed component and a contingent component. The fixed component includes (i) the aggregate payment of $10 million in cash, payable in installments through January 2016 and (ii) 494,017 newly issued unregistered shares of the Company. The contingent component consists of a three year earn-out provision beginning on the effective date (January 2, 2015) of 100% of pre-tax net earnings of CCM for January and February of 2015, 65% of the pre-tax net earnings for the next 10 months of 2015, 55% of pre-tax 2016 net earnings and 45% of pre-tax 2017 net earnings. During the six months ended June 30, 2016 , consideration paid to CashCall, Inc. was $2.5 million pursuant to the fixed component of the Asset Purchase Agreement and $13.1 million pursuant to the earn-out provision. If, during the four years following January 2, 2015, the Company sells all or substantially all of its assets or the assets of CCM, the division of IMC, or a person acquires 50% or more of the securities of the Company or IMC, then the Company will pay additional contingent consideration, subject to adjustment, to CashCall of 15% of the enterprise value (as defined in the Asset Purchase Agreement) in excess of $200 million plus an additional 5% of the enterprise value in excess of $500 million (Business Appreciation Rights). The table below presents the purchase price allocation of the estimated fair values of assets acquired and the liabilities assumed as of March 31, 2015. Consideration paid: Cash $ IMH common stock Deferred payments Contingent consideration (1) $ Assets acquired: Trademark $ Customer list Non-compete agreement Fixed assets and software Total assets acquired Liabilities assumed: Total liabilities assumed — Goodwill $ (1) Included within the contingent consideration is $1.4 million of Business Appreciation Rights, as defined above. The CCM acquisition was accounted for under the acquisition method of accounting pursuant to FASB Accounting Standards Codification (ASC) 805, Business Combinations. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the acquisition date. The Company made significant estimates and exercised significant judgment in estimating fair values of the acquired assets and assumed liabilities. The application of the acquisition method of accounting resulted in tax deductible goodwill of $104.6 million. The acquisition closed on March 31, 2015; however, the effective date of the transaction was January 2, 2015. From the effective date to the date of the close, IMC was entitled to and recognized the net earnings of the loans originated by CCM. Acquisition related costs of $0.3 million were expensed as incurred. The expenses were comprised primarily of legal and professional fees. Unaudited Pro Forma Results of Operations The following table presents unaudited pro forma results of operations as if the CCM acquisition had been completed on January 1, 2014. The unaudited pro forma results of operations include the historical accounts of the Company and CCM and pro forma adjustments, including the amortization of intangibles with definite lives, depreciation of fixed assets, accretion of discount on contingent consideration and elimination of commissions and loan due diligence costs of IMC. The unaudited pro forma information presented below is intended for informational purposes only and is not necessarily indicative of the future operating results or operating results that would have occurred had the CCM acquisition been completed at the beginning of 2014. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, expense efficiencies or asset dispositions. For the Three and Six Months Ended June 30, 2015 Revenues $ $ Other (expense) income Expenses Pretax net earnings $ $ |
Mortgage Loans Held-for-Sale
Mortgage Loans Held-for-Sale | 6 Months Ended |
Jun. 30, 2016 | |
Mortgage Loans Held-for-Sale | |
Mortgage Loans Held-for-Sale | Note 3.—Mortgage Loans Held-for-Sale A summary of the unpaid principal balance (UPB) of mortgage loans held-for-sale by type is presented below: June 30, December 31, 2016 2015 Government (1) $ $ Conventional (2) Other (3) Fair value adjustment (4) Total mortgage loans held for sale $ $ (1) Includes all government-insured loans including Federal Housing Administration (FHA), Veterans Affairs (VA) and United States Department of Agriculture (USDA). (2) Includes loans eligible for sale to Federal National Mortgage Association (Fannie Mae or FNMA) and Federal Home Loan Mortgage Corporation (Freddie Mac or FHLMC). (3) Includes NonQM and Jumbo loans. (4) Changes in fair value are included in the statements of operations. Gain on mortgage loans held-for-sale (LHFS), included in gain on sale of loans, net in the consolidated statement of operations, is comprised of the following for the three and six months ended June 30, 2016 and 2015: For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 Gain on sale of mortgage loans $ $ $ $ Premium from servicing retained loan sales Unrealized gains from derivative financial instruments Realized (losses) gains from derivative financial instruments Mark to market gain (loss) on LHFS Direct origination expenses, net Provision for repurchases Total gain on sale of loans, net $ $ $ $ |
Mortgage Servicing Rights
Mortgage Servicing Rights | 6 Months Ended |
Jun. 30, 2016 | |
Mortgage Servicing Rights | |
Mortgage Servicing Rights | Note 4.—Mortgage Servicing Rights The Company retains mortgage servicing rights (MSRs) from its sales of certain mortgage loans. MSRs are reported at fair value based on the income derived from the net projected cash flows associated with the servicing contracts. The Company receives servicing fees, less subservicing costs, on the UPB of the loans. The servicing fees are collected from the monthly payments made by the mortgagors or when the underlying real estate is foreclosed upon and liquidated. The Company may receive other remuneration from rights to various mortgagor-contracted fees such as late charges, collateral reconveyance charges, nonsufficient fund fees and the Company is generally entitled to retain the interest earned on funds held pending remittance (or float) related to its collection of mortgagor principal, interest, tax and insurance payments. The following table summarizes the activity of MSRs for the six months ended June 30, 2016 and year ended December 31, 2015: June 30, December 31, 2016 2015 Balance at beginning of period $ $ Additions from servicing retained loan sales Reductions from bulk sales Changes in fair value (1) Fair value of MSRs at end of period $ $ (1) Changes in fair value are included within loss on mortgage servicing rights in the consolidated statements of operations. At June 30, 2016 and December 31, 2015, the outstanding principal balance of the mortgage servicing portfolio was comprised of the following: June 30, December 31, 2016 2015 Government insured (1) $ $ Conventional (2) NonQM Total loans serviced $ $ (1) As of June 30, 2016 , the Government insured servicing has been pledged as collateral as part of the Term Financing. (See Note 7. — Term Financing. ) (2) As of June 30, 2016 , the Conventional servicing has been pledged as collateral and subject to acknowledgement agreements with FNMA and FHLMC as part of the Term Financing. (See Note 7. — Term Financing. ) The table below illustrates hypothetical changes in fair values of MSRs, caused by assumed immediate changes to key assumptions that are used to determine fair value. See Note 10.—Fair Value of Financial Instruments for a description of the key assumptions used to determine the fair value of MSRs. June 30, Mortgage Servicing Rights Sensitivity Analysis 2016 Fair value of MSRs $ Prepayment Speed: Decrease in fair value from 10% adverse change Decrease in fair value from 20% adverse change Decrease in fair value from 30% adverse change Discount Rate: Decrease in fair value from 10% adverse change Decrease in fair value from 20% adverse change Decrease in fair value from 30% adverse change Sensitivities are hypothetical changes in fair value and cannot be extrapolated because the relationship of changes in assumptions to changes in fair value may not be linear. Also, the effect of a variation in a particular assumption is calculated without changing any other assumption, whereas a change in one factor may result in changes to another. Accordingly, no assurance can be given that actual results would be consistent with the results of these estimates. As a result, actual future changes in MSR values may differ significantly from those displayed above. Loss on mortgage servicing rights is comprised of the following for the three and six months ended June 30, 2016 and 2015 : For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 Loss on sale of mortgage servicing rights $ $ $ $ Change in fair value of mortgage servicing rights Realized and unrealized gains from hedging instruments — — Loss on mortgage servicing rights $ $ $ $ During the three months ended June 30, 2016 , the Company recorded a $ 2.4 million loss on sale of mortgage servicing rights related to refunds of premiums to investors for loan payoffs associated with sales of servicing rights in previous periods as well as a loss on the sale of MSRs during the quarter. Change in fair value of mortgage servicing right was primarily due to a decrease in mortgage interest rates in the second quarter resulting in an increase in actual prepayments as well as prepayment speed assumptions. The following is a summary of certain components of servicing income, net as reported in the Company’s consolidated statements of operations for the three and six months ended June 30, 2016 : For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 Contractual servicing fees $ $ $ $ Late and ancillary fees |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets. | |
Goodwill and Intangible Assets | Note 5.—Goodwill and Intangible Assets Goodwill arises from the acquisition method of accounting for business combinations and represents the excess of the purchase price over the fair value of the net assets and other identifiable intangible assets acquired. Other intangible assets with definite lives include trademarks, customer relationships, and non-compete agreements. In the first quarter of 2015, the Company acquired CCM and reco rded $104.6 millio n of goodwill and intangible assets of $33.1 million, consisting of $17.2 millio n for trade mark, $10.2 million for customer relationsh ips and $5.7 million for a non-compete agreement with the former owner of CCM. The purchase price allocation was prepared with the assistance of a third party valuation firm. Goodwill, trademarks and other intangible assets are tested annually for impairment or more frequently if events and circumstances indicate that the asset might be impaired. The carrying value of these intangible assets could be impaired if a significant adverse change in the use, life, or brand strategy of the asset is determined, or if a significant adverse change in the legal and regulatory environment, business or competitive climate occurs that would adversely impact the asset. Goodwill and other intangible assets deemed to have indefinite lives generated from purchase business combinations are not subject to amortization but are instead tested for impairment no less than annually. Impairment exists when the carrying value of goodwill exceeds its implied fair value. An impairment loss, if any, is measured as the excess of carrying value of the goodwill over the implied fair value of the goodwill and would be recorded in other expense in the consolidated statements of operations. Intangible assets with definite lives are amortized over their estimated lives using an amortization method that reflects the pattern in which the economic benefits of the asset are consumed. For goodwill, the determination of fair value of a reporting unit involves, among other things, application of the income approach, which includes developing forecasts of future cash flows and determining an appropriate discount rate. Goodwill is considered a Level 3 nonrecurring fair value measurement. The methodology used to determine the fair value of trademarks includes assumptions with inherent uncertainty, including projected sales volumes and related projected revenues, long-term growth rates, royalty rates that a market participant might assume and judgments regarding the factors to develop an applied discount rate. The carrying value of intangible assets is at risk of impairment if future projected revenues or long-term growth rates are lower than those currently projected, or if factors used in the development of a discount rate result in the application of a higher discount rate. The intangible assets are considered Level 3 nonrecurring fair value measurements. As part of the acquisition of CCM, the purchase price of the intangible assets the Company acquired are listed below: Gross Carrying Accumulated Net Carrying Amount Amount Amortization at June 30, 2016 Remaining Life Intangible assets: Trademark $ $ $ Customer relationships Non-compete agreement Total intangible assets acquired $ $ $ As part of the acquisition of CCM, the purchase price of other assets the Company acquired are listed below: Gross Carrying Accumulated Net Carrying Amount Amount Amortization at June 30, 2016 Remaining Life Other assets: Developed software $ $ $ |
Warehouse Borrowings
Warehouse Borrowings | 6 Months Ended |
Jun. 30, 2016 | |
Warehouse Borrowings. | |
Warehouse Borrowings | Note 6.—Warehouse Borrowings The Company, through its subsidiaries, enters into Master Repurchase Agreements with lenders providing warehouse facilities. The warehouse facilities are uncommitted facilities used to fund, and are secured by, residential mortgage loans that are held for sale. In accordance with the terms of the Master Repurchase Agreements, the Company is required to maintain cash balances with the lender as additional collateral for the borrowings which are included in restricted cash in the accompanying consolidated balance sheets. The following table presents certain information on warehouse borrowings and related accrued interest for the periods indicated: Maximum Balance Outstanding At Borrowing June 30, December 31, Capacity 2016 2015 Short-term borrowings: Repurchase agreement 1 (1) $ $ $ Repurchase agreement 2 (2) Repurchase agreement 3 (3) Repurchase agreement 4 Repurchase agreement 5 (4) Repurchase agreement 6 (5) — — Total warehouse borrowings $ $ $ (1) In June 2016, the maturity date was extended to June 16, 2017. (2) In July 2016, the maturity date was extended to May 28, 2017. (3) As of June 30, 2016 and December 31, 2015, $ 56.4 million and $ 36.4 million, respectively, are attributable to financing facility advances made to the Company’s warehouse customers. (4) In August 2016, the lender granted the Company an increase in the maximum borrowing capacity to $175.0 million with a temporary increase to $200.0 million until September 15, 2016. In April 2016, the maturity date was extended to March 1, 2017. (5) In June 2016, the Company enter ed into repurchase agreement 6 which has a maximum borrowing capacity of $150.0 million and a maturity date of June 30, 2017. |
Term Financing
Term Financing | 6 Months Ended |
Jun. 30, 2016 | |
Term Financing | |
Term Financing | Note 7.—Term Financing In June 2015, the Company and its subsidiaries, (IRES, IMC and Impac Warehouse Lending, Inc. (IWLI), collectively the (Borrowers)) entered into a Loan Agreement (Loan Agreement) with a lender (Lender) pursuant to which the Lender provided to the Borrowers a term loan in the aggregate principal amount of $30.0 million (Term Financing) due and payable on December 19, 2016, which may be extended to December 18, 2017 at the Lender’s discretion. In connection with the Term Financing, the Borrowers issued to the Lender a Term Note dated June 19, 2015. The Lender may in its discretion make additional advances not to exceed an aggregate amount outstanding of $50.0 million. In June 2016, the maturity of the Term Financing was extended to June 16, 2017 and the Company paid an additional $100 thousand extension fee, which is amortized using the effective yield method over the life of the term financing. The proceeds from the Term Financing were used to pay off the working capital line of credit with a national bank (approximately $4.0 million) and amounts under an existing master repurchase agreement with the Lender (approximately $3.2 million). The Borrowers also paid the Lender an origination fee of $300 thousand which is amortized using the effective yield method over the life of the term financing. Interest on the Term Financing is payable monthly and accrues at a rate of LIBOR plus 8.5% per annum. As of June 30, 2016 , amounts under the Term Financing may be prepaid at any time without penalty or premium. The Borrowers are subject to mandatory prepayment on the Term Financing based on a borrowing base formula that includes amounts under outstanding warehouse facilities, market value of mortgage servicing rights and residual securities and certain mortgage loans. The balance under the Term Financing as of June 30, 2016 and December 31, 2015 was $29.8 million and $29.7 million, respectively, net of debt issuance costs of $245 thousand and $284 thousand, respectively. The obligations of the Borrowers under the Loan Agreement are secured by assets and a pledge of all of the capital stock of the operating subsidiaries IRES, IMC and IWLI pursuant to a Security Agreement dated as of June 19, 2015 between the Borrowers and the Lender (Security Agreement). As part of the Loan Agreement the Company received an acknowledgement agreement from FNMA and FHLMC to pledge the mortgage servicing rights to the Lender. The Term Financing is subject to customary affirmative and negative covenants of the Borrowers. Upon an event of default, all outstanding amounts under the Term Financing may become immediately due and payable. An event of default also occurs upon a change of control, which means acquisition of more than 25% of the common stock of the Company, more than 50% of the common stock of any other Borrower, or the ability to elect a majority of such Borrower’s directors or an event that triggers a violation of a change of control provision in any of the Borrowers’ warehouse facilities. |
