Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 01, 2017 | Jun. 30, 2016 | |
Document and Entity Information | |||
Entity Registrant Name | IMPAC MORTGAGE HOLDINGS INC | ||
Entity Central Index Key | 1,000,298 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 124.6 | ||
Entity Common Stock, Shares Outstanding | 16,025,483 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and cash equivalents | $ 40,096 | $ 32,409 |
Restricted cash | 5,971 | 3,474 |
Mortgage loans held-for-sale | 388,422 | 310,191 |
Finance receivables | 62,937 | 36,368 |
Mortgage servicing rights | 131,537 | 36,425 |
Securitized mortgage trust assets | 4,033,290 | 4,594,534 |
Goodwill | 104,938 | 104,938 |
Intangibles assets, net | 25,778 | 29,975 |
Deferred tax asset, net | 24,420 | 24,420 |
Other assets | 46,345 | 38,118 |
Total assets | 4,863,734 | 5,210,852 |
LIABILITIES | ||
Warehouse borrowings | 420,573 | 325,616 |
Term financing | 29,910 | 29,716 |
Convertible notes | 24,965 | 44,819 |
Contingent consideration | 31,072 | 48,079 |
Long-term debt | 47,207 | 31,898 |
Securitized mortgage trust liabilities | 4,017,603 | 4,580,326 |
Other liabilities | 61,364 | 35,908 |
Total liabilities | 4,632,694 | 5,096,362 |
Commitments and contingencies (See Note 16) | ||
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value; 200,000,000 shares authorized; 16,019,983 and 10,326,520 shares issued and outstanding as of December 31, 2016 and December 31, 2015, respectively | 160 | 103 |
Additional paid-in capital | 1,168,125 | 1,098,302 |
Net accumulated deficit: | ||
Cumulative dividends declared | (822,520) | (822,520) |
Retained deficit | (114,746) | (161,416) |
Net accumulated deficit | (937,266) | (983,936) |
Total stockholders’ equity | 231,040 | 114,490 |
Total liabilities and stockholders' equity | 4,863,734 | 5,210,852 |
Series A-1 junior participating preferred stock | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock | ||
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) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Preferred stock, liquidation value (in dollars) | $ 51,800 | |
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 | 16,019,983 | 10,326,520 |
Common stock, shares outstanding | 16,019,983 | 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, liquidation value (in dollars) | $ 16,640 | $ 16,640 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 665,592 | 665,592 |
Preferred stock, shares outstanding | 665,592 | 665,592 |
Series C 9.125% redeemable preferred stock | ||
Preferred stock, liquidation value (in dollars) | $ 35,127 | $ 35,127 |
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 |
Common stock, par value (in dollars per share) | $ 9.125 | $ 9.125 |
Common stock, shares authorized | 0.01 | 0.01 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||
Gain on sale of loans, net | $ 311,017 | $ 169,206 | $ 28,217 |
Real estate services fees, net | 8,395 | 9,850 | 14,729 |
Servicing income, net | 13,734 | 6,102 | 4,586 |
Loss on mortgage servicing rights, net | (36,441) | (18,598) | (5,116) |
Other | 1,051 | 397 | 1,723 |
Total revenues | 297,756 | 166,957 | 44,139 |
Expenses: | |||
Personnel expense | 124,559 | 77,821 | 37,398 |
Business promotion | 42,571 | 27,650 | 1,182 |
General, administrative and other | 33,771 | 27,988 | 18,760 |
Accretion of contingent consideration | 6,997 | 8,142 | |
Change in fair value of contingent consideration | 30,145 | (45,920) | |
Total expenses | 238,043 | 95,681 | 57,340 |
Operating income (loss): | 59,713 | 71,276 | (13,201) |
Other income (expense): | |||
Interest income | 263,600 | 276,799 | 295,656 |
Interest expense | (260,810) | (274,853) | (294,521) |
Change in fair value of long-term debt | (14,436) | (8,661) | (4,014) |
Change in fair value of net trust assets, including trust REO (losses) gains | (304) | (5,638) | 11,063 |
Total other (expense) income | (11,950) | (12,353) | 8,184 |
Earnings before income taxes | 47,763 | 58,923 | (5,017) |
Income tax expense (benefit) | 1,093 | (21,876) | 1,305 |
Net earnings | $ 46,670 | $ 80,799 | $ (6,322) |
Earnings per common share: | |||
Basic (in dollars per share) | $ 3.54 | $ 8 | $ (0.68) |
Diluted (in dollars per share) | $ 3.31 | $ 6.40 | $ (0.68) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Preferred Stock | Common Stock | Additional Paid-In Capital | Cumulative Dividends Declared | Retained Deficit | Total |
Balance at Dec. 31, 2013 | $ 21 | $ 90 | $ 1,084,173 | $ (822,520) | $ (235,893) | $ 25,871 |
Balance (in shares) at Dec. 31, 2013 | 2,070,678 | 8,988,910 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Proceeds and tax benefit from exercise of stock options | 38 | 38 | ||||
Proceeds and tax benefit from exercise of stock options (in shares) | 14,622 | |||||
Stock based compensation | 1,921 | 1,921 | ||||
Legal Settlements | $ 6 | 3,442 | 3,448 | |||
Legal Settlements (in shares) | 585,000 | |||||
Net earnings | (6,322) | (6,322) | ||||
Balance at Dec. 31, 2014 | $ 21 | $ 96 | 1,089,574 | (822,520) | (242,215) | 24,956 |
Balance (in shares) at Dec. 31, 2014 | 2,070,678 | 9,588,532 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Proceeds and tax benefit from exercise of stock options | $ 2 | 970 | 972 | |||
Proceeds and tax benefit from exercise of stock options (in shares) | 243,971 | |||||
Stock based compensation | 1,613 | 1,613 | ||||
Shares issued related to CashCall acquisition (Note 2) | $ 5 | 6,145 | 6,150 | |||
Shares issued related to CashCall acquisition (Note 2) (in shares) | 494,017 | |||||
Net earnings | 80,799 | 80,799 | ||||
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 | $ 1 | 217 | 218 | |||
Proceeds and tax benefit from exercise of stock options (in shares) | 42,954 | |||||
Stock based compensation | 2,131 | 2,131 | ||||
Common stock issuance | $ 38 | 47,493 | 47,531 | |||
Common stock issuance (in shares) | 3,811,429 | |||||
Convertible note share issuance | $ 18 | 19,982 | 20,000 | |||
Convertible note share issuance (in shares) | 1,839,080 | |||||
Net earnings | 46,670 | 46,670 | ||||
Balance at Dec. 31, 2016 | $ 21 | $ 160 | $ 1,168,125 | $ (822,520) | $ (114,746) | $ 231,040 |
Balance (in shares) at Dec. 31, 2016 | 2,070,678 | 16,019,983 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net earnings (loss) | $ 46,670 | $ 80,799 | $ (6,322) |
Loss on sale of mortgage servicing rights | 10,688 | 8,046 | (1,113) |
Change in fair value of mortgage servicing rights | 24,388 | 10,939 | 6,229 |
Gain on sale of AmeriHome | (1,208) | ||
Gain on sale of mortgage loans | (309,185) | (162,988) | (23,668) |
Change in fair value of mortgage loans held-for-sale | 22 | (404) | (6,857) |
Change in fair value of derivatives lending, net | (1,807) | (6,916) | 27 |
Provision for repurchases | 379 | 1,012 | 2,253 |
Origination of mortgage loans held-for-sale | (12,924,252) | (9,258,350) | (2,845,494) |
Sale and principal reduction on mortgage loans held-for-sale | 13,026,911 | 9,252,839 | 2,736,431 |
Losses from REO | 5,934 | 6,595 | (7,581) |
Change in fair value of net trust assets, excluding REO | (7,347) | (5,021) | (8,658) |
Change in fair value of long-term debt | 14,436 | 8,661 | 4,014 |
Accretion of interest income and expense | 126,598 | 148,121 | 180,478 |
Amortization of intangible and other assets | 4,769 | 3,576 | |
Accretion of contingent consideration | 6,997 | 8,142 | |
Change in fair value of contingent consideration | 30,145 | (45,920) | |
Amortization of debt issuance costs and discount on note payable | 440 | 334 | 48 |
Stock-based compensation | 2,131 | 1,613 | 1,921 |
Impairment of deferred charge | 1,278 | 1,558 | 453 |
Change in deferred tax assets | (24,420) | ||
Net change in restricted cash | (2,497) | (1,054) | (953) |
Net change in other assets and liabilities | 8,778 | 3,502 | (19) |
Net cash provided by operating activities | 65,476 | 30,664 | 29,981 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Net change in securitized mortgage collateral | 619,844 | 649,454 | 634,714 |
Proceeds from the sale of mortgage servicing rights | 6,837 | 67,111 | 28,388 |
Finance receivable advances to customers | (928,238) | (664,550) | (76,317) |
Repayments of finance receivables | 901,669 | 636,540 | 67,959 |
Net change in mortgages held-for-investment | 46 | 46 | 7 |
Purchase of premises and equipment | (266) | 109 | (18) |
Net principal change on investment securities available-for-sale | 47 | 90 | 76 |
Acquisition of CashCall Mortgage | (7,500) | ||
Proceeds from the sale of REO | 41,962 | 33,087 | 36,288 |
Proceeds from the sale of AmeriHome | 10,200 | ||
Net cash provided by investing activities | 641,901 | 714,387 | 701,297 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Net proceeds from issuance of common stock | 47,531 | ||
Issuance of convertible notes | 25,000 | ||
Issuance of term financing | 30,000 | ||
Repayment of warehouse borrowings | (12,318,880) | (8,825,747) | (2,611,066) |
Borrowings under warehouse agreement | 12,413,837 | 8,924,645 | 2,718,150 |
Repayment of line of credit | (11,000) | (28,250) | |
Borrowings under line of credit | 7,000 | 29,250 | |
Repayment of short-term borrowing | (15,000) | ||
Payment of acquisition related contingent consideration | (54,149) | (38,110) | |
Short-term borrowing | 15,000 | ||
Repayment of securitized mortgage borrowings | (787,644) | (828,195) | (844,499) |
Principal payments on short-term debt | (6,000) | 6,000 | |
Principal payments on capital lease | (503) | (781) | (736) |
Debt issuance costs | (100) | (500) | (60) |
Proceeds from exercise of stock options | 218 | 973 | 37 |
Net cash used in financing activities | (699,690) | (722,715) | (731,174) |
Net change in cash and cash equivalents | 7,687 | 22,336 | 104 |
Cash and cash equivalents at beginning of year | 32,409 | 10,073 | 9,969 |
Cash and cash equivalents at end of year | 40,096 | 32,409 | 10,073 |
SUPPLEMENTARY INFORMATION: | |||
Interest paid | 77,469 | 63,283 | 56,595 |
Taxes paid, net of refunds | 339 | 1,229 | 725 |
NON-CASH TRANSACTIONS: | |||
Transfer of securitized mortgage collateral to real estate owned | 39,706 | 40,471 | 33,377 |
Mortgage servicing rights retained from loan sales and issuance of mortgage backed securities | 128,273 | 98,103 | 29,388 |
Common stock issued upon conversion of debt | 20,000 | ||
Acquisition of equipment purchased through capital lease | $ 551 | 413 | 573 |
Acquisition related goodwill asset related to CashCall | 104,586 | ||
Acquisition related intangible assets related to CashCall | 33,122 | ||
Acquisition related contingent consideration liability related to CashCall | $ 124,592 | ||
Common stock issued upon legal settlement | $ 3,448 | ||
Common stock issued related to CashCall acquisition | 6,150 |
Summary of Business and Financi
Summary of Business and Financial Statement Presentation including Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Business and Financial Statement Presentation | |
Summary of Business and Financial Statement Presentation | Note 1.—Summary of Business and Financial Statement Presentation including Significant Accounting Policies Business Summary Impac Mortgage Holdings, Inc. (the Company, IMH or Parent) 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 Basis of Presentation The accompanying consolidated financial statements include the accounts of IMH and its wholly-owned subsidiaries and have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). 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 year 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 . Principles of Consolidation The accompanying consolidated financial statements include accounts of IMH and other entities in which the Company has a controlling financial interest. The usual condition for a controlling financial interest is ownership of a majority of the voting interests of an entity. However, a controlling financial interest may also exist in entities, such as variable interest entities (VIEs), through arrangements that do not involve voting interests. The VIE framework requires a variable interest holder (counterparty to a VIE) to consolidate the VIE if that party has the power to direct activities of the VIE that most significantly impact the entity’s economic performance, will absorb a majority of the expected losses of the VIE, will receive a majority of the residual returns of the VIE, or both, and directs the significant activities of the entity. This party is considered the primary beneficiary of the entity. The determination of whether the Company meets the criteria to be considered the primary beneficiary of a VIE requires an evaluation of all transactions (such as investments, liquidity commitments, derivatives and fee arrangements) with the entity. Significant Accounting Policies Fair Value Option The Company has elected the fair value option for investment securities available-for-sale, securitized mortgage collateral, mortgage servicing rights, mortgage loans held-for-sale, securitized mortgage borrowings and long-term debt. Elections were made to mitigate income statement volatility caused by differences in the measurement basis of elected instruments. Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash and highly liquid investments with maturities of three months or less at the date of acquisition. The carrying amount of cash and cash equivalents approximates fair value. Cash balances that have restrictions as to the Company’s ability to withdraw funds are considered restricted cash. At December 31, 2016 and 2015, restricted cash totaled $6.0 million and $3.5 million, respectively. The restricted cash is the result of the terms of the Company’s warehouse borrowings. In accordance with the terms of the Master Repurchase Agreements related to the warehouse borrowings, the Company is required to maintain cash balances with the lender as additional collateral for the borrowings (See Note 8.—Debt). Mortgage Loans Held‑for‑Sale Mortgage loans held-for-sale (LHFS) are accounted for using the fair value option, with changes in fair value recorded in gain on sale of loans, net in the accompanying consolidated statements of operations. In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 825, Financial Instruments , loan origination fees and expenses are recognized in earnings as incurred and not deferred. Revenue derived from the Company’s mortgage lending activities includes loan fees collected at the time of origination and gain or loss from the sale of LHFS. Loan fees consist of fee income earned on all loan originations, including loans closed and held for sale. Loan fees are recognized as earned and consist of amounts collected for application and underwriting fees, fees on cancelled loans and discount points. The related direct loan origination costs are recognized when incurred and consists of broker fees and commissions. Gain or loss from the sale and mark‑to‑market of LHFS includes both realized and unrealized gains and losses and are included in gain on sale of loans, net in the accompanying consolidated statements of operations. The valuation of LHFS approximates a whole‑loan price, which includes the value of the related mortgage servicing rights. The Company principally sells its LHFS to government sponsored entities, and to a lesser extent, investors. The Company evaluates its loan sales for sales treatment. To the extent the transfer of loans qualifies as a sale, the Company derecognizes the loans and records a realized gain or loss on the sale date. In the event the Company determines that the transfer of loans does not qualify as a sale, the transfer would be treated as a secured borrowing. Interest on loans is recorded as income when earned and deemed collectible. LHFS are placed on nonaccrual status when any portion of the principal or interest is 90 days past due or earlier if factors indicate that the ultimate collectability of the principal or interest is not probable. Interest received from loans on nonaccrual status is recorded as income when collected. Loans return to accrual status when the principal and interest become current and it is probable that the amounts are fully collectible. Mortgage Servicing Rights The Company accounts for mortgage loan sales in accordance with ASC 860, Transfers and Servicing . Upon sale of mortgage loans on a service-retained basis, the LHFS are removed from the balance sheet, mortgage servicing rights (MSRs) are recorded as an asset for servicing rights retained. The Company elected to measure MSRs at fair value as prescribed by FASB ASC 860-50-35, and as such, servicing assets or liabilities are valued using discounted cash flow modeling techniques using assumptions regarding future net servicing cash flow, including prepayment rates, discount rates, servicing cost and other factors. Changes in estimated fair value are reported in the accompanying consolidated statements of operations within loss on mortgage servicing rights, net. When the Company sells mortgage servicing rights, the Company records a gain or loss on such sale based on the selling price of the mortgage servicing rights less the carrying value and transaction costs. Gains and losses are reported in the accompanying consolidated statements of operations within loss on mortgage servicing rights, net. Finance Receivables Finance receivables represent transactions with the Company’s customers involved in residential real estate lending. As a warehouse lender, the Company’s warehouse lending operations are a secured creditor of the mortgage bankers and brokers to which the Company extends credit and is subject to the risks inherent in that status, including the risk of borrower fraud, default and bankruptcy. Any claim of the Company’s warehouse lending operations as a secured lender in a bankruptcy proceeding may be subject to adjustment and delay. Finance receivables from customers represent repurchase facilities with mortgage bankers that are primarily collateralized by mortgages on single-family residential real estate. Terms of the repurchase facilities, including the maximum facility amount and interest rate, are determined based upon the financial strength, historical performance and other qualifications of the borrower. The warehouse facilities to customers have maturities that range from on-demand to one year. Finance receivables are stated at the principal balance outstanding. Interest income is recorded on the accrual basis. Securitized Mortgage Collateral The Company’s long‑term mortgage portfolio primarily includes adjustable rate and, to a lesser extent, fixed rate non‑conforming mortgages and commercial mortgages that were acquired and originated by our mortgage and commercial operations prior to 2008. Non‑conforming mortgages may not have certain documentation or verifications that are required by government sponsored entities and, therefore, in making our credit decisions, we were more reliant upon the borrower’s credit score and the adequacy of the underlying collateral. Historically, the Company securitized mortgages in the form of collateralized mortgage obligations (CMO) or real estate mortgage investment conduits (REMICs). These securitizations are evaluated for consolidation based on the provisions of FASB ASC 810‑10‑25. Amounts consolidated are included in trust assets and liabilities as securitized mortgage collateral, real estate owned, derivative assets, securitized mortgage borrowings and derivative liabilities in the accompanying consolidated balance sheets. The Company accounts for securitized mortgage collateral at fair value, with changes in fair value during the period reflected in earnings. Fair value measurements are based on the Company’s estimated cash flow models, which incorporate assumptions, inputs of other market participants and quoted prices for the underlying bonds. The Company’s assumptions include its expectations of inputs that other market participants would use. These assumptions include judgments about the underlying collateral, prepayment speeds, credit losses, investor yield requirements, forward interest rates and certain other factors. Interest income on securitized mortgage collateral is recorded using the effective yield for the period based on the previous quarter‑end’s estimated fair value. Securitized mortgage collateral is generally not placed on nonaccrual status as the servicer advances the interest payments to the trust regardless of the delinquency status of the underlying mortgage loan, until it becomes apparent to the servicer that the advance is not collectible. Real Estate Owned Real estate owned (REO) on the balance sheet, are primarily assets within the securitized trusts but are recorded as a separate asset for accounting and reporting purposes and are within the long‑term mortgage portfolio. REO, which consists of residential real estate acquired in satisfaction of loans, is carried at net realizable value, which includes the estimated fair value of the residential real estate less estimated selling and holding costs. Adjustments to the loan carrying value required at the time of foreclosure affect the carrying amount of REO. Subsequent write‑downs in the net realizable value of REO are included in change in fair value of net trust assets, including trust REO (losses) gains in the consolidated statements of operations. 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. 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 exceeds its implied fair value. An impairment loss, if any, is measured as the excess of carrying value over the implied fair value 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. Business Combinations Business combinations are accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations . Under the acquisition method, the acquiring entity in a business combination recognizes 100 percent of the acquired assets and assumed liabilities, regardless of the percentage owned, at their estimated fair values as of the date of acquisition. Any excess of the purchase price over the fair value of net assets and other identifiable intangible assets acquired is recorded as goodwill. To the extent the fair value of net assets acquired, including other identifiable assets, exceeds the purchase price, a bargain purchase gain is recognized. Assets acquired and liabilities assumed which involve contingencies must also be recognized at their estimated fair value, provided such fair value can be determined during the measurement period. Acquisition-related costs, including severance, conversion and other restructuring charges, such as abandoned space accruals, are expensed as incurred. Results of operations of an acquired business are included in the consolidated statements of operations from the date of acquisition. Securitized Mortgage Borrowings The Company records securitized mortgage borrowings in the accompanying consolidated balance sheets for the consolidated CMO and REMIC securitized trusts within the long-term mortgage portfolio. The debt from each issuance of a securitized mortgage borrowing is payable from the principal and interest payments on the underlying mortgages collateralizing such debt, as well as the proceeds from liquidations of REO. If the principal and interest payments are insufficient to repay the debt, the shortfall is allocated first to the residual interest holders (generally owned by the Company) then, if necessary, to the certificate holders (e.g. third party investors in the securitized mortgage borrowings) in accordance with the specific terms of the various respective indentures. Securitized mortgage borrowings typically are structured as one-month LIBOR “floaters” and fixed rate securities with interest payable to certificate holders monthly. The maturity of each class of securitized mortgage borrowing is directly affected by the amount of net interest spread, overcollateralization and the rate of principal prepayments and defaults on the related securitized mortgage collateral. The actual maturity of any class of a securitized mortgage borrowing can occur later than the stated maturities of the underlying mortgages. When the Company issued securitized mortgage borrowings, the Company generally sought an investment grade rating for the Company’s securitized mortgages by nationally recognized rating agencies. To secure such ratings, it was often necessary to incorporate certain structural features that provide for credit enhancement. This generally included the pledge of collateral in excess of the principal amount of the securities to be issued, a bond guaranty insurance policy for some or all of the issued securities, or additional forms of mortgage insurance. The Company’s total loss exposure is limited to the Company’s initial net economic investment in each trust, which is referred to as a residual interest. The Company accounts for securitized mortgage borrowings at fair value, with changes in fair value during the period reflected in earnings. Fair value measurements are based on the Company’s estimated cash flow models, which incorporate assumptions, inputs of other market participants and quoted prices for the underlying bonds. The Company’s assumptions include its expectations of inputs that other market participants would use. These assumptions include judgments about the underlying collateral, prepayment speeds, credit losses, investor yield requirements, forward interest rates and certain other factors. Interest expense on securitized mortgage borrowings are recorded quarterly using the effective yield for the period based on the previous quarter‑end’s estimated fair value. Derivative Instruments In accordance with FASB ASC 815‑10 Derivatives and Hedging—Overview , the Company records all derivative instruments at fair value. The Company has accounted for all its derivatives as non‑designated hedge instruments or free‑standing derivatives. Interest Rate Swaps, Caps and Floors The Company’s interest rate risk management objective was to limit the exposure to the variability in future cash flows attributable to the variability of one-month LIBOR, which is the underlying index of adjustable rate securitized mortgage borrowings. The Company’s interest rate risk management policies were formulated with the intent to offset the potential adverse effects of changing interest rates on securitized mortgage borrowings. To mitigate exposure to the effect of changing interest rates on cash flows on securitized mortgage borrowings, the Company purchased derivative instruments primarily in the form of interest rate swap agreements (swaps) and, to a lesser extent, interest rate cap agreements (caps) and interest rate floor agreements (floors). There were no outstanding derivatives as of December 31, 2016. The Company had $1.7 million in derivative liabilities outstanding as of December 31, 2015, all of which are in the securitized trusts and included in trust liabilities in the consolidated balance sheets. The fair value of the Company’s swaps, caps, floors and other derivative instruments is generally based on market prices provided by dealers and market makers, or estimates of future cash flows from these financial instruments. Lending Derivatives The mortgage lending operation enters into IRLCs with consumers to originate mortgage loans at a specified interest rate. These IRLCs are accounted for as derivative instruments. The fair values of IRLCs utilize current secondary market prices for underlying loans and estimated servicing value with similar coupons, maturity and credit quality, subject to the anticipated loan funding probability (Pull‑through Rate). The fair value of IRLCs is subject to change primarily due to changes in interest rates and the estimated Pull‑through Rate. The Company reports IRLCs within other assets and other liabilities at fair value with changes in fair value being recorded in the accompanying consolidated statements of operations within gain on sale of loans, net. The Company hedges the changes in fair value associated with changes in interest rates related to IRLCs and uncommitted LHFS by using forward sold commitments including Fannie Mae and Ginnie Mae mortgage‑backed securities known as to‑be‑announced mortgage‑backed securities (TBA MBS or Hedging Instruments). The Hedging Instruments are typically entered into at the time the IRLC is made and are accounted for as derivative instruments. The fair value of Hedging Instruments is subject to change primarily due to changes in interest rates. The Company reports Hedging Instruments within other assets and other liabilities at fair value with changes in fair value being recorded in the accompanying consolidated statements of operations within gain on sale of loans, net. The Company hedges the changes in fair value associated with changes in interest rates related to MSRs by using TBA MBS or Hedging Instruments. The Hedging Instruments are typically entered into at the time the MSR is created and are accounted for as derivative instruments. The fair value of Hedging Instruments is subject to change primarily due to changes in interest rates. The Company reports Hedging Instruments within other assets and other liabilities at fair value with changes in fair value being recorded in the accompanying consolidated statements of operations within loss on sale of mortgage servicing rights. The fair value of IRLCs and Hedging Instruments are represented as derivative assets, lending and derivative liabilities, lending in Note 12.