Company: TIPT
Filing Date: 2025-04-30
Form Type: 10-Q
Source: 0001393726-25-000055
Chunk: 71

Company: TIPTREE INC.
Filing Date: 2025-04-30
Form: 10-Q
Item: Part I, Item 8
Chunk 71
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 recapture reserves. The fair value adjustment on mortgage servicing rights represents fair value adjustments considering estimated prepayments and other factors associated with changes in interest rates, plus actual run-off in the servicing portfolio. We report these adjustments separate from servicing income and servicing expense.

Other Revenue includes loan origination fees, interest income, and mortgage servicing income. Loan origination fees are earned as mortgage loans are funded. Servicing fees are earned over the life of the loan. Interest income includes interest earned on loans held for sale and interest income on bank balances and short-term investments.

Expenses

Employee Compensation and Benefits includes salaries, commissions, benefits, bonuses, other incentive compensation and related taxes for employees. Commissions expense for sales staff generally varies with loan origination volumes.

Interest Expense represents borrowing costs under warehouse and other credit facilities used primarily to fund loan originations. Amortization of deferred financing costs, including commitment fees, is included in interest expense.

Depreciation is mainly associated with furniture, fixtures and equipment. Amortization is primarily associated with a trade name and internally developed software.

Other Expenses include loan origination expenses, namely, leads, appraisals, credit reporting and licensing fees, general and administrative expenses, including office rent, insurance, legal, consulting and payroll processing expenses, and servicing expense.

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The following tables present the Mortgage segment results for the following periods:

Results of Operations

($ in thousands)Three Months EndedMarch 31, 20252024Revenues:Net realized and unrealized gains (losses)$9,510 $10,664 Other revenue5,669 5,227 Total revenues$15,179 $15,891 Expenses:Employee compensation and benefits$9,316 $9,239 Interest expense302 651 Depreciation and amortization74 125 Other expenses5,697 5,123 Total expenses$15,389 $15,138 Income (loss) before taxes$(210)$753 Key Performance Metrics:Origination volumes$209,142 $210,402 Gain on sale margins4.8 %5.0 %Return on average equity(1.0)%4.5 %Non-GAAP Financial Measures (1):Adjusted net income$610 $(309)Adjusted return on average equity4.4 %(2.4)%

(1)    See “—Non-GAAP Reconciliations” for a discussion of non-GAAP financial measures.

Revenues - Three