Convertible Notes
Convertible Notes | 6 Months Ended |
Jun. 30, 2016 | |
Convertible Notes | |
Convertible Notes | Note 8.—Convertible Notes In January 2016, pursuant to the terms of the $20.0 million Convertible Promissory Notes issued in April 2013 (the Notes), the Company elected to exercise its option to convert the Notes to common stock. The conversion resulted in the Company issuing an aggregate of 1,839,080 shares of common stock in February 2016, at a conversion price of $10.875 . As a result of the transaction, the Company converted $20.0 million of debt into equity and paid interest through April 2016. No gain or loss was recorded as a result of the transaction. In May 2015, the Company issued an additional $25.0 million Convertible Promissory Notes (2015 Convertible Notes). The 2015 Convertible Notes mature on or before May 9, 2020 and accrue interest at a rate of 7.5% per annum, to be paid quarterly. The Company had approximately $50 thousand in transaction costs which are amortized using the effective yield method over the life of the 2015 Convertible Notes. Noteholders may convert all or a portion of the outstanding principal amount of the 2015 Convertible Notes into shares of the Company’s Common Stock (Conversion Shares) at a rate of $21.50 per share, subject to adjustment for stock splits and dividends (the Conversion Price). The Company has the right to convert the entire outstanding principal of the 2015 Convertible Notes into Conversion Shares at the Conversion Price if the market price per share of the Common Stock, as measured by the average volume-weighted closing stock price per share of the Common Stock on the NYSE MKT (or any other U.S. national securities exchange then serving as the principal such exchange on which the shares of Common Stock are listed), reaches the level of $30.10 , for any twenty ( 20 ) trading days in any period of thirty ( 30 ) consecutive trading days after the Closing Date. Upon conversion of the 2015 Convertible Notes by the Company, the entire amount of accrued and unpaid interest (and all other amounts owing) under the 2015 Convertible Notes are immediately due and payable. Furthermore, if the conversion of the 2015 Convertible Notes by the Company occurs prior to the third anniversary of the Closing Date, then the entire amount of interest under the 2015 Convertible Notes through the third anniversary is immediately due and payable. To the extent the Company pays any cash dividends on its shares of common stock prior to conversion of the 2015 Convertible Notes, upon conversion of the 2015 Convertible Notes, the Noteholders will also receive such dividends on an as-converted basis of the 2015 Convertible Notes less the amount of interest paid by the Company prior to such dividend. Unless an event of default has occurred and is continuing, each purchaser of the Convertible Notes agrees, for the three years after the Closing Date, to vote all Conversion Shares for each of the Company’s nominees for election to the Company’s board of directors and not to nominate any other candidate for election to the board of directors at any time within such three year period. |
Securitized Mortgage Trusts
Securitized Mortgage Trusts | 6 Months Ended |
Jun. 30, 2016 | |
Securitized Mortgage Trusts | |
Securitized Mortgage Trusts | Note 9.—Securitized Mortgage Trusts Securtized Mortgage Trust Assets Securitized mortgage trust assets, which are recorded at their estimated fair value (FMV), are comprised of the following at June 30, 2016 and December 31, 2015: June 30, December 31, 2016 2015 Securitized mortgage collateral $ $ REO Investment securities available-for-sale Total securitized mortgage trust assets $ $ Securitized Mortgage Trust Liabilities Securitized mortgage trust liabilities, which are recorded at their estimated FMV , are comprised of the following at June 30, 2016 and December 31, 2015: June 30, December 31, 2016 2015 Securitized mortgage borrowings $ $ Derivative liabilities Total securitized mortgage trust liabilities $ $ Changes in fair value of net trust assets, including trust REO losses are comprised of the following for the three and six months ended June 30, 2016 and 2015: For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 Change in fair value of net trust assets, excluding REO $ $ $ $ (Losses) gains from REO Change in fair value of net trust assets, including trust REO gains (losses) $ $ $ $ |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | Note 10.—Fair Value of Financial Instruments The use of fair value to measure the Company’s financial instruments is fundamental to its consolidated financial statements and is a critical accounting estimate because a substantial portion of its assets and liabilities are recorded at estimated fair value. FASB ASC 825 requires disclosure of the estimated fair value of certain financial instruments and the methods and significant assumption used to estimate such fair values. The following table presents the estimated fair value of financial instruments included in the consolidated financial statements as of the dates indicated: June 30, 2016 December 31, 2015 Carrying Estimated Fair Value Carrying Estimated Fair Value Amount Level 1 Level 2 Level 3 Amount Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ $ $ — $ — $ $ $ — $ — Restricted cash — — — — Mortgage loans held-for-sale — — — — Finance receivables — — — — Mortgage servicing rights — — — — Derivative assets, lending, net — — Investment securities available-for-sale — — — — Securitized mortgage collateral — — — — Liabilities Warehouse borrowings $ $ — $ $ — $ $ — $ $ — Term financing — — — — Convertible notes — — — — Contingent consideration — — — — Long-term debt — — — — Securitized mortgage borrowings — — — — Derivative liabilities, securitized trusts — — — — Derivative liabilities, lending, net — — — — The fair value amounts above have been estimated by management using available market information and appropriate valuation methodologies. Considerable judgment is required to interpret market data to develop the estimates of fair value in both inactive and orderly markets. Accordingly, the estimates presented are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. For securitized mortgage collateral and securitized mortgage borrowings, the underlying Alt-A (non-conforming) residential and commercial loans and mortgage-backed securities market have experienced significant declines in market activity, along with a lack of orderly transactions. The Company’s methodology to estimate fair value of these assets and liabilities include the use of internal pricing techniques such as the net present value of future expected cash flows (with observable market participant assumptions, where available) discounted at a rate of return based on the Company’s estimates of market participant requirements. The significant assumptions utilized in these internal pricing techniques, which are based on the characteristics of the underlying collateral, include estimated credit losses, estimated prepayment speeds and appropriate discount rates. Refer to Recurring Fair Value Measurements below for a description of the valuation methods used to determine the fair value of investment securities available-for-sale, securitized mortgage collateral and borrowings, derivative assets and liabilities, long-term debt, mortgage servicing rights and mortgage loans held-for-sale. The carrying amount of cash, cash equivalents and restricted cash approximates fair value. Finance receivables carrying amounts approximate fair value due to the short-term nature of the assets and do not present unanticipated interest rate or credit concerns. Warehouse borrowings carrying amounts approximate fair value due to the short-term nature of the liabilities and do not present unanticipated interest rate or credit concerns. Convertible notes are recorded at amortized cost. The estimated fair value is determined using a discounted cash flow model using estimated market rates. Term financing structured debt has a maturity of less than one year. The term financing is recorded at amortized cost. The carrying amount approximates fair value due to the short-term nature of the liability and does not present unanticipated interest rate or credit concerns. Fair Value Hierarchy The application of fair value measurements may be on a recurring or nonrecurring basis depending on the accounting principles applicable to the specific asset or liability or whether management has elected to carry the item at its estimated fair value. FASB ASC 820-10-35 specifies a hierarchy of valuation techniques based on whether the inputs to those techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy: · Level 1—Quoted prices (unadjusted) in active markets for identical instruments or liabilities that an entity has the ability to assess at measurement date. · Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; inputs other than quoted prices that are observable for an asset or liability, including interest rates and yield curves observable at commonly quoted intervals, prepayment speeds, loss severities, credit risks and default rates; and market-corroborated inputs. · Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers is unobservable. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when estimating fair value. As a result of the lack of observable market data resulting from inactive markets, the Company has classified its investment securities available-for-sale, mortgage servicing rights, securitized mortgage collateral and borrowings, derivative assets and liabilities (trust and IRLCs), and long-term debt as Level 3 fair value measurements. Level 3 assets and liabilities measured at fair value on a recurring basis were approximately 86% and 94% and 99% and 99% , respectively, of total assets and total liabilities measured at estimated fair value at June 30, 2016 and December 31, 2015. Recurring Fair Value Measurements The Company assesses the financial instruments on a quarterly basis to determine the appropriate classification within the fair value hierarchy, as defined by ASC Topic 810. Transfers between fair value classifications occur when there are changes in pricing observability levels. Transfers of financial instruments among the levels occur at the beginning of the reporting period. There were no material transfers between our Level 1 and Level 2 classified instruments during the three and six months ended June 30, 2016 . The following tables present the Company’s assets and liabilities that are measured at estimated fair value on a recurring basis, including financial instruments for which the Company has elected the fair value option at June 30, 2016 and December 31, 2015, based on the fair value hierarchy: Recurring Fair Value Measurements June 30, 2016 December 31, 2015 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Investment securities available-for-sale $ — $ — $ $ — $ — $ Mortgage loans held-for-sale — — — — Derivative assets, lending, net (1) — — Mortgage servicing rights — — — — Securitized mortgage collateral — — — — Total assets at fair value $ — $ $ $ — $ $ Liabilities Securitized mortgage borrowings $ — $ — $ $ — $ — $ Derivative liabilities, securitized trusts (2) — — — — Long-term debt — — — — Contingent consideration — — — — Derivative liabilities, lending, net (3) — — — — Total liabilities at fair value $ — $ $ $ — $ $ (1) At June 30, 2016 , derivative assets, lending, net included $19.3 million in IRLCs and $510 thousand in Hedging Intruments, respectively, and is included in other assets in the accompanying consolidated balance sheets. At December 31, 2015, derivative assets, lending, net included $9.2 million in IRLCs and $89 thousand in Hedging Instruments associated with the Company’s mortgage lending operations, and is included in other assets in the accompanying consolidated balance sheet. (2) At June 30, 2016 and December 31, 2015, derivative liabilities, securitized trusts, are included within trust liabilities in the accompanying consolidated balance sheets. (3) At June 30, 2016 and December 31, 2015, derivative liabilities, lending, net are included in other liabilities in the accompanying consolidated balance sheets. The following tables present reconciliations for all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended June 30, 2016 and 2015: Level 3 Recurring Fair Value Measurements For the three months ended June 30, 2016 Derivative Investment liabilities, Interest securities Securitized Securitized net, Mortgage rate lock Long- available- mortgage mortgage securitized servicing commitments, term Contingent for-sale collateral borrowings trusts rights net debt consideration Fair value, March 31, 2016 $ $ $ $ $ $ $ $ Total gains (losses) included in earnings: Interest income (1) — — — — — — Interest expense (1) — — — — — — Change in fair value Total gains (losses) included in earnings Transfers in and/or out of Level 3 — — — — — — — — Purchases, issuances and settlements: Purchases — — — — — — — — Issuances — — — — — — — Settlements — — Fair value, June 30, 2016 $ $ $ $ $ $ $ $ Unrealized gains (losses) still held (2) $ $ — $ — $ — $ $ $ $ (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $2.4 million for the three months ended June 30, 2016 . The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations is primarily from contractual interest on the securitized mortgage collateral and borrowings. (2) Represents the amount of unrealized gains (losses) relating to assets and liabilities classified as Level 3 that are still held and reflected in the fair values at June 30, 2016 . Level 3 Recurring Fair Value Measurements For the three months ended June 30, 2015 Derivative Investment liabilities, Interest securities Securitized Securitized net, Mortgage rate lock Long- available- mortgage mortgage securitized servicing commitments, term Contingent for-sale collateral borrowings trusts rights net debt consideration Warrant Fair value, March 31, 2015 $ $ $ $ $ $ $ $ $ Total gains (losses) included in earnings: Interest income (1) — — — — — — — Interest expense (1) — — — — — — — Change in fair value Total (losses) gains included in earnings Transfers in and/or out of Level 3 — — — — — — — — — Purchases, issuances and settlements: Purchases — — — — — — — — — Issuances — — — — — — — — Settlements — — — Fair value, June 30, 2015 $ $ $ $ $ $ $ $ $ Unrealized gains (losses) still held (2) $ $ $ $ $ $ $ $ $ (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $2.1 million for the three months ended June 30, 2015 . The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations is primarily from contractual interest on the securitized mortgage collateral and borrowings. (2) Represents the amount of unrealized gains (losses) relating to assets and liabilities classified as Level 3 that are still held and reflected in the fair values at June 30, 2015 . The following tables present reconciliations for all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2016 and 2015: Level 3 Recurring Fair Value Measurements For the six months ended June 30, 2016 Derivative Investment liabilities, Interest securities Securitized Securitized net, Mortgage rate lock Long- available- mortgage mortgage securitized servicing commitments, term Contingent for-sale collateral borrowings trusts rights net debt consideration Fair value, December 31, 2015 $ $ $ $ $ $ $ $ Total gains (losses) included in earnings: Interest income (1) — — — — — — Interest expense (1) — — — — — — Change in fair value Total gains (losses) included in earnings Transfers in and/or out of Level 3 — — — — — — — — Purchases, issuances and settlements: Purchases — — — — — — — — Issuances — — — — — — — Settlements — — Fair value, June 30, 2016 $ $ $ $ $ $ $ $ (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $4.8 million for six months ended June 30, 2016 . The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations is primarily from contractual interest on the securitized mortgage collateral and borrowings. Level 3 Recurring Fair Value Measurements For the six months ended June 30, 2015 Derivative Investment liabilities, Interest securities Securitized Securitized net, Mortgage rate lock Long- available- mortgage mortgage securitized servicing commitments, term Contingent for-sale collateral borrowings trusts rights net debt consideration Warrant Fair value, December 31, 2014 $ $ $ $ $ $ $ $ — $ Total gains (losses) included in earnings: Interest income (1) — — — — — — — Interest expense (1) — — — — — — — Change in fair value Total (losses) gains included in earnings Transfers in and/or out of Level 3 — — — — — — — — — Purchases, issuances and settlements: Purchases — — — — — — — — — Issuances — — — — — — — Settlements — — — Fair value, June 30, 2015 $ $ $ $ $ $ $ $ $ (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $4.3 million for the six months ended June 30, 2015 . The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations is primarily from contractual interest on the securitized mortgage collateral and borrowings. The following table presents quantitative information about the valuation techniques and unobservable inputs applied to Level 3 fair value measurements for financial instruments measured at fair value on a recurring and non-recurring basis at June 30, 2016 : Estimated Valuation Unobservable Range of Weighted Financial Instrument Fair Value Technique Input Inputs Average Assets and liabilities backed by real estate Investment securities available-for-sale, $ DCF Discount rates 3.5 - 25.0 % % Securitized mortgage collateral, and Prepayment rates 2.9 - 23.1 % % Securitized mortgage borrowings Default rates 0.5 - 10.4 % % Loss severities 1.6 - 82.2 % % Other assets and liabilities Mortgage servicing rights $ DCF Discount rate 9.0 - 14.0 % % Prepayment rates 5.6 - 89.0 % % Derivative liabilities, net, securitized trusts DCF 1M forward LIBOR 0.5 - 2.0 % N/A % Derivative assets - IRLCs, net Market pricing Pull-through rate 26.0 - 99.0 % % Long-term debt DCF Discount rate % % Contingent consideration DCF Discount rate % % Margins 2.1 - 2.4 % % Probability of outcomes (1) 20.0 - 50.0 % % DCF = Discounted Cash Flow 1M = 1 Month (1) Probability of outcomes is the probability of projected CCM earnings over the earn-out period based upon three scenarios (base, low