— Fair Value of Financial Instruments. Long‑term Debt Long‑term debt (consisting of trust preferred securities and junior subordinated notes) is reported at fair value. These securities are measured based upon an analysis prepared by management, which considers the Company’s own credit risk and discounted cash flow analysis. Unrealized gains and losses are recognized in earnings in the accompanying consolidated statements of operations within change in fair value of long‑term debt. The Company does not consolidate trust preferred entities (which are sometimes hereinafter referred to as capital trusts) since the Company does not have a variable interest in the trust. Instead, the Company records its investment in the trust preferred entities (included in other assets in the accompanying consolidated balance sheets) and accounts for such under the equity method of accounting and reflects a liability for the issuance of the notes to the trust preferred entities. Repurchase Reserve The Company sells mortgage loans in the secondary market, including U.S. government sponsored entities and issues mortgage‑backed securities through Ginnie Mae and Fannie Mae. When the Company sells or issues securities, 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. In the event of a breach of its representations and warranties, the Company may be required to either repurchase the mortgage loans with the identified defects or indemnify the investor or insurer for any loss. Also, the Company’s loss may be reduced by proceeds from the sale or liquidation of the repurchased loan. The Company’s loss may be reduced by any recourse it has to correspondent lenders that, in turn, had sold such mortgage loans to the Company and breached similar or other representations and warranties. In such event, the Company has the right to seek a recovery of related repurchase losses from that correspondent lender. The Company records a provision for losses relating to such representations and warranties as part of its loan sale transactions. The method used to estimate the liability for representations and warranties is a function of the representations and warranties given and considers a combination of factors, including, but not limited to, estimated future defaults and loan repurchase rates and the potential severity of loss in the event of defaults including any loss on sale or liquidation of the repurchased loan and the probability of reimbursement by the correspondent loan seller. The Company establishes a liability at the time loans are sold and continually updates its estimated repurchase liability. The level of the repurchase liability for representations and warranties is difficult to estimate and requires considerable management judgment. The level of mortgage loan repurchase losses is dependent on economic factors, investor demands for loan repurchases and other external conditions that may change over the lives of the underlying loans. Revenue Recognition for Fees from Services The Company follows ASC 605, Revenue Recognition , which provides guidance on the application of GAAP to selected revenue recognition issues relates to our real estate services revenues. The Company’s real estate services segment provides various real estate related services and loss mitigation services including (i) managing distressed mortgage portfolios and foreclosed real estate assets, (ii) the disposition of such assets, (iii) surveillance services for residential and multifamily mortgage portfolios, (iv) loan modification services and (v) the master servicing on various residential mortgage and multifamily loan pools for loans in the long‑term portfolio of IMH, and to a lesser extent, non‑affiliated entities. The revenues from these services are recognized in income in the period when services are rendered and collectability is reasonably certain. Advertising Costs Advertising costs are expensed as incurred and are included in business promotion expense. Stock‑Based Compensation The Company accounts for stock‑based compensation in accordance with FASB ASC 718 Compensation—Stock Compensation . Accordingly, the Company measures the cost of stock‑based awards using the grant‑date fair value of the award and recognizes that cost over the requisite service period. The fair value of each stock option granted under the Company’s stock-based compensation plan is estimated on the date of grant using the Black-Scholes-Merton option-pricing model and assumptions noted in Note 17.—Share Based Payments and Employee Benefit Plans. The risk-free interest rate is based on the U.S. Treasury rate with a term equal to the expected term of the option grants on the date of grant. FASB ASC 718 requires forfeitures to be estimated at the time of grant and prospectively revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Stock‑based compensation expense is recorded net of estimated forfeitures for the years ended December 31, 2016 and 2015, such that the expense was recorded only for those stock‑based awards that were expected to vest during such periods. Refer to Note 17.— Share Based Payments and Employee Benefit Plans . Income Taxes In accordance with ASC 740, Income Taxes , the Company records income tax expense as well as deferred tax assets and liabilities. Current income tax expense approximates taxes to be paid or refunded for the current period and includes income tax expense related to uncertain tax positions and amortization/impairment of deferred charge, explained below. The Company determines deferred income taxes using the balance sheet method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and recognizes enacted changes in tax rates and laws in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized subject to management’s judgment that realization is “more likely than not.” Uncertain tax positions that meet the more likely than not recognition threshold are measured to determine the amount of benefit to recognize. An uncertain tax position is measured at the largest amount of benefit that management believes has a greater than 50% likelihood of realization upon settlement. The Company is subject to federal income taxes as a regular (Subchapter C) corporation and files a consolidated U.S. federal income tax return on qualifying subsidiaries. The Company files income tax returns in the U.S. for federal and various states. In prior periods when the Company was taxed as a real estate investment trust (REIT), it recorded a deferred charge to eliminate the expense recognition of income taxes paid on inter-Company profits that result from the sale of mortgage loans from the taxable REIT subsidiaries to IMH. The deferred charge is included in other assets in the consolidated balance sheets and is amortized and, or impaired as a component of income tax expense in the consolidated statements of operations over the estimated life of the mortgages retained in the securitized mortgage collateral. Earnings per Common Share Basic earnings per common share is computed on the basis of the weighted average number of shares outstanding for the year divided into earnings for the year. Diluted earnings per common share is computed on the basis of the weighted average number of shares and dilutive common equivalent shares outstanding for the year divided by earnings for the year, unless anti‑dilutive. Refer to Note 13.— Reconciliation of Earnings Per Share . Recent Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-15, “ Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern ”, which requires management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern and provide related disclosures. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In April 2015, the FASB issued 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 September 2015, the FASB issued ASU 2015-16, “ Simplifying the Accounting for Measurement-Period Adjustments (Topic 805)” , which replaces the requirement that an acquirer in a business combination account for measurement period adjustments retrospectively with a requirement that an acquirer recognize adjustments to the provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU 2015-16 requires that the acquirer record, in t |
Acquisition of CashCall Mortgag
Acquisition of CashCall Mortgage | 12 Months Ended |
Dec. 31, 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 consisted of a fixed component and a contingent component. The fixed component included (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 consisted 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 pretax net earnings for the next 10 months of 2015, 55% of pre-tax 2016 net earnings and 45% of pretax 2017 net earnings. During the year ended December 31, 2015, consideration paid to CashCall, Inc. included $7.5 million cash and 494,017 shares of common stock of the Company (issued April 1, 2015) valued at $6.2 million, pursuant to the fixed component of the Asset Purchase Agreement and $38.1 million pursuant to the earn-out provision. During the year ended December 31, 2016, consideration paid to CashCall, Inc. was $2.5 million pursuant to the fixed component of the Asset Purchase Agreement and $54.1 million, pursuant to the earn-out provision. In February 2017, consideration paid to CashCall, Inc. for the fourth quarter of 2016 earn-out period was $8.0 million. 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 acquisition date fair values of assets acquired and the liabilities assumed: 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 ASC 805. 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 Company retained the services of a third party to assist in the valuation of the intangible assets. 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 for the periods presented 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 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 Year Ended December 31, 2015 2014 Revenues $ $ Other (expense) income Expenses Pretax net earnings (loss) $ $ For the year ended December 31, 2015, revenues from CCM totaled $135.3 million. For the year ended December 31, 2015, expenses from operations were $80.9 million. During the first quarter of 2015 prior to the close of the acquisition, expenses related to CCM were included in gain on sale of loans, net in the consolidated statements of operations. |
Mortgage Loans Held-for-Sale
Mortgage Loans Held-for-Sale | 12 Months Ended |
Dec. 31, 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: December 31, 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 Fannie Mae (FNMA) and Freddie Mac (FHLMC). (3) Includes NonQM and Jumbo loans. (4) Changes in fair value are included in the accompanying consolidated statements of operations. The Company does not have any delinquent or nonaccrual mortgage loans held-for-sale as of December 31, 2016 or 2015. Gain on LHFS (included in gain on sale of loans, net in the consolidated statements of operations) is comprised of the following for the years ended December 31, 2016, 2015 and 2014: For the Year Ended December 31, 2016 2015 2014 Gain on sale of mortgage loans $ $ $ Premium from servicing retained loan sales Unrealized gains (losses) from derivative financial instruments Realized gains (losses) from derivative financial instruments Mark to market (loss) gain on LHFS Direct origination expenses, net Provision for repurchases Total gain on sale of loans, net $ $ $ |
Finance Receivables
Finance Receivables | 12 Months Ended |
Dec. 31, 2016 | |
Finance Receivables.. | |
Finance Receivables | Note 4.—Finance Receivables The Company uses a portion of the excess 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. The finance receivables are secured by residential mortgage loans as well as personal guarantees. There are no aged balances as of December 31, 2016 and 2015 . A summary of outstanding warehouse lines to non-affiliated customers and outstanding balances of December 31, 2016 and 2015 are presented below: December 31, 2016 2015 Uncommitted warehouse lines to non-affiliated customers $ $ Outstanding balance |
Mortgage Servicing Rights
Mortgage Servicing Rights | 12 Months Ended |
Dec. 31, 2016 | |
Mortgage Servicing Rights | |
Mortgage Servicing Rights | Note 5.—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 interest portion of 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 years ended December 31, 2016 and 2015: December 31, 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 December 31, 2016 and 2015, the outstanding principal balance of the mortgage servicing portfolio was comprised of the following: December 31, December 31, 2016 2015 Government insured $ $ Conventional (1) NonQM Total loans serviced $ $ (1) Approximately $10.8 billion and $2.8 billion of FNMA and FHLMC servicing has been pledged at December 31, 2016 and 2015, as collateral as part of the Term Financing (See Note 8.—Debt). Pledged collateral was approximately 86% and 76% of the fair value of Mortgage servicing rights in the consolidated balance sheets at December 31, 2016 and 2015, respectively. The table below illustrates hypothetical changes in the fair value of MSRs, caused by assumed immediate changes to key assumptions that are used to determine fair value. See Note 12.—Fair Value of Financial Instruments for a description of the key assumptions used to determine the fair value of MSRs. December 31, December 31, Mortgage Servicing Rights Sensitivity Analysis 2016 2015 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, net is comprised of the following for the years ended December 31, 2016, 2015 and 2014: For the Year Ended December 31, 2016 2015 2014 Change in fair value of mortgage servicing rights $ $ $ (Loss) gain on sale of mortgage servicing rights Realized and unrealized (losses) gains from hedging instruments — Loss on mortgage servicing rights, net $ $ $ Servicing income, net is comprised of the following for the years ended December 31, 2016, 2015 and 2014: For the Year Ended December 31, 2016 2015 2014 Contractual servicing fees $ $ $ Late and ancillary fees Subservicing and other costs Servicing income, net $ $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets. | |
Goodwill and Intangible Assets | Note 6.—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 recorded $104.6 million of goodwill and intangible assets of $33.1 million, consisting of $17.2 million for trademark, $10.2 million for customer relationships 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. The following table presents the changes in the carrying amount of goodwill for the period indicated: Balance at December 31, 2014 $ Addition from CCM acquisition Balance at December 31, 2015 $ Additions (Impairment) — Balance at December 31, 2016 $ As part of the acquisition of CCM, the purchase price of the intangible assets the Company acquired are listed below for the periods indicated: Gross Carrying Accumulated Net Carrying Amount Amount Amortization at December 31, 2016 Remaining Life Intangible assets: Trademark $ $ $ Customer relationships Non-compete agreement Total intangible assets acquired $ $ $ Gross Carrying Accumulated Net Carrying Amount Amount Amortization at December 31, 2015 Intangible assets: Trademark $ $ $ Customer relationships Non-compete agreement Total intangible assets acquired $ $ $ The Company recognized $4.2 million and $3.1 million of amortization expense associated with intangible assets for the years ended December 31, 2016 and 2015. The following table presents the estimated aggregate amortization expense for the periods indicated: Amortization Expense Year 2017 $ Year 2018 Year 2019 Year 2020 Year 2021 and thereafter Total future amortization expense $ |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2016 | |
Other Assets. | |
Other Assets | Note 7.—Other Assets Other Assets Other assets consisted of the following: December 31, December 31, 2016 2015 Derivative assets – lending (See Note 10) $ $ Loans eligible for repurchase from GNMA — Deferred charge (See Note 12) Accounts receivable, net Prepaid expenses Servicing advances Developed software, net Premises and equipment, net Other Total other assets $ $ Loans Eligible for Repurchase from GNMA The Company routinely sells loans in GNMA guaranteed MBS by pooling eligible loans through a pool custodian and assigning rights to the loans to GNMA. When these GNMA loans are initially pooled and securitized, the Company meets the criteria for sale treatment and de-recognizes the loans. The terms of the GNMA MBS program allow, but do not require, the Company to repurchase mortgage loans when the borrower has made no payments for three consecutive months. When the Company has the unconditional right, as servicer, to repurchase GNMA pool loans it has previously sold and are more than 90 days past due, the Company then re-recognizes the loans on its balance sheet, at their unpaid principal balances and records a corresponding liability in other liabilities in the consolidated balance sheets. Accounts Receivable, net Accounts receivable are primarily holdbacks from MSR sales which are generally collected within 6 months of the sale date, cash due to the Company related to hedging instruments and fees earned for real estate services rendered, generally collected one month in arrears. Accounts receivable are stated at their carrying value, net of an $86 thousand and $114 thousand reserve for doubtful accounts as of December 31, 2016 and 2015, respectively. Servicing Advances The Company is required to advance certain amounts to meet its contractual loan servicing requirements. The Company advances principal, interest, property taxes and insurance for borrowers that have insufficient escrow accounts, plus any other costs to preserve the property. Also, the Company will advance funds to maintain, repair and market foreclosed real estate properties. The Company is entitled to recover advances from the borrowers for reinstated and performing loans or from proceeds of liquidated properties. Servicer advances totaled $3.1 million and $927 thousand at December 31, 2016 and 2015, respectively. Developed Software, net As part of the acquisition of CCM, the purchase price of other assets the Company acquired are listed below for the periods indicated: Gross Carrying Accumulated Net Carrying Amount Amount Amortization at December 31, 2016 Remaining Life Other assets: Developed software $ $ $ Gross Carrying Accumulated Net Carrying Amount Amount Amortization at December 31, 2015 Other assets: Developed software $ $ $ Premises and Equipment, net Premises and equipment are stated at cost, less accumulated depreciation or amortization. Depreciation on premises and equipment is recorded using the straight‑line method over the estimated useful lives of individual assets, typically three to twenty years. Premises and equipment and accumulated depreciation were as follows as of the dates indicated: December 31, 2016 2015 Premises and equipment $ $ Less: Accumulated depreciation Total premises and equipment, net $ $ |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt | |
Debt | Note 8.—Debt The following table shows contractual reductions of debt as of December 31, 2016: Payments Due by Period Less Than One to Three to More Than Total One Year Three Years Five Years Five Years Warehouse borrowings $ $ $ — $ — $ — Term financing (1) — — — 2015 Convertible Notes — — — Long-term debt — — — Total Debt Obligations $ $ $ — $ $ (1) In February 2017, the Term Financing was paid off. See Note 21.-Subsequent Events. Warehouse Borrowings The Company, through its subsidiaries, enters into Master Repurchase Agreements with lenders providing warehouse facilities. The warehouse facilities are 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. In November and December 2016, the Company was not in compliance with certain financial covenants and received the necessary waivers. The following table presents certain information on warehouse borrowings for the periods indicated: Maximum Balance Outstanding At Allowable Borrowing December 31, December 31, Advance Rate Capacity 2016 2015 Rates (%) Range Maturity Date Short-term borrowings: Repurchase agreement 1 $ $ $ 90 - 98 1ML + 3.13 - 6.75% June 16, 2017 Repurchase agreement 2 (1) 90 - 98 Prime + 0.0 - 0.50% May 28, 2017 Repurchase agreement 3 (2) 90 - 97 Base Rate + 2.50% December 22, 2017 Repurchase agreement 4 1ML + 2.55% March 30, 2017 Repurchase agreement 5 Note Rate - 0.50% March 31, 2017 Repurchase agreement 6 — 95 - 98 1ML + 2.15 - 2.40% June 30, 2017 Total warehouse borrowings $ $ $ (1) In February 2017, the Company lowered the maximum borrowing capacity to $25.0 million from $50.0 million. (2) As of December 31, 2016 and 2015, the balance outstanding includes $62.9 million and $36.4 million, respectively, attributable to finance receivables made to the Company’s warehouse customers. The following table presents certain information on warehouse borrowings for the periods indicated: For the year ended December 31, 2016 2015 Maximum outstanding balance during the year $ $ Average balance outstanding for the year Underlying collateral (mortgage loans) Weighted average rate for period % % Structured Debt In December 2014, the Company entered into a $6.0 million short-term structured debt agreement using eight of the Company’s residual interests (net trust assets) as collateral. The Company received proceeds of $6.0 million and had transaction costs of approximately $60 thousand. The agreement had an interest rate of LIBOR plus 5.75% per annum, had a final repurchase date of June 29, 2015 and the Company had the right to repurchase the securities without penalty prior to the final repurchase date. In June 2015, the Company used approximately $3.2 million of the proceeds from the Term Financing to satisfy fully the remaining amount due on the short-term structured debt agreement and the residuals held as collateral were released to the Company. Promissory Note On April 27, 2015, the Company issued a $10.0 million short-term Promissory Note with an interest rate of 15% to the former owner of CCM. The balance was repaid in May 2015. 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 extend 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. 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. In February 2017, the Term Financing was paid off (see Note 21.-Subsequent Events). 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 being amortized on an effective yield method over the life of the term financing. Interest on the Term Financing was payable monthly and accrued at a rate of LIBOR plus 8.5% per annum. As of December 31, 2016, amounts under the Term Financing may be prepaid at any time without penalty or premium. The obligations of the Borrowers under the Loan Agreement were 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 associated with FNMA and FHLMC production as collateral. 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. 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 accrues interest at a rate of 7.5% per annum, to be paid quarterly. The Company had approximately $50 thousand in transaction costs which are being amortized on an 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. Long‑term Debt As of December 31, 2016 and 2015, the Company had long term debt as follows: Trust Preferred Securities During 2005, the Company formed four wholly‑owned trust subsidiaries (Trusts) for the purpose of issuing an aggregate of $99.2 million of trust preferred securities (the Trust Preferred Securities). All proceeds from the sale of the Trust Preferred Securities and the common securities issued by the Trusts were originally invested in $96.3 million of junior subordinated debentures (subordinated debentures), which became the sole assets of the Trusts. The Trusts pay dividends on the Trust Preferred Securities at the same rate as paid by the Company on the debentures held by the Trusts. During 2008 and 2009, the Company purchased and cancelled $36.5 million in outstanding Trust Preferred Securities for $5.5 million. Additionally, during 2009, the Company exchanged an aggregate of $51.3 million in outstanding Trust Preferred Securities for $62.0 million in Junior Subordinated Notes (Notes). As a result of these transactions, $8.5 million in Trust Preferred Securities remain outstanding. The Company carries its Trust Preferred Securities at estimated fair value as more fully described in Note 12.— Fair Value of Financial Instruments . The following table shows the remaining principal balance and fair value of Trust Preferred Securities issued as of December 31, 2016 and 2015: December 31, 2016 2015 Trust preferred securities (1) $ $ Common securities Fair value adjustment Total $ $ (1) Stated maturity of July 30, 2035 and redeemable at par at any time. The interest rate is a variable rate of three-month LIBOR plus 3.75% per annum. At December 31, 2016, the interest rate was 4.75%. If an event of default occurs (such as a payment default that is outstanding for 30 days, a default in performance, a breach of any covenant or representation, bankruptcy or insolvency of the Company or liquidation or dissolution of the Trust), either the trustee of the Notes or the holders of at least 25% of the aggregate principal amount of the outstanding Notes may declare the principal amount of, and all accrued interest on, all the Notes to be due and payable immediately, or if the holders of the Notes fail to make such declaration, the holders of at least 25% in aggregate liquidation amount of the Trust Preferred Securities outstanding shall have a right to make such declaration. Junior Subordinated Notes The Company carries its Junior Subordinated Notes at estimated fair value as more fully described in Note 12.— Fair Value of Financial Instruments . The following table shows the remaining principal balance and fair value of junior subordinated notes issued as of December 31, 2016 and 2015: December 31, 2016 2015 Junior subordinated notes (1) $ $ Fair value adjustment Total $ $ (1) Stated maturity of March 2034; requires quarterly distributions initially at a fixed rate of 2.00% per annum through March 2014 with increases of 1.00% per year in 2014 through 2017. Starting in 2018, the interest rates become variable at 3‑month LIBOR plus 3.75% per annum. At December 31, 2016, the interest rate was 5.00%. Line of Credit Agreement The Company had a $4.0 million working capital line of credit agreement, which was repaid in June 2015, with a national bank that had an interest rate at a variable rate of one-month LIBOR plus 3.50%. The line of credit was unsecured. Under the terms of the agreement, the Company and its subsidiaries were required to maintain various financial and other covenants. As previously discussed, in June 2015, the Company used approximately $4.0 million of the proceeds from the Term Financing to fully satisfy the remaining amount due on the line of credit agreement and terminated the line. The following table presents certain information on the line of credit for the periods indicated: For the year ended December 31, 2016 2015 Maximum outstanding balance during the year $ — $ Average balance outstanding for the year — Weighted average rate for period — |
Securitized Mortgage Trusts
Securitized Mortgage Trusts | 12 Months Ended |
Dec. 31, 2016 | |
Securitized Mortgage Trusts | |
Securitized Mortgage Trusts | Note 9.—Securitized Mortgage Trusts Securitized Mortgage Trust Assets Securitized mortgage trust assets, which are recorded at fair market value (FMV), are comprised of the following at December 31, 2016 and 2015: December 31, 2016 2015 Securitized mortgage collateral $ $ REO Investment securities available-for-sale — Total securitized mortgage trust assets $ $ Securitized Mortgage Collateral Securitized mortgage collateral consisted of the following: December 31, 2016 2015 Mortgages secured by residential real estate $ $ Mortgages secured by commercial real estate Fair value adjustment Total securitized mortgage collateral $ $ As of December 31, 2016, the Company was also a master servicer of mortgages for others of approximately $682.0 million in UPB that were primarily collateralizing REMIC securitizations, compared to $800.0 Million at December 31, 2015. Related fiduciary funds are held in trust for investors in non‑interest bearing accounts and therefore not included in the Company’s consolidated balance sheets. The Company may also be required to advance funds or cause loan servicers to advance funds to cover principal and interest payments not received from borrowers depending on the status of their mortgages. Real Estate Owned (REO) The Company’s REO consisted of the following: December 31, 2016 2015 REO $ $ Impairment (1) Ending balance $ $ REO inside trusts $ $ REO outside trusts — — Total $ $ (1) Impairment represents the cumulative write‑downs of net realizable value subsequent to foreclosure. Securitized Mortgage Trust Liabilities Securitized mortgage trust liabilities, which are recorded at FMV, are comprised of the following at December 31, 2016 and 2015: December 31, 2016 2015 Securitized mortgage borrowings $ $ Derivative liabilities, securitized trusts — Total securitized mortgage trust liabilities $ $ Securitized Mortgage Borrowings Selected information on securitized mortgage borrowings for the periods indicated consisted of the following (dollars in millions): Securitized mortgage borrowings outstanding as of December 31, Range of Interest Rates Interest Interest Rate Rate Original Fixed Margins over Margins after Issuance Interest One-Month Contractual Year of Issuance Amount 2016 2015 Rates LIBOR (1) Call Date (2) 2002 $ $ $ 5.25 - 12.00 0.27 - 2.75 0.54 - 3.68 2003 4.34 - 12.75 0.27 - 3.00 0.54 - 4.50 2004 3.58 - 5.56 0.25 - 2.50 0.50 - 3.75 2005 — 0.24 - 2.90 0.48 - 4.35 2006 0.1 - 2.75 0.20 - 4.13 2007 — 0.06 - 2.00 0.12 - 3.00 Subtotal contractual principal balance (3) Fair value adjustment Total securitized mortgage borrowings $ $ (1) One-month LIBOR was 0.77% as of December 31, 2016. (2) Interest rate margins are generally adjusted when the unpaid principal balance is reduced to less than 10‑20% of the original issuance amount, or if certain other triggers are met. (3) Represents the outstanding balance in accordance with trustee reporting. As of December 31, 2016, expected principal reductions of the securitized mortgage borrowings, which is based on contractual principal payments and expected prepayment and loss assumptions for securitized mortgage collateral, was as follows (dollars in millions): Payments Due by Period Less Than One to Three to More Than Total One Year Three Years Five Years Five Years Securitized mortgage borrowings (1) $ $ $ $ $ (1) Represents the outstanding balance in accordance with trustee reporting. Derivative Liabilities, Securitized Trusts As of December 31, 2016, there are no longer derivatives in the securitization trusts as compared to a net liability of $1.7 million at December 31, 2015. As of December 31, 2015, the notional balance of derivative assets and liabilities, securitized trusts was $67.7 million. The derivative values were based on the net present value of cash receipts or payments expected to be received or paid by the bankruptcy remote trusts. The fair value of the derivatives fluctuates with changes in the future expectation of cash receipts or payments based on notional balances and estimated LIBOR rates. Change in fair value of net trust assets, including trust real estate owned (REO) (losses) gains Changes in fair value of net trust assets, including trust REO (losses) gains are comprised of the following for the years ended December 31, 2016, 2015 and 2014: For the Year Ended December 31, 2016 2015 2014 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 (losses) gains $ $ $ |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments | |
Derivative Instruments | Note 10.—Derivative Instruments Derivative Assets and Liabilities, Lending The mortgage lending operation enters into IRLCs with prospective borrowers to originate mortgage loans at a specified interest rate and Hedging Instruments to hedge the fair value changes associated with changes in interest rates relating to its mortgage loan origination operations as well as mortgage servicing rights. The fair value of IRLCs and Hedging Instruments related to mortgage loan origination are included in other assets and other liabilities, respectively, in the consolidated balance sheets. As of December 31, 2016, the estimated fair value of IRLCs and Hedging Instruments associated with mortgage lending totaled $11.2 million and $63 thousand, respectively. Additionally, the fair value of Hedging Instruments related to mortgage servicing rights are included in other liabilities at December 31, 2016 and had an estimated fair value of $272 thousand. The following table includes information for the derivative assets and liabilities, lending for the periods presented: Total Gains (Losses) (1) Notional Amount For the Year Ended December 31, December 31, December 31, 2016 2015 2016 2015 2014 Derivative – IRLC's $ $ $ $ $ Derivative – TBA MBS (1) Amounts included in gain on sale of loans, net within the accompanying consolidated statements of operations. Other Derivatives Upon entering an arrangement to facilitate the Company’s ability to offer NonQM mortgage products, a warrant to purchase up to 9.9% of Impac Mortgage Corp. was issued in 2014. The warrant expired in August of 2015 and was not exercised. The estimated fair value of the warrant was based on a model incorporating various assumptions including expected future book value of Impac Mortgage Corp., the probability of the warrant being exercised, volatility, expected term and certain other factors. |
Redeemable Preferred Stock
Redeemable Preferred Stock | 12 Months Ended |
Dec. 31, 2016 | |
Redeemable Preferred Stock | |
Redeemable Preferred Stock | Note 11.—Redeemable Preferred Stock At December 31, 2016, the Company has outstanding $51.8 million liquidation preference of Series B and Series C Preferred Stock. The holders of each series of Preferred Stock, which are non‑voting and redeemable at the option of the Company, retain the right to a $25.00 per share liquidation preference in the event of a liquidation of the Company and the right to receive dividends on the Preferred Stock if any such dividends are declared. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | Note 12.—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 assumptions 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: December 31, 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 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, loans held‑for‑sale, and call and put options. The carrying amount of cash and 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 approximates fair value due to the short‑term nature of the liabilities and do not present unanticipated interest rate or credit concerns. 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. Convertible notes are recorded at amortized cost. The estimated fair value is determined using a discounted cash flow model using estimated market rates. 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 are 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, call and put options, 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 92% and 99% and 94% and 99%, respectively, of total assets and total liabilities measured at estimated fair value at December 31, 2016 and 2015. Recurring Fair Value Measurements The Company assesses its 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 Level 1 and Level 2 classified instruments during the year ended December 31, 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 December 31, 2016 and 2015, based on the fair value hierarchy: Recurring Fair Value Measurements December 31, 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 December 31, 2016, derivative assets, lending, net included $11.2 million in IRLCs 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 is included in other assets in the accompanying consolidated balance sheets. (2) At December 31, 2016 and 2015, derivative liabilities, securitized trusts, are included within trust liabilities in the accompanying consolidated balance sheets. (3) At December 31, 2016 and 2015, derivative liabilities, lending, net are included in other liabilities in the accompanying consolidated balance sheets. The following tables present reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2016, 2015 and 2014: Level 3 Recurring Fair Value Measurements For the Year Ended December 31, 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, December 31, 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 $9.9 million for the year ended December 31, 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 December 31, 2016. Level 3 Recurring Fair Value Measurements For the Year Ended December 31, 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 gains (losses) included in earnings Transfers in and/or out of Level 3 — — — — — — — — — Purchases, issuances and settlements: Purchases — — — — — — — — — Issuances — — — — — — — Settlements — — — Fair value, December 31, 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 $8.3 million for the year ended December 31, 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 December 31, 2015. Level 3 Recurring Fair Value Measurements For the Year Ended December 31, 2014 Derivative Investment liabilities, Interest securities Securitized Securitized net, Mortgage rate lock Long- available- mortgage mortgage securitized servicing commitments, term for-sale collateral borrowings trusts rights net debt Warrant Fair value, December 31, 2013 $ $ $ $ $ $ $ $ — 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, December 31, 2014 $ $ $ $ $ $ $ $ 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 $5.7 million for the year ended December 31, 2014. 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 December 31, 2014. 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 December 31, 2016. Estimated Valuation Unobservable Range of Weighted Financial Instrument Fair Value Technique Input Inputs Average Assets and liabilities backed by real estate Securitized mortgage collateral, and $ Prepayment rates 2.5 - 30.5 % % Securitized mortgage borrowings Default rates 0.1 - 10.2 % % Loss severities 9.6 - 98.3 % % Discount rates 4.3 - 25.0 % % Other assets and liabilities Mortgage servicing rights $ DCF Discount rate 9.0 - 14.0 % % Prepayment rates 8.0 - 86.6 % % Derivative liabilities, net, securitized trusts — DCF 1M forward LIBOR 0.8 - 2.8 % N/A Derivative assets - IRLCs, net Market pricing Pull-through rate 25 - 99.9 % % Long-term debt DCF Discount rate % % Contingent consideration DCF Discount rate % % Margins 1.5 - 2.6 % % Probability of outcomes (1) 25.0 - 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). The estimated aggregate undiscounted earn out payments to the seller over the remaining earn out period of one year as of December 31, 2016 was $33.3 million, and the estimated range of undiscounted earn out payments as of December 31, 2016 was $31.6 million to $34.9 million. 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. A significant increase or decrease in pull‑through rate assumptions would result in a significant increase or decrease in the fair value of IRLCs. 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 for the years ended December 31, 2016, 2015 and 2014: Recurring Fair Value Measurements Changes in Fair Value Included in Net Earnings For the Year Ended December 31, 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) — — — — — 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 $1.5 million in changes in the fair value of derivative instruments, offset by $1.7 million in cash payments from the securitization trusts for the year ended December 31, 2016. (3) Included in (loss) gain on mortgage servicing rights in the consolidated statements of operations. (4) For the year ended December 31, 2016, change in the fair value of trust assets, excluding REO was $5.6 million. Excluded from the $7.3 million change in fair value of net trust assets, excluding REO, in the accompanying consolidated statement of cash flows is $1.7 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 Year Ended December 31, 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 $3.6 million in changes in the fair value of derivative instruments, offset by $4.1 million in cash payments from the securitization trusts for the year ended December 31, 2015. (3) Included in (loss) gain on mortgage servicing rights in the consolidated statements of operations. (4) For the year ended December 31, 2015, change in the fair value of trust assets, excluding REO was $1.0 million. Excluded from the $5.0 million change in fair value of net trust assets, excluding REO, in the accompanying consolidated statement of cash flows is $4.1 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 Year Ended December 31, 2014 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 — — — — — 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 $4.6 million in changes in the fair value of derivative instruments, offset by $5.2 million in cash payments from the securitization trusts for the year ended December 31, 2014. (3) Included in (loss) gain on mortgage servicing rights in the consolidated statements of operations. (4) For the year ended December 31, 2014, change in the fair value of trust assets, excluding REO was $3.5 million. Excluded from the $(8.7) million change in fair value of net trust assets, excluding REO, in the accompanying consolidated statement of cash flows is $5.2 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 December 31, 2016 and 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 are classified as a Level 3 measurement at December 31, 2015. Mortgage servicing rights —The Company elected to carry its mortgage servicing rights arising from its mortgage loan origination operation at fair value. The fair value of mortgage servicing rights is based upon 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 December 31, 2016. Mortgage loans held‑for‑sale —The Company elected to carry its mortgage loans held‑for‑sale originated or acquired from its mortgage lending operation at 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 December 31, 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 December 31, 2016, securitized mortgage collateral had an unpaid principal balance of $4.9 billion, compared to an estimated fair value on the Company’s balance sheet of $4.0 billion. The aggregate unpaid principal balance exceeds the fair value by $0.9 billion at December 31, 2016. As of December 31, 2016, the unpaid principal balance of loans 90 days or more past due was $0.7 billion compared to an estimated fair value of $0.3 billion. The aggregate unpaid principal balances of loans 90 days or more past due exceed the fair value by $0.4 billion at December 31, 2016. Securitized mortgage collateral is considered a Level 3 measurement at December 31, 2016. Securitized mortgage borrowings —The Company elected to carry all of 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 December 31, 2016, securitized mortgage borrowings had an outstanding principal balance of $4.9 billion, net of $2.2 billion in bond losses, compared to an estimated fair value of $4.0 billion. The aggregate outstanding principal balance exceeds the fair value by $0.9 billion at December 31, 2016. Securitized mortgage borrowings are considered a Level 3 measurement at December 31, 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 year ended December 31, 2016, the change in fair value of contingent consideration was related to the estimated reduction in future pre-tax earnings of CCM over the expected earn-out period, primarily due to margin compression. 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 December 31, 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 December 31, 2016, long‑term debt had an unpaid principal balance of $70.5 million compared to an estimated fair value of $47.2 million. The aggregate unpaid principal balance exceeds the fair value by $23.3 million at December 31, 2016. The long‑term debt is considered a Level 3 measurement at December 31, 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 December 31, 2016, there were no derivative assets or liabilities in the securitized trusts. As of December 31, 2015, the notional balance of derivative assets and liabilities, securitized trusts was $67.7 million. These derivatives were included in the consolidated securitization trusts, which are nonrecourse to the Company, 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 were considered a Level 3 measurement at December 31, 2015. 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 December 31, 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 December 31, 2016. 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 incorporating various assumptions including expected future book value of Impac Mortgage Corp., the probability of the warrant being exercised, volatility, expected term and certain other factors. The warrant was considered a Level 3 measurement at December 31, 2014. Nonrecurring Fair Value Measurements The Company is required to measure certain assets and liabilities at estimated fair value from time to time. These fair value measurements typically result from the application of specific accounting pronouncements under GAAP. The fair value measurements are considered nonrecurring fair value measurements under FASB ASC 820‑10. The following table presents financial and non‑financial assets and liabilities measured using nonrecurring fair value measurements at December 31, 2016 and 2015, respectively: Nonrecurring Fair Value Measurements December 31, 2016 December 31, 2015 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 REO (1) $ — $ $ — $ — $ $ — Deferred charge — — — — (1) Balance represents REO at December 31, 2016 and December 31, 2015 which has been impaired subsequent to foreclosure. The following table presents total gains and (losses) on financial and non‑financial assets and liabilities measured using nonrecurring fair value measurements for the years ended December 31, 2016, 2015 and 2014, respectively: Total Gains (Losses) (1) For the Year Ended December 31, 2016 2015 2014 REO (2) $ $ $ Lease liability (3) — Deferred charge (4) (1) Total losses reflect losses from all nonrecurring measurements during the period. (2) For the years ended December 31, 2016, 2015 and 2014, the Company recorded $5.9 million, $6.6 million and $7.6 million, respectively, in gains (losses) related to changes in the net realizable value (NRV) of properties. Gains represent recovery of the NRV attributable to an improvement in state specific loss severities on properties held during the period which resulted in an increase to NRV. Losses represent impairment of the NRV attributable to an increase in state specific loss severities on properties held during the period which resulted in a decrease to NRV. (3 |
Reconciliation of Earnings Per
Reconciliation of Earnings Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Reconciliation of Earnings Per Share | |
Reconciliation of Earnings Per Share | Note 13.—Reconciliation of Earnings Per Share The following table presents the computation of basic and diluted earnings per common share, including the dilutive effect of stock options and cumulative redeemable preferred stock outstanding for the periods indicated: For the Year Ended December 31, 2016 2015 2014 Numerator for basic earnings (loss) per share: Net earnings (loss) $ $ $ Numerator for diluted earnings (loss) per share: Net earnings (loss) $ $ $ Interest expense attributable to convertible notes — Net earnings (loss) plus interest expense attributable to convertible notes $ $ $ Denominator for basic earnings (loss) per share (1): Basic weighted average common shares outstanding during the period Denominator for diluted earnings (loss) 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 (loss) per common share: Basic $ $ $ Diluted $ $ $ (1) Share amounts presented in thousands. The anti‑dilutive stock options outstanding for the years ending December 31, 2016, 2015 and 2014 were 685 thousand, 357 thousand and 2.9 million shares, respectively. Included in the anti-dilutive shares for 2014 were 1.8 million shares attributable to the Convertible Notes. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | Note 14.—Income Taxes The Company is subject to federal income taxes as a regular (Subchapter C) corporation and files a consolidated U.S. federal income tax return. Income taxes for the years ended December 31, 2016, 2015 and 2014 were as follows: For the year ended December 31, 2016 2015 2014 Current income taxes: Federal $ $ $ State Total current income tax expense Deferred income taxes: Federal — — State — — Total deferred income tax benefit — — Total income tax expense (benefit) $ $ $ The Company recorded income tax expense (benefit) of $1.1 million, $(21.9) million and $1.3 million for the years ended December 31, 2016, 2015 and 2014, respectively. The income tax expense of $1.1 million for the year ended December 31, 2016 is primarily the result of the amortization of the deferred charge, federal 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 year ended December 31, 2015, the Company recorded a deferred income tax 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 income tax expense of $1.3 million for 2014 is primarily related to alternative minimum taxes associated with taxable income generated from the sale of AmeriHome and mortgage servicing rights.. 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 statement of operations. Deferred tax assets are recognized subject to management's judgment that realization is "more likely than not". A valuation allowance is recognized for a deferred tax asset if, based on the weight of the available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. In making such judgments, significant weight is given to evidence that can be objectively verified. As of each reporting date, the Company considers new evidence, both positive and negative, that could impact management's view with regard to future realization of deferred tax assets. Significant judgment is required in assessing future earnings trends and the timing of reversals of temporary differences. The Company's evaluation is based on current tax laws as well as management's expectation of future performance. The Company's deferred tax assets are primarily the result of net operating losses and other fair value write downs of financial assets and liabilities. As of December 31, 2014, the Company had net deferred tax assets of approximately $295.2 million which the Company recorded a full valuation allowance against. During the first quarter of 2015, with the aforementioned acquisition of CCM, the Company significantly expanded its mortgage lending operations and profitability. In March 2015, in part because of the earnings of CCM during the first quarter of 2015, current year projected earnings, future projected earnings as well as the historical earnings of CCM, management determined that sufficient positive evidence existed to conclude that it was more likely than not that deferred taxes of $24.4 million were realizable in future years, and therefore, reduced the valuation allowance accordingly. The Company has recorded a valuation allowance against its remaining net deferred tax assets at December 31, 2016 as it is more likely than not that not all of the deferred tax assets will be realized. The valuation allowance is based on the management's assessment that it is more likely than not that certain deferred tax assets, primarily net operating loss carryforwards, may not be realized in the foreseeable future due to objective negative evidence that the Company would not generate sufficient taxable income to realize the deferred tax assets. Deferred tax assets are comprised of the following temporary differences between the financial statement carrying value and the tax basis of assets: For the year ended December 31, 2016 2015 Deferred tax assets: Federal and state net operating losses $ $ Mortgage securities Depreciation and amortization Compensation and other accruals Repurchase reserve Total gross deferred tax assets Deferred tax liabilities: Fair value (1) Mortgage servicing rights Derivatives — Total gross deferred tax liabilities Valuation allowance Total net deferred tax assets $ $ (1) The following is a reconciliation of income taxes to the expected statutory federal corporate income tax rates for the years ended December 31, 2016, 2015 and 2014: For the year ended December 31, 2016 2015 2014 Expected income tax expense (benefit) $ $ $ State tax (benefit), net of federal benefit State rate change — — Change in valuation allowance Deferred charge Other Total income tax expense (benefit) $ $ $ As of December 31, 2016, the Company had estimated federal and state net operating loss (NOL) carryforwards of approximately $511.0 million and $491.7 million, respectively. Federal and state net operating loss carryforwards begin to expire in 2027 and 2016, respectively. By utilizing a portion of the Company’s net operating loss carryforward, the Company was able to reverse $17.0 million of the valuation allowance reducing the income tax expense to $1.1 million for the year ended December 31, 2016. Moreover, management has also determined that sufficient evidence existed at December 31, 2016 to conclude that deferred taxes of $24.4 million were realizable in future years. The Company files numerous tax returns in various jurisdictions. While the Company is subject to examination by various taxing authorities, the Company believes there are no unresolved issues or claims likely to be material to its financial position. The Company classifies interest and penalties on taxes as provision for income taxes. As of December 31, 2016 and 2015, the Company has no material uncertain tax positions. The Company has federal and state AMT credits in the amount of $789 thousand and $200 thousand, respectively, as of December 31, 2016. The Company recognizes tax benefits associated with the exercise of stock options directly to stockholders’ equity only when realized. A windfall tax benefit occurs when the actual tax benefit realized upon an employee’s disposition of a share‑based award exceeds the deferred tax asset, if any, associated with the award. At December 31, 2016 and 2015, deferred tax assets do not include $5.1 million and $4.9 million respectively of excess tax benefits from stock‑based compensation. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting | |
Segment Reporting | Note 15.—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. The following table presents selected balance sheet data by reporting segment as of the dates indicated: Balance Sheet Items as of Mortgage Real Estate Long-term Corporate December 31, 2016: Lending Services Portfolio and other Consolidated Cash and cash equivalents $ $ $ — $ $ Restricted cash — — — Mortgage loans held-for-sale — — — Finance receivables — — — Mortgage servicing rights — — — Trust assets — — — Goodwill — — Other assets (1) Total assets Total liabilities Balance Sheet Items as of Mortgage Real Estate Long-term Corporate December 31, 2015: Lending Services Portfolio and other Consolidated Cash and cash equivalents $ $ — $ — $ $ Restricted cash — — — Mortgage loans held-for-sale — — — Finance receivables — — — Mortgage servicing rights — — — Trust assets — — — Goodwill — — Other assets (1) Total assets Total liabilities (1) All segment asset balances exclude intercompany balances. The following table presents selected statement of operations information by reporting segment for the years ended December 31, 2016, 2015 and 2014: Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Year Ended December 31, 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 — — — Change in fair value of long-term debt — — — Other (expense) income Net earnings (loss) before income taxes $ $ $ $ Income tax expense Net earnings $ Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Year Ended December 31, 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 — — — Change in fair value of long-term debt — — — Other expense Net earnings (loss) before income taxes $ $ $ $ $ Income tax benefit Net earnings $ Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Year Ended December 31, 2014: 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 — — — — — Change in fair value of long-term debt — — — Other (expense) income Net (loss) earnings before income taxes $ $ $ $ $ Income tax expense Net loss $ |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 16.—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 cases, 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 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 legal matters summarized below are ongoing and may have an effect on the Company’s business and future financial condition and results of operations: On or about April 20, 2011, an action was filed entitled Federal Home Loan Bank of Boston v. Ally Financial Inc., et al., naming IMH Assets Corp, IFC, the Company, and ISAC as defendants. The complaint alleges misrepresentations in the materials used to market mortgage‑backed securities that the plaintiff purchased. The complaint seeks damages and attorney’s fees in an amount to be established at time of trial. The case was removed to the United States District Court for the District of Massachusetts and on September 30, 2013, the Court granted the Company’s motion to dismiss claims against it arising under the Massachusetts Uniform Securities Act. On February 7, 2017, the Court remanded this case to the Suffolk County Superior Court. The case remains pending as to other claims against the Company. On December 7, 2011, a purported class action was filed in the Circuit Court of Baltimore City entitled Timm, v. Impac Mortgage Holdings, Inc, et al. alleging on behalf of holders of the Company’s 9.375% Series B Cumulative Redeemable Preferred Stock (Preferred B) and 9.125% Series C Cumulative Redeemable Preferred Stock (Preferred C) who did not tender their stock in connection with the Company’s 2009 completion of its Offer to Purchase and Consent Solicitation that the Company failed to achieve the required consent of the Preferred B and C holders, the consents to amend the Preferred stock were not effective because they were given on unissued stock (after redemption), the Company tied the tender offer with a consent requirement that constituted an improper “vote buying” scheme, and that the tender offer was a breach of a fiduciary duty. The action seeks the payment of two quarterly dividends for the Preferred B and C holders, the unwinding of the consents and reinstatement of the cumulative dividend on the Preferred B and C stock, and the election of two directors by the Preferred B and C holders. The action also seeks punitive damages and legal expenses. The court, on January 28, 2013, dismissed all individual director and officer defendants from the case and further dismissed three of the six causes of action. The remaining causes of action against the Company allege the Preferred B holders did not approve amendments to its Articles Supplementary and the holders thereof seek to recover two quarters of dividends and to elect two members to the Board of Directors of the Company. The Company and Plaintiffs have filed a motion for summary judgment on the remaining claims and motions are currently pending. On April 30, 2012, a purported class action was filed entitled Marentes v. Impac Mortgage Holdings, Inc., alleging that certain loan modification activities of the Company constitute an unfair business practice, false advertising and marketing, and that the fees charged are improper. The complaint seeks unspecified damages, restitution, injunctive relief, attorney’s fees and prejudgment interest. On August 22, 2012, the plaintiff filed an amended complaint adding Impac Funding Corporation as a defendant and on October 2, 2012, the plaintiff dismissed Impac Mortgage Holdings, Inc., without prejudice. Discovery is currently proceeding in this matter. On December 14, 2013, a matter was filed in the US District Court, District of Minnesota, entitled Residential Funding Company, LLC v. Impac Funding Corp. alleging the defendant is responsible for unspecific debts of Pinnacle Direct Funding Corp., as its successor in interest. On April 3, 2014, the plaintiff filed a First Amended Complaint alleging the defendant is responsible for breaches of representations and warranties in connection with certain loan sales from Pinnacle to plaintiff. The plaintiff seeks declaratory relief and unspecified damages. The matter is currently in the discovery phase. On October 28, 2014, an action was filed in the Superior Court of the State of California in Orange County entitled Mallory Hill v. Impac Mortgage Holdings, Inc., Impac Mortgage Corporation et al. In the action Mr. Hill sought compensatory damages, general damages, treble damages, exemplary damages, an accounting, injunctive relief, attorney’s fees and costs for claims based upon a consulting agreement entered into with Mr. Hill, a purported employment relationship entered into with Mr. Hill and other purported claims. The matter proceeded to trial and in November 2016, judgement was entered in favor of all Defendants. In October 2011 and November 2012, the Company received letters from Countrywide Securities Corporation (Countrywide), Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch), and UBS Securities LLC (UBS) claiming indemnification relating to mortgage‑backed securities bonds issued, originated or sold by ISAC, IFC, IMH Assets Corp. and the Company. The claims seek indemnification from claims asserted against Countrywide, Merrill Lynch, and UBS in specified legal actions entitled American International Group Inc. v. Bank of America Corp., et al., in the United States District Court for the Southern District of New York and Federal Home Loan Bank of Boston v. Ally Financial, Inc., et al., in the United States District Court for the District of Massachusetts. The notices each seek indemnification for all losses, liabilities, damages and legal fees and costs incurred in those actions. Further related to these claims, the Company received a demand from American International Group (AIG) for claims it purports to have based upon 12 residential mortgage‑backed securities it purchased in which the Company was depositor, sponsor, seller and/or originator. AIG contends it has suffered almost $800 million in losses on the securities and contends there were misrepresentations and breaches of representations and warranties regarding the securities. In October 2012, January 2013, and December 2014, Deutsche Bank issued indemnification demands for claims asserted against them in the Superior Court of New York in cases entitled Royal Park Investments SA/NV v. Merrill Lynch, et al. and Dealink Funding Ltd. v. Deutsche Bank and in the Circuit Court for the City of Richmond, Virginia, in a case entitled Commonwealth of VA, et al. v. Barclays Capital Inc, et al. In February of 2013 the Company also received a notice of intent to seek indemnification on behalf of Deutsche Bank AG, Deutsche Bank Securities, Inc., DB Structured Products, Inc., ACE Securities Corp and Deutsche Alt‑A Securities, Inc. The claims relates to an action filed against those entities in the Superior Court of New York. No further requests, notices or claims have been received regarding these notices. On November 22, 2016, an action was filed in the United States District Court, Southern District of New York entitled Specialized Loan Servicing LLC v. Impac Mortgage Corp. d/b/a CashCall Mortgage. In the action the Plaintiff contends they purchased Mortgage Servicing Rights from Impac Mortgage Corp. under a contract that imposed a restriction on Impac’s ability to directly solicit the same borrowers for refinancing of the loan. The Plaintiff alleges Impac breached that provision and it suffered damages as a result. The action seeks damages, attorney’s fees, interest and an injunction against further direct solicitations. The case is presently in the discovery phase. 