MEDALLION FINANCIAL CORP, 10-K filed on 07 Mar 24
v3.24.0.1
Document and Entity Information - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2023
Mar. 06, 2024
Document and Entity Information [Line Items]    
Document Type 10-K  
Amendment Flag false  
Document Annual Report true  
Document Transition Report false  
Document Period End Date Dec. 31, 2023  
Document Fiscal Year Focus 2023  
Document Fiscal Period Focus FY  
Entity Registrant Name MEDALLION FINANCIAL CORP  
Entity Central Index Key 0001000209  
Current Fiscal Year End Date --12-31  
Entity Well-known Seasoned Issuer No  
Entity Current Reporting Status Yes  
Entity Voluntary Filers No  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Common Stock, Shares Outstanding   23,483,564
Entity Public Float $ 146,115,624  
Entity Emerging Growth Company false  
Entity Small Business true  
Entity Shell Company false  
ICFR Auditor Attestation Flag true  
Document Financial Statement Error Correction [Flag] false  
Entity Incorporation, State or Country Code DE  
Entity File Number 001-37747  
Entity Tax Identification Number 04-3291176  
Entity Address, Address Line One 437 MADISON AVENUE, 38th Floor  
Entity Address, City or Town New York  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 10022  
City Area Code 212  
Local Phone Number 328-2100  
Title of 12(b) Security Common Stock, par value $0.01 per share  
Trading Symbol MFIN  
Security Exchange Name NASDAQ  
Documents Incorporated by Reference

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Definitive Proxy Statement for its 2024 Annual Meeting of Shareholders, for which a Definitive Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after the registrant’s fiscal year-end of December 31, 2023, are incorporated by reference into Part III of this Form 10-K.

 
Auditor Firm ID 339  
Auditor Name Mazars USA LLP  
Auditor Location New York, New York  
v3.24.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2023
Dec. 31, 2022
Assets    
Cash and cash equivalents $ 52,591 $ 33,172
Federal funds sold 97,254 72,426
Investment securities 54,282 48,492
Equity investments 11,430 10,293
Loans 2,215,886 1,916,953
Allowance for credit losses [1] (84,235) (63,845) [2]
Net loans receivable 2,131,651 1,853,108
Goodwill 150,803 150,803
Intangible assets, net 20,591 22,035
Property, equipment, and right-of-use lease asset, net 14,076 13,168
Accrued interest receivable 13,538 12,613
Loan collateral in process of foreclosure [3] 11,772 21,819
Income tax receivable 671 2,095
Other assets 29,168 19,855
Total assets 2,587,827 2,259,879
Liabilities    
Deposits [4] 1,866,657 1,607,110
Long-term debt [5] 235,544 214,320
Deferred tax liabilities, net 21,207 26,753
Short-term debt 8,000 5,000
Operating lease liabilities 7,019 8,408
Accrued interest payable 6,822 4,790
Accounts payable and accrued expenses [6] 30,804 22,974
Total liabilities 2,176,053 1,889,355
Commitments and contingencies
Stockholders’ equity    
Preferred stock (1,000,000 shares of $0.01 par value stock authorized-none outstanding) 0 0
Common stock (50,000,000 shares of $0.01 par value stock authorized - 29,051,800 shares at December 31, 2023 and 28,663,827 shares at December 31, 2022 issued) 291 287
Additional paid in capital 288,046 283,663
Treasury stock (5,602,154 shares at December 31, 2023 and December 31, 2021) (45,538) (45,538)
Accumulated other comprehensive income (loss) (3,696) (3,349)
Retained earnings 103,883 66,673
Total stockholders’ equity 342,986 301,736
Non-controlling interest in consolidated subsidiaries 68,788 68,788
Total equity 411,774 370,524
Total liabilities and equity $ 2,587,827 $ 2,259,879
Number of shares outstanding 23,449,646 23,061,673
Book value per share $ 14.63 $ 13.08
[1] As of December 31, 2023 and 2022, there was no allowance for credit losses and net charge-offs related to the strategic partnership loans.