and high). For assets and liabilities backed by real estate, a significant increase in discount rates, default rates or loss severities would result in a significantly lower estimated fair value. The effect of changes in prepayment speeds would have differing effects depending on the seniority or other characteristics of the instrument. For other assets and liabilities, a significant increase in discount rates would result in a significantly lower estimated fair value. A significant increase in one-month LIBOR would result in a significantly higher estimated fair value for derivative liabilities, net, securitized trusts. The Company believes that the imprecision of an estimate could be significant. The following tables present the changes in recurring fair value measurements included in net earnings (loss) for the three months ended June 30, 2016 and 2015: Recurring Fair Value Measurements Changes in Fair Value Included in Net Earnings For the three months ended June 30, 2016 Change in Fair Value of Interest Interest Net Trust Long-term Other Revenue Gain on sale Income (1) Expense (1) Assets Debt and Expense of loans, net Total Investment securities available-for-sale $ $ — $ $ — $ — $ — $ Securitized mortgage collateral — — — — Securitized mortgage borrowings — — — — Derivative liabilities, net, securitized trusts — — (2) — — — Long-term debt — — — — Mortgage servicing rights (3) — — — — — Contingent consideration — — — — — Mortgage loans held-for-sale — — — — — Derivative assets — IRLCs — — — — — Derivative liabilities — Hedging Instruments — — — — — Total $ $ $ $ $ $ $ (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in this amount is $56 4 thousand in changes in the fair value of derivative instruments, offset by $621 thousand in cash payments from the securitization trusts for the three months ended June 30, 2016 . (3) Included in loss on mortgage servicing rights in the consolidated statements of operations. Recurring Fair Value Measurements Changes in Fair Value Included in Net Earnings For the three months ended June 30, 2015 Change in Fair Value of Interest Interest Net Trust long-term Other Gain on sale Income (1) Expense (1) Assets Debt Revenue of loans, net Total Investment securities available-for-sale $ $ — $ $ — $ — $ — $ Securitized mortgage collateral — — — — Securitized mortgage borrowings — — — — Derivative liabilities, net, securitized trusts — — (2) — — — Long-term debt — — — — Mortgage servicing rights (3) — — — — — Warrant — — — — — Contingent consideration — — — — — Mortgage loans held-for-sale — — — — — Derivative assets — IRLCs — — — — — Derivative liabilities — Hedging Instruments — — — — — Total $ $ $ $ $ $ $ (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in this amount is $939 thousand in change in the fair value of derivative instruments, offset by $1.1 million in cash payments from the securitization trusts for the three months ended June 30, 2015 . (3) Included in loss on mortgage servicing rights in the consolidated statements of operations. Recurring Fair Value Measurements Changes in Fair Value Included in Net Earnings For the six months ended June 30, 2016 Change in Fair Value of Interest Interest Net Trust Long-term Other Revenue Gain on sale Income (1) Expense (1) Assets Debt and Expense of loans, net Total Investment securities available-for-sale $ $ — $ $ — $ — $ — $ Securitized mortgage collateral — — — — Securitized mortgage borrowings — — — — Derivative liabilities, net, securitized trusts — — (2) — — — Long-term debt — — — — Mortgage servicing rights (3) — — — — — Contingent consideration — — — — — Mortgage loans held-for-sale — — — — — Derivative assets — IRLCs — — — — — Derivative liabilities — Hedging Instruments — — — — — Total $ $ $ (4) $ $ $ $ (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in this amount is $1.2 million in change in the fair value of derivative instruments, offset by $1.3 million in cash payments from the securitization trusts for the six months ended June 30, 2016 . (3) Included in loss on mortgage servicing rights in the consolidated statements of operations. (4) For the six months ended June 30, 2016 , change in the fair value of net trust assets, excluding REO was $6.1 million. Excluded from the $7.4 million change in fair value of net trust assets, excluding REO, in the accompanying consolidated statement of cash flows is $1.3 million in cash payments from the securitization trusts related to the Company’s net derivative liabilities. Recurring Fair Value Measurements Changes in Fair Value Included in Net Earnings For the six months ended June 30, 2015 Change in Fair Value of Interest Interest Net Trust long-term Other Gain on sale Income (1) Expense (1) Assets Debt Revenue of loans, net Total Investment securities available-for-sale $ $ — $ $ — $ — $ — $ Securitized mortgage collateral — — — — Securitized mortgage borrowings — — — — Derivative liabilities, net, securitized trusts — — (2) — — — Long-term debt — — — — Mortgage servicing rights (3) — — — — — Warrant — — — — — Contingent consideration — — — — — Mortgage loans held-for-sale — — — — — Derivative assets — IRLCs — — — — — Derivative liabilities — Hedging Instruments — — — — — Total $ $ $ (4) $ $ $ $ (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in this amount is $1.8 million in change in the fair value of derivative instruments, offset by $2.2 million in cash payments from the securitization trusts for the six months ended June 30, 2015 . (3) Included in loss on mortgage servicing rights in the consolidated statements of operations. (4) For the six months ended June 30, 2015 , change in the fair value of net trust assets, excluding REO was $2.4 million. Excluded from the $4.6 million change in fair value of net trust assets, excluding REO, in the accompanying consolidated statement of cash flows is $2.2 million in cash payments from the securitization trusts related to the Company’s net derivative liabilities. The following is a description of the measurement techniques for items recorded at estimated fair value on a recurring basis. Investment securities available-for-sale —Investment securities available-for-sale are carried at fair value. The investment securities consist primarily of non-investment grade mortgage-backed securities. The fair value of the investment securities is measured based upon the Company’s expectation of inputs that other market participants would use. Such assumptions include judgments about the underlying collateral, prepayment speeds, future credit losses, forward interest rates and certain other factors. Given the lack of observable market data as of June 30, 2016 and December 31, 2015 relating to these securities, the estimated fair value of the investment securities available-for-sale was measured using significant internal expectations of market participants’ assumptions. Investment securities available-for-sale is considered a Level 3 measurement at June 30, 2016 . Mortgage servicing rights —The Company elected to carry its mortgage servicing rights arising from its mortgage loan origination operation at estimated fair value. The fair value of mortgage servicing rights is based upon market prices for similar instruments and a discounted cash flow model. The valuation model incorporates assumptions that market participants would use in estimating the fair value of servicing. These assumptions include estimates of prepayment speeds, discount rate, cost to service, escrow account earnings, contractual servicing fee income, prepayment and late fees, among other considerations. Mortgage servicing rights are considered a Level 3 measurement at June 30, 2016 . Mortgage loans held-for-sale —The Company elected to carry its mortgage loans held-for-sale originated or acquired at estimated fair value. Fair value is based on quoted market prices, where available, prices for other traded mortgage loans with similar characteristics, and purchase commitments and bid information received from market participants. Given the meaningful level of secondary market activity for mortgage loans, active pricing is available for similar assets and accordingly, the Company classifies its mortgage loans held-for-sale as a Level 2 measurement at June 30, 2016 . Securitized mortgage collateral —The Company elected to carry its securitized mortgage collateral at fair value. These assets consist primarily of non-conforming mortgage loans securitized between 2002 and 2007. Fair value measurements are based on the Company’s internal models used to compute the net present value of future expected cash flows with observable market participant assumptions, where available. The Company’s assumptions include its expectations of inputs that other market participants would use in pricing these assets. These assumptions include judgments about the underlying collateral, prepayment speeds, estimated future credit losses, forward interest rates, investor yield requirements and certain other factors. As of June 30, 2016 , securitized mortgage collateral had UPB of $5.3 billion, compared to an estimated fair value on the Company’s balance sheet of $4.3 billion. The aggregate UPB exceeds the fair value by $1.0 billion at June 30, 2016 . As of June 30, 2016 , the UPB of loans 90 days or more past due was $0.8 billion compared to an estimated fair value of $0.3 billion. The aggregate UPB of loans 90 days or more past due exceed the fair value by $0.5 billion at June 30, 2016 . Securitized mortgage collateral is considered a Level 3 measurement at June 30, 2016 . Securitized mortgage borrowings —The Company elected to carry its securitized mortgage borrowings at fair value. These borrowings consist of individual tranches of bonds issued by securitization trusts and are primarily backed by non-conforming mortgage loans. Fair value measurements include the Company’s judgments about the underlying collateral and assumptions such as prepayment speeds, estimated future credit losses, forward interest rates, investor yield requirements and certain other factors. As of June 30, 2016 , securitized mortgage borrowings had an outstanding principal balance of $5.3 billion, net of $2.2 billion in bond losses, compared to an estimated fair value of $4.3 billion. The aggregate outstanding principal balance exceeds the fair value by $1.0 billion at June 30, 2016 . Securitized mortgage borrowings are considered a Level 3 measurement at June 30, 2016 . Contingent consideration— Contingent consideration is applicable to the acquisition of CCM and is estimated and recorded at fair value at the acquisition date as part of purchase price consideration. Additionally, each reporting period, the Company estimates the change in fair value of the contingent consideration and any change in fair value is recognized in the Company’s consolidated statements of operations if it is determined to not be a measurement period adjustment. The estimate of the fair value of contingent consideration requires significant judgment and assumptions to be made about future operating results, discount rates and probabilities of various projected operating result scenarios. During the three months ended June 30, 2016 , the change in fair value of contingent consideration was related to an increase in projected volumes and earnings of CCM. Future revisions to these assumptions could materially change the estimated fair value of contingent consideration and materially affect the Company’s financial results. Contingent consideration is considered a Level 3 measurement at June 30, 2016 . Long-term debt —The Company elected to carry all of its long-term debt (consisting of trust preferred securities and junior subordinated notes) at fair value. These securities are measured based upon an analysis prepared by management, which considered the Company’s own credit risk, including settlements with trust preferred debt holders and discounted cash flow analysis. As of June 30, 2016 , long-term debt had UPB of $70.5 million compared to an estimated fair value of $ 31.0 million. The aggregate UPB exceeds the fair value by $39.5 million at June 30, 2016 . The long-term debt is considered a Level 3 measurement at June 30, 2016 . Derivative assets and liabilities, Securitized trusts —For non-exchange traded contracts, fair value is based on the amounts that would be required to settle the positions with the related counterparties as of the valuation date. Valuations of derivative assets and liabilities are based on observable market inputs, if available. To the extent observable market inputs are not available, fair values measurements include the Company’s judgments about future cash flows, forward interest rates and certain other factors, including counterparty risk. Additionally, these values also take into account the Company’s own credit standing, to the extent applicable; thus, the valuation of the derivative instrument includes the estimated value of the net credit differential between the counterparties to the derivative contract. As of June 30, 2016 , the notional balance of derivative assets and liabilities, securitized trusts was $44.8 million. These derivatives are included in the consolidated securitization trusts, which are nonrecourse to the Company, and thus the economic risk from these derivatives is limited to the Company’s residual interests in the securitization trusts. Derivative assets and liabilities, securitized trusts are considered a Level 3 measurement at June 30, 2016 . Derivative assets and liabilities, Lending —The Company’s derivative assets and liabilities are carried at fair value as required by GAAP and are accounted for as free standing derivatives. The derivatives include IRLCs with prospective residential mortgage borrowers whereby the interest rate on the loan is determined prior to funding and the borrowers have locked in that interest rate. These commitments are determined to be derivative instruments in accordance with GAAP. The derivatives also include hedging instruments (typically TBA MBS) used to hedge the fair value changes associated with changes in interest rates relating to its mortgage lending originations as well as mortgage servicing rights. The Company hedges the period from the interest rate lock (assuming a fall-out factor) to the date of the loan sale. The estimated fair value of IRLCs are based on underlying loan types with similar characteristics using the TBA MBS market, which is actively quoted and easily validated through external sources. The data inputs used in this valuation include, but are not limited to, loan type, underlying loan amount, note rate, loan program, and expected sale date of the loan, adjusted for current market conditions. These valuations are adjusted at the loan level to consider the servicing release premium and loan pricing adjustments specific to each loan. For all IRLCs, the base value is then adjusted for the anticipated Pull-through Rate. The anticipated Pull-through Rate is an unobservable input based on historical experience, which results in classification of IRLCs as a Level 3 measurement at June 30, 2016 . The fair value of the Hedging Instruments is based on the actively quoted TBA MBS market using observable inputs related to characteristics of the underlying MBS stratified by product, coupon and settlement date. Therefore, the Hedging Instruments are classified as a Level 2 measurement at June 30, 2016 . The following table includes information for the derivative assets and liabilities, lending for the periods presented: Total Gains (Losses) (1) Total Gains (Losses) (1) Notional Amount For the three months ended For the six months ended June 30, June 30, June 30, June 30, 2016 2015 2016 2015 2016 2015 Derivative – IRLC's $ $ $ $ $ $ Derivative – TBA MBS (1) Amounts included in gain on sale of loans, net within the accompanying consolidated statements of operations. Warrant — Upon entering an arrangement to facilitate the Company’s ability to offer Non-QM mortgage products, a warrant to purchase up to 9.9% of Impac Mortgage Corp. was issued. The warrant expired in August 2015 and was not exercised. The estimated fair value of the warrant was based on a model incorpo |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Taxes | |
Income Taxes | Note 11.—Income Taxes The Company calculates its quarterly tax provision pursuant to the guidelines in ASC 740 Income Taxes. ASC 740 requires companies to estimate the annual effective tax rate for current year ordinary income. In calculating the effective tax rate, permanent differences between financial reporting and taxable income are factored into the calculation, but temporary differences are not. The estimated annual effective tax rate represents the best estimate of the tax provision in relation to the best estimate of pre-tax ordinary income or loss. The estimated annual effective tax rate is then applied to year-to-date ordinary income or loss to calculate the year-to-date interim tax provision. The Company recorded income tax expense of $423 thousand and $ 858 thousand for the the three and six months ended June 30, 2016 primarily the result of amortization of the deferred charge, federal alternative minimum tax (AMT), and state income taxes from states where the Company does not have net operating loss carryforwards or state minimum taxes, including AMT. For the the three and six months ended June 30, 2015 , t he Company recorded income tax expense (benefit) of $71 thousand and ($23.6) million. For the three months ended June 30, 2015 , the Company recorded amortization of the deferred charge partially offset by a reduction in current income tax provision based upon an estimated reduction in federal alternative minimum tax (AMT)and state income taxes. For the six months ended June 30, 2015 , the Company recorded a benefit of $24.4 million primarily the result of a reversal of valuation allowance partially offset by federal alternative minimum tax (AMT), amortization of the deferred charge and state income taxes from states where the Company does not have net operating loss carryforwards or state minimum taxes, including AMT. The deferred charge represents the deferral of income tax expense on inter-company profits that resulted from the sale of mortgages from taxable subsidiaries to IMH prior to 2008. The deferred charge is amortized and/or impaired, which does not result in any tax liability to be paid. The deferred charge is included in other assets in the accompanying consolidated balance sheets and is amortized as a component of income tax expense in the accompanying consolidated statements of operations. |