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 above 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. Lease Commitments The Company leases office space and certain office equipment under long‑term leases expiring at various dates through 2024. Future minimum commitments under non‑cancelable leases are as follows: Operating Capital Leases Leases Total Year 2017 $ $ $ Year 2018 Year 2019 Year 2020 — Year 2021 and thereafter — Total lease commitments $ $ $ Total rental expense for the years ended December 31, 2016, 2015 and 2014 was $5.1 million, $4.7 million and $5.0 million, respectively. Interest expense on the capital leases was $32 thousand, $57 thousand and $72 thousand for the years ended December 31, 2016, 2015 and 2014, respectively. 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 (included in other liabilities in the accompanying consolidated balance sheets) related to previously sold loans for the years ended December 31, 2016 and 2015 is as follows: December 31, 2016 2015 Beginning balance $ $ Provision for repurchases Settlements Total repurchase reserve $ $ Concentration of Risk The aggregate unpaid principal balance of loans in the Company’s long‑term mortgage portfolio secured by properties in California and Florida was $2.6 billion and $517.0 million, or 52% and 10%, respectively, at December 31, 2016. The Company does not have a significant concentration of risk to any individual client except for the U.S. government and its agencies relating to its concentration of loan sales. The Company also has geographic concentration risk because 84.7% of the Company’s mortgage loan originations were from California. |
Share Based Payments and Employ
Share Based Payments and Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Equity and Share Based Payments | |
Share Based Payments and Employee Benefit Plans | Note 17.—Share Based Payments and Employee Benefit Plans The Company maintains a stock‑based incentive compensation plan, the terms of which are governed by the 2010 Omnibus Incentive Plan (the 2010 Incentive Plan). The 2010 Incentive Plan provides for the grant of stock appreciation rights, restricted stock units, performance shares and other stock and cash‑based incentive awards. Employees, directors, consultants or other persons providing services to the Company or its affiliates are eligible to receive awards pursuant to the 2010 Incentive Plan. In connection with the adoption of the 2010 Incentive Plan, the Company’s 2001 Stock Plan, which was scheduled to expire in March 2011, was frozen. Further, all outstanding awards under the 2001 Stock Plan, as well as the Company’s previous 1995 Stock Option, Deferred Stock and Restricted Stock Plan (together with the 2001 Stock Plan, the “Prior Plans”), were assumed by the 2010 Incentive Plan. During the third quarter of 2016, the shareholders voted on and approved the amendment to the 2010 Omnibus Incentive Plan to increase the shares subject to the plan by 300,000 shares. As of December 31, 2016, the aggregate number of shares reserved under the 2010 Incentive Plan is 1,921,321 shares (including all outstanding awards assumed from Prior Plans), and there were 39,380 shares available for grant as stock options, restricted stock and deferred stock awards. The Company issues new shares of common stock to satisfy stock option exercises. There were 342,000 options granted for the year ended December 31, 2016. The fair value of options granted, which is amortized to expense over the option vesting period, is estimated on the date of grant with the following weighted average assumptions: For the year ended December 31, 2016 2015 2014 Risk-free interest rate 1.16% 1.54 - 1.76% 1.08 - 1.79% Expected lives (in years) 5.47 5.50 - 5.73 3.48 - 5.73 Expected volatility (1) 49.71% 49.53 - 79.56% 70.47 - 75.93% Expected dividend yield 0.00% 0.00% 0.00% Fair value per share $ 7.95 $ 6.74 - 9.96 $ 2.69 - 4.46 (1) Expected volatilities are based on both the implied and historical volatility of the Company’s stock over the expected option life. The following table summarizes activity, pricing and other information for the Company’s stock options for the years presented below: For the year ended December 31, 2016 2015 2014 Weighted- Weighted- Weighted- Average Average Average Number of Exercise Number of Exercise Number of Exercise Shares Price Shares Price Shares Price Options outstanding at beginning of period $ $ $ Options granted Options exercised Options forfeited/cancelled Options outstanding at end of year Options exercisable at end of year $ $ $ The aggregate intrinsic value in the following table represents the total pre‑tax intrinsic value, based on the Company’s closing stock price of $14.02 and $18.00 per common share as of December 31, 2016 and 2015, respectively. Aggregate intrinsic value represents the amount of proceeds the option holders would have received had all option holders exercised their options and sold the stock as of that date. As of December 31, 2016 2015 Weighted- Weighted- Average Aggregate Average Aggregate Remaining Intrinsic Remaining Intrinsic Life Value Life Value (Years) (in thousands) (Years) (in thousands) Options outstanding at end of year $ $ Options exercisable at end of year $ $ As of December 31, 2016, there was approximately $3.8 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 2.0 years. For the years ended December 31, 2016, 2015 and 2014, the aggregate grant‑date fair value of stock options granted was approximately $2.7 million, $3.8 million and $1.4 million, respectively. For the years ended December 31, 2016, 2015 and 2014, total stock‑based compensation expense was $2.1 million, $1.6 million and $1.9 million, respectively. Additional information regarding stock options outstanding as of December 31, 2016 is as follows: Stock Options Outstanding Options Exercisable Weighted- Average Weighted- Weighted- Exercise Remaining Average Average Price Number Contractual Exercise Number Exercise Range Outstanding Life in Years Price Exercisable Price $ 0 - 2.80 $ $ 2.81 - 5.39 5.40 - 10.65 10.66 - 16.43 16.44 - 17.40 — — 17.41 - 21.50 $ 2.80 - 21.50 $ $ In addition to the options granted, the Company has granted deferred stock units (DSU’s), which vest between one and three year periods. The fair value of each DSU was measured on the date of grant using the grant date price of the Company’s stock. For the years ended December 31, 2016 and 2015, the aggregate grant‑date fair value of DSU’s granted was approximately $87 thousand and $103 thousand, respectively. The following table summarizes activity, pricing and other information for the Company’s DSU’s for the years presented below: For the year ended December 31, 2016 2015 2014 Weighted- Weighted- Weighted- Average Average Average Number of Grant Date Number of Grant Date Number of Grant Date Shares Fair Value Shares Fair Value Shares Fair Value DSU’s outstanding at beginning of year $ $ $ DSU’s granted DSU’s exercised — — — — — — DSU’s forfeited/cancelled — — — — — — DSU’s outstanding at end of year $ $ $ As of December 31, 2016, there was approximately $74 thousand of total unrecognized compensation cost related to the DSU compensation arrangements granted under the plan. This cost is expected to be recognized over a weighted average period of 2.6 years. 401(k) Plan After meeting certain employment requirements, employees can participate in the Company’s 401(k) plan. Under the 401(k) plan, employees may contribute up to 25% of their salaries, pursuant to certain restrictions. The Company matches 50% of the first 4% of employee contributions. Additional contributions may be made at the discretion of the board of directors. During the year ended December 31, 2016, the Company recorded approximately $895 thousand for basic matching contributions. During the year ended December 31, 2015, the Company recorded approximately $299 thousand for basic matching contributions. There were no discretionary matching contributions recorded during the years ended December 31, 2016 or 2015. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions | |
Related Party Transactions | Note 18.—Related Party Transactions In January 2015, the Company entered into a $5.0 million short-term borrowing agreement with a related party of the Company, secured by Ginnie Mae servicing rights with an interest rate of 15%, and transaction costs of $50 thousand. The balance was repaid in March 2015. In April 2015, the Company issued a $10.0 million short-term Promissory Note to a related party with an interest rate of 15%. The balance was repaid in May 2015. In June 2015, the Company issued the 2015 Convertible Notes to purchasers, some of which are related parties. See Note 8.—Debt — Convertible Notes. |
Tax Benefits Preservation Right
Tax Benefits Preservation Rights Plan | 12 Months Ended |
Dec. 31, 2016 | |
Tax Benefits Preservation Rights Plan | |
Tax Benefits Preservation Rights Plan | Note 19.—Tax Benefits Preservation Rights Plan In September 2013, the Company adopted a Tax Benefits Preservation Rights Agreement (Rights Plan) to help preserve the value of certain deferred tax benefits, including those generated by net operating losses (collectively, Tax Benefits). In general, the Company may “carry forward” net operating losses in certain circumstances to offset current and future taxable income, which will reduce federal and state income tax liability, subject to certain requirements and restrictions. The Company’s ability to use these Tax Benefits would be substantially limited and impaired if it were to experience an “ownership change” for purposes of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations promulgated thereunder. Generally, the Company will experience an “ownership change” if the percentage of the shares of Common Stock owned by one or more “five-percent shareholders” increases by more than 50 percentage points over the lowest percentage of shares of Common Stock owned by such stockholder at any time during the prior three year on a rolling basis. As such, the Rights Plan has a 4.99% “trigger” threshold that is intended to act as a deterrent to any person or entity seeking to acquire 4.99% or more of the outstanding Common Stock without the prior approval of the Board. The Rights Plan also has certain ancillary anti‑takeover effects. The rights accompany each share of common stock of the Company and are evidenced by ownership of common stock. The rights are not exercisable except upon the occurrence of certain change of control events. Once triggered, the rights would entitle the stockholders, other than a person qualifying as an “Acquiring Person” pursuant to the rights plan, to certain “flip‑in”, “flip‑over” and exchange rights. The rights issued under the Rights Plan may be redeemed by the board of directors at a nominal redemption price of $0.001 per right, and the board of directors may amend the rights in any respect until the rights are triggered. On July 19, 2016, the stockholders of the Company approved an amendment to the Company’s Rights Plan extending the expiration date to September 2, 2019. |
Selected Quartely Financial Dat
Selected Quartely Financial Data - (unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Selected Quarterly Financial Data - (unaudited) | |
Selected Quarterly Financial Data - (unaudited) | Note 20.—Selected Quarterly Financial Data - (unaudited) The following tables present selected unaudited quarterly financial data: For the three months ended March 31, June 30, September 30, December 31, Total revenues $ $ $ $ Total expenses Total other (expense) income Earnings before income taxes Income tax expense (benefit) Net earnings $ $ $ $ Earnings per common share : Basic $ $ $ $ Diluted $ $ $ $ For the three months ended March 31, June 30, September 30, December 31, Total revenues $ $ $ $ Total expenses Total other (expense) income Earnings before income taxes Income tax (benefit) expense Net earnings $ $ $ $ Earnings per common share : Basic $ $ $ $ Diluted $ $ $ $ |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events | |
Subsequent Events | Note 21.—Subsequent Events On February 10, 2017, Impac Mortgage Corp. (Borrower), a subsidiary of Impac Mortgage Holdings, Inc. (Company), entered into a Loan and Security Agreement (Loan Agreement) with a lender (Lender) providing for a revolving loan commitment of $40.0 million for a period of two years (the Loan). The Borrower is able to borrow up to 55% of the fair market value of Fannie Mae pledged servicing rights. Upon the two year anniversary of the Loan Agreement, any amounts outstanding will automatically be converted into a term loan due and payable in full on the one year anniversary of the conversion date. Interest payments are payable monthly and accrue interest at the rate per annum equal to one-month LIBOR plus 4.0% and the balance of the obligation may be prepaid at any time. The Borrower initially drew down $35.1 million, and used a portion of the proceeds to pay off the Term Financing with Macquarie Alpine Inc. (approximately $30.1 million) originally entered into in June 2015. The Borrower also paid the Lender an origination fee of $100 thousand. On February 10, 2017, the Company lowered the maximum borrowing capacity of repurchase agreement 2 to $25.0 million from $50.0 million. Subsequent events have been evaluated through the date of this filing. |
Summary of Business and Finan28
Summary of Business and Financial Statement Presentation including Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Business and Financial Statement Presentation | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the accounts of IMH and its wholly-owned subsidiaries and have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). 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 year 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 . |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include accounts of IMH and other entities in which the Company has a controlling financial interest. The usual condition for a controlling financial interest is ownership of a majority of the voting interests of an entity. However, a controlling financial interest may also exist in entities, such as variable interest entities (VIEs), through arrangements that do not involve voting interests. The VIE framework requires a variable interest holder (counterparty to a VIE) to consolidate the VIE if that party has the power to direct activities of the VIE that most significantly impact the entity’s economic performance, will absorb a majority of the expected losses of the VIE, will receive a majority of the residual returns of the VIE, or both, and directs the significant activities of the entity. This party is considered the primary beneficiary of the entity. The determination of whether the Company meets the criteria to be considered the primary beneficiary of a VIE requires an evaluation of all transactions (such as investments, liquidity commitments, derivatives and fee arrangements) with the entity. |
Fair Value Option | Fair Value Option The Company has elected the fair value option for investment securities available-for-sale, securitized mortgage collateral, mortgage servicing rights, mortgage loans held-for-sale, securitized mortgage borrowings and long-term debt. Elections were made to mitigate income statement volatility caused by differences in the measurement basis of elected instruments. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash and highly liquid investments with maturities of three months or less at the date of acquisition. The carrying amount of cash and cash equivalents approximates fair value. Cash balances that have restrictions as to the Company’s ability to withdraw funds are considered restricted cash. At December 31, 2016 and 2015, restricted cash totaled $6.0 million and $3.5 million, respectively. The restricted cash is the result of the terms of the Company’s warehouse borrowings. In accordance with the terms of the Master Repurchase Agreements related to the warehouse borrowings, the Company is required to maintain cash balances with the lender as additional collateral for the borrowings (See Note 8.—Debt). |
Mortgage Loans Held-for-Sale | Mortgage Loans Held‑for‑Sale Mortgage loans held-for-sale (LHFS) are accounted for using the fair value option, with changes in fair value recorded in gain on sale of loans, net in the accompanying consolidated statements of operations. In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 825, Financial Instruments , loan origination fees and expenses are recognized in earnings as incurred and not deferred. Revenue derived from the Company’s mortgage lending activities includes loan fees collected at the time of origination and gain or loss from the sale of LHFS. Loan fees consist of fee income earned on all loan originations, including loans closed and held for sale. Loan fees are recognized as earned and consist of amounts collected for application and underwriting fees, fees on cancelled loans and discount points. The related direct loan origination costs are recognized when incurred and consists of broker fees and commissions. Gain or loss from the sale and mark‑to‑market of LHFS includes both realized and unrealized gains and losses and are included in gain on sale of loans, net in the accompanying consolidated statements of operations. The valuation of LHFS approximates a whole‑loan price, which includes the value of the related mortgage servicing rights. The Company principally sells its LHFS to government sponsored entities, and to a lesser extent, investors. The Company evaluates its loan sales for sales treatment. To the extent the transfer of loans qualifies as a sale, the Company derecognizes the loans and records a realized gain or loss on the sale date. In the event the Company determines that the transfer of loans does not qualify as a sale, the transfer would be treated as a secured borrowing. Interest on loans is recorded as income when earned and deemed collectible. LHFS are placed on nonaccrual status when any portion of the principal or interest is 90 days past due or earlier if factors indicate that the ultimate collectability of the principal or interest is not probable. Interest received from loans on nonaccrual status is recorded as income when collected. Loans return to accrual status when the principal and interest become current and it is probable that the amounts are fully collectible. |
Mortgage Servicing Rights | Mortgage Servicing Rights The Company accounts for mortgage loan sales in accordance with ASC 860, Transfers and Servicing . Upon sale of mortgage loans on a service-retained basis, the LHFS are removed from the balance sheet, mortgage servicing rights (MSRs) are recorded as an asset for servicing rights retained. The Company elected to measure MSRs at fair value as prescribed by FASB ASC 860-50-35, and as such, servicing assets or liabilities are valued using discounted cash flow modeling techniques using assumptions regarding future net servicing cash flow, including prepayment rates, discount rates, servicing cost and other factors. Changes in estimated fair value are reported in the accompanying consolidated statements of operations within loss on mortgage servicing rights, net. When the Company sells mortgage servicing rights, the Company records a gain or loss on such sale based on the selling price of the mortgage servicing rights less the carrying value and transaction costs. Gains and losses are reported in the accompanying consolidated statements of operations within loss on mortgage servicing rights, net. |
Finance Receivables | Finance Receivables Finance receivables represent transactions with the Company’s customers involved in residential real estate lending. As a warehouse lender, the Company’s warehouse lending operations are a secured creditor of the mortgage bankers and brokers to which the Company extends credit and is subject to the risks inherent in that status, including the risk of borrower fraud, default and bankruptcy. Any claim of the Company’s warehouse lending operations as a secured lender in a bankruptcy proceeding may be subject to adjustment and delay. Finance receivables from customers represent repurchase facilities with mortgage bankers that are primarily collateralized by mortgages on single-family residential real estate. Terms of the repurchase facilities, including the maximum facility amount and interest rate, are determined based upon the financial strength, historical performance and other qualifications of the borrower. The warehouse facilities to customers have maturities that range from on-demand to one year. Finance receivables are stated at the principal balance outstanding. Interest income is recorded on the accrual basis. |
Securitized Mortgage Collateral | Securitized Mortgage Collateral The Company’s long‑term mortgage portfolio primarily includes adjustable rate and, to a lesser extent, fixed rate non‑conforming mortgages and commercial mortgages that were acquired and originated by our mortgage and commercial operations prior to 2008. Non‑conforming mortgages may not have certain documentation or verifications that are required by government sponsored entities and, therefore, in making our credit decisions, we were more reliant upon the borrower’s credit score and the adequacy of the underlying collateral. Historically, the Company securitized mortgages in the form of collateralized mortgage obligations (CMO) or real estate mortgage investment conduits (REMICs). These securitizations are evaluated for consolidation based on the provisions of FASB ASC 810‑10‑25. Amounts consolidated are included in trust assets and liabilities as securitized mortgage collateral, real estate owned, derivative assets, securitized mortgage borrowings and derivative liabilities in the accompanying consolidated balance sheets. The Company accounts for securitized mortgage collateral at fair value, with changes in fair value during the period reflected in earnings. Fair value measurements are based on the Company’s estimated cash flow models, which incorporate assumptions, inputs of other market participants and quoted prices for the underlying bonds. The Company’s assumptions include its expectations of inputs that other market participants would use. These assumptions include judgments about the underlying collateral, prepayment speeds, credit losses, investor yield requirements, forward interest rates and certain other factors. Interest income on securitized mortgage collateral is recorded using the effective yield for the period based on the previous quarter‑end’s estimated fair value. Securitized mortgage collateral is generally not placed on nonaccrual status as the servicer advances the interest payments to the trust regardless of the delinquency status of the underlying mortgage loan, until it becomes apparent to the servicer that the advance is not collectible. |
Real Estate Owned | Real Estate Owned Real estate owned (REO) on the balance sheet, are primarily assets within the securitized trusts but are recorded as a separate asset for accounting and reporting purposes and are within the long‑term mortgage portfolio. REO, which consists of residential real estate acquired in satisfaction of loans, is carried at net realizable value, which includes the estimated fair value of the residential real estate less estimated selling and holding costs. Adjustments to the loan carrying value required at the time of foreclosure affect the carrying amount of REO. Subsequent write‑downs in the net realizable value of REO are included in change in fair value of net trust assets, including trust REO (losses) gains in the consolidated statements of operations. |
Goodwill and Intangible assets | 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. 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 exceeds its implied fair value. An impairment loss, if any, is measured as the excess of carrying value over the implied fair value 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. |
Business Combinations | Business Combinations Business combinations are accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations . Under the acquisition method, the acquiring entity in a business combination recognizes 100 percent of the acquired assets and assumed liabilities, regardless of the percentage owned, at their estimated fair values as of the date of acquisition. Any excess of the purchase price over the fair value of net assets and other identifiable intangible assets acquired is recorded as goodwill. To the extent the fair value of net assets acquired, including other identifiable assets, exceeds the purchase price, a bargain purchase gain is recognized. Assets acquired and liabilities assumed which involve contingencies must also be recognized at their estimated fair value, provided such fair value can be determined during the measurement period. Acquisition-related costs, including severance, conversion and other restructuring charges, such as abandoned space accruals, are expensed as incurred. Results of operations of an acquired business are included in the consolidated statements of operations from the date of acquisition. |