[2] Represents allowance prior to the adoption of ASU 2016-13.
[3] Includes financed sales of this collateral to third parties that are reported separately from the loan portfolio, and that are conducted by the Bank of $6.2 million and $7.5 million as of December 31, 2023 and 2022
[4] Includes $4.3 million and $3.8 million of deferred financing costs as of December 31, 2023 and 2022. Refer to Note 5 for more details
[5] Includes $4.2 million and $3.2 million of deferred financing costs as of December 31, 2023 and 2022. Refer to Note 5 for more details.
[6] Includes the short-term portion of lease liabilities of $2.5 million and $2.2 million as of December 31, 2023 and 2022. Refer to Note 6 for more details.
v3.24.0.1
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Millions
Dec. 31, 2023
Dec. 31, 2022
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, par value $ 0.01 $ 0.01
Preferred stock, shares outstanding 0 0
Common stock, shares authorized 50,000,000 50,000,000
Common stock, par value $ 0.01 $ 0.01
Common stock, shares issued 29,051,800 28,663,827
Treasury stock, Shares 5,602,154 5,602,154
Loan collateral in process of foreclosure, financed sales collateral to third parties $ 6.2 $ 7.5
Short term lease liabilities 2.5 2.2
Deposits [Member]    
Deferred financing costs 4.3 3.8
Long-Term Debt [Member]    
Deferred financing costs $ 4.2 $ 3.2
v3.24.0.1
Consolidated Statements of Operations - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Interest and fees on loans $ 244,829 $ 195,074 $ 157,990
Interest and dividends on investment securities 6,211 1,547 976
Total interest income [1] 251,040 196,621 158,966
Interest on deposits 47,780 22,666 17,543
Interest on long-term debt 12,670 13,387 12,907
Interest on short-term borrowings 2,496 132 690
Total interest expense [2] 62,946 36,185 31,140
Net interest income (loss) 188,094 160,436 127,826
Provision for credit losses 37,810 30,059 4,622
Net interest income after provision for credit losses 150,284 130,377 123,204
Other income      
Gain on equity investments 5,178 2,779 17,379
Gain on sale of loans and taxi medallion 4,992 5,448 1,788
Write-down of loan collateral in process of foreclosure (1,696) (657) (5,592)
Sponsorship and race winnings, net 0 0 12,567
Gain on extinguishment of debt 0 0 4,626
Other income 2,846 1,956 798
Total other income, net 11,320 9,526 31,566
Other expenses      
Salaries and employee benefits 37,562 31,130 31,591
Loan servicing fees 9,543 8,371 7,013
Collection costs 6,000 5,314 5,279
Professional fees 5,886 13,054 5,311
Regulatory fees 3,194 2,418 1,872
Rent expense 2,472 2,378 2,454
Amortization of intangible assets 1,445 1,445 1,445
Race team related expenses 0 0 9,559
Other expenses 9,466 7,943 8,375
Total other expenses 75,568 72,053 72,899
Income before income taxes 86,036 67,850 81,871
Income tax provision (24,910) (17,963) (24,217)
Net income after taxes 61,126 49,887 57,654
Less: income attributable to the non-controlling interest 6,047 6,047 3,546
Total net income attributable to Medallion Financial Corp. $ 55,079 $ 43,840 $ 54,108
Basic net income per share $ 2.45 $ 1.86 $ 2.2
Diluted net income per share $ 2.37 $ 1.83 $ 2.17
Weighted average common shares outstanding      
Basic 22,510,435 23,583,049 24,599,804
Diluted 23,248,323 23,927,342 24,943,169
[1] Included in interest and investment income is $1.6 million, $0.7 million, and $0.8 million of paid-in-kind interest for the years ended December 31, 2023, 2022, and 2021.