Reconciliation of Earnings Per
Reconciliation of Earnings Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Reconciliation of Earnings Per Share | |
Reconciliation of Earnings Per Share | Note 12.—Reconciliation of Earnings Per Share Basic net earnings per share is computed by dividing net earnings available to common stockholders (numerator) by the weighted average number of vested, common shares outstanding during the period (denominator). Diluted net earnings per share is computed on the basis of the weighted average number of shares of common stock outstanding plus the effect of dilutive potential common shares outstanding during the period using the if-converted method. Dilutive potential common shares include shares issuable upon conversion of Convertible Notes, dilutive effect of outstanding stock options and deferred stock units (DSUs). For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 Numerator for basic earnings per share: Net earnings $ $ $ $ Numerator for diluted earnings per share: Net earnings $ $ $ $ Interest expense attributable to convertible notes Net earnings plus interest expense attributable to convertible notes $ $ $ $ Denominator for basic earnings per share (1): Basic weighted average common shares outstanding during the period Denominator for diluted earnings per share (1): Basic weighted average common shares outstanding during the period Net effect of dilutive convertible notes Net effect of dilutive stock options and DSU’s Diluted weighted average common shares Net earnings per common share: Basic $ $ $ $ Diluted $ $ $ $ (1) Number of shares presented in thousands. For the three and six months ended June 30, 2016 there were 345 thousand anti-dilutive stock options outstanding. There was no anti-dilutive stock options outstanding for the three and six months ended June 30, 2015. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting | |
Segment Reporting | Note 13.—Segment Reporting The Company has three primary reporting segments which include mortgage lending, real estate services and long-term mortgage portfolio. Unallocated corporate and other administrative costs, including the costs associated with being a public company, are presented in Corporate and other. Statement of Operations Items for the Mortgage Real Estate Long-term Corporate three months ended June 30, 2016: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ $ — $ — $ — $ Real estate services fees, net — — Servicing income, net — — — Loss on mortgage servicing rights — — — Other revenue — Accretion of contingent consideration — — — Change in fair value of contingent consideration — — — Other expense Other income (expense) — Net earnings (loss) before income taxes $ $ $ $ Income tax expense Net earnings $ Statement of Operations Items for the Mortgage Real Estate Long-term Corporate three months ended June 30, 2015: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ $ — $ — $ — $ Real estate services fees, net — — — Servicing income, net — — — Loss on mortgage servicing rights — — — Other revenue — Accretion of contingent consideration — — — Change in fair value of contingent consideration — — — Other expense Other income (expense) — Net earnings (loss) before income taxes $ $ $ $ $ Income tax expense Net earnings $ Statement of Operations Items for the Mortgage Real Estate Long-term Corporate six months ended June 30, 2016: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ $ — $ — $ — $ Real estate services fees, net — — — Servicing income, net — — — Loss on mortgage servicing rights — — — Other revenue — Accretion of contingent consideration — — — Change in fair value of contingent consideration — — — Other expense Other income (expense) — Net earnings (loss) before income taxes $ $ $ $ Income tax expense Net earnings $ Statement of Operations Items for the Mortgage Real Estate Long-term Corporate six months ended June 30, 2015: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ $ — $ — $ — $ Real estate services fees, net — — — Servicing income, net — — — Loss on mortgage servicing rights — — — Other revenue — Accretion of contingent consideration — — — Change in fair value of contingent consideration — — — Other expense Other income (expense) — Net earnings (loss) before income taxes $ $ $ $ $ Income tax benefit Net earnings $ Long-term Mortgage Real Estate Mortgage Corporate Balance Sheet Items as of: Lending Services Portfolio and other Consolidated Total Assets at June 30, 2016 (1) $ $ $ $ $ Total Assets at December 31, 2015(1) $ $ $ $ $ (1) All segment asset balances exclude intercompany balances . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 14.—Commitments and Contingencies Legal Proceedings The Company is a defendant in or a party to a number of legal actions or proceedings that arise in the ordinary course of business. In some of these actions and proceedings, claims for monetary damages are asserted against the Company. In view of the inherent difficulty of predicting the outcome of such legal actions and proceedings, the Company generally cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss related to each pending matter may be, if any. In accordance with applicable accounting guidance, the Company establishes an accrued liability for litigation when those matters present loss contingencies that are both probable and estimable. In any case, there may be an exposure to losses in excess of any such amounts whether accrued or not. Any estimated loss is subject to significant judgment and is based upon currently available information, a variety of assumptions, and known and unknown uncertainties. The matters underlying the estimated loss will change from time to time, and actual results may vary significantly from the current estimate. Therefore, an estimate of possible loss represents what the Company believes to be an estimate of possible loss only for certain matters meeting these criteria. It does not represent the Company’s maximum loss exposure. Based on the Company’s current understanding of these pending legal actions and proceedings, management does not believe that judgments or settlements arising from pending or threatened legal matters, individually or in the aggregate, will have a material adverse effect on the consolidated financial position, operating results or cash flows of the Company. However, in light of the inherent uncertainties involved in these matters, some of which are beyond the Company’s control, and the very large or indeterminate damages sought in some of these matters, an adverse outcome in one or more of these matters could be material to the Company’s results of operations or cash flows for any particular reporting period. The Company is a party to other litigation and claims which are normal in the course of our operations. While the results of such other litigation and claims cannot be predicted with certainty, we believe the final outcome of such matters will not have a material adverse effect on our financial condition or results of operations. The Company believes that it has meritorious defenses to the claims and intends to defend these claims vigorously and as such the Company believes the final outcome of such matters will not have a material adverse effect on its financial condition or results of operations. Nevertheless, litigation is uncertain and the Company may not prevail in the lawsuits and can express no opinion as to their ultimate resolution. An adverse judgment in any of these matters could have a material adverse effect on the Company’s financial position and results of operations. Please refer to IMH’s report on Form 10-K for the year ended December 31, 2015 for a description of litigation and claims. Repurchase Reserve When the Company sells mortgage loans, it makes customary representations and warranties to the purchasers about various characteristics of each loan such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local law. The Company’s whole loan sale agreements generally require it to repurchase loans if the Company breached a representation or warranty given to the loan purchaser. The following table summarizes the repurchase reserve activity related to previously sold loans for the three months ended June 30, 2016 and year ended December 31, 2015: June 30, December 31, 2016 2015 Beginning balance $ $ Provision for repurchases Settlements Total repurchase reserve $ $ Short-Term Loan Commitments The Company uses a portion of its warehouse borrowing capacity to provide secured short-term revolving financing to small and medium-size mortgage originators to finance mortgage loans from the closing of the mortgage loans until sold to investors (Finance Receivables). As of June 30, 2016 , the warehouse lending operations had warehouse lines to non-affiliated customers totaling $145.5 million, of which there was an outstanding balance of $ 56.4 million in finance receivables compared to $ 36.4 million as of December 31, 2015. The finance receivables are generally secured by residential mortgage loans as well as personal guarantees. |
Share Based Payments and Employ
Share Based Payments and Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2016 | |
Equity and Share Based Payments | |
Equity and Share Based Payments | Note 15.—Equity and Share Based Payments Equity As further described in Note 8. – Convertible Notes, in January 2016, the Company elected to exercise its option to convert the Notes to common stock. The conversion resulted in the Company issuing an aggregate of 1,839,080 shares of common stock at a conversion price of $10.875 . The Company initiated an equity offering program (EOP) on December 3, 2015 by filing a prospectus supplement with the Securities and Exchange Comission under its shelf registration. The EOP allows the Company to offer and sell, from time to time, up to $25.0 million of its common stock in negotiated transactions or transactions that are deemed to be "at the market offerings", as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on the NYSE MKT or sales made to or through a market maker other than on an exchange. During the six months ended June 30, 2016 , the Company sold 355,420 shares of its common stock through the EOP at an average price of $13.99 per share, for which it received proceeds of $4.9 million, net of $100 thousand in sales commission. Share Based Payments There were no stock options granted during the three and six months ended June 30, 2016 . The following table summarizes activity, pricing and other information for the Company’s stock options for the six months ended June 30, 2016 : Weighted- Average Number of Exercise Shares Price Options outstanding at beginning of period $ Options granted — — Options exercised Options forfeited/cancelled Options outstanding at end of period Options exercisable at end of period $ As of June 30, 2016 , there was approximately $2.7 million of total unrecognized compensation cost related to stock option compensation arrangements granted under the plan, net of estimated forfeitures. That cost is expected to be recognized over the remaining weighted average period of 1.9 years. There were no and 35,000 options granted during the six months ended June 30, 2016 and 2015, respectively. For the six months ended June 30, 2016 and 2015, the aggregate grant-date fair value of stock options granted was none and approximately $236 thousand, respectively. The following table summarizes activity, pricing and other information for the Company’s DSU’s, also referred to as deferred stock units as the issuance of the stock is deferred until termination of service, for the six months ended June 30, 2016 : Weighted- Average Number of Grant Date Shares Fair Value DSU’s outstanding at beginning of period $ DSU’s granted — — DSU’s exercised — — DSU’s forfeited/cancelled — — DSU’s outstanding at end of period $ As of June 30, 2016 , there was approximately $13 thousand of total unrecognized compensation cost related to the DSU compensation arrangements granted under the plan. That cost is expected to be recognized over a weighted average period of 0.1 years. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events | |
Subsequent Events | Note 16.—Subsequent Events On July 19, 2016, the stockholders of the Company approved an amendment to the Company’s 2010 Omnibus Incentive Plan, as amended (Plan), increasing the number of shares available under the Plan by 300,000 shares. Awards under the Plan may include incentive stock options, nonqualified stock options, stock appreciation rights, restricted shares of common stock, restricted stock units, performance share or unit awards, other stock-based awards and cash-based incentive awards. The increase in shares available under the Plan is designed to enhance the flexibility in granting stock options and other awards to officers, employees, non-employee directors and other key persons and to ensure that the Company can continue to grant stock options and other awards to such persons at levels determined to be appropriate by the Company’s compensation committee. In August 2016, the maximum borrowing capacity for repurchase agreement 5 was increased to $175.0 million with a temporary increase to $200.0 million until September 15, 2016. Subsequent events have been evaluated through the date of this filing. |
Acquisition of CashCall Mortg23
Acquisition of CashCall Mortgage (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Acquisition of CashCall Mortgage | |
Schedule of purchase price allocation | The table below presents the purchase price allocation of the estimated fair values of assets acquired and the liabilities assumed as of March 31, 2015. Consideration paid: Cash $ IMH common stock Deferred payments Contingent consideration (1) $ Assets acquired: Trademark $ Customer list Non-compete agreement Fixed assets and software Total assets acquired Liabilities assumed: Total liabilities assumed — Goodwill $ (1) Included within the contingent consideration is $1.4 million of Business Appreciation Rights, as defined above. |
Schedule of pro forma results of operations | For the Three and Six Months Ended June 30, 2015 Revenues $ $ Other (expense) income Expenses Pretax net earnings $ $ |
Mortgage Loans Held-for-Sale (T
Mortgage Loans Held-for-Sale (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Mortgage Loans Held-for-Sale | |
Summary of the unpaid principal balance (UPB ) of mortgage loans held-for-sale by type | June 30, December 31, 2016 2015 Government (1) $ $ Conventional (2) Other (3) Fair value adjustment (4) Total mortgage loans held for sale $ $ (1) Includes all government-insured loans including Federal Housing Administration (FHA), Veterans Affairs (VA) and United States Department of Agriculture (USDA). (2) Includes loans eligible for sale to Federal National Mortgage Association (Fannie Mae or FNMA) and Federal Home Loan Mortgage Corporation (Freddie Mac or FHLMC). (3) Includes NonQM and Jumbo loans. (4) Changes in fair value are included in the statements of operations. |
Schedule of gain on loans held-for-sale (LHFS) | For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 Gain on sale of mortgage loans $ $ $ $ Premium from servicing retained loan sales Unrealized gains from derivative financial instruments Realized (losses) gains from derivative financial instruments Mark to market gain (loss) on LHFS Direct origination expenses, net Provision for repurchases Total gain on sale of loans, net $ $ $ $ |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Mortgage Servicing Rights | |
Schedule of hypothetical changes in the fair values of MSRs, caused by assumed immediate changes to key assumptions that are used to determine fair value. | June 30, Mortgage Servicing Rights Sensitivity Analysis 2016 Fair value of MSRs $ Prepayment Speed: Decrease in fair value from 10% adverse change Decrease in fair value from 20% adverse change Decrease in fair value from 30% adverse change Discount Rate: Decrease in fair value from 10% adverse change Decrease in fair value from 20% adverse change Decrease in fair value from 30% adverse change |
Schedule of Loss on mortgage servicing rights | For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 Loss on sale of mortgage servicing rights $ $ $ $ Change in fair value of mortgage servicing rights Realized and unrealized gains from hedging instruments — — Loss on mortgage servicing rights $ $ $ $ |
Schedule of components of servicing income | For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 Contractual servicing fees $ $ $ $ Late and ancillary fees |
Mortgage servicing rights | |
Mortgage Servicing Rights | |
Schedule of changes in the fair value of MSRs | June 30, December 31, 2016 2015 Balance at beginning of period $ $ Additions from servicing retained loan sales Reductions from bulk sales Changes in fair value (1) Fair value of MSRs at end of period $ $ (1) Changes in fair value are included within loss on mortgage servicing rights in the consolidated statements of operations. |
Schedule of the outstanding loans serviced by entity | June 30, December 31, 2016 2015 Government insured (1) $ $ Conventional (2) NonQM Total loans serviced $ $ (1) As of June 30, 2016 , the Government insured servicing has been pledged as collateral as part of the Term Financing. (See Note 7. — Term Financing. ) (2) As of June 30, 2016 , the Conventional servicing has been pledged as collateral and subject to acknowledgement agreements with FNMA and FHLMC as part of the Term Financing. (See Note 7. — Term Financing. ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets. | |
Summary of preliminary purchase price of intangible assets | Gross Carrying Accumulated Net Carrying Amount Amount Amortization at June 30, 2016 Remaining Life Intangible assets: Trademark $ $ $ Customer relationships Non-compete agreement Total intangible assets acquired $ $ $ |
Other Finite Lived Intangible Assets Amortization Expense Table Text Block | Gross Carrying Accumulated Net Carrying Amount Amount Amortization at June 30, 2016 Remaining Life Other assets: Developed software $ $ $ |