Securitized Mortgage Borrowings | Securitized Mortgage Borrowings The Company records securitized mortgage borrowings in the accompanying consolidated balance sheets for the consolidated CMO and REMIC securitized trusts within the long-term mortgage portfolio. The debt from each issuance of a securitized mortgage borrowing is payable from the principal and interest payments on the underlying mortgages collateralizing such debt, as well as the proceeds from liquidations of REO. If the principal and interest payments are insufficient to repay the debt, the shortfall is allocated first to the residual interest holders (generally owned by the Company) then, if necessary, to the certificate holders (e.g. third party investors in the securitized mortgage borrowings) in accordance with the specific terms of the various respective indentures. Securitized mortgage borrowings typically are structured as one-month LIBOR “floaters” and fixed rate securities with interest payable to certificate holders monthly. The maturity of each class of securitized mortgage borrowing is directly affected by the amount of net interest spread, overcollateralization and the rate of principal prepayments and defaults on the related securitized mortgage collateral. The actual maturity of any class of a securitized mortgage borrowing can occur later than the stated maturities of the underlying mortgages. When the Company issued securitized mortgage borrowings, the Company generally sought an investment grade rating for the Company’s securitized mortgages by nationally recognized rating agencies. To secure such ratings, it was often necessary to incorporate certain structural features that provide for credit enhancement. This generally included the pledge of collateral in excess of the principal amount of the securities to be issued, a bond guaranty insurance policy for some or all of the issued securities, or additional forms of mortgage insurance. The Company’s total loss exposure is limited to the Company’s initial net economic investment in each trust, which is referred to as a residual interest. The Company accounts for securitized mortgage borrowings at fair value, with changes in fair value during the period reflected in earnings. Fair value measurements are based on the Company’s estimated cash flow models, which incorporate assumptions, inputs of other market participants and quoted prices for the underlying bonds. The Company’s assumptions include its expectations of inputs that other market participants would use. These assumptions include judgments about the underlying collateral, prepayment speeds, credit losses, investor yield requirements, forward interest rates and certain other factors. Interest expense on securitized mortgage borrowings are recorded quarterly using the effective yield for the period based on the previous quarter‑end’s estimated fair value. |
Derivative Instruments | Derivative Instruments In accordance with FASB ASC 815‑10 Derivatives and Hedging—Overview , the Company records all derivative instruments at fair value. The Company has accounted for all its derivatives as non‑designated hedge instruments or free‑standing derivatives. Interest Rate Swaps, Caps and Floors The Company’s interest rate risk management objective was to limit the exposure to the variability in future cash flows attributable to the variability of one-month LIBOR, which is the underlying index of adjustable rate securitized mortgage borrowings. The Company’s interest rate risk management policies were formulated with the intent to offset the potential adverse effects of changing interest rates on securitized mortgage borrowings. To mitigate exposure to the effect of changing interest rates on cash flows on securitized mortgage borrowings, the Company purchased derivative instruments primarily in the form of interest rate swap agreements (swaps) and, to a lesser extent, interest rate cap agreements (caps) and interest rate floor agreements (floors). There were no outstanding derivatives as of December 31, 2016. The Company had $1.7 million in derivative liabilities outstanding as of December 31, 2015, all of which are in the securitized trusts and included in trust liabilities in the consolidated balance sheets. The fair value of the Company’s swaps, caps, floors and other derivative instruments is generally based on market prices provided by dealers and market makers, or estimates of future cash flows from these financial instruments. Lending Derivatives The mortgage lending operation enters into IRLCs with consumers to originate mortgage loans at a specified interest rate. These IRLCs are accounted for as derivative instruments. The fair values of IRLCs utilize current secondary market prices for underlying loans and estimated servicing value with similar coupons, maturity and credit quality, subject to the anticipated loan funding probability (Pull‑through Rate). The fair value of IRLCs is subject to change primarily due to changes in interest rates and the estimated Pull‑through Rate. The Company reports IRLCs within other assets and other liabilities at fair value with changes in fair value being recorded in the accompanying consolidated statements of operations within gain on sale of loans, net. The Company hedges the changes in fair value associated with changes in interest rates related to IRLCs and uncommitted LHFS by using forward sold commitments including Fannie Mae and Ginnie Mae mortgage‑backed securities known as to‑be‑announced mortgage‑backed securities (TBA MBS or Hedging Instruments). The Hedging Instruments are typically entered into at the time the IRLC is made and are accounted for as derivative instruments. The fair value of Hedging Instruments is subject to change primarily due to changes in interest rates. The Company reports Hedging Instruments within other assets and other liabilities at fair value with changes in fair value being recorded in the accompanying consolidated statements of operations within gain on sale of loans, net. The Company hedges the changes in fair value associated with changes in interest rates related to MSRs by using TBA MBS or Hedging Instruments. The Hedging Instruments are typically entered into at the time the MSR is created and are accounted for as derivative instruments. The fair value of Hedging Instruments is subject to change primarily due to changes in interest rates. The Company reports Hedging Instruments within other assets and other liabilities at fair value with changes in fair value being recorded in the accompanying consolidated statements of operations within loss on sale of mortgage servicing rights. The fair value of IRLCs and Hedging Instruments are represented as derivative assets, lending and derivative liabilities, lending in Note 12.— Fair Value of Financial Instruments. |
Long-term Debt | Long‑term Debt Long‑term debt (consisting of trust preferred securities and junior subordinated notes) is reported at fair value. These securities are measured based upon an analysis prepared by management, which considers the Company’s own credit risk and discounted cash flow analysis. Unrealized gains and losses are recognized in earnings in the accompanying consolidated statements of operations within change in fair value of long‑term debt. The Company does not consolidate trust preferred entities (which are sometimes hereinafter referred to as capital trusts) since the Company does not have a variable interest in the trust. Instead, the Company records its investment in the trust preferred entities (included in other assets in the accompanying consolidated balance sheets) and accounts for such under the equity method of accounting and reflects a liability for the issuance of the notes to the trust preferred entities. |
Repurchase Reserve | Repurchase Reserve The Company sells mortgage loans in the secondary market, including U.S. government sponsored entities and issues mortgage‑backed securities through Ginnie Mae and Fannie Mae. When the Company sells or issues securities, 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. In the event of a breach of its representations and warranties, the Company may be required to either repurchase the mortgage loans with the identified defects or indemnify the investor or insurer for any loss. Also, the Company’s loss may be reduced by proceeds from the sale or liquidation of the repurchased loan. The Company’s loss may be reduced by any recourse it has to correspondent lenders that, in turn, had sold such mortgage loans to the Company and breached similar or other representations and warranties. In such event, the Company has the right to seek a recovery of related repurchase losses from that correspondent lender. The Company records a provision for losses relating to such representations and warranties as part of its loan sale transactions. The method used to estimate the liability for representations and warranties is a function of the representations and warranties given and considers a combination of factors, including, but not limited to, estimated future defaults and loan repurchase rates and the potential severity of loss in the event of defaults including any loss on sale or liquidation of the repurchased loan and the probability of reimbursement by the correspondent loan seller. The Company establishes a liability at the time loans are sold and continually updates its estimated repurchase liability. The level of the repurchase liability for representations and warranties is difficult to estimate and requires considerable management judgment. The level of mortgage loan repurchase losses is dependent on economic factors, investor demands for loan repurchases and other external conditions that may change over the lives of the underlying loans. |
Revenue Recognition for Fees from Services | Revenue Recognition for Fees from Services The Company follows ASC 605, Revenue Recognition , which provides guidance on the application of GAAP to selected revenue recognition issues relates to our real estate services revenues. The Company’s real estate services segment provides various real estate related services and loss mitigation services including (i) managing distressed mortgage portfolios and foreclosed real estate assets, (ii) the disposition of such assets, (iii) surveillance services for residential and multifamily mortgage portfolios, (iv) loan modification services and (v) the master servicing on various residential mortgage and multifamily loan pools for loans in the long‑term portfolio of IMH, and to a lesser extent, non‑affiliated entities. The revenues from these services are recognized in income in the period when services are rendered and collectability is reasonably certain. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and are included in business promotion expense. |
Stock-Based Compensation | Stock‑Based Compensation The Company accounts for stock‑based compensation in accordance with FASB ASC 718 Compensation—Stock Compensation . Accordingly, the Company measures the cost of stock‑based awards using the grant‑date fair value of the award and recognizes that cost over the requisite service period. The fair value of each stock option granted under the Company’s stock-based compensation plan is estimated on the date of grant using the Black-Scholes-Merton option-pricing model and assumptions noted in Note 17.—Share Based Payments and Employee Benefit Plans. The risk-free interest rate is based on the U.S. Treasury rate with a term equal to the expected term of the option grants on the date of grant. FASB ASC 718 requires forfeitures to be estimated at the time of grant and prospectively revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Stock‑based compensation expense is recorded net of estimated forfeitures for the years ended December 31, 2016 and 2015, such that the expense was recorded only for those stock‑based awards that were expected to vest during such periods. Refer to Note 17.— Share Based Payments and Employee Benefit Plans . |
Income Taxes | Income Taxes In accordance with ASC 740, Income Taxes , the Company records income tax expense as well as deferred tax assets and liabilities. Current income tax expense approximates taxes to be paid or refunded for the current period and includes income tax expense related to uncertain tax positions and amortization/impairment of deferred charge, explained below. The Company determines deferred income taxes using the balance sheet method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and recognizes enacted changes in tax rates and laws in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized subject to management’s judgment that realization is “more likely than not.” Uncertain tax positions that meet the more likely than not recognition threshold are measured to determine the amount of benefit to recognize. An uncertain tax position is measured at the largest amount of benefit that management believes has a greater than 50% likelihood of realization upon settlement. The Company is subject to federal income taxes as a regular (Subchapter C) corporation and files a consolidated U.S. federal income tax return on qualifying subsidiaries. The Company files income tax returns in the U.S. for federal and various states. In prior periods when the Company was taxed as a real estate investment trust (REIT), it recorded a deferred charge to eliminate the expense recognition of income taxes paid on inter-Company profits that result from the sale of mortgage loans from the taxable REIT subsidiaries to IMH. The deferred charge is included in other assets in the consolidated balance sheets and is amortized and, or impaired as a component of income tax expense in the consolidated statements of operations over the estimated life of the mortgages retained in the securitized mortgage collateral. |
Earnings per Common Share | Earnings per Common Share Basic earnings per common share is computed on the basis of the weighted average number of shares outstanding for the year divided into earnings for the year. Diluted earnings per common share is computed on the basis of the weighted average number of shares and dilutive common equivalent shares outstanding for the year divided by earnings for the year, unless anti‑dilutive. Refer to Note 13.— Reconciliation of Earnings Per Share . |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-15, “ Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern ”, which requires management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern and provide related disclosures. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In April 2015, the FASB issued 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 September 2015, the FASB issued ASU 2015-16, “ Simplifying the Accounting for Measurement-Period Adjustments (Topic 805)” , which replaces the requirement that an acquirer in a business combination account for measurement period adjustments retrospectively with a requirement that an acquirer recognize adjustments to the provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU 2015-16 requires that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. For public business entities, ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The guidance is to be applied prospectively to adjustments to provisional amounts that occur after the effective date of the guidance, with earlier application permitted for financial statements that have not been issued. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, " Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes ". The amendments in ASU 2015-17 eliminates the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The amendments in this ASU are effective for public business entities for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The amendments may be applied prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, " Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. " The amendments in ASU 2016-01, among other things, requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; Requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; Requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables); Eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The new guidance permits early adoption of the own credit provision. In addition, the new guidance permits early adoption of the provision that exempts private companies and not-for-profit organizations from having to disclose fair value information about financial instruments measured at amortized cost. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU) No. 2016-02, “ Leases (Topic 842) .” Under ASU 2016-02, an entity will be required to recognize assets and liabilities for the rights and obligations created by leases on the entity’s balance sheet for both finance and operating leases. For leases with a term of 12 months or less, an entity can elect to not recognize lease assets and lease liabilities and expense the lease over a straight-line basis for the term of the lease. ASU 2016-02 will require new disclosures that depict the amount, timing, and uncertainty of cash flows pertaining to an entity’s leases. Companies are required to adopt the new standard using a modified retrospective approach for annual and interim periods beginning after December 15, 2018. Early adoption of ASU 2016-02 is permitted. When adopted, the Company does not expect 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. In August 2016, the FASB issued ASU 2016-15, “ Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments .” The update amends the guidance in Accounting Standards Codification 230, Statement of Cash Flows, and clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows with the objective of reducing the existing diversity in practice related to eight specific cash flow issues. In addition, in November 2016, the FASB issued Statement of Cash Flows (Topic 230), Restricted Cash (ASU In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805) Clarifying the Definition of a Business.” The amendments in this Update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, " Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment. " The update removes the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those periods. 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 Mortg29
Acquisition of CashCall Mortgage (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Acquisition of CashCall Mortgage | |
Schedule of purchase price allocation | 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 Year Ended December 31, 2015 2014 Revenues $ $ Other (expense) income Expenses Pretax net earnings (loss) $ $ |
Mortgage Loans Held-for-Sale (T
Mortgage Loans Held-for-Sale (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Mortgage Loans Held-for-Sale | |
Summary of the unpaid principal balance (UPB ) of mortgage loans held-for-sale by type | December 31, 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 Fannie Mae (FNMA) and Freddie Mac (FHLMC). (3) Includes NonQM and Jumbo loans. (4) Changes in fair value are included in the accompanying consolidated statements of operations. |
Schedule of gain on loans held-for-sale (LHFS) | For the Year Ended December 31, 2016 2015 2014 Gain on sale of mortgage loans $ $ $ Premium from servicing retained loan sales Unrealized gains (losses) from derivative financial instruments Realized gains (losses) from derivative financial instruments Mark to market (loss) gain on LHFS Direct origination expenses, net Provision for repurchases Total gain on sale of loans, net $ $ $ |
Finance Receivables (Tables)
Finance Receivables (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Finance Receivables.. | |
Summary of outstanding warehouse lines to non-affiliated customers and outstanding | December 31, 2016 2015 Uncommitted warehouse lines to non-affiliated customers $ $ Outstanding balance |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 12 Months Ended |
Dec. 31, 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. | December 31, December 31, Mortgage Servicing Rights Sensitivity Analysis 2016 2015 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 Year Ended December 31, 2016 2015 2014 Change in fair value of mortgage servicing rights $ $ $ (Loss) gain on sale of mortgage servicing rights Realized and unrealized (losses) gains from hedging instruments — Loss on mortgage servicing rights, net $ $ $ |
Schedule of components of servicing income | For the Year Ended December 31, 2016 2015 2014 Contractual servicing fees $ $ $ Late and ancillary fees Subservicing and other costs Servicing income, net $ $ $ |
Mortgage servicing rights | |
Mortgage Servicing Rights | |
Schedule of changes in the fair value of MSRs | December 31, 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. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets. | |
Summary of changes in carrying amount of goodwill | Balance at December 31, 2014 $ Addition from CCM acquisition Balance at December 31, 2015 $ Additions (Impairment) — Balance at December 31, 2016 $ |
Summary of preliminary purchase price of intangible assets | Gross Carrying Accumulated Net Carrying Amount Amount Amortization at December 31, 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 December 31, 2016 Remaining Life Other assets: Developed software $ $ $ Gross Carrying Accumulated Net Carrying Amount Amount Amortization at December 31, 2015 Other assets: Developed software $ $ $ |
Summary of estimated aggregate amortization expense | Amortization Expense Year 2017 $ Year 2018 Year 2019 Year 2020 Year 2021 and thereafter Total future amortization expense $ |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Assets. | |
Schedule of other assets | December 31, December 31, 2016 2015 Derivative assets – lending (See Note 10) $ $ Loans eligible for repurchase from GNMA — Deferred charge (See Note 12) Accounts receivable, net Prepaid expenses Servicing advances Developed software, net Premises and equipment, net Other Total other assets $ $ |
Summary of purchase price of other assets | Gross Carrying Accumulated Net Carrying Amount Amount Amortization at December 31, 2016 Remaining Life Other assets: Developed software $ $ $ Gross Carrying Accumulated Net Carrying Amount Amount Amortization at December 31, 2015 Other assets: Developed software $ $ $ |
Schedule of premises and equipment and accumulated depreciation | December 31, 2016 2015 Premises and equipment $ $ Less: Accumulated depreciation Total premises and equipment, net $ $ |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Instrument [Line Items] | |
Schedule of information on warehouse borrowings | For the year ended December 31, 2016 2015 Maximum outstanding balance during the year $ $ Average balance outstanding for the year Underlying collateral (mortgage loans) Weighted average rate for period % % |
Schedule of line of credit | For the year ended December 31, 2016 2015 Maximum outstanding balance during the year $ — $ Average balance outstanding for the year — Weighted average rate for period — |
Trust Preferred Securities | |
Debt Instrument [Line Items] | |
Schedule of remaining principal balance and fair value | December 31, 2016 2015 Trust preferred securities (1) $ $ Common securities Fair value adjustment Total $ $ (1) Stated maturity of July 30, 2035 and redeemable at par at any time. The interest rate is a variable rate of three-month LIBOR plus 3.75% per annum. At December 31, 2016, the interest rate was 4.75%. |
Junior subordinated notes | |
Debt Instrument [Line Items] | |
Schedule of remaining principal balance and fair value | December 31, 2016 2015 Junior subordinated notes (1) $ $ Fair value adjustment Total $ $ (1) Stated maturity of March 2034; requires quarterly distributions initially at a fixed rate of 2.00% per annum through March 2014 with increases of 1.00% per year in 2014 through 2017. Starting in 2018, the interest rates become variable at 3‑month LIBOR plus 3.75% per annum. At December 31, 2016, the interest rate was 5.00%. |
Securitized Mortgage Trusts (Ta
Securitized Mortgage Trusts (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Securitized Mortgage Collateral | |
Schedule of trust assets | December 31, 2016 2015 Securitized mortgage collateral $ $ REO Investment securities available-for-sale — Total securitized mortgage trust assets $ $ |
Schedule of trust liabilities | December 31, 2016 2015 Securitized mortgage borrowings $ $ Derivative liabilities, securitized trusts — Total securitized mortgage trust liabilities $ $ |
Securitized mortgage borrowings | |
Securitized Mortgage Collateral | |
Schedule of expected principal reductions of securitized mortgage borrowings | As of December 31, 2016, expected principal reductions of the securitized mortgage borrowings, which is based on contractual principal payments and expected prepayment and loss assumptions for securitized mortgage collateral, was as follows (dollars in millions): Payments Due by Period Less Than One to Three to More Than Total One Year Three Years Five Years Five Years Securitized mortgage borrowings (1) $ $ $ $ $ (1) Represents the outstanding balance in accordance with trustee reporting. |
Securitized mortgage collateral | |
Securitized Mortgage Collateral | |
Schedule of real estate owned | December 31, 2016 2015 REO $ $ Impairment (1) Ending balance $ $ REO inside trusts $ $ REO outside trusts — — Total $ $ (1) Impairment represents the cumulative write‑downs of net realizable value subsequent to foreclosure. |
Schedule of securitized mortgage borrowings | Securitized mortgage borrowings outstanding as of December 31, Range of Interest Rates Interest Interest Rate Rate Original Fixed Margins over Margins after Issuance Interest One-Month Contractual Year of Issuance Amount 2016 2015 Rates LIBOR (1) Call Date (2) 2002 $ $ $ 5.25 - 12.00 0.27 - 2.75 0.54 - 3.68 2003 4.34 - 12.75 0.27 - 3.00 0.54 - 4.50 2004 3.58 - 5.56 0.25 - 2.50 0.50 - 3.75 2005 — 0.24 - 2.90 0.48 - 4.35 2006 0.1 - 2.75 0.20 - 4.13 2007 — 0.06 - 2.00 0.12 - 3.00 Subtotal contractual principal balance (3) Fair value adjustment Total securitized mortgage borrowings $ $ (1) One-month LIBOR was 0.77% as of December 31, 2016. (2) Interest rate margins are generally adjusted when the unpaid principal balance is reduced to less than 10‑20% of the original issuance amount, or if certain other triggers are met. (3) Represents the outstanding balance in accordance with trustee reporting. |
Schedule of changes in fair value of net trust assets, including trust REO losses | For the Year Ended December 31, 2016 2015 2014 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 (losses) gains $ $ $ |
Summary of the activity of MSRs | December 31, 2016 2015 Mortgages secured by residential real estate $ $ Mortgages secured by commercial real estate Fair value adjustment Total securitized mortgage collateral $ $ |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments | |
Schedule of information for derivative assets and liabilities - lending | Total Gains (Losses) (1) Notional Amount For the Year Ended December 31, December 31, December 31, 2016 2015 2016 2015 2014 Derivative – IRLC's $ $ $ $ $ Derivative – TBA MBS (1) Amounts included in gain on sale of loans, net within the accompanying consolidated statements of operations. |
Fair Value of Financial Instr38
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value of Financial Instruments | |
Schedule of estimated fair value of financial instruments included in consolidated financial statements | December 31, 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 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 Year Ended December 31, 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, December 31, 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 $9.9 million for the year ended December 31, 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 December 31, 2016. Level 3 Recurring Fair Value Measurements For the Year Ended December 31, 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 gains (losses) included in earnings Transfers in and/or out of Level 3 — — — — — — — — — Purchases, issuances and settlements: Purchases — — — — — — — — — Issuances — — — — — — — Settlements — — — Fair value, December 31, 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 $8.3 million for the year ended December 31, 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 December 31, 2015. Level 3 Recurring Fair Value Measurements For the Year Ended December 31, 2014 Derivative Investment liabilities, Interest securities Securitized Securitized net, Mortgage rate lock Long- available- mortgage mortgage securitized servicing commitments, term for-sale collateral borrowings trusts rights net debt Warrant Fair value, December 31, 2013 $ $ $ $ $ $ $ $ — 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, December 31, 2014 $ $ $ $ $ $ $ $ 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 $5.7 million for the year ended December 31, 2014. 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 December 31, 2014. |
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 December 31, 2016. Estimated Valuation Unobservable Range of Weighted Financial Instrument Fair Value Technique Input Inputs Average Assets and liabilities backed by real estate Securitized mortgage collateral, and $ Prepayment rates 2.5 - 30.5 % % Securitized mortgage borrowings Default rates 0.1 - 10.2 % % Loss severities 9.6 - 98.3 % % Discount rates 4.3 - 25.0 % % Other assets and liabilities Mortgage servicing rights $ DCF Discount rate 9.0 - 14.0 % % Prepayment rates 8.0 - 86.6 % % Derivative liabilities, net, securitized trusts — DCF 1M forward LIBOR 0.8 - 2.8 % N/A Derivative assets - IRLCs, net Market pricing Pull-through rate 25 - 99.9 % % Long-term debt DCF Discount rate % % Contingent consideration DCF Discount rate % % Margins 1.5 - 2.6 % % Probability of outcomes (1) 25.0 - 50.0 % % DCF = Discounted Cash Flow 1M = 1 Month Probability of outcomes is the probability of projected CCM earnings over the earn-out period based upon three scenarios (base, low and high). The estimated aggregate undiscounted earn out payments to the seller over the remaining earn out period of one year as of December 31, 2016 was $33.3 million, and the estimated range of undiscounted earn out payments as of December 31, 2016 was $31.6 million to $34.9 million. |