Warehouse Borrowings (Tables)
Warehouse Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Warehouse Borrowings. | |
Schedule of information on warehouse borrowings | Maximum Balance Outstanding At Borrowing June 30, December 31, Capacity 2016 2015 Short-term borrowings: Repurchase agreement 1 (1) $ $ $ Repurchase agreement 2 (2) Repurchase agreement 3 (3) Repurchase agreement 4 Repurchase agreement 5 (4) Repurchase agreement 6 (5) — — Total warehouse borrowings $ $ $ (1) In June 2016, the maturity date was extended to June 16, 2017. (2) In July 2016, the maturity date was extended to May 28, 2017. (3) As of June 30, 2016 and December 31, 2015, $ 56.4 million and $ 36.4 million, respectively, are attributable to financing facility advances made to the Company’s warehouse customers. (4) In August 2016, the lender granted the Company an increase in the maximum borrowing capacity to $175.0 million with a temporary increase to $200.0 million until September 15, 2016. In April 2016, the maturity date was extended to March 1, 2017. In June 2016, the Company enter ed into repurchase agreement 6 which has a maximum borrowing capacity of $150.0 million and a maturity date of June 30, 2017. |
Securitized Mortgage Trusts (Ta
Securitized Mortgage Trusts (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Securitized Mortgage Trusts | |
Schedule of trust assets | June 30, December 31, 2016 2015 Securitized mortgage collateral $ $ REO Investment securities available-for-sale Total securitized mortgage trust assets $ $ |
Schedule of trust liabilities | June 30, December 31, 2016 2015 Securitized mortgage borrowings $ $ Derivative liabilities Total securitized mortgage trust liabilities $ $ |
Schedule of changes in fair value of net trust assets, including trust REO losses | For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 Change in fair value of net trust assets, excluding REO $ $ $ $ (Losses) gains from REO Change in fair value of net trust assets, including trust REO gains (losses) $ $ $ $ |
Fair Value of Financial Instr29
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value of Financial Instruments | |
Schedule of estimated fair value of financial instruments included in consolidated financial statements | June 30, 2016 December 31, 2015 Carrying Estimated Fair Value Carrying Estimated Fair Value Amount Level 1 Level 2 Level 3 Amount Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ $ $ — $ — $ $ $ — $ — Restricted cash — — — — Mortgage loans held-for-sale — — — — Finance receivables — — — — Mortgage servicing rights — — — — Derivative assets, lending, net — — Investment securities available-for-sale — — — — Securitized mortgage collateral — — — — Liabilities Warehouse borrowings $ $ — $ $ — $ $ — $ $ — Term financing — — — — Convertible notes — — — — Contingent consideration — — — — Long-term debt — — — — Securitized mortgage borrowings — — — — Derivative liabilities, securitized trusts — — — — Derivative liabilities, lending, net — — — — |
Schedule of assets and liabilities that are measured at estimated fair value on recurring basis | Recurring Fair Value Measurements June 30, 2016 December 31, 2015 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Investment securities available-for-sale $ — $ — $ $ — $ — $ Mortgage loans held-for-sale — — — — Derivative assets, lending, net (1) — — Mortgage servicing rights — — — — Securitized mortgage collateral — — — — Total assets at fair value $ — $ $ $ — $ $ Liabilities Securitized mortgage borrowings $ — $ — $ $ — $ — $ Derivative liabilities, securitized trusts (2) — — — — Long-term debt — — — — Contingent consideration — — — — Derivative liabilities, lending, net (3) — — — — Total liabilities at fair value $ — $ $ $ — $ $ (1) At June 30, 2016 , derivative assets, lending, net included $19.3 million in IRLCs and $510 thousand in Hedging Intruments, respectively, and is included in other assets in the accompanying consolidated balance sheets. At December 31, 2015, derivative assets, lending, net included $9.2 million in IRLCs and $89 thousand in Hedging Instruments associated with the Company’s mortgage lending operations, and is included in other assets in the accompanying consolidated balance sheet. (2) At June 30, 2016 and December 31, 2015, derivative liabilities, securitized trusts, are included within trust liabilities in the accompanying consolidated balance sheets. (3) At June 30, 2016 and December 31, 2015, derivative liabilities, lending, net are included in other liabilities in the accompanying consolidated balance sheets. |
Schedule of reconciliation for all assets and liabilities measured at estimated fair value on recurring basis using significant unobservable inputs (Level 3) | Level 3 Recurring Fair Value Measurements For the three months ended June 30, 2016 Derivative Investment liabilities, Interest securities Securitized Securitized net, Mortgage rate lock Long- available- mortgage mortgage securitized servicing commitments, term Contingent for-sale collateral borrowings trusts rights net debt consideration Fair value, March 31, 2016 $ $ $ $ $ $ $ $ Total gains (losses) included in earnings: Interest income (1) — — — — — — Interest expense (1) — — — — — — Change in fair value Total gains (losses) included in earnings Transfers in and/or out of Level 3 — — — — — — — — Purchases, issuances and settlements: Purchases — — — — — — — — Issuances — — — — — — — Settlements — — Fair value, June 30, 2016 $ $ $ $ $ $ $ $ Unrealized gains (losses) still held (2) $ $ — $ — $ — $ $ $ $ (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $2.4 million for the three months ended June 30, 2016 . The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations is primarily from contractual interest on the securitized mortgage collateral and borrowings. (2) Represents the amount of unrealized gains (losses) relating to assets and liabilities classified as Level 3 that are still held and reflected in the fair values at June 30, 2016 . Level 3 Recurring Fair Value Measurements For the three months ended June 30, 2015 Derivative Investment liabilities, Interest securities Securitized Securitized net, Mortgage rate lock Long- available- mortgage mortgage securitized servicing commitments, term Contingent for-sale collateral borrowings trusts rights net debt consideration Warrant Fair value, March 31, 2015 $ $ $ $ $ $ $ $ $ Total gains (losses) included in earnings: Interest income (1) — — — — — — — Interest expense (1) — — — — — — — Change in fair value Total (losses) gains included in earnings Transfers in and/or out of Level 3 — — — — — — — — — Purchases, issuances and settlements: Purchases — — — — — — — — — Issuances — — — — — — — — Settlements — — — Fair value, June 30, 2015 $ $ $ $ $ $ $ $ $ Unrealized gains (losses) still held (2) $ $ $ $ $ $ $ $ $ (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $2.1 million for the three months ended June 30, 2015 . The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations is primarily from contractual interest on the securitized mortgage collateral and borrowings. (2) Represents the amount of unrealized gains (losses) relating to assets and liabilities classified as Level 3 that are still held and reflected in the fair values at June 30, 2015 . The following tables present reconciliations for all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2016 and 2015: Level 3 Recurring Fair Value Measurements For the six months ended June 30, 2016 Derivative Investment liabilities, Interest securities Securitized Securitized net, Mortgage rate lock Long- available- mortgage mortgage securitized servicing commitments, term Contingent for-sale collateral borrowings trusts rights net debt consideration Fair value, December 31, 2015 $ $ $ $ $ $ $ $ Total gains (losses) included in earnings: Interest income (1) — — — — — — Interest expense (1) — — — — — — Change in fair value Total gains (losses) included in earnings Transfers in and/or out of Level 3 — — — — — — — — Purchases, issuances and settlements: Purchases — — — — — — — — Issuances — — — — — — — Settlements — — Fair value, June 30, 2016 $ $ $ $ $ $ $ $ (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $4.8 million for six months ended June 30, 2016 . The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations is primarily from contractual interest on the securitized mortgage collateral and borrowings. Level 3 Recurring Fair Value Measurements For the six months ended June 30, 2015 Derivative Investment liabilities, Interest securities Securitized Securitized net, Mortgage rate lock Long- available- mortgage mortgage securitized servicing commitments, term Contingent for-sale collateral borrowings trusts rights net debt consideration Warrant Fair value, December 31, 2014 $ $ $ $ $ $ $ $ — $ Total gains (losses) included in earnings: Interest income (1) — — — — — — — Interest expense (1) — — — — — — — Change in fair value Total (losses) gains included in earnings Transfers in and/or out of Level 3 — — — — — — — — — Purchases, issuances and settlements: Purchases — — — — — — — — — Issuances — — — — — — — Settlements — — — Fair value, June 30, 2015 $ $ $ $ $ $ $ $ $ (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $4.3 million for the six months ended June 30, 2015 . The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations is primarily from contractual interest on the securitized mortgage collateral and borrowings. |
Schedule of quantitative information about the valuation techniques and unobservable inputs applied to Level 3 fair value measurements for financial instruments measured at fair value on a recurring and non-recurring basis | The following table presents quantitative information about the valuation techniques and unobservable inputs applied to Level 3 fair value measurements for financial instruments measured at fair value on a recurring and non-recurring basis at June 30, 2016 : Estimated Valuation Unobservable Range of Weighted Financial Instrument Fair Value Technique Input Inputs Average Assets and liabilities backed by real estate Investment securities available-for-sale, $ DCF Discount rates 3.5 - 25.0 % % Securitized mortgage collateral, and Prepayment rates 2.9 - 23.1 % % Securitized mortgage borrowings Default rates 0.5 - 10.4 % % Loss severities 1.6 - 82.2 % % Other assets and liabilities Mortgage servicing rights $ DCF Discount rate 9.0 - 14.0 % % Prepayment rates 5.6 - 89.0 % % Derivative liabilities, net, securitized trusts DCF 1M forward LIBOR 0.5 - 2.0 % N/A % Derivative assets - IRLCs, net Market pricing Pull-through rate 26.0 - 99.0 % % Long-term debt DCF Discount rate % % Contingent consideration DCF Discount rate % % Margins 2.1 - 2.4 % % Probability of outcomes (1) 20.0 - 50.0 % % DCF = Discounted Cash Flow 1M = 1 Month (1) Probability of outcomes is the probability of projected CCM earnings over the earn-out period based upon three scenarios (base, low and high). |
Schedule of changes in recurring fair value measurements included in net earnings (loss) | Recurring Fair Value Measurements Changes in Fair Value Included in Net Earnings For the three months ended June 30, 2016 Change in Fair Value of Interest Interest Net Trust Long-term Other Revenue Gain on sale Income (1) Expense (1) Assets Debt and Expense of loans, net Total Investment securities available-for-sale $ $ — $ $ — $ — $ — $ Securitized mortgage collateral — — — — Securitized mortgage borrowings — — — — Derivative liabilities, net, securitized trusts — — (2) — — — Long-term debt — — — — Mortgage servicing rights (3) — — — — — Contingent consideration — — — — — Mortgage loans held-for-sale — — — — — Derivative assets — IRLCs — — — — — Derivative liabilities — Hedging Instruments — — — — — Total $ $ $ $ $ $ $ (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in this amount is $56 4 thousand in changes in the fair value of derivative instruments, offset by $621 thousand in cash payments from the securitization trusts for the three months ended June 30, 2016 . (3) Included in loss on mortgage servicing rights in the consolidated statements of operations. Recurring Fair Value Measurements Changes in Fair Value Included in Net Earnings For the three months ended June 30, 2015 Change in Fair Value of Interest Interest Net Trust long-term Other Gain on sale Income (1) Expense (1) Assets Debt Revenue of loans, net Total Investment securities available-for-sale $ $ — $ $ — $ — $ — $ Securitized mortgage collateral — — — — Securitized mortgage borrowings — — — — Derivative liabilities, net, securitized trusts — — (2) — — — Long-term debt — — — — Mortgage servicing rights (3) — — — — — Warrant — — — — — Contingent consideration — — — — — Mortgage loans held-for-sale — — — — — Derivative assets — IRLCs — — — — — Derivative liabilities — Hedging Instruments — — — — — Total $ $ $ $ $ $ $ (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in this amount is $939 thousand in change in the fair value of derivative instruments, offset by $1.1 million in cash payments from the securitization trusts for the three months ended June 30, 2015 . (3) Included in loss on mortgage servicing rights in the consolidated statements of operations. Recurring Fair Value Measurements Changes in Fair Value Included in Net Earnings For the six months ended June 30, 2016 Change in Fair Value of Interest Interest Net Trust Long-term Other Revenue Gain on sale Income (1) Expense (1) Assets Debt and Expense of loans, net Total Investment securities available-for-sale $ $ — $ $ — $ — $ — $ Securitized mortgage collateral — — — — Securitized mortgage borrowings — — — — Derivative liabilities, net, securitized trusts — — (2) — — — Long-term debt — — — — Mortgage servicing rights (3) — — — — — Contingent consideration — — — — — Mortgage loans held-for-sale — — — — — Derivative assets — IRLCs — — — — — Derivative liabilities — Hedging Instruments — — — — — Total $ $ $ (4) $ $ $ $ (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in this amount is $1.2 million in change in the fair value of derivative instruments, offset by $1.3 million in cash payments from the securitization trusts for the six months ended June 30, 2016 . (3) Included in loss on mortgage servicing rights in the consolidated statements of operations. (4) For the six months ended June 30, 2016 , change in the fair value of net trust assets, excluding REO was $6.1 million. Excluded from the $7.4 million change in fair value of net trust assets, excluding REO, in the accompanying consolidated statement of cash flows is $1.3 million in cash payments from the securitization trusts related to the Company’s net derivative liabilities. Recurring Fair Value Measurements Changes in Fair Value Included in Net Earnings For the six months ended June 30, 2015 Change in Fair Value of Interest Interest Net Trust long-term Other Gain on sale Income (1) Expense (1) Assets Debt Revenue of loans, net Total Investment securities available-for-sale $ $ — $ $ — $ — $ — $ Securitized mortgage collateral — — — — Securitized mortgage borrowings — — — — Derivative liabilities, net, securitized trusts — — (2) — — — Long-term debt — — — — Mortgage servicing rights (3) — — — — — Warrant — — — — — Contingent consideration — — — — — Mortgage loans held-for-sale — — — — — Derivative assets — IRLCs — — — — — Derivative liabilities — Hedging Instruments — — — — — Total $ $ $ (4) $ $ $ $ (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in this amount is $1.8 million in change in the fair value of derivative instruments, offset by $2.2 million in cash payments from the securitization trusts for the six months ended June 30, 2015 . (3) Included in loss on mortgage servicing rights in the consolidated statements of operations. (4) For the six months ended June 30, 2015 , change in the fair value of net trust assets, excluding REO was $2.4 million. Excluded from the $4.6 million change in fair value of net trust assets, excluding REO, in the accompanying consolidated statement of cash flows is $2.2 million in cash payments from the securitization trusts related to the Company’s net derivative liabilities. |
Schedule of information for derivative assets and liabilities - lending | Total Gains (Losses) (1) Total Gains (Losses) (1) Notional Amount For the three months ended For the six months ended June 30, June 30, June 30, June 30, 2016 2015 2016 2015 2016 2015 Derivative – IRLC's $ $ $ $ $ $ Derivative – TBA MBS (1) Amounts included in gain on sale of loans, net within the accompanying consolidated statements of operations. |
Schedule of financial and non-financial assets and liabilities measured using nonrecurring fair value measurements | Nonrecurring Fair Value Measurements Total Gains (Losses) (1) Total Gains (Losses) (1) June 30, 2016 For the Three Months Ended For the Six Months Ended Level 1 Level 2 Level 3 June 30, 2016 June 30, 2016 REO (2) $ — $ $ — $ $ Deferred charge (3) — — (1) Total losses reflect losses from all nonrecurring measurements during the period. (2) Balance represents REO at June 30, 2016 which has been impaired subsequent to foreclosure. For the three and six months ended June 30, 2016 , the $ 3 .4 million and $4.5 million loss, respectively, represents additional impairment write-downs attributable to higher expected loss severities on properties held during the period which resulted in a decrease to the net realizable value (NRV). (3) For the three and six months ended June 30, 2016 , the Company recorded $190 thousand and $615 thousand in income tax expense resulting from impairment write-downs of deferred charge based on changes in estimated cash flows and lives of the related mortgages retained in the securitized mortgage collateral. Non-recurring Fair Value Measurements Total Gains (Losses) (1) Total Gains (Losses) (1) June 30, 2015 For the Three Months Ended For the Six Months Ended Level 1 Level 2 Level 3 June 30, 2015 June 30, 2015 REO (2) $ — $ $ — $ $ Lease liability (3) — — Deferred charge (4) — — (1) Total losses reflect losses from all nonrecurring measurements during the period. (2) Balance represents REO at June 30, 2015 which has been impaired subsequent to foreclosure. For the three months ended June 30, 2015, the $207 thousand gain represents recovery of the net realizable value (NRV) attributable to an improvement in state specific loss severities on properties held during the period which resulted in an increase to NRV. For the six months ended June 30, 2015, the $2.5 million loss represents additional impairment write-downs attributable to higher expected loss severities on properties held during the period which resulted in a decrease to the net realizable value (NRV). (3) For the three and six months ended June 30, 2015 , the Company recorded $16 thousand and $39 thousand expense, resulting from changes in lease liabilities a s a result of changes in our expected minimum future lease payments. For the three and six months ended June 30, 2015 , the Company recorded $324 thousand and $633 thousand in income tax expense resulting from impairment write-downs of deferred charge based on changes in estimated cash flows and lives of the related mortgages retained in the securitized mortgage collateral. |