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 Year Ended December 31, 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) — — — — — 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 $1.5 million in changes in the fair value of derivative instruments, offset by $1.7 million in cash payments from the securitization trusts for the year ended December 31, 2016. (3) Included in (loss) gain on mortgage servicing rights in the consolidated statements of operations. (4) For the year ended December 31, 2016, change in the fair value of trust assets, excluding REO was $5.6 million. Excluded from the $7.3 million change in fair value of net trust assets, excluding REO, in the accompanying consolidated statement of cash flows is $1.7 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 Year Ended December 31, 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 $3.6 million in changes in the fair value of derivative instruments, offset by $4.1 million in cash payments from the securitization trusts for the year ended December 31, 2015. (3) Included in (loss) gain on mortgage servicing rights in the consolidated statements of operations. (4) For the year ended December 31, 2015, change in the fair value of trust assets, excluding REO was $1.0 million. Excluded from the $5.0 million change in fair value of net trust assets, excluding REO, in the accompanying consolidated statement of cash flows is $4.1 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 Year Ended December 31, 2014 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 — — — — — 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 $4.6 million in changes in the fair value of derivative instruments, offset by $5.2 million in cash payments from the securitization trusts for the year ended December 31, 2014. (3) Included in (loss) gain on mortgage servicing rights in the consolidated statements of operations. (4) For the year ended December 31, 2014, change in the fair value of trust assets, excluding REO was $3.5 million. Excluded from the $(8.7) million change in fair value of net trust assets, excluding REO, in the accompanying consolidated statement of cash flows is $5.2 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) Notional Amount For the Year Ended December 31, December 31, December 31, 2016 2015 2016 2015 2014 Derivative – IRLC's $ $ $ $ $ Derivative – TBA MBS (1) Amounts included in gain on sale of loans, net within the accompanying consolidated statements of operations. |
Reconciliation of Earnings Pe39
Reconciliation of Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Reconciliation of Earnings Per Share | |
Schedule of computation of basic and diluted earnings per common share | For the Year Ended December 31, 2016 2015 2014 Numerator for basic earnings (loss) per share: Net earnings (loss) $ $ $ Numerator for diluted earnings (loss) per share: Net earnings (loss) $ $ $ Interest expense attributable to convertible notes — Net earnings (loss) plus interest expense attributable to convertible notes $ $ $ Denominator for basic earnings (loss) per share (1): Basic weighted average common shares outstanding during the period Denominator for diluted earnings (loss) 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 (loss) per common share: Basic $ $ $ Diluted $ $ $ (1) Share amounts presented in thousands. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Schedule of income taxes | For the year ended December 31, 2016 2015 2014 Current income taxes: Federal $ $ $ State Total current income tax expense Deferred income taxes: Federal — — State — — Total deferred income tax benefit — — Total income tax expense (benefit) $ $ $ |
Schedule of deferred tax assets and liabilities temporary differences between the financial statement carrying value and the tax basis of assets | For the year ended December 31, 2016 2015 Deferred tax assets: Federal and state net operating losses $ $ Mortgage securities Depreciation and amortization Compensation and other accruals Repurchase reserve Total gross deferred tax assets Deferred tax liabilities: Fair value (1) Mortgage servicing rights Derivatives — Total gross deferred tax liabilities Valuation allowance Total net deferred tax assets $ $ (1) |
Schedule of a reconciliation of income taxes to the statutory federal corporate income tax rates | For the year ended December 31, 2016 2015 2014 Expected income tax expense (benefit) $ $ $ State tax (benefit), net of federal benefit State rate change — — Change in valuation allowance Deferred charge Other Total income tax expense (benefit) $ $ $ |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting | |
Schedule of the selected balance sheet data by reporting segment | Balance Sheet Items as of Mortgage Real Estate Long-term Corporate December 31, 2016: Lending Services Portfolio and other Consolidated Cash and cash equivalents $ $ $ — $ $ Restricted cash — — — Mortgage loans held-for-sale — — — Finance receivables — — — Mortgage servicing rights — — — Trust assets — — — Goodwill — — Other assets (1) Total assets Total liabilities Balance Sheet Items as of Mortgage Real Estate Long-term Corporate December 31, 2015: Lending Services Portfolio and other Consolidated Cash and cash equivalents $ $ — $ — $ $ Restricted cash — — — Mortgage loans held-for-sale — — — Finance receivables — — — Mortgage servicing rights — — — Trust assets — — — Goodwill — — Other assets (1) Total assets Total liabilities (1) All segment asset balances exclude intercompany balances. |
Schedule of the selected statement of operations information by reporting segment | Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Year Ended December 31, 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 — — — Change in fair value of long-term debt — — — Other (expense) income Net earnings (loss) before income taxes $ $ $ $ Income tax expense Net earnings $ Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Year Ended December 31, 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 — — — Change in fair value of long-term debt — — — Other expense Net earnings (loss) before income taxes $ $ $ $ $ Income tax benefit Net earnings $ Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Year Ended December 31, 2014: 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 — — — — — Change in fair value of long-term debt — — — Other (expense) income Net (loss) earnings before income taxes $ $ $ $ $ Income tax expense Net loss $ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Schedule of future minimum commitments under non-cancelable leases | Operating Capital Leases Leases Total Year 2017 $ $ $ Year 2018 Year 2019 Year 2020 — Year 2021 and thereafter — Total lease commitments $ $ $ |
Schedule of the activity related to the repurchase reserve for previously sold loans | December 31, 2016 2015 Beginning balance $ $ Provision for repurchases Settlements Total repurchase reserve $ $ |
Share Based Payments and Empl43
Share Based Payments and Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity and Share Based Payments | |
Schedule of weighted average assumptions used in estimation of the fair value of options granted | For the year ended December 31, 2016 2015 2014 Risk-free interest rate 1.16% 1.54 - 1.76% 1.08 - 1.79% Expected lives (in years) 5.47 5.50 - 5.73 3.48 - 5.73 Expected volatility (1) 49.71% 49.53 - 79.56% 70.47 - 75.93% Expected dividend yield 0.00% 0.00% 0.00% Fair value per share $ 7.95 $ 6.74 - 9.96 $ 2.69 - 4.46 (1) Expected volatilities are based on both the implied and historical volatility of the Company’s stock over the expected option life |
Summary of activity, pricing and other information for the Company's stock options | For the year ended December 31, 2016 2015 2014 Weighted- Weighted- Weighted- Average Average Average Number of Exercise Number of Exercise Number of Exercise Shares Price Shares Price Shares Price Options outstanding at beginning of period $ $ $ Options granted Options exercised Options forfeited/cancelled Options outstanding at end of year Options exercisable at end of year $ $ $ |
Schedule of aggregate intrinsic value | As of December 31, 2016 2015 Weighted- Weighted- Average Aggregate Average Aggregate Remaining Intrinsic Remaining Intrinsic Life Value Life Value (Years) (in thousands) (Years) (in thousands) Options outstanding at end of year $ $ Options exercisable at end of year $ $ |
Schedule of additional information regarding stock options outstanding | Stock Options Outstanding Options Exercisable Weighted- Average Weighted- Weighted- Exercise Remaining Average Average Price Number Contractual Exercise Number Exercise Range Outstanding Life in Years Price Exercisable Price $ 0 - 2.80 $ $ 2.81 - 5.39 5.40 - 10.65 10.66 - 16.43 16.44 - 17.40 — — 17.41 - 21.50 $ 2.80 - 21.50 $ $ |
Summary of activity, pricing and other information for the Company's (DSU's) | For the year ended December 31, 2016 2015 2014 Weighted- Weighted- Weighted- Average Average Average Number of Grant Date Number of Grant Date Number of Grant Date Shares Fair Value Shares Fair Value Shares Fair Value DSU’s outstanding at beginning of year $ $ $ DSU’s granted DSU’s exercised — — — — — — DSU’s forfeited/cancelled — — — — — — DSU’s outstanding at end of year $ $ $ |
Selected Quarterly Financial Da
Selected Quarterly Financial Data - (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Selected Quarterly Financial Data - (unaudited) | |
Selected unaudited quarterly financial data | For the three months ended March 31, June 30, September 30, December 31, Total revenues $ $ $ $ Total expenses Total other (expense) income Earnings before income taxes Income tax expense (benefit) Net earnings $ $ $ $ Earnings per common share : Basic $ $ $ $ Diluted $ $ $ $ For the three months ended March 31, June 30, September 30, December 31, Total revenues $ $ $ $ Total expenses Total other (expense) income Earnings before income taxes Income tax (benefit) expense Net earnings $ $ $ $ Earnings per common share : Basic $ $ $ $ Diluted $ $ $ $ |
Summary of Business and Finan45
Summary of Business and Financial Statement Presentation including Significant Accounting Policies (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Cash and Cash Equivalents and Restricted Cash | ||
Restricted cash and cash equivalents, current | $ 5,971 | $ 3,474 |
Summary of Business and Finan46
Summary of Business and Financial Statement Presentation including Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Mortgage Loans Held-for-Sale | ||
Maximum past due period of principal or interest based on LHFS are placed on nonaccrual status | 90 days | |
Derivative Instruments | ||
Derivative liabilities | $ 0 | $ 1.7 |
Acquisition of CashCall Mortg47
Acquisition of CashCall Mortgage (Details) - USD ($) $ in Thousands | Jan. 06, 2015 | Feb. 28, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business combinations | |||||||||||||
Payment of acquisition related contingent consideration | $ 54,149 | $ 38,110 | |||||||||||
Consideration paid: | |||||||||||||
Contingent consideration | $ 31,072 | $ 48,079 | 31,072 | 48,079 | |||||||||
Assets acquired: | |||||||||||||
Goodwill. | 104,938 | 104,938 | 104,938 | 104,938 | $ 352 | ||||||||
Unaudited Pro Forma Results of Operations | |||||||||||||
Revenues | 185,357 | 109,126 | |||||||||||
Other expense | (12,143) | 9,226 | |||||||||||
Expenses | (166,111) | (139,401) | |||||||||||
Pretax net income | 7,103 | (21,049) | |||||||||||
Revenues | 77,251 | $ 103,993 | $ 69,213 | $ 47,299 | 35,878 | $ 47,652 | $ 49,084 | $ 34,343 | 297,756 | 166,957 | 44,139 | ||
Operating Expenses | $ 50,638 | $ 81,359 | $ 60,891 | $ 45,155 | 21,443 | $ 24,677 | $ 32,420 | 17,141 | 238,043 | $ 95,681 | $ 57,340 | ||
Cash Call Inc | |||||||||||||
Business combinations | |||||||||||||
Acquisition price, cash portion | $ 10,000 | ||||||||||||
Newly issued unregistered shares | 494,017 | 494,017 | |||||||||||
Earn out period of contingent consideration | 3 years | ||||||||||||
Percentage of earn out based on pre-tax earnings for January and February 2015 | 100.00% | ||||||||||||
Percentage of earn out based on pre-tax earnings for 10 months in 2015 after February | 65.00% | ||||||||||||
Earn out of period after February 2015 | 10 months | ||||||||||||
Percentage of earn out based on pre-tax earnings for 2016 | 55.00% | ||||||||||||
Percentage of earn out based on pre-tax earnings for 2017 | 45.00% | ||||||||||||
Threshold percentage of ownership transfer considered | 50.00% | ||||||||||||
Contingent consideration, as percent of the enterprise value in excess of $200 million | 15.00% | ||||||||||||
Enterprise value over which 15% is paid as contingent consideration | $ 200,000 | ||||||||||||
Payment of acquisition related contingent consideration | 54,000 | $ 38,100 | |||||||||||
Consideration paid, total | $ 140,742 | $ 8,000 | |||||||||||
Contingent consideration, as percent of the enterprise value in excess of $500 million | 5.00% | ||||||||||||
Enterprise value over which 5% is paid as contingent consideration | $ 500,000 | ||||||||||||
Consideration paid: | |||||||||||||
Cash | 5,000 | $ 2,500 | 7,500 | ||||||||||
IMH common stock | $ 6,200 | 6,200 | |||||||||||
IMH common stock | 6,150 | ||||||||||||
Deferred payments | 5,000 | ||||||||||||
Contingent consideration | 124,592 | ||||||||||||
Consideration paid, total | 140,742 | $ 8,000 | |||||||||||
Assets acquired: | |||||||||||||
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 | ||||||||||||
Unaudited Pro Forma Results of Operations | |||||||||||||
Revenues | 135,300 | ||||||||||||
Operating Expenses | $ 80,900 | ||||||||||||
Trademark | Cash Call Inc | |||||||||||||
Assets acquired: | |||||||||||||
Identifiable intangible assets | 17,251 | ||||||||||||
Customer list | Cash Call Inc | |||||||||||||
Assets acquired: | |||||||||||||
Identifiable intangible assets | 10,170 | ||||||||||||
Non-compete agreement | Cash Call Inc | |||||||||||||
Assets acquired: | |||||||||||||
Identifiable intangible assets | $ 5,701 |
Mortgage Loans Held-for-Sale (D
Mortgage Loans Held-for-Sale (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Mortgage loans held-for-Sale | |||
Total mortgage loans held-for-sale | $ 388,422 | $ 310,191 | |
Gain on LHFS | |||
Premium from servicing retained loan sales | 13,734 | 6,102 | $ 4,586 |
Provision for repurchases | (379) | (1,012) | (2,253) |
Total gain on sale of loans, net | 309,185 | 162,988 | 23,668 |
Government | |||
Mortgage loans held-for-Sale | |||
Total mortgage loans held-for-sale | 146,305 | 104,576 | |
Conventional | |||
Mortgage loans held-for-Sale | |||
Total mortgage loans held-for-sale | 168,581 | 170,519 | |
Other | |||
Mortgage loans held-for-Sale | |||
Total mortgage loans held-for-sale | 62,701 | 24,239 | |
Mortgage loans, held-for-sale | |||
Mortgage loans held-for-Sale | |||
Fair value adjustment | 10,835 | 10,857 | |
Gain on LHFS | |||
Gain on sale of mortgage loans | 321,392 | 232,552 | 100,338 |
Premium from servicing retained loan sales | 128,273 | 98,103 | 29,388 |
Unrealized gains (losses) from derivative financial instruments | 2,326 | 6,827 | (27) |
Realized gains (losses) from derivative financial instruments | 6,224 | (7,045) | (15,397) |
Mark to market (loss) gain on LHFS | (22) | 404 | 6,857 |
Direct origination expenses, net | (146,797) | (160,623) | (90,689) |
Provision for repurchases | (379) | (1,012) | (2,253) |
Total gain on sale of loans, net | $ 311,017 | $ 169,206 | $ 28,217 |
Finance Receivables (Details)
Finance Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Finance Receivables.. | ||
Finance receivable past due | $ 0 | $ 0 |
Uncommitted warehouse lines to non-affiliated customers | 175,500 | 119,500 |
Outstanding balance | $ 62,937 | $ 36,368 |
Mortgage Servicing Rights (Deta
Mortgage Servicing Rights (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in the fair value of MSRs | |||
Balance at beginning of period | $ 36,425 | ||
Fair value of MSRs at end of period | 131,537 | $ 36,425 | |
Total loans serviced | 12,351,522 | 3,570,659 | |
FNMA and FHLMC servicing collateral | $ 10,800,000 | $ 2,800,000 | |
Pledged collateral | 86.00% | 76.00% | |
Mortgage Servicing Rights Sensitivity Analysis | |||
Fair value of MSRs | $ 131,537 | $ 36,425 | |
Change in fair value of mortgage servicing rights | (24,388) | (10,939) | $ (6,229) |
(Loss) gain on sale of mortgage servicing rights | (10,688) | (8,046) | 1,113 |
Realized and unrealized (losses) gains from hedging instruments | (1,365) | 387 | |
Loss on mortgage servicing rights, net | (36,441) | (18,598) | (5,116) |
Servicing income, net | |||
Contractual servicing fees | 17,497 | 8,547 | 6,115 |
Late and Ancillary fees | 174 | 129 | 150 |
Subservicing and other costs | (3,937) | (2,574) | (1,679) |
Servicing income, net | 13,734 | 6,102 | 4,586 |
Government | |||
Changes in the fair value of MSRs | |||
Total loans serviced | 1,359,569 | 675,744 | |
Conventional | |||
Changes in the fair value of MSRs | |||
Total loans serviced | 10,815,998 | 2,799,758 | |
NonQM | |||
Changes in the fair value of MSRs | |||
Total loans serviced | 175,955 | 95,157 | |
Mortgage servicing rights | |||
Changes in the fair value of MSRs | |||
Balance at beginning of period | 36,425 | 24,418 | |
Additions from servicing retained loan sales | 128,273 | 98,103 | |
Reductions from bulk sales | (8,773) | (75,157) | |
Changes in fair value | (24,388) | (10,939) | |
Fair value of MSRs at end of period | 131,537 | 36,425 | $ 24,418 |
Mortgage Servicing Rights Sensitivity Analysis | |||
Prepayment Speed, Decrease in fair value from 10% adverse change | (4,956) | (1,337) | |
Prepayment Speed, Decrease in fair value from 20% adverse change | (9,593) | (2,577) | |
Prepayment Speed, Decrease in fair value from 30% adverse change | (13,940) | (3,729) | |
Discount Rate, Decrease in fair value from 10% adverse change | (4,927) | (1,314) | |
Discount Rate, Decrease in fair value from 20% adverse change | (9,511) | (2,539) | |
Discount Rate, Decrease in fair value from 30% adverse change | $ (13,786) | $ (3,683) |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Changes in carrying amount of goodwill | |
Goodwill, Beginning Balance | $ 352 |
Addition from CCM acquisition | 104,586 |
Goodwill, Ending Balance | $ 104,938 |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets - Intangibles Other Than Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Intangible assets and other assets: | ||
Gross Carrying Amount | $ 33,122 | $ 33,122 |
Accumulated Amortization | (7,344) | (3,147) |
Net carrying amount | $ 25,778 | 29,975 |
Remaining Life | 9 years 4 months 24 days | |
Amortization of intangible and other assets | $ 4,769 | 3,576 |
Trademark | ||
Intangible assets and other assets: | ||
Gross Carrying Amount | 17,251 | 17,251 |
Accumulated Amortization | (2,047) | (877) |
Net carrying amount | $ 15,204 | 16,374 |
Remaining Life | 13 years | |
Customer relationships | ||
Intangible assets and other assets: | ||
Gross Carrying Amount | $ 10,170 | 10,170 |
Accumulated Amortization | (2,637) | (1,130) |
Net carrying amount | $ 7,533 | 9,040 |
Remaining Life | 5 years | |
Non-compete agreement | ||
Intangible assets and other assets: | ||
Gross Carrying Amount | $ 5,701 | 5,701 |
Accumulated Amortization | (2,660) | (1,140) |
Net carrying amount | $ 3,041 | 4,561 |
Remaining Life | 2 years | |
Developed software | ||
Intangible assets and other assets: | ||
Gross Carrying Amount | $ 2,719 | 2,719 |
Accumulated Amortization | (1,002) | (429) |
Net carrying amount | $ 1,717 | $ 2,290 |
Remaining Life | 3 years |
Goodwill and Intangible Asset53
Goodwill and Intangible Assets - Estimated Aggregate Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill and Intangible Assets. | ||
Year 2,017 | $ 4,197 | |
Year 2,018 | 4,197 | |
Year 2,019 | 2,676 | |
Year 2,020 | 2,676 | |
Year 2021 and thereafter | 12,032 | |
Net carrying amount | $ 25,778 | $ 29,975 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Other Assets | ||
Derivative assets – lending (See Note 10) | $ 11,169 | $ 9,273 |
Loans eligible for repurchase from GNMA | 9,917 | |
Deferred charge (See Note 12) | 8,685 | 9,963 |
Accounts receivable, net | 6,953 | 11,385 |
Prepaid expenses | 3,179 | 2,587 |
Servicing advances | 3,075 | 927 |
Developed software, net | 1,717 | 2,290 |
Premises and equipment, net | 976 | 1,210 |
Other | 674 | 483 |
Total other assets | $ 46,345 | 38,118 |
Finance Receivables.. | ||
Average collection period after sale date for holdbacks from MSR sales | 6 months | |
Average number of months in arrears for collection of receivables related to hedging instruments and real estate service fees | 1 month | |
Reserve for doubtful accounts | $ 86 | $ 114 |
Other Assets - Developed Softwa
Other Assets - Developed Software (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Premises and Equipment, net | ||
Premises and equipment | $ 16,467 | $ 15,650 |
Less: Accumulated depreciation | (15,491) | (14,440) |
Total premises and equipment, net | 976 | 1,210 |
Intangible assets and other assets: | ||
Gross Carrying Amount | 33,122 | 33,122 |
Accumulated Amortization | (7,344) | (3,147) |
Net Carrying Amount | $ 25,778 | 29,975 |
Remaining Life | 9 years 4 months 24 days | |
Servicer Advances | ||
Servicer advances | $ 3,075 | 927 |
Minimum | ||
Premises and Equipment, net | ||
Useful lives | P3Y | |
Maximum | ||
Premises and Equipment, net | ||
Useful lives | P20Y | |
Developed software | ||
Intangible assets and other assets: | ||
Gross Carrying Amount | $ 2,719 | 2,719 |
Accumulated Amortization | (1,002) | (429) |
Net Carrying Amount | $ 1,717 | $ 2,290 |
Remaining Life | 3 years |
Debt - Warehouse Borrowings (De
Debt - Warehouse Borrowings (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Feb. 10, 2017 | Feb. 09, 2017 | |
Contractual reductions of the convertible notes | ||||
Less Than One Year | $ 450,483 | |||
Three to Five Years | 24,965 | |||
More Than Five Years | 70,500 | |||
Long-term debt | 47,207 | $ 31,898 | ||
Total Debt Obligations | 545,948 | |||
Warehouse Agreement Borrowings | 420,573 | 325,616 | ||
Information on warehouse borrowings | ||||
Securitized mortgage collateral | 4,021,891 | 4,574,919 | ||
Term financing | ||||
Contractual reductions of the convertible notes | ||||
Less Than One Year | 29,910 | |||
Long-term debt | $ 29,910 | |||
Term financing | LIBOR | ||||
Contractual reductions of the convertible notes | ||||
Interest rate margin (as a percent) | 8.50% | |||
2015 Convertible Notes | ||||
Contractual reductions of the convertible notes | ||||
Three to Five Years | $ 24,965 | |||
Long-term debt | 24,965 | |||
Long-term debt | ||||
Contractual reductions of the convertible notes | ||||
More Than Five Years | 70,500 | |||
Long-term debt | 70,500 | |||
Warehouse Borrowings | ||||
Contractual reductions of the convertible notes | ||||
Maximum Borrowing Capacity | 925,000 | |||
Short-term debt | 420,573 | 325,616 | ||
Information on warehouse borrowings | ||||
Maximum outstanding balance during the year | 880,111 | 541,252 | ||
Average balance outstanding for the year | 449,598 | 353,750 | ||
Securitized mortgage collateral | $ 436,887 | $ 336,075 | ||
Weighted average rate for period (as a percent) | 3.40% | 3.27% | ||
Repurchase agreement 1 | ||||
Contractual reductions of the convertible notes | ||||
Maximum Borrowing Capacity | $ 150,000 | |||
Short-term debt | $ 106,609 | $ 63,368 | ||
Repurchase agreement 1 | Minimum | ||||
Contractual reductions of the convertible notes | ||||
Allowable Advance Rates (as a percent) | 90.00% | |||
Repurchase agreement 1 | Minimum | 1ML | ||||
Contractual reductions of the convertible notes | ||||
Interest rate margin (as a percent) | 3.13% | |||
Repurchase agreement 1 | Maximum | 1ML | ||||
Contractual reductions of the convertible notes | ||||
Interest rate margin (as a percent) | 6.75% | |||
Repurchase agreement 2 | ||||
Contractual reductions of the convertible notes | ||||
Maximum Borrowing Capacity | $ 50,000 | |||
Short-term debt | $ 44,761 | 46,673 | ||
Repurchase agreement 2 | Subsequent Event | ||||
Contractual reductions of the convertible notes | ||||
Maximum Borrowing Capacity | $ 25,000 | $ 50,000 | ||
Repurchase agreement 2 | Minimum | ||||
Contractual reductions of the convertible notes | ||||
Allowable Advance Rates (as a percent) | 90.00% | |||
Repurchase agreement 2 | Minimum | Prime | ||||
Contractual reductions of the convertible notes | ||||
Interest rate margin (as a percent) | 0.00% | |||
Repurchase agreement 2 | Maximum | Prime | ||||
Contractual reductions of the convertible notes | ||||
Interest rate margin (as a percent) | 0.50% | |||
Repurchase agreement 3 | ||||
Contractual reductions of the convertible notes | ||||
Maximum Borrowing Capacity | $ 225,000 | |||
Short-term debt | 125,320 | 122,242 | ||
Line of Credit Facility, Amount Outstanding | $ 62,900 | 36,400 | ||
Repurchase agreement 3 | Minimum | ||||
Contractual reductions of the convertible notes | ||||
Allowable Advance Rates (as a percent) | 90.00% | |||
Repurchase agreement 3 | Minimum | BR | ||||
Contractual reductions of the convertible notes | ||||
Interest rate margin (as a percent) | 2.50% | |||
Repurchase agreement 3 | Maximum | ||||
Contractual reductions of the convertible notes | ||||
Allowable Advance Rates (as a percent) | 97.00% | |||
Repurchase agreement 4 | ||||
Contractual reductions of the convertible notes | ||||
Maximum Borrowing Capacity | $ 200,000 | |||
Short-term debt | $ 52,067 | 83,162 | ||
Allowable Advance Rates (as a percent) | 99.00% | |||
Repurchase agreement 4 | Minimum | 1ML | ||||
Contractual reductions of the convertible notes | ||||
Interest rate margin (as a percent) | 2.55% | |||
Repurchase agreement 5 | ||||
Contractual reductions of the convertible notes | ||||
Maximum Borrowing Capacity | $ 100,000 | |||
Short-term debt | $ 56,655 | $ 10,171 | ||
Allowable Advance Rates (as a percent) | 100.00% | |||
Repurchase agreement 5 | Minimum | LIBOR | ||||
Contractual reductions of the convertible notes | ||||
Interest rate margin (as a percent) | 0.50% | |||
Repurchase agreement 6 | ||||
Contractual reductions of the convertible notes | ||||
Maximum Borrowing Capacity | $ 200,000 | |||
Short-term debt | $ 35,161 | |||
Repurchase agreement 6 | Minimum | ||||
Contractual reductions of the convertible notes | ||||
Allowable Advance Rates (as a percent) | 95.00% | |||
Repurchase agreement 6 | Minimum | 1ML | ||||
Contractual reductions of the convertible notes | ||||
Interest rate margin (as a percent) | 2.15% | |||
Repurchase agreement 6 | Maximum | ||||
Contractual reductions of the convertible notes | ||||
Allowable Advance Rates (as a percent) | 98.00% | |||
Repurchase agreement 6 | Maximum | 1ML | ||||
Contractual reductions of the convertible notes | ||||
Interest rate margin (as a percent) | 2.40% |
Debt - Short Term Debt (Details
Debt - Short Term Debt (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($)item | Dec. 31, 2016USD ($) | Apr. 27, 2015USD ($) | |
Structured debt agreement | ||||
Short Term Debt | ||||
Debt issued | $ 6,000 | |||
Number of residual interests used as collateral for structured debt facility | item | 8 | |||
Proceeds from issuance of debt, net of payoff and transaction costs | $ 6,000 | |||
Transaction costs | $ 60 | |||
Variable interest rate base | LIBOR | |||
Interest margin over base rate (as a percent) | 5.75% | |||
Repayment of the previous debt by using proceeds of new debt | $ 3,200 | $ 3,200 | ||
Promissory Note | ||||
Short Term Debt | ||||
Debt issued | $ 10,000 | |||
Interest rate (as a percent) | 15.00% |
Debt - Term Financing (Details)
Debt - Term Financing (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Long-term Debt | ||||
Long-term debt | $ 47,207 | $ 31,898 | ||
Contractual reductions of the convertible notes | ||||
Less Than One Year | 450,483 | |||
Three to Five Years | 24,965 | |||
More Than Five Years | 70,500 | |||
Term financing | ||||
Long-term Debt | ||||
Amount of debt issued | $ 30,000 | |||
Loan extension fee | 100 | |||
Debt issuance costs | 300 | |||
Long-term debt | 29,910 | |||
Contractual reductions of the convertible notes | ||||
Less Than One Year | $ 29,910 | |||
Term financing | LIBOR | ||||
Long-term Debt | ||||
Interest margin over base rate (as a percent) | 8.50% | |||
Structured debt agreement | ||||
Long-term Debt | ||||
Amount of debt issued | $ 6,000 | |||
Repayment of the previous debt by using proceeds of new debt | $ 3,200 | $ 3,200 | ||
Debt issuance costs | $ 60 | |||
Interest margin over base rate (as a percent) | 5.75% | |||
Line of credit | ||||
Long-term Debt | ||||
Repayment of the previous debt by using proceeds of new debt | $ 4,000 |
Debt - Convertible Notes (Detai
Debt - Convertible Notes (Details) $ / shares in Units, $ in Thousands | May 31, 2015USD ($)item$ / shares | Jan. 31, 2016USD ($)shares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Convertible Notes | |||||
Amount of debt converted | $ 20,000 | ||||
Interest expense | $ 260,810 | $ 274,853 | $ 294,521 | ||
2013 Convertible Notes | |||||
Convertible Notes | |||||
Amount of debt issued | $ 20,000 | ||||
Common stock issued upon conversion of notes (in shares) | shares | 1,839,080 | ||||
Amount of debt converted | $ 20,000 | ||||
Gain (loss) on conversion of debt into shares | $ 0 | ||||
2015 Convertible Notes | |||||
Convertible Notes | |||||
Amount of debt issued | $ 25,000 | ||||
Transaction costs | $ 50 | ||||
Conversion price (in dollars per share) | $ / shares | $ 21.50 | ||||
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 | ||||
Interest rate of debt (as a percent) | 7.50% |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2009USD ($) | Dec. 31, 2008USD ($) | Dec. 31, 2005USD ($)item | |
Long-term Debt | |||||
Common stock issued upon conversion of debt | $ 20,000 | ||||
Long-term debt | $ 47,207 | $ 31,898 | |||
Junior subordinated notes | |||||
Long-term Debt | |||||
Interest rate at the end of the period (as a percent) | 5.00% | ||||
Junior subordinated notes | Through March 2014 | |||||
Long-term Debt | |||||
Fixed interest rate (as a percent) | 2.00% | ||||
Junior subordinated notes | January 2014 through 2017 | |||||
Long-term Debt | |||||
Increase in interest rate (as a percent) | 1.00% | ||||
Junior subordinated notes | From 2018 | 3ML | |||||
Long-term Debt | |||||
Applicable margin (as a percent) | 3.75% | ||||
Trust Preferred Securities | |||||
Long-term Debt | |||||
Amount of debt purchased and cancelled | $ 36,500 | $ 36,500 | |||
Amount for which debt was purchased and cancelled | 5,500 | $ 5,500 | |||
Common stock issued upon conversion of debt | 51,300 | ||||
Long-term debt | $ 8,500 | 8,500 | |||
Fair value adjustment | (3,197) | (4,869) | |||
Total | $ 5,566 | 3,894 | |||
Interest rate at the end of the period (as a percent) | 4.75% | ||||
Default period to declare principal amount and interest payable immediately | 30 days | ||||