Reconciliation of Earnings Pe30
Reconciliation of Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Reconciliation of Earnings Per Share | |
Schedule of computation of basic and diluted earnings per common share | For the Three Months Ended For the Six Months Ended June 30, June 30, 2016 2015 2016 2015 Numerator for basic earnings per share: Net earnings $ $ $ $ Numerator for diluted earnings per share: Net earnings $ $ $ $ Interest expense attributable to convertible notes Net earnings plus interest expense attributable to convertible notes $ $ $ $ Denominator for basic earnings per share (1): Basic weighted average common shares outstanding during the period Denominator for diluted earnings per share (1): Basic weighted average common shares outstanding during the period Net effect of dilutive convertible notes Net effect of dilutive stock options and DSU’s Diluted weighted average common shares Net earnings per common share: Basic $ $ $ $ Diluted $ $ $ $ (1) Number of shares presented in thousands. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting | |
Schedule of the selected statement of operations information by reporting segment | Statement of Operations Items for the Mortgage Real Estate Long-term Corporate three months ended June 30, 2016: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ $ — $ — $ — $ Real estate services fees, net — — Servicing income, net — — — Loss on mortgage servicing rights — — — Other revenue — Accretion of contingent consideration — — — Change in fair value of contingent consideration — — — Other expense Other income (expense) — Net earnings (loss) before income taxes $ $ $ $ Income tax expense Net earnings $ Statement of Operations Items for the Mortgage Real Estate Long-term Corporate three months ended June 30, 2015: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ $ — $ — $ — $ Real estate services fees, net — — — Servicing income, net — — — Loss on mortgage servicing rights — — — Other revenue — Accretion of contingent consideration — — — Change in fair value of contingent consideration — — — Other expense Other income (expense) — Net earnings (loss) before income taxes $ $ $ $ $ Income tax expense Net earnings $ Statement of Operations Items for the Mortgage Real Estate Long-term Corporate six months ended June 30, 2016: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ $ — $ — $ — $ Real estate services fees, net — — — Servicing income, net — — — Loss on mortgage servicing rights — — — Other revenue — Accretion of contingent consideration — — — Change in fair value of contingent consideration — — — Other expense Other income (expense) — Net earnings (loss) before income taxes $ $ $ $ Income tax expense Net earnings $ Statement of Operations Items for the Mortgage Real Estate Long-term Corporate six months ended June 30, 2015: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ $ — $ — $ — $ Real estate services fees, net — — — Servicing income, net — — — Loss on mortgage servicing rights — — — Other revenue — Accretion of contingent consideration — — — Change in fair value of contingent consideration — — — Other expense Other income (expense) — Net earnings (loss) before income taxes $ $ $ $ $ Income tax benefit Net earnings $ Long-term Mortgage Real Estate Mortgage Corporate Balance Sheet Items as of: Lending Services Portfolio and other Consolidated Total Assets at June 30, 2016 (1) $ $ $ $ $ Total Assets at December 31, 2015(1) $ $ $ $ $ All segment asset balances exclude intercompany balances |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies | |
Schedule of the activity related to the repurchase reserve for previously sold loans | June 30, December 31, 2016 2015 Beginning balance $ $ Provision for repurchases Settlements Total repurchase reserve $ $ |
Share Based Payments and Empl33
Share Based Payments and Employee Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Equity and Share Based Payments | |
Summary of activity, pricing and other information for the Company's stock options | The following table summarizes activity, pricing and other information for the Company’s stock options for the six months ended June 30, 2016 : Weighted- Average Number of Exercise Shares Price Options outstanding at beginning of period $ Options granted — — Options exercised Options forfeited/cancelled Options outstanding at end of period Options exercisable at end of period $ |
Summary of activity, pricing and other information for the Company's (DSU's) | The following table summarizes activity, pricing and other information for the Company’s DSU’s, also referred to as deferred stock units as the issuance of the stock is deferred until termination of service, for the six months ended June 30, 2016 : Weighted- Average Number of Grant Date Shares Fair Value DSU’s outstanding at beginning of period $ DSU’s granted — — DSU’s exercised — — DSU’s forfeited/cancelled — — DSU’s outstanding at end of period $ |
Summary of Business and Finan34
Summary of Business and Financial Statement Presentation (Details) - USD ($) $ in Thousands | Jan. 01, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Other assets | $ 41,764 | $ 38,118 | |
Accounting Standard Update 2015-03 | Retrospective adjustment | |||
Other assets | $ (465) | ||
Long Term Loans And Convertible Notes Payable | $ (465) |
Acquisition of CashCall Mortg35
Acquisition of CashCall Mortgage (Details) - USD ($) $ in Thousands | Jan. 06, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 |
Consideration paid: | |||||||
Contingent consideration | $ 49,986 | $ 49,986 | $ 48,079 | ||||
Assets acquired: | |||||||
Goodwill. | 104,938 | 104,938 | $ 104,938 | ||||
Unaudited Pro Forma Results of Operations | |||||||
Revenues | 49,084 | $ 101,828 | |||||
Other expense | 217 | (6,509) | |||||
Expenses | (37,013) | (77,843) | |||||
Pretax net income | 12,288 | 17,476 | |||||
Revenues | 69,213 | $ 49,084 | 116,512 | 83,428 | |||
Operating Expenses | $ 60,891 | 32,420 | 106,046 | 49,560 | |||
Cash Call Inc | |||||||
Business combinations | |||||||
Acqusition price, cash portion | $ 10,000 | ||||||
Newly issued unregistered shares | 494,017 | ||||||
Earn out period of contingent consideration | 3 years | ||||||
Percentage of pre-tax profits expected for contingent earn-out for the month of January and February of 2015 | 100.00% | ||||||
Percentage of pre tax profit expected for contingent earn out for remaining part of the year | 65.00% | ||||||
Period for newly issued unregistered shares | 10 months | ||||||
Percentage of pre-tax profits expected for contingent earn-out in second year | 55.00% | ||||||
Percentage of pre-tax profits expected for contingent earn-out in third year | 45.00% | ||||||
Threshold percentage of ownership transfer considered | 50.00% | ||||||
Percentage of payment on enterprise value | 15.00% | ||||||
Amount paid pursuant to earn-out provision | 13,100 | ||||||
Amount of enterprise value considered for payment | $ 200,000 | ||||||
Additional percentage of payment on enterprise value | 5.00% | ||||||
Threshold Enterprise Value Considered For Additional Payment | $ 500,000 | ||||||
Consideration paid: | |||||||
Cash | $ 5,000 | $ 2,500 | |||||
IMH common stock | 6,150 | ||||||
Deferred payments | 5,000 | ||||||
Contingent consideration | 124,592 | ||||||
Consideration paid, total | 140,742 | ||||||
Assets acquired: | |||||||
Identifiable intangible assets | 33,100 | ||||||
Fixed assets and software | 3,034 | ||||||
Total assets acquired | 36,156 | ||||||
Goodwill. | 104,586 | ||||||
Contingent consideration of business appreciation rights | 1,400 | ||||||
Acquisition related costs | 300 | ||||||
Tax deductible goodwill | $ 104,600 | $ 104,600 | |||||
Trademark | Cash Call Inc | |||||||
Assets acquired: | |||||||
Identifiable intangible assets | 17,251 | ||||||
Identifiable intangible assets | 17,200 | ||||||
Customer list | Cash Call Inc | |||||||
Assets acquired: | |||||||
Identifiable intangible assets | 10,170 | ||||||
Identifiable intangible assets | 10,200 | ||||||
Non-compete agreement | Cash Call Inc | |||||||
Assets acquired: | |||||||
Identifiable intangible assets | 5,701 | ||||||
Identifiable intangible assets | $ 5,700 |
Mortgage Loans Held-for-Sale (D
Mortgage Loans Held-for-Sale (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Mortgage loans held-for-Sale | |||||
Fair value adjustment | $ 24,976 | $ 24,976 | $ 10,857 | ||
Total mortgage loans held-for-sale | 683,687 | 683,687 | 310,191 | ||
Gain on LHFS | |||||
Premium from servicing retained loan sales | 2,803 | $ 1,017 | 4,891 | $ 1,652 | |
Provision for repurchases | (851) | (1,320) | |||
Total gain on sale of loans, net | 110,812 | 28,551 | |||
Government | |||||
Mortgage loans held-for-Sale | |||||
Fair value adjustment | 130,001 | 130,001 | 104,576 | ||
Conventional | |||||
Mortgage loans held-for-Sale | |||||
Fair value adjustment | 499,595 | 499,595 | 170,519 | ||
Other | |||||
Mortgage loans held-for-Sale | |||||
Fair value adjustment | 29,115 | 29,115 | $ 24,239 | ||
Mortgage loans, held-for-sale | |||||
Gain on LHFS | |||||
Gain on sale of mortgage loans | 83,812 | 65,051 | 143,024 | 120,141 | |
Premium from servicing retained loan sales | 32,097 | 30,364 | 50,919 | 52,734 | |
Unrealized gains from derivative financial instruments | 3,512 | (69) | 8,458 | 7,799 | |
Realized losses from derivative financial instruments | (7,132) | 1,457 | (15,590) | (1,705) | |
Mark to market gain on LHFS | 3,087 | (8,559) | 14,272 | 2,352 | |
Direct origination expenses, net | (36,082) | (39,151) | (67,541) | (93,960) | |
Provision for repurchases | (472) | (747) | (851) | (1,617) | |
Total gain on sale of loans, net | $ 78,822 | $ 48,346 | $ 132,691 | $ 85,744 |
Mortgage Servicing Rights (Deta
Mortgage Servicing Rights (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Changes in the fair value of MSRs | |||||
Balance at beginning of period | $ 36,425 | $ 24,418 | $ 24,418 | ||
Additions from servicing retained loan sales | 50,919 | 98,103 | |||
Reductions from bulk sales | (8,773) | (75,157) | |||
Changes in fair value | (23,824) | (10,939) | |||
Fair value of MSRs at end of period | $ 54,747 | 54,747 | 36,425 | ||
Total loans serviced | 6,641,547 | 6,641,547 | 3,570,659 | ||
Mortgage Servicing Rights Sensitivity Analysis | |||||
Loss on sale of mortgage servicing rights | 2,459 | $ 2,248 | 3,079 | 5,722 | |
Change in fair value of mortgage servicing rights | (12,904) | (542) | (23,824) | (3,636) | |
Realized and unrealized gains from hedging instruments | 881 | 1,511 | |||
Loss on mortgage servicing rights | (14,482) | (2,790) | (25,392) | (9,358) | |
Servicing income | |||||
Servicing income, net | 2,803 | 1,017 | 4,891 | 1,652 | |
Contractual servicing fees | |||||
Servicing income | |||||
Servicing income, net | 3,685 | 1,595 | 6,318 | 2,688 | |
Late and ancillary fees | |||||
Servicing income | |||||
Servicing income, net | 40 | $ 9 | 73 | $ 59 | |
Alt-QM | |||||
Changes in the fair value of MSRs | |||||
Total loans serviced | 190,411 | 190,411 | 95,157 | ||
Government | |||||
Changes in the fair value of MSRs | |||||
Total loans serviced | 575,841 | 575,841 | 675,744 | ||
Conventional | |||||
Changes in the fair value of MSRs | |||||
Total loans serviced | 5,875,295 | 5,875,295 | $ 2,799,758 | ||
Mortgage servicing rights | |||||
Mortgage Servicing Rights Sensitivity Analysis | |||||
Fair value of MSRs | 54,747 | 54,747 | |||
Prepayment Speed, Decrease in fair value from 10% adverse change | (2,714) | (2,714) | |||
Prepayment Speed, Decrease in fair value from 20% adverse change | (5,196) | (5,196) | |||
Prepayment Speed, Decrease in fair value from 30% adverse change | (7,474) | (7,474) | |||
Discount Rate, Decrease in fair value from 10% adverse change | (1,739) | (1,739) | |||
Discount Rate, Decrease in fair value from 20% adverse change | (3,372) | (3,372) | |||
Discount Rate, Decrease in fair value from 30% adverse change | $ (4,907) | $ (4,907) |
Goodwill and Intangible Asset38
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
Changes in carrying amount of goodwill | |||
Goodwill | $ 104,938 | $ 104,938 | |
Cash Call Inc | |||
Changes in carrying amount of goodwill | |||
Goodwill | $ 104,586 | ||
Identifiable intangible assets | 33,100 | ||
Trademark | Cash Call Inc | |||
Changes in carrying amount of goodwill | |||
Identifiable intangible assets | 17,200 | ||
Customer list | Cash Call Inc | |||
Changes in carrying amount of goodwill | |||
Identifiable intangible assets | 10,200 | ||
Non-compete agreement | Cash Call Inc | |||
Changes in carrying amount of goodwill | |||
Identifiable intangible assets | $ 5,700 |
Goodwill and Intangible Asset39
Goodwill and Intangible Assets - Intangibles Other Than Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Intangible assets and other assets: | |
Gross Carrying Amount | $ 33,122 |
Accumulated Amortization | (5,246) |
Net Carrying Amount | $ 27,876 |
Remaining Life | 9 years 7 months 6 days |
Trademark | |
Intangible assets and other assets: | |
Gross Carrying Amount | $ 17,251 |
Accumulated Amortization | (1,462) |
Net Carrying Amount | $ 15,789 |
Remaining Life | 13 years 6 months |
Customer Relationships | |
Intangible assets and other assets: | |
Gross Carrying Amount | $ 10,170 |
Accumulated Amortization | (1,884) |
Net Carrying Amount | $ 8,286 |
Remaining Life | 5 years 6 months |
Non-compete agreement | |
Intangible assets and other assets: | |
Gross Carrying Amount | $ 5,701 |
Accumulated Amortization | (1,900) |
Net Carrying Amount | $ 3,801 |
Remaining Life | 2 years 6 months |
Developed software | |
Intangible assets and other assets: | |
Gross Carrying Amount | $ 2,719 |
Accumulated Amortization | (716) |
Net Carrying Amount | $ 2,003 |
Remaining Life | 3 years 6 months |
Warehouse Borrowings (Details)
Warehouse Borrowings (Details) - USD ($) $ in Thousands | Aug. 01, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Short Term Debt | |||
Maximum Borrowing Capacity | $ 875,000 | ||
Warehouse Agreement Borrowings | 699,377 | $ 325,616 | |
Information on warehouse borrowings | |||
Securitized mortgage collateral | 4,290,994 | 4,574,919 | |
Warehouse Borrowings | Non-affiliated customers | |||
Short Term Debt | |||
Maximum Borrowing Capacity | 145,500 | ||
Repurchase agreement 1 | |||
Short Term Debt | |||
Maximum Borrowing Capacity | 150,000 | ||
Warehouse Agreement Borrowings | 148,667 | 63,368 | |
Repurchase agreement 2 | |||
Short Term Debt | |||
Maximum Borrowing Capacity | 50,000 | ||
Warehouse Agreement Borrowings | 49,607 | 46,673 | |
Repurchase agreement 3 | |||
Short Term Debt | |||
Maximum Borrowing Capacity | 225,000 | ||
Warehouse Agreement Borrowings | 194,628 | 122,242 | |
Financing facility advances made to warehouse customers | 56,400 | 36,400 | |
Repurchase agreement 4 | |||
Short Term Debt | |||
Maximum Borrowing Capacity | 200,000 | ||
Warehouse Agreement Borrowings | 193,295 | 83,162 | |
Repurchase agreement 5 | |||
Short Term Debt | |||
Maximum Borrowing Capacity | $ 175,000 | 100,000 | |
Warehouse Agreement Borrowings | 113,180 | $ 10,171 | |
Increase in maximum borrowing capacity | $ 200,000 | ||
Repurchase agreement 5 | Subsequent Event | |||
Short Term Debt | |||
Maximum Borrowing Capacity | 175,000 | ||
Increase in maximum borrowing capacity | 200,000 | ||
Repurchase agreement 6 | |||
Short Term Debt | |||
Maximum Borrowing Capacity | $ 150,000 |
Term Financing (Details)
Term Financing (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | May 31, 2015 | Jun. 30, 2016 | Dec. 31, 2015 | Apr. 30, 2013 | |
Long-term Debt | |||||
Long-term debt | $ 30,990 | $ 31,898 | |||
Term financing | |||||
Long-term Debt | |||||
Amount of debt issued | $ 30,000 | ||||
Maximum loan advances | 50,000 | ||||
Loan extension fee | 100 | ||||
Debt issuance costs | $ 300 | 245 | 284 | ||
Long-term debt | $ 29,800 | $ 29,700 | |||
Percentage of common stock of any other borrowers' to be acquired in the event of default (as a percent) | 50.00% | ||||
Percentage Of Common Stock To Be Acquired On Default | 25.00% | ||||
Term financing | LIBOR | |||||
Long-term Debt | |||||
Interest margin over base rate (as a percent) | 8.50% | ||||
2013 Convertible Notes | |||||
Long-term Debt | |||||
Amount of debt issued | $ 20,000 | ||||
2015 Convertible Notes | |||||
Long-term Debt | |||||
Amount of debt issued | $ 25,000 | ||||
Debt issuance costs | $ 50 | ||||
Mast repurchase agreement | |||||
Long-term Debt | |||||
Repayment of the previous debt by using proceeds of new debt | $ 3,200 | ||||
Line of credit | |||||
Long-term Debt | |||||
Repayment of the previous debt by using proceeds of new debt | $ 4,000 |
Convertible Notes (Details)
Convertible Notes (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Feb. 29, 2016USD ($)$ / sharesshares | Jan. 31, 2016$ / sharesshares | May 31, 2015USD ($)item$ / shares | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Apr. 30, 2013USD ($) | |
Convertible Notes | ||||||||
Common stock issued upon conversion of notes (in shares) | shares | 1,839,080 | 1,839,080 | ||||||
Conversion price (in dollars per share) | $ / shares | $ 10.875 | |||||||
Conversion of debt into equity | $ 20,000 | |||||||
Interest expense | $ 66,469 | $ 66,310 | $ 135,897 | $ 137,860 | ||||
Convertible notes voting restriction period | 3 years | |||||||
2013 Convertible Notes | ||||||||
Convertible Notes | ||||||||
Amount of debt issued | $ 20,000 | |||||||
Conversion price (in dollars per share) | $ / shares | $ 10.875 | |||||||
Gain (loss) on conversion of notes to common stock | $ 0 | |||||||
2015 Convertible Notes | ||||||||
Convertible Notes | ||||||||
Amount of debt issued | $ 25,000 | |||||||
Conversion price (in dollars per share) | $ / shares | $ 21.50 | |||||||
Interest rate of debt (as a percent) | 7.50% | |||||||
Conditional conversion price (in dollars per share) | $ / shares | $ 30.10 | |||||||
Number of trading days for which stock price must exceed specified price | item | 20 | |||||||
Number of consecutive trading days during which stock price must exceed specified price | 30 days | |||||||
Transaction costs | $ 50 |
Securitized Mortgage Trusts- As
Securitized Mortgage Trusts- Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Trust Assets | ||
Securitized mortgage collateral | $ 4,290,994 | $ 4,574,919 |
Difference between aggregate unpaid principal balance and fair value of securitized mortgage collateral | 24,976 | 10,857 |
REO | 14,056 | 19,589 |
Investment securities available-for-sale | 21 | 26 |
Total securitized mortgage trust assets | $ 4,305,071 | $ 4,594,534 |
Securitized Mortgage Trusts - L
Securitized Mortgage Trusts - Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Trust Liabilities | ||
Securitized mortgage borrowings | $ 4,288,585 | $ 4,578,657 |
Derivative liabilities | 354 | 1,669 |
Total securitized mortgage trust liabilities | $ 4,288,939 | $ 4,580,326 |
Securitized Mortgage Trusts - C
Securitized Mortgage Trusts - Change in Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Securitized Mortgage Trusts | |||||
Derivative liabilities | $ 354 | $ 354 | $ 1,669 | ||
Change in fair value of net trust assets, including trust REO losses | |||||
Change in fair value of net trust assets, excluding REO | 5,556 | $ 596 | 6,069 | $ 2,389 | |
(Losses) gains from REO | (3,391) | 206 | (4,531) | (2,463) | |
Change in fair value of net trust assets, including trust REO losses | $ 2,165 | $ 802 | $ 1,538 | $ (74) |
Fair Value of Financial Instr46
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | |||
Mortgage servicing rights | $ 54,747 | $ 36,425 | $ 24,418 |
Liabilities | |||
Derivative liabilities, lending, net | 354 | 1,669 | |
Carrying Amount | |||
Assets | |||
Cash and cash equivalents. | 19,736 | 32,409 | |
Restricted cash. | 8,280 | 3,474 | |
Mortgage loans held for-for-sale | 683,687 | 310,191 | |
Finance receivables. | 56,388 | 36,368 | |
Mortgage servicing rights | 54,747 | 36,425 | |
Derivatives assets, lending, net | 19,813 | 9,273 | |
Investment securities available-for-sale | 21 | 26 | |
Securitized mortgage collateral | 4,290,994 | 4,574,919 | |
Liabilities | |||
Warehouse borrowings | 699,377 | 325,616 | |
Term financing | 29,755 | 29,716 | |
Convertible notes | 24,962 | 44,819 | |
Contingent consideration | 49,986 | 48,079 | |
Long-term debt | 30,990 | 31,898 | |
Securitized mortgage borrowings | 4,288,585 | 4,578,657 | |
Derivative liabilities, securitized trusts | 354 | 1,669 | |
Derivative liabilities, lending, net | 4,955 | 404 | |
Level 1 | Estimated Fair Value | |||
Assets | |||
Cash and cash equivalents. | 19,736 | 32,409 | |
Restricted cash. | 8,280 | 3,474 | |
Level 2 | Estimated Fair Value | |||
Assets | |||
Mortgage loans held for-for-sale | 683,687 | 310,191 | |
Finance receivables. | 56,388 | 36,368 | |
Derivatives assets, lending, net | 510 | 89 | |
Liabilities | |||
Warehouse borrowings | 699,377 | 325,616 | |
Derivative liabilities, lending, net | 4,955 | 404 | |
Level 3 | Estimated Fair Value | |||
Assets | |||
Mortgage servicing rights | 54,747 | 36,425 | |
Derivatives assets, lending, net | 19,303 | 9,184 | |
Investment securities available-for-sale | 21 | 26 | |
Securitized mortgage collateral | 4,290,994 | 4,574,919 | |
Liabilities | |||
Term financing | 29,755 | 29,716 | |
Convertible notes | 24,962 | 44,819 | |
Contingent consideration | 49,986 | 48,079 | |
Long-term debt | 30,990 | 31,898 | |
Securitized mortgage borrowings | 4,288,585 | 4,578,657 | |
Derivative liabilities, securitized trusts | $ 354 | $ 1,669 |
Fair Value of Financial Instr47
Fair Value of Financial Instruments - Assets and Liabilities Measure On Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | |||
Mortgage servicing rights | $ 54,747 | $ 36,425 | $ 24,418 |
Liabilities | |||
Derivative liabilities, lending, net | $ 354 | $ 1,669 | |
Level 3 | |||
Fair Value Measurements | |||
Percentage of level three assets to total assets measured at fair value | 86.00% | 99.00% | |
Percentage of level three liabilities to total liabilities measured at fair value | 94.00% | 99.00% | |
Recurring basis | Level 2 | |||
Assets | |||
Mortgage loans held for-for-sale | $ 683,687 | $ 310,191 | |
Derivatives assets, lending, net | 510 | 89 | |
Total assets at fair value | 684,197 | 310,280 | |
Liabilities | |||
Derivative liabilities, lending, net | 4,955 | 404 | |
Total liabilities at fair value | 4,955 | 404 | |
Recurring basis | Level 3 | |||
Assets | |||
Investment securities available-for-sale | 21 | 26 | |
Derivatives assets, lending, net | 19,303 | 9,184 | |
Mortgage servicing rights | 54,747 | 36,425 | |
Securitized mortgage collateral | 4,290,994 | 4,574,919 | |
Total assets at fair value | 4,365,065 | 4,620,554 | |
Liabilities | |||
Securitized mortgage borrowings | 4,288,585 | 4,578,657 | |
Derivative liabilities, securitized trusts | 354 | 1,669 | |
Long-term debt | 30,990 | 31,898 | |
Contingent consideration | 49,986 | 48,079 | |
Total liabilities at fair value | 4,369,915 | 4,660,303 | |
Recurring basis | Interest rate lock commitments. net (IRLCs) | |||
Assets | |||
Derivatives assets, lending, net | 19,300 | 9,200 | |
Recurring basis | Hedging Instruments | |||
Assets | |||
Derivatives assets, lending, net | $ 510,000 | $ 89,000 |
Fair Value of Financial Instr48
Fair Value of Financial Instruments - Reconciliations for Assets and Liabilities Measured Using Level 3 (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Level 3 | ||||
Purchases, issuances and settlements | ||||
Net interest income including cash received and paid | $ 2,400 | $ 2,100 | $ 4,800 | $ 4,300 |
Securitized mortgage borrowings | ||||
Purchases, issuances and settlements | ||||
Fair value at the end of the period | (4,288,585) | (4,288,585) | ||
Changes in fair value of liabilities during the period | ||||
Fair value in the beginning of the period | (4,368,356) | (5,109,133) | (4,578,657) | (5,245,860) |
Total gains (losses) included in earnings: | ||||
Total (losses) gains included in earnings | (120,262) | (71,883) | (84,347) | (124,394) |
Purchases, issuances and settlements | ||||
Settlements | 200,033 | 203,866 | 374,419 | 393,104 |
Fair value at the end of the period | (4,288,585) | (4,977,150) | (4,288,585) | (4,977,150) |
Unrealized gains (losses) still held | 3,327,569 | |||
Securitized mortgage borrowings | Interest expense. | ||||
Total gains (losses) included in earnings: | ||||
Total (losses) gains included in earnings | (46,925) | (50,331) | (97,971) | (106,697) |
Securitized mortgage borrowings | Change in fair value | ||||
Total gains (losses) included in earnings: | ||||
Total (losses) gains included in earnings | (73,337) | (21,552) | 13,624 | (17,697) |
Derivative liabilities, net, securitized trusts | ||||
Changes in fair value of liabilities during the period | ||||
Fair value in the beginning of the period | (969) | (4,499) | (1,669) | (5,447) |
Total gains (losses) included in earnings: | ||||
Total (losses) gains included in earnings | (57) | (115) | (150) | (356) |
Purchases, issuances and settlements | ||||
Settlements | 672 | 1,105 | 1,465 | 2,294 |
Fair value at the end of the period | (354) | (3,509) | (354) | (3,509) |
Unrealized gains (losses) still held | (3,225) | |||
Derivative liabilities, net, securitized trusts | Change in fair value | ||||
Total gains (losses) included in earnings: | ||||
Total (losses) gains included in earnings | (57) | (115) | (150) | (356) |
Long-term debt | ||||
Changes in fair value of liabilities during the period | ||||
Fair value in the beginning of the period | (32,141) | (29,646) | (31,898) | (22,122) |
Total gains (losses) included in earnings: | ||||
Total (losses) gains included in earnings | 1,151 | (1,792) | 908 | (9,316) |
Purchases, issuances and settlements | ||||
Fair value at the end of the period | (30,990) | (31,438) | (30,990) | (31,438) |
Unrealized gains (losses) still held | 39,645 | 39,325 | ||
Long-term debt | Interest expense. | ||||
Total gains (losses) included in earnings: | ||||
Total (losses) gains included in earnings | (203) | (248) | (446) | (656) |
Long-term debt | Change in fair value | ||||
Total gains (losses) included in earnings: | ||||
Total (losses) gains included in earnings | 1,354 | (1,544) | 1,354 | (8,660) |
Contingent consideration | ||||
Changes in fair value of liabilities during the period | ||||
Fair value in the beginning of the period | (48,772) | (124,592) | (48,079) | |
Total gains (losses) included in earnings: | ||||
Total (losses) gains included in earnings | (10,171) | 8,280 | (15,007) | 8,280 |
Purchases, issuances and settlements | ||||
Issuances | (124,592) | |||
Settlements | 8,957 | 24,905 | 13,100 | 24,905 |
Fair value at the end of the period | (49,986) | (91,407) | (49,986) | (91,407) |
Unrealized gains (losses) still held | (49,986) | (91,407) | ||
Contingent consideration | Change in fair value | ||||
Total gains (losses) included in earnings: | ||||
Total (losses) gains included in earnings | (10,171) | 8,280 | (15,007) | 8,280 |
Investment securities available-for-sale | ||||
Changes in fair value of assets during the period | ||||
Fair value at the beginning of the period | 23 | 88 | (26) | 92 |
Total gains (losses) included in earnings: | ||||
Total gains (losses) included in earnings | 33 | 9 | 42 | 46 |
Purchases, issuances and settlements | ||||
Settlements | (35) | (16) | (47) | (57) |
Fair value at the end of the period | 21 | 81 | 21 | 81 |
Unrealized gains (losses) still held | 21 | 81 | ||
Investment securities available-for-sale | Interest income | ||||
Total gains (losses) included in earnings: | ||||
Total gains (losses) included in earnings | 1 | 3 | 2 | 7 |
Investment securities available-for-sale | Change in fair value | ||||
Total gains (losses) included in earnings: | ||||
Total gains (losses) included in earnings | 32 | 6 | 40 | 39 |
Securitized mortgage collateral | ||||
Changes in fair value of assets during the period | ||||
Fair value at the beginning of the period | 4,364,558 | 5,110,983 | (4,574,919) | 5,249,639 |
Total gains (losses) included in earnings: | ||||
Total gains (losses) included in earnings | 94,479 | 35,328 | 25,759 | 51,192 |
Purchases, issuances and settlements | ||||
Settlements | (168,043) | (166,878) | (309,684) | (321,398) |
Fair value at the end of the period | 4,290,994 | 4,979,433 | 4,290,994 | 4,979,433 |
Unrealized gains (losses) still held | (1,190,093) | |||
Securitized mortgage collateral | Interest income | ||||
Total gains (losses) included in earnings: | ||||
Total gains (losses) included in earnings | 15,561 | 13,071 | 33,204 | 30,789 |
Securitized mortgage collateral | Change in fair value | ||||
Total gains (losses) included in earnings: | ||||
Total gains (losses) included in earnings | 78,918 | 22,257 | (7,445) | 20,403 |
Mortgage servicing rights | ||||
Changes in fair value of assets during the period | ||||
Fair value at the beginning of the period | 44,327 | 26,656 | (36,425) | 24,418 |
Total gains (losses) included in earnings: | ||||
Total gains (losses) included in earnings | (12,904) | (542) | (23,824) | (3,636) |
Purchases, issuances and settlements | ||||
Issuances | 32,097 | 30,364 | 50,919 | 52,734 |
Settlements | (8,773) | (12,234) | (8,773) | (29,272) |
Fair value at the end of the period | 54,747 | 44,244 | 54,747 | 44,244 |
Unrealized gains (losses) still held | 54,747 | 44,244 | ||
Mortgage servicing rights | Change in fair value | ||||
Total gains (losses) included in earnings: | ||||
Total gains (losses) included in earnings | (12,904) | (542) | (23,824) | (3,636) |
Interest rate lock commitments. net (IRLCs) | ||||
Changes in fair value of assets during the period | ||||
Fair value at the beginning of the period | 15,475 | 12,769 | (9,184) | 2,884 |
Total gains (losses) included in earnings: | ||||
Total gains (losses) included in earnings | 3,828 | (4,363) | 10,119 | 5,522 |
Purchases, issuances and settlements | ||||
Fair value at the end of the period | 19,303 | 8,406 | 19,303 | 8,406 |
Unrealized gains (losses) still held | 19,303 | 8,406 | ||
Interest rate lock commitments. net (IRLCs) | Change in fair value | ||||
Total gains (losses) included in earnings: | ||||
Total gains (losses) included in earnings | $ 3,828 | (4,363) | $ 10,119 | 5,522 |
Warrant | ||||
Changes in fair value of assets during the period | ||||
Fair value at the beginning of the period | 91 | 84 | ||
Total gains (losses) included in earnings: | ||||
Total gains (losses) included in earnings | 74 | 81 | ||
Purchases, issuances and settlements | ||||
Fair value at the end of the period | 165 | 165 | ||
Unrealized gains (losses) still held | 165 | |||
Warrant | Change in fair value | ||||
Total gains (losses) included in earnings: | ||||
Total gains (losses) included in earnings | $ 74 | $ 81 |
Fair Value of Financial Instr49
Fair Value of Financial Instruments - Valuation Techniques And Unobservable Inputs (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Level 3 | |
Unobservable input | |
Probability of outcomes | 33.10% |
Securitized mortgage borrowings | DCF | Level 3 | |
Valuation techniques | |
Estimated fair value of liabilities | $ (4,288,585) |
Securitized mortgage borrowings | DCF | Level 3 | Minimum | |
Unobservable input | |
Default rates (as a percent) | 0.50% |
Loss severities (as a percent) | 1.60% |
Securitized mortgage borrowings | DCF | Level 3 | Maximum | |
Unobservable input | |
Default rates (as a percent) | 10.40% |
Loss severities (as a percent) | 82.20% |
Securitized mortgage borrowings | DCF | Level 3 | Weighted Average | |
Unobservable input | |
Default rates (as a percent) | 2.10% |
Loss severities (as a percent) | 43.50% |
Derivative liabilities, net, securitized trusts | DCF | Level 3 | |
Valuation techniques | |
Estimated fair value of liabilities | $ (354) |
Derivative liabilities, net, securitized trusts | DCF | Level 3 | Minimum | |
Unobservable input | |
Variable rate (as a percent) | 0.50% |
Derivative liabilities, net, securitized trusts | DCF | Level 3 | Maximum | |
Unobservable input | |
Variable rate (as a percent) | 2.00% |
Long-term debt | DCF | Level 3 | |
Valuation techniques | |
Estimated fair value of liabilities | $ (30,990) |
Unobservable input | |
Discount rates (as a percent) | 13.80% |
Long-term debt | DCF | Level 3 | Weighted Average | |
Unobservable input | |
Discount rates (as a percent) | 13.80% |
Contingent consideration | DCF | Level 3 | |
Valuation techniques | |
Estimated fair value of liabilities | $ (49,986) |
Unobservable input | |
Margins | 16.50% |
Contingent consideration | DCF | Level 3 | Minimum | |
Unobservable input | |
Margins | 2.10% |
Contingent consideration | DCF | Level 3 | Maximum | |
Unobservable input | |
Margins | 2.40% |
Contingent consideration | DCF | Level 3 | Weighted Average | |
Unobservable input | |
Margins | 16.50% |
Probability of outcomes | 2.30% |
Contingent consideration | DCF | LIBOR | Minimum | |
Unobservable input | |
Probability of outcomes | 20.00% |
Contingent consideration | DCF | LIBOR | Maximum | |
Unobservable input | |
Probability of outcomes | 50.00% |
Investment securities available-for-sale | DCF | Level 3 | |
Valuation techniques | |
Estimated fair value of assets | $ 21 |
Investment securities available-for-sale | DCF | Level 3 | Minimum | |
Unobservable input | |
Discount rates (as a percent) | 3.50% |
Investment securities available-for-sale | DCF | Level 3 | Maximum | |
Unobservable input | |
Discount rates (as a percent) | 25.00% |
Investment securities available-for-sale | DCF | Level 3 | Weighted Average | |
Unobservable input | |
Discount rates (as a percent) | 5.50% |
Securitized mortgage collateral | DCF | Level 3 | |
Valuation techniques | |
Estimated fair value of assets | $ 4,290,994 |
Securitized mortgage collateral | DCF | Level 3 | Minimum | |
Unobservable input | |
Prepayment rates (as a percent) | 2.90% |
Securitized mortgage collateral | DCF | Level 3 | Maximum | |
Unobservable input | |
Prepayment rates (as a percent) | 23.10% |
Securitized mortgage collateral | DCF | Level 3 | Weighted Average | |
Unobservable input | |
Prepayment rates (as a percent) | 6.40% |
Mortgage servicing rights | DCF | Level 3 | |
Valuation techniques | |
Estimated fair value of assets | $ 54,747 |
Mortgage servicing rights | DCF | Level 3 | Minimum | |
Unobservable input | |
Discount rates (as a percent) | 9.00% |
Prepayment rates (as a percent) | 5.60% |
Mortgage servicing rights | DCF | Level 3 | Maximum | |
Unobservable input | |
Discount rates (as a percent) | 14.00% |
Mortgage servicing rights | DCF | Level 3 | Weighted Average | |
Unobservable input | |
Discount rates (as a percent) | 9.50% |
Prepayment rates (as a percent) | 15.10% |
Mortgage servicing rights | Derivative liabilities, net, securitized trusts | DCF | Level 3 | Maximum | |
Unobservable input | |
Prepayment rates (as a percent) | 89.00% |
Interest rate lock commitments. net (IRLCs) | Market pricing | Level 3 | |
Valuation techniques | |
Estimated fair value of assets | $ 19,303 |
Interest rate lock commitments. net (IRLCs) | Market pricing | Level 3 | Minimum | |
Unobservable input | |
Pull-through rate (as a percent) | 26.00% |
Interest rate lock commitments. net (IRLCs) | Market pricing | Level 3 | Maximum | |
Unobservable input | |
Pull-through rate (as a percent) | 99.00% |
Interest rate lock commitments. net (IRLCs) | Market pricing | Level 3 | Weighted Average | |
Unobservable input | |
Pull-through rate (as a percent) | 73.80% |
Fair Value of Financial Instr50
Fair Value of Financial Instruments - Changes in Fair Value Included in Earnings (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in the fair value of trust assets, excluding REO | $ 5,556 | $ 596 | $ 6,069 | $ 2,389 | |
Change in fair value of net trust assets, excluding REO | 7,434 | 4,583 | |||
Securitized mortgage collateral | |||||
Difference between aggregate unpaid principal balance and fair value of securitized mortgage collateral | 24,976 | 24,976 | $ 10,857 | ||