Trust Preferred Securities | Minimum | |||||
Long-term Debt | |||||
Percentage of debt, holders of which are to declare principal amount and interest payable immediately in the event of default | 25.00% | ||||
Percentage of liquidation amount, holders of which are to declare principal amount and interest payable immediately in the event of default | 25.00% | ||||
Trust Preferred Securities | After July 30, 2035 | |||||
Long-term Debt | |||||
Applicable margin (as a percent) | 3.75% | ||||
Junior subordinated notes | |||||
Long-term Debt | |||||
Amount for which debt was exchanged | $ 62,000 | ||||
Long-term debt | $ 62,000 | 62,000 | |||
Fair value adjustment | (20,359) | (33,996) | |||
Total | 41,641 | 28,004 | |||
Common securities | |||||
Long-term Debt | |||||
Long-term debt | $ 263 | $ 263 | |||
Trusts | |||||
Long-term Debt | |||||
Number of wholly owned subsidiaries formed to issue securities | item | 4 | ||||
Trusts | Junior subordinated notes | |||||
Long-term Debt | |||||
Debt issued | $ 96,300 | ||||
Trusts | Trust Preferred Securities | |||||
Long-term Debt | |||||
Amount of debt issued | $ 99,200 |
Debt - Line of Credit Agreement
Debt - Line of Credit Agreement (Details) - Line of credit - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Line of Credit Agreement | |||
Maximum borrowing capacity | $ 4,000 | ||
Maximum outstanding balance during the year | $ 4,000 | ||
Average balance outstanding for the year | $ 1,649 | ||
Weighted average rate for period (as a percent) | 3.70% | ||
1ML | |||
Line of Credit Agreement | |||
Interest margin over base rate (as a percent) | 3.50% | ||
Term financing | |||
Line of Credit Agreement | |||
Proceeds from debt | $ 4,000 |
Securitized Mortgage Trusts- As
Securitized Mortgage Trusts- Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Trust Assets | ||
Securitized mortgage collateral | $ 4,021,891 | $ 4,574,919 |
REO | 11,399 | 19,589 |
Investment securities available-for-sale | 26 | |
Total securitized mortgage trust assets | 4,033,290 | 4,594,534 |
Mortgages secured by residential real estate | ||
Trust Assets | ||
Securitized mortgage collateral | 4,500,719 | 5,204,922 |
Mortgages secured by commercial real estate | ||
Trust Assets | ||
Securitized mortgage collateral | 426,494 | 517,969 |
Securitized mortgage collateral | ||
Trust Assets | ||
Securitized mortgage collateral | 4,021,891 | 4,574,919 |
Difference between aggregate unpaid principal balance and fair value of securitized mortgage collateral | (905,322) | (1,147,972) |
Mortgages serviced for others | ||
Trust Assets | ||
Other mortgages primarily collateralized by REMIC | 682,000 | 800,000,000 |
REO inside trusts | ||
Trust Assets | ||
REO | $ 11,399 | $ 19,589 |
Securitized Mortgage Trusts - L
Securitized Mortgage Trusts - Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Securitized Mortgage Trusts | ||
REO | $ 25,802 | $ 28,058 |
Impairment (1) | (14,403) | (8,469) |
Trust Liabilities | ||
Securitized mortgage borrowings | 4,017,603 | 4,578,657 |
Derivative liabilities, securitized trusts | 1,669 | |
Total securitized mortgage trust liabilities | $ 4,017,603 | $ 4,580,326 |
Securitized Mortgage Trusts (De
Securitized Mortgage Trusts (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Minimum | ||
Range of interest rates | ||
Interest rate margin adjustment trigger, percentage of unpaid principal balance to original issuance amount | 10.00% | |
Maximum | ||
Range of interest rates | ||
Interest rate margin adjustment trigger, percentage of unpaid principal balance to original issuance amount | 20.00% | |
2,002 | ||
Securitized Mortgage Borrowings | ||
Original Issuance Amount | $ 3,876.1 | |
Subtotal contractual principal balance (3) | $ 8.8 | $ 10.4 |
2002 | Minimum | ||
Range of interest rates | ||
Fixed interest rate (as a percent) | 5.25% | |
Interest Rate Margins after Contractual Call Date (as a percent) | 0.54% | |
2002 | Maximum | ||
Range of interest rates | ||
Fixed interest rate (as a percent) | 12.00% | |
Interest Rate Margins after Contractual Call Date (as a percent) | 3.68% | |
2002 | 1ML | Minimum | ||
Range of interest rates | ||
Variable interest rate | 0.27% | |
2002 | 1ML | Maximum | ||
Range of interest rates | ||
Variable interest rate | 2.75% | |
2,003 | ||
Securitized Mortgage Borrowings | ||
Original Issuance Amount | $ 5,966.1 | |
Subtotal contractual principal balance (3) | $ 62.8 | 75.6 |
2003 | Minimum | ||
Range of interest rates | ||
Fixed interest rate (as a percent) | 4.34% | |
Interest Rate Margins after Contractual Call Date (as a percent) | 0.54% | |
2003 | Maximum | ||
Range of interest rates | ||
Fixed interest rate (as a percent) | 12.75% | |
Interest Rate Margins after Contractual Call Date (as a percent) | 4.50% | |
2003 | 1ML | Minimum | ||
Range of interest rates | ||
Variable interest rate | 0.27% | |
2003 | 1ML | Maximum | ||
Range of interest rates | ||
Variable interest rate | 3.00% | |
2,004 | ||
Securitized Mortgage Borrowings | ||
Original Issuance Amount | $ 17,710.7 | |
Subtotal contractual principal balance (3) | $ 640 | 766.9 |
2004 | Minimum | ||
Range of interest rates | ||
Fixed interest rate (as a percent) | 3.58% | |
Interest Rate Margins after Contractual Call Date (as a percent) | 0.50% | |
2004 | Maximum | ||
Range of interest rates | ||
Fixed interest rate (as a percent) | 5.56% | |
Interest Rate Margins after Contractual Call Date (as a percent) | 3.75% | |
2004 | 1ML | Minimum | ||
Range of interest rates | ||
Variable interest rate | 0.25% | |
2004 | 1ML | Maximum | ||
Range of interest rates | ||
Variable interest rate | 2.50% | |
2,005 | ||
Securitized Mortgage Borrowings | ||
Original Issuance Amount | $ 13,387.7 | |
Subtotal contractual principal balance (3) | $ 2,163.1 | 2,439.7 |
2005 | Minimum | ||
Range of interest rates | ||
Interest Rate Margins after Contractual Call Date (as a percent) | 0.48% | |
2005 | Maximum | ||
Range of interest rates | ||
Interest Rate Margins after Contractual Call Date (as a percent) | 4.35% | |
2005 | 1ML | Minimum | ||
Range of interest rates | ||
Variable interest rate | 0.24% | |
2005 | 1ML | Maximum | ||
Range of interest rates | ||
Variable interest rate | 2.90% | |
2,006 | ||
Securitized Mortgage Borrowings | ||
Original Issuance Amount | $ 5,971.4 | |
Subtotal contractual principal balance (3) | $ 2,617.8 | 2,848.9 |
Range of interest rates | ||
Fixed interest rate (as a percent) | 6.25% | |
2006 | Minimum | ||
Range of interest rates | ||
Interest Rate Margins after Contractual Call Date (as a percent) | 0.20% | |
2006 | Maximum | ||
Range of interest rates | ||
Interest Rate Margins after Contractual Call Date (as a percent) | 4.13% | |
2006 | 1ML | Minimum | ||
Range of interest rates | ||
Variable interest rate | 0.10% | |
2006 | 1ML | Maximum | ||
Range of interest rates | ||
Variable interest rate | 2.75% | |
2,007 | ||
Securitized Mortgage Borrowings | ||
Original Issuance Amount | $ 3,860.5 | |
Subtotal contractual principal balance (3) | $ 1,589.6 | 1,728.2 |
2007 | Minimum | ||
Range of interest rates | ||
Interest Rate Margins after Contractual Call Date (as a percent) | 0.12% | |
2007 | Maximum | ||
Range of interest rates | ||
Interest Rate Margins after Contractual Call Date (as a percent) | 3.00% | |
2007 | 1ML | Minimum | ||
Range of interest rates | ||
Variable interest rate | 0.06% | |
2007 | 1ML | Maximum | ||
Range of interest rates | ||
Variable interest rate | 2.00% | |
Securitized mortgage borrowings | ||
Securitized Mortgage Borrowings | ||
Subtotal contractual principal balance (3) | $ 7,082.1 | 7,869.7 |
Fair value adjustment | (3,064.5) | (3,291) |
Total securitized mortgage borrowings | $ 4,017.6 | $ 4,578.7 |
Securitized mortgage borrowings | LIBOR | ||
Range of interest rates | ||
Reference rate (as a percent) | 0.77% |
Securitized Mortgage Trusts (65
Securitized Mortgage Trusts (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Securitized Mortgage Borrowings | ||
Less Than One Year | $ 450,483 | |
Three to Five Years | 24,965 | |
More Than Five Years | 70,500 | |
Securitized mortgage borrowings | ||
Securitized Mortgage Borrowings | ||
Total | 7,082,100 | $ 7,869,700 |
Less Than One Year | 639,000 | |
One to Three Years | 973,200 | |
Three to Five Years | 708,200 | |
More Than Five Years | $ 4,761,700 |
Securitized Mortgage Trusts - C
Securitized Mortgage Trusts - Change in Fair Value (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative [Line Items] | |||
Derivative liabilities, securitized trusts | $ 1,669 | ||
Change in fair value of net trust assets, including trust REO losses | |||
Change in fair value of net trust assets, excluding REO | $ 5,630 | 957 | $ 3,482 |
(Losses) gains from REO | (5,934) | (6,595) | 7,581 |
Change in fair value of net trust assets, including trust REO (losses) gains | (304) | (5,638) | $ 11,063 |
Mortgage lending operations | Derivative liabilities, net, securitized trusts | |||
Derivative [Line Items] | |||
Derivative liabilities, securitized trusts | 0 | $ 1,700 | |
Notional balance of derivative assets and liabilities, securitized trusts | 67,700 | ||
Mortgage lending operations | Derivative assets - IRLCs | |||
Derivative [Line Items] | |||
Notional balance of derivative assets and liabilities, securitized trusts | $ 67,700 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative assets and liabilities - lending | |||
Maximum percentage of ownership interest in acquiree for which warrants were issued | 9.90% | 9.90% | |
Interest rate lock commitments. net (IRLCs) | |||
Derivative assets and liabilities - lending | |||
Derivative Assets, Notional Balance | $ 558,538 | $ 569,618 | |
Total Gains (Losses) | 1,985 | 6,300 | $ 1,982 |
Hedging Instruments | |||
Derivative assets and liabilities - lending | |||
Derivative liabilities, Notional Balance | 492,157 | 403,610 | |
Total Gains (Losses) | 5,201 | $ (6,132) | $ (17,406) |
Mortgage lending operations | Interest rate lock commitments. net (IRLCs) | |||
Derivative assets and liabilities - lending | |||
Assets fair value | 11,200 | ||
Mortgage lending operations | Hedging Instruments | |||
Derivative assets and liabilities - lending | |||
Assets fair value | 63 | ||
Mortgage servicing rights | Hedging Instruments | |||
Derivative assets and liabilities - lending | |||
Assets fair value | $ 272 |
Redeemable Preferred Stock (Det
Redeemable Preferred Stock (Details) $ / shares in Units, $ in Millions | Dec. 31, 2016USD ($)$ / shares |
Redeemable Preferred Stock | |
Outstanding liquidation preference of Series B and Series C Preferred Stock | $ | $ 51.8 |
Liquidation preference amount per share (in dollars per share) | $ / shares | $ 25 |
Fair Value of Financial Instr69
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Mortgage servicing rights | $ 131,537 | $ 36,425 |
Liabilities | ||
Derivative liabilities, lending, net | 1,669 | |
Level 3 | Contingent consideration | ||
Liabilities | ||
Liabilities fair value | 31,072 | |
Carrying Amount | ||
Assets | ||
Cash and cash equivalents. | 40,096 | 32,409 |
Restricted cash. | 5,971 | 3,474 |
Mortgage loans held for-for-sale | 388,422 | 310,191 |
Finance receivables. | 62,937 | 36,368 |
Mortgage servicing rights | 131,537 | 36,425 |
Derivatives assets, lending, net | 11,169 | 9,184 |
Investment securities available-for-sale | 26 | |
Securitized mortgage collateral | 4,021,891 | 4,574,919 |
Liabilities | ||
Warehouse borrowings | 420,573 | 325,616 |
Term financing | 29,910 | 29,716 |
Convertible notes | 24,965 | 44,819 |
Contingent consideration | 31,072 | 48,079 |
Long-term debt | 47,207 | 31,898 |
Securitized mortgage borrowings | 4,017,603 | 4,578,657 |
Derivative liabilities, securitized trusts | 1,669 | |
Derivative liabilities, lending, net | 336 | 315 |
Estimated Fair Value | Level 1 | ||
Assets | ||
Cash and cash equivalents. | 40,096 | 32,409 |
Restricted cash. | 5,971 | 3,474 |
Estimated Fair Value | Level 2 | ||
Assets | ||
Mortgage loans held for-for-sale | 388,422 | 310,191 |
Finance receivables. | 62,937 | 36,368 |
Liabilities | ||
Warehouse borrowings | 420,573 | 325,616 |
Derivative liabilities, lending, net | 336 | 315 |
Estimated Fair Value | Level 3 | ||
Assets | ||
Mortgage servicing rights | 131,537 | 36,425 |
Derivatives assets, lending, net | 11,169 | 9,184 |
Investment securities available-for-sale | 26 | |
Securitized mortgage collateral | 4,021,891 | 4,574,919 |
Liabilities | ||
Term financing | 29,910 | 29,716 |
Convertible notes | 24,965 | 44,819 |
Contingent consideration | 31,072 | 48,079 |
Long-term debt | 47,207 | 31,898 |
Securitized mortgage borrowings | $ 4,017,603 | 4,578,657 |
Derivative liabilities, securitized trusts | $ 1,669 |
Fair Value of Financial Instr70
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value Measurements | ||
Transfers between Level 1 and Level 2 | $ 0 | |
Transfers between Level 2 and Level 1 | 0 | |
Assets | ||
Mortgage servicing rights | $ 131,537 | $ 36,425 |
Liabilities | ||
Derivative liabilities, lending, net | $ 1,669 | |
Level 3 | ||
Fair Value Measurements | ||
Percentage of level three assets to total assets measured at fair value | 92.00% | 94.00% |
Percentage of level three liabilities to total liabilities measured at fair value | 99.00% | 99.00% |
Recurring basis | Level 2 | ||
Assets | ||
Mortgage loans held for-for-sale | $ 388,422 | $ 310,191 |
Total assets at fair value | 388,422 | 310,191 |
Liabilities | ||
Derivative liabilities, lending, net | 336 | 315 |
Total liabilities at fair value | 336 | 315 |
Recurring basis | Level 3 | ||
Assets | ||
Investment securities available-for-sale | 26 | |
Derivatives assets, lending, net | 11,169 | 9,184 |
Mortgage servicing rights | 131,537 | 36,425 |
Securitized mortgage collateral | 4,021,891 | 4,574,919 |
Total assets at fair value | 4,164,597 | 4,620,554 |
Liabilities | ||
Securitized mortgage borrowings | 4,017,603 | 4,578,657 |
Derivative liabilities, securitized trusts | 1,669 | |
Long-term debt | 47,207 | 31,898 |
Contingent consideration | 31,072 | 48,079 |
Total liabilities at fair value | 4,095,882 | 4,660,303 |
Recurring basis | Derivative assets, lending, net | Interest rate lock commitments. net (IRLCs) | Level 3 | ||
Assets | ||
Total assets at fair value | 11,200 | $ 9,200 |
Long-term debt | Recurring basis | Level 3 | ||
Liabilities | ||
Long-term debt | $ 47,200 |
Fair Value of Financial Instr71
Fair Value of Financial Instruments - Reconciliations for Assets and Liabilities Measured Using Level 3 (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Level 3 | |||
Purchases, issuances and settlements | |||
Net interest income including cash received and paid | $ 9,900 | $ 8,300 | $ 5,700 |
Securitized mortgage borrowings | |||
Changes in fair value of liabilities during the period | |||
Fair value in the beginning of the period | (4,578,657) | (5,245,860) | (5,492,371) |
Total gains (losses) included in earnings: | |||
Total (losses) gains included in earnings | (226,406) | (160,791) | (597,798) |
Purchases, issuances and settlements | |||
Settlements | 787,460 | 827,994 | 844,309 |
Fair value at the end of the period | (4,017,603) | (4,578,657) | (5,245,860) |
Unrealized gains (losses) still held | 3,064,481 | 3,291,072 | 3,452,064 |
Securitized mortgage borrowings | Interest expense. | |||
Total gains (losses) included in earnings: | |||
Total (losses) gains included in earnings | (182,903) | (211,272) | (237,793) |
Securitized mortgage borrowings | Change in fair value | |||
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | (43,503) | ||
Total gains (losses) included in earnings: | |||
Total (losses) gains included in earnings | 50,481 | (360,005) | |
Derivative liabilities, net, securitized trusts | |||
Changes in fair value of liabilities during the period | |||
Fair value in the beginning of the period | (1,669) | (5,447) | (10,214) |
Total gains (losses) included in earnings: | |||
Total (losses) gains included in earnings | (233) | (487) | (599) |
Purchases, issuances and settlements | |||
Settlements | 1,902 | 4,265 | 5,366 |
Fair value at the end of the period | (1,669) | (5,447) | |
Unrealized gains (losses) still held | (1,485) | 5,063 | |
Derivative liabilities, net, securitized trusts | Change in fair value | |||
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | (233) | ||
Total gains (losses) included in earnings: | |||
Total (losses) gains included in earnings | (487) | (599) | |
Long-term debt | |||
Changes in fair value of liabilities during the period | |||
Fair value in the beginning of the period | (31,898) | (22,122) | (15,871) |
Total gains (losses) included in earnings: | |||
Total (losses) gains included in earnings | (15,309) | (9,776) | (6,251) |
Purchases, issuances and settlements | |||
Fair value at the end of the period | (47,207) | (31,898) | (22,122) |
Unrealized gains (losses) still held | 23,556 | 38,865 | 48,641 |
Long-term debt | Interest expense. | |||
Total gains (losses) included in earnings: | |||
Total (losses) gains included in earnings | (873) | (1,115) | (2,237) |
Long-term debt | Change in fair value | |||
Total gains (losses) included in earnings: | |||
Total (losses) gains included in earnings | (14,436) | (8,661) | (4,014) |
Contingent consideration | |||
Changes in fair value of assets during the period | |||
Fair value at the beginning of the period | (48,079) | ||
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | (37,142) | ||
Purchases, issuances and settlements | |||
Settlements | 54,149 | ||
Fair value at the end of the period | (48,079) | ||
Unrealized gains (losses) still held | (31,072) | ||
Purchases, issuances and settlements | |||
Fair value at the end of the period | (31,072) | ||
Contingent consideration | Change in fair value | |||
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | (37,142) | ||
Investment securities available-for-sale | |||
Changes in fair value of assets during the period | |||
Fair value at the beginning of the period | 26 | 92 | 108 |
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | 21 | 25 | 60 |
Purchases, issuances and settlements | |||
Settlements | (47) | (91) | (76) |
Fair value at the end of the period | 26 | 92 | |
Unrealized gains (losses) still held | 26 | 91 | |
Investment securities available-for-sale | Interest income | |||
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | 2 | 10 | 26 |
Investment securities available-for-sale | Change in fair value | |||
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | 19 | 15 | 34 |
Securitized mortgage collateral | |||
Changes in fair value of assets during the period | |||
Fair value at the beginning of the period | 4,574,919 | 5,249,639 | 5,494,152 |
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | 106,523 | 15,204 | 423,578 |
Purchases, issuances and settlements | |||
Settlements | (659,551) | (689,924) | (668,091) |
Fair value at the end of the period | 4,021,891 | 4,574,919 | 5,249,639 |
Unrealized gains (losses) still held | (905,322) | (1,147,971) | (1,317,650) |
Securitized mortgage collateral | Interest income | |||
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | 57,176 | 64,256 | 59,526 |
Securitized mortgage collateral | Change in fair value | |||
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | 49,347 | (49,052) | 364,052 |
Mortgage servicing rights | |||
Changes in fair value of assets during the period | |||
Fair value at the beginning of the period | 36,425 | 24,418 | 35,981 |
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | (24,388) | (10,939) | (6,229) |
Purchases, issuances and settlements | |||
Issuances | 128,273 | 98,103 | 29,388 |
Settlements | (8,773) | (75,157) | (34,722) |
Fair value at the end of the period | 131,537 | 36,425 | 24,418 |
Unrealized gains (losses) still held | 131,537 | 36,425 | 24,418 |
Mortgage servicing rights | Change in fair value | |||
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | (24,388) | (10,939) | (6,229) |
Interest rate lock commitments. net (IRLCs) | |||
Changes in fair value of assets during the period | |||
Fair value at the beginning of the period | 9,184 | 2,884 | 913 |
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | 1,985 | 6,300 | 1,982 |
Purchases, issuances and settlements | |||
Settlements | (11) | ||
Fair value at the end of the period | 11,169 | 9,184 | 2,884 |
Unrealized gains (losses) still held | 11,169 | 9,184 | 2,884 |
Interest rate lock commitments. net (IRLCs) | Change in fair value | |||
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | 1,985 | 6,300 | 1,982 |
Warrant | |||
Changes in fair value of assets during the period | |||
Fair value at the beginning of the period | 84 | ||
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | (84) | (80) | |
Purchases, issuances and settlements | |||
Issuances | 164 | ||
Fair value at the end of the period | 84 | ||
Unrealized gains (losses) still held | 84 | ||
Warrant | Change in fair value | |||
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | (84) | $ (80) | |
Contingent consideration | |||
Changes in fair value of assets during the period | |||
Fair value at the beginning of the period | $ (48,079) | ||
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | 37,778 | ||
Purchases, issuances and settlements | |||
Issuances | (124,592) | ||
Settlements | 38,735 | ||
Fair value at the end of the period | (48,079) | ||
Unrealized gains (losses) still held | (48,079) | ||
Contingent consideration | Change in fair value | |||
Total gains (losses) included in earnings: | |||
Total gains (losses) included in earnings | $ 37,778 |
Fair Value of Financial Instr72
Fair Value of Financial Instruments - Valuation Techniques And Unobservable Inputs (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Level 3 | Weighted Average | |
Unobservable input | |
Probability of outcomes | 33.30% |
DCF | Level 3 | |
Unobservable input | |
Remaining earn out period | 1 year |
Estimated undiscounted earn out payments | $ 33,300 |
Estimated undiscounted earn out payment minimum | 31,600 |
Estimated undiscounted earn out payment maximum | $ 34,900 |
DCF | Level 3 | Maximum | |
Unobservable input | |
Margins | 13.40% |
DCF | Level 3 | Weighted Average | |
Unobservable input | |
Margins | 2.30% |
DCF | LIBOR | Minimum | |
Unobservable input | |
Probability of outcomes | 25.00% |
DCF | LIBOR | Maximum | |
Unobservable input | |
Probability of outcomes | 50.00% |
Securitized mortgage borrowings | Level 3 | Weighted Average | |
Unobservable input | |
Loss severities (as a percent) | 42.40% |
Securitized mortgage borrowings | DCF | Level 3 | |
Valuation techniques | |
Estimated fair value of liabilities | $ (4,017,603) |
Securitized mortgage borrowings | DCF | Level 3 | Minimum | |
Unobservable input | |
Discount rates (as a percent) | 4.30% |
Default rates (as a percent) | 0.10% |
Securitized mortgage borrowings | DCF | Level 3 | Maximum | |
Unobservable input | |
Discount rates (as a percent) | 25.00% |
Default rates (as a percent) | 10.20% |
Loss severities (as a percent) | 98.30% |
Securitized mortgage borrowings | DCF | Level 3 | Weighted Average | |
Unobservable input | |
Discount rates (as a percent) | 5.50% |
Default rates (as a percent) | 1.70% |
Derivative liabilities, net, securitized trusts | DCF | Level 3 | Minimum | |
Unobservable input | |
Variable rate (as a percent) | 0.80% |
Derivative liabilities, net, securitized trusts | DCF | Level 3 | Maximum | |
Unobservable input | |
Variable rate (as a percent) | 2.80% |
Long-term debt | DCF | Level 3 | |
Valuation techniques | |
Estimated fair value of liabilities | $ (47,207) |
Unobservable input | |
Discount rates (as a percent) | 10.30% |
Long-term debt | DCF | Level 3 | Weighted Average | |
Unobservable input | |
Discount rates (as a percent) | 10.30% |
Contingent consideration | DCF | Level 3 | Minimum | |
Unobservable input | |
Margins | 1.50% |
Contingent consideration | DCF | Level 3 | Maximum | |
Unobservable input | |
Margins | 2.60% |
Contingent consideration | Level 3 | |
Valuation techniques | |
Estimated fair value of liabilities | $ (31,072) |
Contingent consideration | DCF | Level 3 | |
Unobservable input | |
Discount rates (as a percent) | 13.40% |
Contingent consideration | DCF | Level 3 | Weighted Average | |
Unobservable input | |
Discount rates (as a percent) | 13.40% |
Securitized mortgage collateral | DCF | Level 3 | |
Valuation techniques | |
Estimated fair value of assets | $ 4,021,891 |
Securitized mortgage collateral | DCF | Level 3 | Minimum | |
Unobservable input | |
Prepayment rates (as a percent) | 2.50% |
Securitized mortgage collateral | DCF | Level 3 | Maximum | |
Unobservable input | |
Prepayment rates (as a percent) | 30.50% |
Securitized mortgage collateral | DCF | Level 3 | Weighted Average | |
Unobservable input | |
Prepayment rates (as a percent) | 6.90% |
Mortgage servicing rights | DCF | Level 3 | |
Valuation techniques | |
Estimated fair value of assets | $ 131,537 |
Mortgage servicing rights | DCF | Level 3 | Minimum | |
Unobservable input | |
Discount rates (as a percent) | 9.00% |
Prepayment rates (as a percent) | 8.00% |
Mortgage servicing rights | DCF | Level 3 | Maximum | |
Unobservable input | |
Discount rates (as a percent) | 14.00% |
Prepayment rates (as a percent) | 86.60% |
Mortgage servicing rights | DCF | Level 3 | Weighted Average | |
Unobservable input | |
Discount rates (as a percent) | 9.50% |
Prepayment rates (as a percent) | 9.30% |
Interest rate lock commitments. net (IRLCs) | Market pricing | Level 3 | |
Valuation techniques | |
Estimated fair value of assets | $ 11,169 |
Interest rate lock commitments. net (IRLCs) | Market pricing | Level 3 | Minimum | |
Unobservable input | |
Pull-through rate (as a percent) | 25.00% |
Interest rate lock commitments. net (IRLCs) | Market pricing | Level 3 | Maximum | |
Unobservable input | |
Pull-through rate (as a percent) | 99.90% |
Interest rate lock commitments. net (IRLCs) | Market pricing | Level 3 | Weighted Average | |
Unobservable input | |
Pull-through rate (as a percent) | 86.20% |
Fair Value of Financial Instr73
Fair Value of Financial Instruments - Changes in Fair Value Included in Earnings (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Change in Fair Value Included in Net Earnings (Loss) | |||
Total | $ (121,750) | $ (180,489) | |
Change in the fair value of trust assets, excluding REO | $ 5,630 | 957 | 3,482 |
Change in fair value of net trust assets, excluding REO | 7,347 | 5,021 | $ 8,658 |
Securitized Mortgage Borrowings | |||
Outstanding principal balance of securitized mortgage borrowings | $ 12,351,522 | 3,570,659 | |
Derivative assets and liabilities | |||
Maximum percentage of ownership interest in acquiree for which warrants were issued | 9.90% | 9.90% | |
Warrant | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of liabilities | (84) | $ (80) | |
Contingent consideration | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | 37,778 | ||
Hedging Instruments | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of liabilities | 616 | (2,009) | |
Securitized mortgage borrowings | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of liabilities | (160,791) | (597,798) | |
Derivative liabilities, net, securitized trusts | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of liabilities | (487) | ||
Derivative liabilities, net, securitized trusts | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of liabilities | (599) | ||
Long-term debt | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of liabilities | (9,776) | (6,251) | |
Investment securities available-for-sale | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | 25 | 60 | |
Securitized mortgage collateral | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | 15,204 | 423,578 | |
Mortgage servicing rights | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | (10,939) | (6,229) | |
Mortgage loans held-for-sale | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | 404 | 6,857 | |
Derivative assets - IRLCs | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | 6,300 | 1,982 | |
Recurring basis | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Total | $ (194,992) | ||
Recurring basis | Interest income | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Total | 57,178 | 64,266 | 59,552 |
Recurring basis | Interest expense. | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Total | (183,776) | (212,387) | (240,030) |
Recurring basis | Change in Fair Value of Net Trust Assets | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Total | 5,630 | 957 | 3,482 |
Recurring basis | Change in Fair Value of Long-term Debt | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Total | (14,436) | (8,661) | (4,014) |
Recurring basis | Other revenue | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Total | (61,892) | 26,844 | (6,309) |
Recurring basis | Gain on sale of loans, net | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Total | 2,304 | 7,231 | 6,830 |
Recurring basis | Warrant | Other revenue | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of liabilities | (84) | (80) | |
Recurring basis | Contingent consideration | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | (37,142) | ||
Recurring basis | Contingent consideration | Other revenue | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | (37,142) | 37,778 | |
Recurring basis | Hedging Instruments | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | (21) | ||
Recurring basis | Hedging Instruments | Other revenue | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of liabilities | (362) | 89 | |
Recurring basis | Hedging Instruments | Gain on sale of loans, net | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | 341 | ||
Change in fair value of liabilities | 527 | (2,009) | |
Recurring basis | Securitized mortgage borrowings | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of liabilities | (226,406) | ||
Recurring basis | Securitized mortgage borrowings | Interest expense. | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of liabilities | (182,903) | (211,272) | (237,793) |
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 | (43,503) | 50,481 | (360,005) |