Securitized Mortgage Borrowings | |||||
Outstanding principal balance of securitized mortgage borrowings | 6,641,547 | $ 6,641,547 | 3,570,659 | ||
Impac Mortgage Corp. | |||||
Derivative assets and liabilities | |||||
Maximum percentage of ownership interest in acquiree for which warrants were issued | 9.90% | ||||
Derivative liabilities, net, securitized trusts | TBA's | |||||
Derivative assets and liabilities | |||||
Derivative Liability, Notional Amount | 582,742 | 473,555 | $ 582,742 | 473,555 | |
Derivative, Gain (Loss) on Derivative, Net | (7,448) | 5,751 | (17,251) | 572 | |
Derivative assets - IRLCs | Interest rate lock commitments. net (IRLCs) | |||||
Derivative assets and liabilities | |||||
Derivative Liability, Notional Amount | 1,053,004 | 680,077 | 1,053,004 | 680,077 | |
Derivative, Gain (Loss) on Derivative, Net | 3,828 | (4,363) | 10,119 | 5,522 | |
Recurring basis | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Total | (40,944) | (39,269) | (73,470) | (67,952) | |
Recurring basis | Interest income | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Total | 15,562 | 13,074 | 33,206 | 30,796 | |
Recurring basis | Interest expense. | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Total | (47,128) | (50,579) | (98,417) | (107,353) | |
Recurring basis | Change in Fair Value of Net Trust Assets | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Total | 5,556 | 596 | 6,069 | 2,389 | |
Recurring basis | Change in Fair Value of Long-term Debt | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Total | 1,354 | (1,544) | 1,354 | (8,660) | |
Recurring basis | Other revenue | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Total | (23,075) | 7,812 | (38,831) | 4,725 | |
Recurring basis | Gain on sale of loans, net | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Total | 6,787 | (8,628) | 23,149 | 10,151 | |
Recurring basis | Warrant | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of liabilities | 74 | 81 | |||
Recurring basis | Warrant | Other revenue | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of liabilities | 74 | 81 | |||
Recurring basis | Contingent consideration | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of liabilities | (10,171) | 8,280 | (15,007) | 8,280 | |
Recurring basis | Contingent consideration | Other revenue | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of liabilities | (10,171) | 8,280 | (15,007) | 8,280 | |
Recurring basis | Securitized mortgage borrowings | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of liabilities | (120,262) | (71,883) | (84,347) | (124,394) | |
Recurring basis | Securitized mortgage borrowings | Interest expense. | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of liabilities | (46,925) | (50,331) | (97,971) | (106,697) | |
Recurring basis | Securitized mortgage borrowings | Change in Fair Value of Net Trust Assets | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of liabilities | (73,337) | (21,552) | 13,624 | (17,697) | |
Recurring basis | Derivative liabilities, net, securitized trusts | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of liabilities | (57) | (115) | (150) | (356) | |
Recurring basis | Derivative liabilities, net, securitized trusts | Change in Fair Value of Net Trust Assets | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of liabilities | (57) | (115) | (150) | (356) | |
Changes in the fair value of derivative instruments | 564 | 939 | 1,200 | 1,800 | |
Cash payments from the securitization trusts | 621,000 | 1,100 | 1,300 | 2,200 | |
Change in fair value of net trust assets, excluding REO | 1,300 | ||||
Recurring basis | Derivative liabilities, net, securitized trusts | Hedging Instruments | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of liabilities | (128) | 4,294 | (1,242) | 2,277 | |
Recurring basis | Derivative liabilities, net, securitized trusts | Hedging Instruments | Gain on sale of loans, net | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of liabilities | (128) | 4,294 | (1,242) | 2,277 | |
Recurring basis | Long-term debt | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of liabilities | 1,151 | (1,792) | 908 | (9,316) | |
Recurring basis | Long-term debt | Interest expense. | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of liabilities | (203) | (248) | (446) | (656) | |
Recurring basis | Long-term debt | Change in Fair Value of Long-term Debt | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of liabilities | 1,354 | (1,544) | 1,354 | (8,660) | |
Recurring basis | Investment securities available-for-sale | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of assets | 33 | 9 | 42 | 46 | |
Recurring basis | Investment securities available-for-sale | Interest income | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of assets | 1 | 3 | 2 | 7 | |
Recurring basis | Investment securities available-for-sale | Change in Fair Value of Net Trust Assets | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of assets | 32 | 6 | 40 | 39 | |
Recurring basis | Securitized mortgage collateral | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of assets | 94,479 | 35,328 | 25,759 | 51,192 | |
Recurring basis | Securitized mortgage collateral | Interest income | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of assets | 15,561 | 13,071 | 33,204 | 30,789 | |
Recurring basis | Securitized mortgage collateral | Change in Fair Value of Net Trust Assets | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of assets | 78,918 | 22,257 | (7,445) | 20,403 | |
Recurring basis | Mortgage servicing rights | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of assets | (12,904) | (542) | (23,824) | (3,636) | |
Recurring basis | Mortgage servicing rights | Other revenue | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of assets | (12,904) | (542) | (23,824) | (3,636) | |
Recurring basis | Mortgage loans held-for-sale | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of assets | 3,087 | (8,559) | 14,272 | 2,352 | |
Recurring basis | Mortgage loans held-for-sale | Gain on sale of loans, net | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of assets | 3,087 | (8,559) | 14,272 | 2,352 | |
Recurring basis | Derivative assets - IRLCs | Interest rate lock commitments. net (IRLCs) | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of assets | 3,828 | (4,363) | 10,119 | 5,522 | |
Recurring basis | Derivative assets - IRLCs | Interest rate lock commitments. net (IRLCs) | Gain on sale of loans, net | |||||
Change in Fair Value Included in Net Earnings (Loss) | |||||
Change in fair value of assets | 3,828 | $ (4,363) | 10,119 | $ 5,522 | |
Recurring basis | Level 3 | |||||
Long-term debt | |||||
Estimated fair value of long-term debt | 30,990 | 30,990 | $ 31,898 | ||
Derivative assets and liabilities | |||||
Notional balance of derivative assets and liabilities, securitized trusts | 44,800 | 44,800 | |||
Recurring basis | Level 3 | Long-term debt | |||||
Long-term debt | |||||
Long-term debt unpaid principal balance | 70,500 | 70,500 | |||
Estimated fair value of long-term debt | 31,000 | 31,000 | |||
Difference between aggregate unpaid principal balances and fair value of long-term debt | 39,500 | 39,500 | |||
Recurring basis | Level 3 | Securitized mortgage collateral | |||||
Securitized mortgage collateral | |||||
Unpaid principal balance of securitized mortgage collateral | 5,300,000 | 5,300,000 | |||
Estimated fair value of securitized mortgage collateral | 4,300,000 | 4,300,000 | |||
Difference between aggregate unpaid principal balance and fair value of securitized mortgage collateral | 1,000,000 | 1,000,000 | |||
Unpaid principal balance of loans 90 days or more past due | 800,000 | 800,000 | |||
Estimated fair value of loans 90 days or more past due | 300,000 | 300,000 | |||
Difference between aggregate unpaid principal balances and fair value of mortgage loans | 500,000 | 500,000 | |||
Securitized Mortgage Borrowings | |||||
Outstanding principal balance of securitized mortgage borrowings | 5,300,000 | 5,300,000 | |||
Estimated fair value of securitized mortgage borrowings | 4,300,000 | 4,300,000 | |||
Bond losses | 2,200,000 | 2,200,000 | |||
Difference between aggregate unpaid principal balances and fair value of securitized mortgage borrowings | $ 1,000,000 | $ 1,000,000 |
Fair Value of Financial Instr51
Fair Value of Financial Instruments - Nonrecurring (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Total Gains (Losses) | ||||
Additional impairment write-downs attributable to higher expected loss severities on properties held | $ (4,531) | |||
Deferred charge, tax expense on impairment write-downs | $ 190 | (615) | ||
Impairment of deferred charge | 615 | $ 633 | ||
Nonrecurring Fair Value Measurements | ||||
Total Gains (Losses) | ||||
Additional impairment write-downs attributable to higher expected loss severities on properties held | (3,391) | $ 207 | (2,463) | |
Losses from changes in lease liabilities as a result of changes in expected minimum future lease payments | (16) | (39) | ||
Deferred charge, tax expense on impairment write-downs | (190) | (324) | (633) | |
Nonrecurring Fair Value Measurements | Level 2 | ||||
Fair Value Measurements | ||||
REO | 2,666 | 11,070 | ||
Nonrecurring Fair Value Measurements | Level 3 | ||||
Fair Value Measurements | ||||
Lease liability | (1,194) | |||
Deferred charge (See Note 17) | $ 9,348 | $ 10,888 | $ 9,348 | $ 10,888 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Reconciliation of income taxes to the expected statutory federal corporate income tax rates | |||||
Income tax expense (benefit) | $ 423 | $ 71 | $ 858 | $ (23,633) | |
Reversal of valuation allowance | $ 24,400 | ||||
Net deferred tax asset | $ 24,420 | $ 24,420 | $ 24,420 |
Reconciliation of Earnings Pe53
Reconciliation of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Numerator for basic earnings per share: | ||||
Net earnings | $ 12,251 | $ 16,810 | $ 13,232 | $ 50,782 |
Numerator for diluted earning per share: | ||||
Net earnings | 12,251 | 16,810 | 13,232 | 50,782 |
Interest expense attributable to convertible notes | 463 | 656 | 1,553 | 1,031 |
Net earnings plus interest expense attributable to convertible notes | $ 12,714 | $ 17,466 | $ 14,785 | $ 51,813 |
Denominator for basic earnings per share: | ||||
Basic weighted average common shares outstanding during the period | 12,395 | 10,199 | 11,896 | 9,906 |
Denominator for diluted earnings per share: | ||||
Basic weighted average common shares outstanding during the period | 12,395 | 10,199 | 11,896 | 9,906 |
Net effect of dilutive convertible notes | 1,163 | 2,529 | 1,559 | 2,185 |
Net effect of dilutive stock options and DSU's | 305 | 383 | 296 | 345 |
Diluted weighted average common shares | 13,863 | 13,111 | 13,751 | 12,436 |
Basic (in dollars per share) | $ 0.99 | $ 1.65 | $ 1.11 | $ 5.13 |
Diluted (in dollars per share) | $ 0.92 | $ 1.33 | $ 1.08 | $ 4.17 |
Stock options | ||||
Denominator for diluted earnings per share: | ||||
Antidilutive stock options excluded from weighted average share calculations (in shares) | 345,000 | 0 | 345,000 | 0 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)item | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting | |||||
Number of reportable segments | item | 3 | ||||
Gain on sale of loans, net | $ 78,822 | $ 48,346 | $ 132,691 | $ 85,744 | |
Real estate services fees, net | 1,995 | 2,355 | 4,095 | 5,097 | |
Servicing income, net | 2,803 | 1,017 | 4,891 | 1,652 | |
Loss on mortgage servicing rights | (14,482) | (2,790) | (25,392) | (9,358) | |
Other revenue | 75 | 156 | 227 | 293 | |
Accretion of contingent consideration | (1,759) | (3,046) | (3,653) | (3,046) | |
Change in fair value of contingent consideration | (8,412) | 11,326 | (11,354) | 11,326 | |
Other expense | (50,720) | (40,700) | (91,039) | (57,840) | |
Other income (expense) | 4,352 | 217 | 3,624 | (6,719) | |
Net earnings (loss) before income taxes | 12,674 | 16,881 | 14,090 | 27,149 | |
Income tax expense (benefit) | 423 | 71 | 858 | (23,633) | |
Net earnings | 12,251 | 16,810 | 13,232 | 50,782 | |
Total assets | 5,326,907 | 5,326,907 | $ 5,210,852 | ||
Corporate and Other. | |||||
Segment Reporting | |||||
Other revenue | 27 | (11) | 62 | 47 | |
Other expense | (2,072) | (2,250) | (3,186) | (4,309) | |
Other income (expense) | (1,224) | (878) | (3,088) | (1,391) | |
Net earnings (loss) before income taxes | (3,269) | (3,139) | (6,212) | (5,653) | |
Total assets | 28,304 | 28,304 | 28,570 | ||
Mortgage Lending | Operating segments | |||||
Segment Reporting | |||||
Gain on sale of loans, net | 78,822 | 48,346 | 132,691 | 85,744 | |
Servicing income, net | 2,803 | 1,017 | 4,891 | 1,652 | |
Loss on mortgage servicing rights | (14,482) | (2,790) | (25,392) | (9,358) | |
Other revenue | 3 | 104 | 52 | 121 | |
Accretion of contingent consideration | (1,759) | (3,046) | (3,653) | (3,046) | |
Change in fair value of contingent consideration | (8,412) | 11,326 | (11,354) | 11,326 | |
Other expense | (46,857) | (36,959) | (84,386) | (50,274) | |
Other income (expense) | 667 | 648 | 1,055 | 1,016 | |
Net earnings (loss) before income taxes | 10,785 | 18,646 | 13,904 | 37,181 | |
Total assets | 979,828 | 979,828 | 573,648 | ||
Real Estate Services | Operating segments | |||||
Segment Reporting | |||||
Real estate services fees, net | 1,995 | 2,355 | 4,095 | 5,097 | |
Other expense | (1,656) | (1,320) | (3,222) | (2,975) | |
Net earnings (loss) before income taxes | 339 | 1,035 | 873 | 2,122 | |
Total assets | 4,065 | 4,065 | 3,933 | ||
Long-term Portfolio | Operating segments | |||||
Segment Reporting | |||||
Other revenue | 45 | 63 | 113 | 125 | |
Other expense | (135) | (171) | (245) | (282) | |
Other income (expense) | 4,909 | 447 | 5,657 | (6,344) | |
Net earnings (loss) before income taxes | 4,819 | $ 339 | 5,525 | $ (6,501) | |
Total assets | $ 4,314,710 | $ 4,314,710 | $ 4,604,701 |
Commitments and Contingencies -
Commitments and Contingencies - Repurchase Reserve (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Commitments and Contingencies | ||
Beginning balance | $ 5,236 | $ 5,714 |
Provision for repurchases | 851 | 1,012 |
Settlements | (57) | (1,490) |
Total repurchase reserve | $ 6,030 | $ 5,236 |
Commitments and Contingencies56
Commitments and Contingencies - Loan Commitments (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies | ||
Approved warehouse lines | $ 875,000 | |
Outstanding balance of finance receivables | $ 56,400 | $ 36,400 |
Series B 9.375% redeemable preferred stock | ||
Commitments and Contingencies | ||
Preferred stock, dividend rate (as a percent) | 9.375% | 9.375% |
Series C 9.125% redeemable preferred stock | ||
Commitments and Contingencies | ||
Preferred stock, dividend rate (as a percent) | 9.125% | 9.125% |
Warehouse Borrowings | Non-affiliated customers | ||
Commitments and Contingencies | ||
Approved warehouse lines | $ 145,500 |
Share Based Payments and Empl57
Share Based Payments and Employee Benefits Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Feb. 29, 2016 | Jan. 31, 2016 | Jun. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 03, 2015 | |
Equity and Share Based Payments | |||||||
Common stock issued upon conversion of notes (in shares) | 1,839,080 | 1,839,080 | |||||
Conversion price of convertible notes into common stock (in dollars per share) | $ 10.875 | ||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | ||||
CEOP | |||||||
Equity and Share Based Payments | |||||||
Common stock, shares authorized | 25,000,000 | ||||||
Common stock, issued during the period | 355,420 | ||||||
Average sale price per share | $ 13.99 | ||||||
Net proceeds from sale of stock | $ 4,900 | ||||||
Sales commission | $ 100 | ||||||
Stock options | |||||||
Number of Shares | |||||||
Options outstanding at beginning of period (in shares) | 1,115,280 | 1,115,280 | |||||
Options granted (in shares) | 0 | 35,000 | |||||
Options exercised (in shares) | (3,941) | ||||||
Options forfeited / cancelled (in shares) | (19,833) | ||||||
Options outstanding at end of period (in shares) | 1,091,506 | 1,091,506 | |||||
Options exercisable at end of period (in shares) | 484,724 | 484,724 | |||||
Weighted-Average Exercise Price | |||||||
Options outstanding at beginning of period (in dollars per share) | $ 11.85 | $ 11.85 | |||||
Options exercised (in dollars per share) | 2.40 | ||||||
Options forfeited / cancelled (in dollars per share) | 16.06 | ||||||
Options outstanding at end of year (in dollars per share) | $ 11.81 | 11.81 | |||||
Options exercisable at end of period (in dollars per share) | $ 8.32 | $ 8.32 | |||||
Additional disclosure related to options | |||||||
Unrecognized compensation cost | $ 2,700 | $ 2,700 | |||||
Weighted-average period over which compensation cost is expected to be recognized | 1 year 10 months 24 days | ||||||
Aggregate grant-date fair value of stock options granted | $ 0 | $ 236 |
Equity and Share Based Payments
Equity and Share Based Payments - Share Based Payments (Details) - Deferred stock units $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($)$ / sharesshares | |
Number of Shares | |
DSU's outstanding at beginning of period (in shares) | shares | 80,750 |
DSU's outstanding at end of period (in shares) | shares | 80,750 |
Weighted-Average Grant Date Fair Value | |
DSU's outstanding at beginning of period (in dollars per share) | $ / shares | $ 9.36 |
DSU's outstanding at end of period (in dollars per share) | $ / shares | $ 9.36 |
Additional information regarding DSUs | |
Unrecognized compensation cost | $ | $ 13 |
Weighted-average period over which compensation cost is expected to be recognized | 1 month 6 days |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Jul. 19, 2016 | Aug. 01, 2016 | Jun. 30, 2016 |
Subsequent events | |||
Maximum Borrowing Capacity | $ 875,000 | ||
2010 Incentive Plan | Subsequent Event | |||
Subsequent events | |||
Increase in shares under amendment to the 2010 Omnibus Incentive Plan | 300,000 | ||
Repurchase agreement 5 | |||
Subsequent events | |||
Maximum Borrowing Capacity | $ 175,000 | 100,000 | |
Increase in maximum borrowing capacity | $ 200,000 | ||
Repurchase agreement 5 | Subsequent Event | |||
Subsequent events | |||
Maximum Borrowing Capacity | 175,000 | ||
Increase in maximum borrowing capacity | $ 200,000 |