Recurring basis | Derivative liabilities, net, securitized trusts | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | (233) | ||
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 | (233) | (487) | |
Changes in the fair value of derivative instruments | 1,500 | ||
Cash payments from the securitization trusts | 1,700 | ||
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 | (599) | ||
Changes in the fair value of derivative instruments | 3,600 | 4,600 | |
Cash payments from the securitization trusts | 4,100 | 5,200 | |
Recurring basis | Long-term debt | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | (15,309) | ||
Recurring basis | Long-term debt | Interest expense. | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of liabilities | (873) | (1,115) | (2,237) |
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 | (14,436) | (8,661) | (4,014) |
Recurring basis | Investment securities available-for-sale | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | 21 | ||
Recurring basis | Investment securities available-for-sale | Interest income | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | 2 | 10 | 26 |
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 | 19 | 15 | 34 |
Recurring basis | Securitized mortgage collateral | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | 106,523 | ||
Recurring basis | Securitized mortgage collateral | Interest income | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | 57,176 | 64,256 | 59,526 |
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 | 49,347 | (49,052) | 364,052 |
Recurring basis | Mortgage servicing rights | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of liabilities | (24,388) | ||
Recurring basis | Mortgage servicing rights | Change in Fair Value of Net Trust Assets | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in the fair value of trust assets, excluding REO | 5,600 | 1,000 | 3,500 |
Change in fair value of net trust assets, excluding REO | 7,300 | 5,000 | (8,700) |
Recurring basis | Mortgage servicing rights | Other revenue | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | (10,939) | (6,229) | |
Change in fair value of liabilities | (24,388) | ||
Recurring basis | Mortgage loans held-for-sale | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of liabilities | (22) | ||
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 | 404 | 6,857 | |
Change in fair value of liabilities | (22) | ||
Recurring basis | Derivative assets - IRLCs | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of liabilities | 1,985 | ||
Recurring basis | Derivative assets - IRLCs | Gain on sale of loans, net | |||
Change in Fair Value Included in Net Earnings (Loss) | |||
Change in fair value of assets | (1,985) | 6,300 | $ 1,982 |
Recurring basis | Level 3 | |||
Long-term debt | |||
Estimated fair value of long-term debt | 47,207 | 31,898 | |
Derivative assets and liabilities | |||
Notional balance of derivative assets and liabilities, securitized trusts | 0 | $ 67,700 | |
Recurring basis | Level 3 | Long-term debt | |||
Long-term debt | |||
Long-term debt unpaid principal balance | 70,500 | ||
Estimated fair value of long-term debt | 47,200 | ||
Difference between aggregate unpaid principal balances and fair value of long-term debt | 23,300 | ||
Recurring basis | Level 3 | Securitized mortgage collateral | |||
Securitized mortgage collateral | |||
Unpaid principal balance of securitized mortgage collateral | 4,900,000 | ||
Estimated fair value of securitized mortgage collateral | 4,000,000 | ||
Difference between aggregate unpaid principal balance and fair value of securitized mortgage collateral | 900,000 | ||
Unpaid principal balance of loans 90 days or more past due | 700,000 | ||
Estimated fair value of loans 90 days or more past due | 300,000 | ||
Difference between aggregate unpaid principal balances and fair value of mortgage loans | 400,000 | ||
Securitized Mortgage Borrowings | |||
Outstanding principal balance of securitized mortgage borrowings | 4,900,000 | ||
Estimated fair value of securitized mortgage borrowings | 4,000,000 | ||
Bond losses | 2,200,000 | ||
Difference between aggregate unpaid principal balances and fair value of securitized mortgage borrowings | $ 900,000 |
Fair Value of Financial Instr74
Fair Value of Financial Instruments - Nonrecurring (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value Measurements | |||
Deferred charge | $ 8,685 | $ 9,963 | |
Total Gains (Losses) | |||
Impairment (1) | (14,403) | (8,469) | |
Nonrecurring Fair Value Measurements | |||
Total Gains (Losses) | |||
REO (2) | 5,934 | 6,595 | $ (7,581) |
Lease Liability (3) | (53) | (681) | |
Deferred charge (4) | (1,278) | (1,558) | (453) |
Nonrecurring Fair Value Measurements | Discontinued Operations | |||
Total Gains (Losses) | |||
Lease Liability (3) | 681 | ||
Deferred charge (4) | 1,300 | 1,600 | 453 |
Gains (losses) resulting from recovery (impairment write-downs) of the net realizable value | 5,900 | 6,600 | |
Nonrecurring Fair Value Measurements | Continuing operations | |||
Total Gains (Losses) | |||
Gains (losses) resulting from recovery (impairment write-downs) of the net realizable value | $ 7,600 | ||
Nonrecurring Fair Value Measurements | Level 2 | |||
Fair Value Measurements | |||
REO | 212 | 1,555 | |
Nonrecurring Fair Value Measurements | Level 3 | |||
Fair Value Measurements | |||
Deferred charge | $ 8,685 | $ 9,963 |
Reconciliation of Earnings Pe75
Reconciliation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator for basic earnings (loss) per share: | |||||||||||
Net earnings (loss) | $ 46,670 | $ 80,799 | $ (6,322) | ||||||||
Numerator for diluted earning (loss) per share: | |||||||||||
Net earnings (loss) | $ 16,940 | $ 16,498 | $ 12,251 | $ 981 | $ 10,708 | $ 19,309 | $ 16,810 | $ 33,972 | 46,670 | 80,799 | (6,322) |
Interest expense attributable to convertible notes | 2,463 | 2,719 | |||||||||
Net earnings (loss) plus interest expense attributable to convertible notes | $ 49,133 | $ 83,518 | $ (6,322) | ||||||||
Denominator for basic earnings (loss) per share: | |||||||||||
Basic weighted average common shares outstanding during the period | 13,193 | 10,094 | 9,344 | ||||||||
Denominator for diluted earnings (loss) per share: | |||||||||||
Basic weighted average common shares outstanding during the period | 13,193 | 10,094 | 9,344 | ||||||||
Net effect of dilutive convertible notes | 1,359 | 2,597 | |||||||||
Net effect of dilutive stock options and DSU's | 304 | 354 | |||||||||
Diluted weighted average common shares | 14,856 | 13,045 | 9,344 | ||||||||
Basic (in dollars per share) | $ 1.06 | $ 1.28 | $ 0.99 | $ 0.09 | $ 1.04 | $ 1.89 | $ 1.65 | $ 3.54 | $ 3.54 | $ 8 | $ (0.68) |
Diluted (in dollars per share) | $ 1 | $ 1.18 | $ 0.92 | $ 0.08 | $ 0.85 | $ 1.48 | $ 1.33 | $ 2.94 | $ 3.31 | $ 6.40 | $ (0.68) |
Stock options | |||||||||||
Denominator for diluted earnings (loss) per share: | |||||||||||
Antidilutive stock options excluded from weighted average share calculations (in shares) | 685,000 | 357,000 | 2,900 | ||||||||
Convertible Debt Notes | |||||||||||
Denominator for diluted earnings (loss) per share: | |||||||||||
Antidilutive stock options excluded from weighted average share calculations (in shares) | 1,800 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current income taxes: | |||||||||||
Federal | $ 907 | $ 2,149 | $ 940 | ||||||||
State | 186 | 395 | 365 | ||||||||
Total current income tax expense | 1,093 | 2,544 | 1,305 | ||||||||
Deferred income taxes: | |||||||||||
Federal | (21,367) | ||||||||||
State | (3,053) | ||||||||||
Total deferred income tax benefit | (24,420) | ||||||||||
Total income tax expense (benefit) | $ 365 | $ (130) | $ 423 | $ 435 | $ 976 | $ 781 | $ 71 | $ (23,704) | 1,093 | (21,876) | 1,305 |
Deferred tax assets: | |||||||||||
Federal and state net operating losses | 226,001 | 194,562 | 226,001 | 194,562 | |||||||
Mortgage securities | 112,302 | 139,284 | 112,302 | 139,284 | |||||||
Depreciation and amortization | 337 | 521 | 337 | 521 | |||||||
Compensation and other accruals | 7,922 | 5,813 | 7,922 | 5,813 | |||||||
Repurchase reserve | 2,430 | 2,346 | 2,430 | 2,346 | |||||||
Total gross deferred tax assets | 348,992 | 342,526 | 348,992 | 342,526 | |||||||
Deferred tax liabilities: | |||||||||||
Fair value | (10,869) | (35,075) | (10,869) | (35,075) | |||||||
Mortgage servicing rights | (59,096) | (16,324) | (59,096) | (16,324) | |||||||
Derivatives | (424) | (424) | |||||||||
Total gross deferred tax liabilities | (69,965) | (51,823) | (69,965) | (51,823) | |||||||
Valuation allowance | (254,607) | (266,283) | (254,607) | (266,283) | |||||||
Total net deferred tax liability | 24,420 | 24,420 | 24,420 | 24,420 | 295,200 | ||||||
Reconciliation of income taxes to the expected statutory federal corporate income tax rates | |||||||||||
Expected income tax expense (benefit) | 16,717 | 20,623 | (1,756) | ||||||||
State tax (benefit), net of federal benefit | 185 | 256 | (248) | ||||||||
State rate change | (153) | ||||||||||
Change in valuation allowance | (17,002) | (44,163) | 2,735 | ||||||||
Deferred charge | 1,278 | 1,558 | 453 | ||||||||
Other | 68 | (150) | 121 | ||||||||
Total income tax expense (benefit) | $ 365 | $ (130) | $ 423 | $ 435 | $ 976 | $ 781 | $ 71 | $ (23,704) | $ 1,093 | $ (21,876) | $ 1,305 |
Income Taxes (Details)77
Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Operating loss carryforwards | ||
Unrecognized Tax Benefits | $ 0 | $ 0 |
Excess tax benefits from stock-based compensation | 5,100 | $ 4,900 |
Federal | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 511,000 | |
AMT credit | 789 | |
California. | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 491,700 | |
AMT credit | $ 200 |
Segment Reporting - Balance She
Segment Reporting - Balance Sheet Items (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Segment Reporting | |||
Cash and cash equivalents | $ 40,096 | $ 32,409 | |
Restricted cash | 5,971 | 3,474 | |
Mortgage loans held-for-sale | 388,422 | 310,191 | |
Finance receivables | 62,937 | 36,368 | |
Mortgage servicing rights | 131,537 | 36,425 | |
Trust assets | 4,033,290 | 4,594,534 | |
Goodwill | 104,938 | 104,938 | $ 352 |
Other assets | 96,543 | 92,513 | |
Total assets | 4,863,734 | 5,210,852 | |
Total liabilities | 4,632,694 | 5,096,362 | |
Corporate and Other. | |||
Segment Reporting | |||
Cash and cash equivalents | 25,904 | 386 | |
Other assets | 27,182 | 28,184 | |
Total assets | 53,086 | 28,570 | |
Total liabilities | 8,622 | 52,180 | |
Mortgage Lending | Operating segments | |||
Segment Reporting | |||
Cash and cash equivalents | 14,026 | 32,023 | |
Restricted cash | 5,971 | 3,474 | |
Mortgage loans held-for-sale | 388,422 | 310,191 | |
Finance receivables | 62,937 | 36,368 | |
Mortgage servicing rights | 131,537 | 36,425 | |
Goodwill | 104,587 | 104,587 | |
Other assets | 55,444 | 50,580 | |
Total assets | 762,924 | 573,648 | |
Total liabilities | 551,110 | 427,703 | |
Real Estate Services | Operating segments | |||
Segment Reporting | |||
Cash and cash equivalents | 166 | ||
Goodwill | 351 | 351 | |
Other assets | 4,934 | 3,582 | |
Total assets | 5,451 | 3,933 | |
Total liabilities | 7,741 | 3,845 | |
Long-term Portfolio | Operating segments | |||
Segment Reporting | |||
Trust assets | 4,033,290 | 4,594,534 | |
Other assets | 8,983 | 10,167 | |
Total assets | 4,042,273 | 4,604,701 | |
Total liabilities | $ 4,065,221 | $ 4,612,634 |
Segment Reporting - Statement o
Segment Reporting - Statement of Operations Items (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Segment Reporting | |||||||||||
Number of reportable segments | item | 3 | ||||||||||
Gain on sale of loans, net | $ 311,017 | $ 169,206 | $ 28,217 | ||||||||
Real estate services fees, net | 8,395 | 9,850 | 14,729 | ||||||||
Servicing income, net | 13,734 | 6,102 | 4,586 | ||||||||
Loss on mortgage servicing rights, net | (36,441) | (18,598) | (5,116) | ||||||||
Other revenue | 1,051 | 397 | 1,723 | ||||||||
Accretion of contingent consideration | (6,997) | (8,142) | |||||||||
Change in fair value of contingent consideration | (30,145) | 45,920 | |||||||||
Change in fair value of long-term debt | (14,436) | (8,661) | (4,014) | ||||||||
Other (Expense) Income | (198,415) | (137,151) | (45,142) | ||||||||
Earnings before income taxes | $ 17,305 | $ 16,368 | $ 12,674 | $ 1,416 | $ 11,684 | $ 20,090 | $ 16,881 | $ 10,268 | 47,763 | 58,923 | (5,017) |
Income tax expense | 365 | (130) | 423 | 435 | 976 | 781 | 71 | (23,704) | 1,093 | (21,876) | 1,305 |
Net earnings | $ 16,940 | $ 16,498 | $ 12,251 | $ 981 | $ 10,708 | $ 19,309 | $ 16,810 | $ 33,972 | 46,670 | 80,799 | (6,322) |
Corporate and Other. | |||||||||||
Segment Reporting | |||||||||||
Other revenue | 730 | 109 | 42 | ||||||||
Other (Expense) Income | (14,251) | (12,174) | (16,674) | ||||||||
Earnings before income taxes | (13,521) | (12,065) | (16,632) | ||||||||
Mortgage Lending | Operating segments | |||||||||||
Segment Reporting | |||||||||||
Gain on sale of loans, net | 311,017 | 169,206 | 28,217 | ||||||||
Servicing income, net | 13,734 | 6,102 | 4,586 | ||||||||
Loss on mortgage servicing rights, net | (36,441) | (18,598) | (5,116) | ||||||||
Other revenue | 79 | 25 | 1,310 | ||||||||
Accretion of contingent consideration | (6,997) | (8,142) | |||||||||
Change in fair value of contingent consideration | (30,145) | 45,920 | |||||||||
Other (Expense) Income | (182,649) | (117,224) | (33,957) | ||||||||
Earnings before income taxes | 68,598 | 77,289 | (4,960) | ||||||||
Real Estate Services | Operating segments | |||||||||||
Segment Reporting | |||||||||||
Real estate services fees, net | 8,395 | 9,850 | 14,729 | ||||||||
Other (Expense) Income | (6,536) | (5,951) | (6,057) | ||||||||
Earnings before income taxes | 1,859 | 3,899 | 8,672 | ||||||||
Long-term Portfolio | Operating segments | |||||||||||
Segment Reporting | |||||||||||
Other revenue | 242 | 263 | 371 | ||||||||
Change in fair value of long-term debt | (14,436) | (8,661) | (4,014) | ||||||||
Other (Expense) Income | 5,021 | (1,802) | 11,546 | ||||||||
Earnings before income taxes | $ (9,173) | $ (10,200) | $ 7,903 |
Commitments and Contingencies -
Commitments and Contingencies - Loan Commitments (Details) $ in Millions | Dec. 07, 2011item | Dec. 31, 2016USD ($)item | Dec. 31, 2015 |
Series B 9.375% redeemable preferred stock | |||
Commitments and Contingencies | |||
Preferred stock, dividend rate (as a percent) | 9.375% | 9.375% | |
Curtis J. Timm | Series B and C Preferred Stock | |||
Commitments and Contingencies | |||
Preferred stock, dividend rate (as a percent) | 2.00% | ||
Number of directors elected by Preferred holders | 2 | ||
Curtis J. Timm | Series B 9.375% redeemable preferred stock | |||
Commitments and Contingencies | |||
Preferred stock, dividend rate (as a percent) | 9.375% | ||
Curtis J. Timm | Series C 9.125% redeemable preferred stock | |||
Commitments and Contingencies | |||
Number of securities included in litigation | 12 | ||
Preferred stock, dividend rate (as a percent) | 9.125% | ||
AIG | Residential Mortgage backed Securities | |||
Commitments and Contingencies | |||
Plaintiff's demand | $ | $ 800 |
Commitments and Contingencies81
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Lease commitments for operating leases | |||
Year 2,017 | $ 5,608 | ||
Year 2,018 | 5,728 | ||
Year 2,019 | 5,618 | ||
Year 2,020 | 4,455 | ||
Year 2021 and thereafter | 17,899 | ||
Total operating lease commitments | 39,308 | ||
Lease commitments for capital leases | |||
Year 2,017 | 346 | ||
Year 2,018 | 211 | ||
Year 2,019 | 82 | ||
Total lease commitments | 639 | ||
Lease Commitments | |||
Year 2,017 | 5,954 | ||
Year 2,018 | 5,939 | ||
Year 2,019 | 5,700 | ||
Year 2,020 | 4,455 | ||
Year 2021 and thereafter | 17,899 | ||
Total lease commitments | 39,947 | ||
Rental expense | |||
Rental expense incurred | 5,100 | $ 4,700 | $ 5,000 |
Interest expense on capital leases | $ 32 | $ 57 | $ 72,000 |
Commitments and Contingencies82
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Continuing operations repurchase reserve activity | ||
Beginning balance | $ 5,236 | $ 5,714 |
Provision for repurchases | 379 | 1,012 |
Settlements | (207) | (1,490) |
Total repurchase reserve | $ 5,408 | $ 5,236 |
Commitments and Contingencies83
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Concentration of Risk | ||
Aggregate unpaid principal balance of loans secured by properties | $ 388,422 | $ 310,191 |
Mortgage loans | Geographic concentration | California | ||
Concentration of Risk | ||
Percentage of risk | 84.70% | |
Properties kept as security for long-term mortgage portfolio | Geographic concentration | California | ||
Concentration of Risk | ||
Aggregate unpaid principal balance of loans secured by properties | $ 2,600,000 | |
Percentage of risk | 52.00% | |
Properties kept as security for long-term mortgage portfolio | Geographic concentration | Florida | ||
Concentration of Risk | ||
Aggregate unpaid principal balance of loans secured by properties | $ 517,000 | |
Percentage of risk | 10.00% |
Share Based Payments and Empl84
Share Based Payments and Employee Benefit Plans - Equity Offering Program (Details) - $ / shares | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Weighted average assumptions used in estimating fair value of options granted | ||||
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | |
2010 Incentive Plan | ||||
Equity and Share Based Payments | ||||
Increase in shares under amendment to the 2010 Omnibus Incentive Plan | 300,000 | |||
Aggregate number of shares reserved under the 2010 Incentive Plan | 1,921,321 | |||
Shares available for grant as stock options, restricted stock and deferred stock awards | 39,380 | |||
Minimum | Stock options | ||||
Weighted average assumptions used in estimating fair value of options granted | ||||
Risk-free interest rate (as a percent) | 1.16% | 1.54% | 1.08% | |
Expected lives (in years) | 5 years 5 months 19 days | 5 years 6 months | 3 years 5 months 23 days | |
Expected volatility (as a percent) | 49.71% | 49.53% | 70.47% | |
Fair value per share (in dollars per share) | $ 7.95 | $ 6.74 | $ 2.69 | |
Maximum | Stock options | ||||
Weighted average assumptions used in estimating fair value of options granted | ||||
Risk-free interest rate (as a percent) | 1.76% | 1.79% | ||
Expected lives (in years) | 5 years 8 months 23 days | 5 years 8 months 23 days | ||
Expected volatility (as a percent) | 79.56% | 75.93% | ||
Fair value per share (in dollars per share) | $ 9.96 | $ 4.46 |
Share Based Payments and empl85
Share Based Payments and employee Benefit Plans - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
2010 Incentive Plan | |||
Number of Shares | |||
Options granted (in shares) | 342,000 | ||
Stock options | |||
Number of Shares | |||
Options outstanding at beginning of period (in shares) | 1,115,280 | 1,078,230 | 787,132 |
Options granted (in shares) | 342,000 | 405,800 | 409,250 |
Options exercised (in shares) | (42,954) | (243,971) | (14,622) |
Options forfeited / cancelled (in shares) | (22,999) | (124,779) | (103,530) |
Options outstanding at end of year (in shares) | 1,391,327 | 1,115,280 | 1,078,230 |
Options exercisable at end of year (in shares) | 705,488 | 476,998 | 534,323 |
Weighted-Average Exercise Price | |||
Options outstanding at beginning of period (in dollars per share) | $ 11.85 | $ 6.88 | $ 9.07 |
Options granted (in dollars per share) | 17.40 | 19.59 | 5.41 |
Options exercised (in dollars per share) | 5.10 | 3.98 | 2.58 |
Options forfeited / cancelled (in dollars per share) | 15.50 | 9.44 | 18.30 |
Options outstanding at end of year (in dollars per share) | 13.37 | 11.85 | 6.88 |
Options exercisable at end of year (in dollars per share) | $ 10.25 | $ 8.23 | $ 6.72 |
Weighted-Average Remaining Life | |||
Weighted-Average Remaining Life, Options outstanding at end of year | 7 years 8 months 9 days | 8 years 18 days | |
Weighted-Average Remaining Life, Options exercisable at end of year | 6 years 6 months | 6 years 8 months 5 days | |
Aggregate Intrinsic Value (in thousands) | |||
Aggregate Intrinsic Value, Options outstanding at end of year (in dollars) | $ 4,293 | $ 7,753 | |
Aggregate Intrinsic Value, Options exercisable at end of year (in dollars) | $ 3,402 | $ 4,662 | |
Additional disclosure related to options | |||
Closing stock price of common share (in dollars per share) | $ 14.02 | $ 18 | |
Unrecognized compensation cost | $ 3,800 | ||
Weighted-average period over which compensation cost is expected to be recognized | 2 years | ||
Aggregate grant-date fair value of stock options granted | $ 2,700 | $ 3,800 | $ 1,400 |
Stock-based compensation expense | $ 2,100 | $ 1,600 | $ 1,900 |
Share Based Payments and Empl86
Share Based Payments and Employee Benefits Plans - Options Exercise Price Range (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
$ 0.00 - 2.80 | |
Additional information regarding stock options outstanding | |
Exercise price range, lower limit (in dollars per share) | $ 0 |
Exercise price range, upper limit (in dollars per share) | $ 2.80 |
Stock Options Outstanding, Number Outstanding (in shares) | shares | 122,963 |
Stock Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 3 years 7 months 28 days |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $ 2.36 |
Options Exercisable, Number Exercisable (in shares) | shares | 122,963 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 2.36 |
$ 2.81 - 5.39 | |
Additional information regarding stock options outstanding | |
Exercise price range, lower limit (in dollars per share) | 2.81 |
Exercise price range, upper limit (in dollars per share) | $ 5.39 |
Stock Options Outstanding, Number Outstanding (in shares) | shares | 258,816 |
Stock Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 7 years 6 months 22 days |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $ 5.39 |
Options Exercisable, Number Exercisable (in shares) | shares | 166,411 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 5.39 |
$ 5.40 - 10.65 | |
Additional information regarding stock options outstanding | |
Exercise price range, lower limit (in dollars per share) | 5.40 |
Exercise price range, upper limit (in dollars per share) | $ 10.65 |
Stock Options Outstanding, Number Outstanding (in shares) | shares | 168,999 |
Stock Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 6 years 10 months 21 days |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $ 10.52 |
Options Exercisable, Number Exercisable (in shares) | shares | 145,666 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 10.60 |
$ 10.66 - 16.43 | |
Additional information regarding stock options outstanding | |
Exercise price range, lower limit (in dollars per share) | 10.66 |
Exercise price range, upper limit (in dollars per share) | $ 16.43 |
Stock Options Outstanding, Number Outstanding (in shares) | shares | 157,499 |
Stock Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 5 years 11 months 9 days |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $ 13.84 |
Options Exercisable, Number Exercisable (in shares) | shares | 156,166 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 13.82 |
$ 16.44 - 17.40 | |
Additional information regarding stock options outstanding | |
Exercise price range, lower limit (in dollars per share) | 16.44 |
Exercise price range, upper limit (in dollars per share) | $ 17.40 |
Stock Options Outstanding, Number Outstanding (in shares) | shares | 340,250 |
Stock Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 9 years 6 months 18 days |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $ 17.40 |
$ 17.41 -21.50 | |
Additional information regarding stock options outstanding | |
Exercise price range, lower limit (in dollars per share) | 17.41 |
Exercise price range, upper limit (in dollars per share) | $ 21.50 |
Stock Options Outstanding, Number Outstanding (in shares) | shares | 342,800 |
Stock Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 8 years 6 months 22 days |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $ 20.52 |
Options Exercisable, Number Exercisable (in shares) | shares | 114,282 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 20.52 |
$ 2.80 - 21.50 | |
Additional information regarding stock options outstanding | |
Exercise price range, lower limit (in dollars per share) | 2.80 |
Exercise price range, upper limit (in dollars per share) | $ 21.50 |
Stock Options Outstanding, Number Outstanding (in shares) | shares | 1,391,327 |
Stock Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 7 years 8 months 9 days |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $ 13.37 |
Options Exercisable, Number Exercisable (in shares) | shares | 705,488 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 10.25 |
Share Based Payments and Empl87
Share Based Payments and Employee Benefit Plans - Deferred Stock Units (Details) - Deferred stock units - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Deferred stock units | |||
Fair value of DSU's granted | $ 87 | $ 103 | |
Number of Shares | |||
DSU's outstanding at beginning of year (in shares) | 80,750 | 75,750 | 72,000 |
DSU's granted (in shares) | 5,000 | 5,000 | 3,750 |
DSU's outstanding at end of year (in shares) | 85,750 | 80,750 | 75,750 |
Weighted-Average Grant Date Fair Value | |||
DSU's outstanding at beginning of year (in dollars per share) | $ 9.36 | $ 8.63 | $ 8.80 |
DSU's granted (in dollars per share) | 17.40 | 20.50 | 5.39 |
DSU's outstanding at end of year (in dollars per share) | $ 9.83 | $ 9.36 | $ 8.63 |
Additional information regarding DSUs | |||
Unrecognized compensation cost | $ 74 | ||
Weighted-average period over which compensation cost is expected to be recognized | 2 years 7 months 6 days | ||
Minimum | |||
Deferred stock units | |||
Vesting period | 1 year | ||
Maximum | |||
Deferred stock units | |||
Vesting period | 3 years |
Share Based Payments and Empl88
Share Based Payments and Employee Benefits Plans - 401(k) Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Equity and Share Based Payments | ||
Employee contribution (as a percent) | 25.00% | |
Employer's match of the first 4% of employee contributions (as a percent) | 50.00% | |
Percentage of eligible compensation, matched 50% by employer | 4.00% | |
Basic matching contributions recorded | $ 895 | $ 299 |
Employer discretionary contributions | $ 0 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Jan. 31, 2015 | Apr. 30, 2016 | Apr. 27, 2015 | |
Promissory Note | |||
Related Party Transactions | |||
Amount of debt issued | $ 10,000 | ||
Interest rate (as a percent) | 15.00% | ||
Affiliated Entity | Short-term borrowing | |||
Related Party Transactions | |||
Amount of debt issued | $ 5,000 | ||
Interest rate (as a percent) | 15.00% | ||
Expenses for services received from related party | $ 50 | ||
Affiliated Entity | Promissory Note | |||
Related Party Transactions | |||
Amount of debt issued | $ 10,000 | ||
Interest rate (as a percent) | 15.00% |
Tax Benefits Preservation Rig90
Tax Benefits Preservation Rights Plan (Details) | 1 Months Ended |
Sep. 30, 2013$ / item | |
Tax Benefits Preservation Rights Plan | |
Ownership percentage held by shareholder | 5.00% |
Minimum percentage points increase in ownership over the lowest percentage of shares of common stock by five-percent shareholders | 50.00% |
Prior period on a rolling basis of increase in ownership over the lowest percentage of shares of common stock by five-percent shareholders | 3 years |
Trigger threshold for acquisition of shares of common stock without prior approval of board | 4.99% |
Nominal redemption price of rights issued under the Rights Plan | 0.001 |
Selected Quartely Financial D91
Selected Quartely Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Selected Quarterly Financial Data - (unaudited) | |||||||||||
Total revenues | $ 77,251 | $ 103,993 | $ 69,213 | $ 47,299 | $ 35,878 | $ 47,652 | $ 49,084 | $ 34,343 | $ 297,756 | $ 166,957 | $ 44,139 |
Total expenses | (50,638) | (81,359) | (60,891) | (45,155) | (21,443) | (24,677) | (32,420) | (17,141) | (238,043) | (95,681) | (57,340) |
Total other (expense) income | (9,308) | (6,266) | 4,352 | (728) | (2,751) | (2,885) | 217 | (6,934) | (11,950) | (12,353) | 8,184 |
Earnings before income taxes | 17,305 | 16,368 | 12,674 | 1,416 | 11,684 | 20,090 | 16,881 | 10,268 | 47,763 | 58,923 | (5,017) |
Income tax expense (benefit) | 365 | (130) | 423 | 435 | 976 | 781 | 71 | (23,704) | 1,093 | (21,876) | 1,305 |
Net earnings | $ 16,940 | $ 16,498 | $ 12,251 | $ 981 | $ 10,708 | $ 19,309 | $ 16,810 | $ 33,972 | $ 46,670 | $ 80,799 | $ (6,322) |
Earnings per common share: | |||||||||||
Basic (in dollars per share) | $ 1.06 | $ 1.28 | $ 0.99 | $ 0.09 | $ 1.04 | $ 1.89 | $ 1.65 | $ 3.54 | $ 3.54 | $ 8 | $ (0.68) |
Diluted (in dollars per share) | $ 1 | $ 1.18 | $ 0.92 | $ 0.08 | $ 0.85 | $ 1.48 | $ 1.33 | $ 2.94 | $ 3.31 | $ 6.40 | $ (0.68) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Feb. 10, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Feb. 09, 2017 | Jun. 30, 2015 |
Subsequent events | ||||||
Debt issuance cost | $ 100 | $ 500 | $ 60 | |||
Term financing | ||||||
Subsequent events | ||||||
Amount of debt issued | $ 30,000 | |||||
Term financing | Subsequent Event | ||||||
Subsequent events | ||||||
Debt repayment | $ 30,100 | |||||
Repurchase agreement 2 | ||||||
Subsequent events | ||||||
Maximum borrowing capacity | $ 50,000 | |||||
Repurchase agreement 2 | Subsequent Event | ||||||
Subsequent events | ||||||
Maximum borrowing capacity | 25,000 | $ 50,000 | ||||
Loan and Security Agreement | Subsequent Event | ||||||
Subsequent events | ||||||
Debt issuance cost | 100,000 | |||||
Impac Mortgage Corp. | Loan and Security Agreement | Subsequent Event | ||||||
Subsequent events | ||||||
Maximum borrowing capacity | $ 40,000 | |||||
Term | 1 year | |||||
Maximum borrowing capacity (in percentage) | 55.00% | |||||
Debt loan payment term | P2Y | |||||
Issuance of secured debt | $ 35,100 | |||||
Impac Mortgage Corp. | 1ML | Subsequent Event | ||||||
Subsequent events | ||||||
Variable interest rate | 4.00% |