[2] Average borrowings outstanding were $2.0 billion, $1.7 billion and $1.4 billion as of December 31, 2023, 2022, and 2021 and the related average borrowing costs were 3.16%, 2.17%, and 2.28% for the years ended December 31, 2023, 2022, and 2021.
v3.24.0.1
Consolidated Statements of Operations (Parenthetical) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Interest paid in kind $ 1,600 $ 700 $ 800
Average borrowings outstanding $ 2,000,000 $ 1,700,000 $ 1,400,000
Average borrowing costs rate 3.16% 2.17% 2.28%
Net realized losses on investments $ 5,178 $ 2,779 $ 17,380
v3.24.0.1
Consolidated Statements of Other Comprehensive Income - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Statement of Comprehensive Income [Abstract]      
Net income after taxes $ 61,126 $ 49,887 $ 57,654
Other comprehensive loss, net of tax (347) (4,383) (978)
Total comprehensive income 60,779 45,504 56,676
Less: comprehensive income attributable to the non-controlling interest 6,047 6,047 3,546
Total comprehensive income attributable to Medallion Financial Corp. $ 54,732 $ 39,457 $ 53,130
v3.24.0.1
Consolidated Statement of Changes in Stockholders' Equity - USD ($)
$ in Thousands
Total
Common Stock [Member]
Capital in Excess of Par [Member]
Treasury Stock [Member]
Retained Earnings (Accumulated Deficit) [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Parent [Member]
Noncontrolling Interest [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Common Stock [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Capital in Excess of Par [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Treasury Stock [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Retained Earnings (Accumulated Deficit) [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Parent [Member]
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
Noncontrolling Interest [Member]
Balance at Dec. 31, 2020 $ 304,561 $ 278 $ 277,539 $ (24,919) $ (23,502) $ 2,012 $ 231,408 $ 73,153                
Balance, shares at Dec. 31, 2020   27,828,871   (2,951,243)                        
Net income after taxes 57,654       54,108   54,108 3,546                
Distributions to non-controlling interest (6,516)             (6,516)                
Disposition of RPAC (1,395)             (1,395)                
Stock-based compensation 2,261 $ 3 2,258       2,261                  
Issuance of restricted stock, net, shares   258,120                            
Forfeiture of restricted stock, net, shares   (21,940)                            
Issuance in connection with vesting of restricted stock units   15,508                            
Exercise of stock options,value $ 241   241       241                  
Exercise of stock options,shares 44,070 [1] 44,070                            
Other comprehensive loss, net of tax $ (978)         (978) (978)                  
Ending balance at Dec. 31, 2021 355,828 $ 281 280,038 $ (24,919) 30,606 1,034 287,040 68,788                
Ending balance, shares at Dec. 31, 2021   28,124,629   (2,951,243)                        
Net income after taxes 49,887       43,840   43,840 6,047                
Distributions to non-controlling interest (6,047)             (6,047)                
Stock-based compensation 3,476 $ 6 3,470       3,476                  
Issuance of restricted stock, net, shares   522,475                            
Forfeiture of restricted stock, net, shares   (29,359)                            
Issuance in connection with vesting of restricted stock units   22,337                            
Exercise of stock options,value $ 155   155       155                  
Exercise of stock options,shares 23,745 [1] 23,745                            
Purchase of common stock (in Shares)       (2,650,911)                        
Purchase of common stock $ (20,619)     $ (20,619)     (20,619)                  
Dividend paid on common stock (7,773)       (7,773)   (7,773)                  
Other comprehensive loss, net of tax (4,383)         (4,383) (4,383)                  
Ending balance at Dec. 31, 2022 370,524 $ 287 283,663 $ (45,538) 66,673 (3,349) 301,736 68,788 $ 360,589 $ 287 $ 283,663 $ (45,538) $ 56,738 $ (3,349) $ 291,801 $ 68,788
Ending balance (Accounting Standards Update 2016-13 [Member]) at Dec. 31, 2022 $ (9,935)       (9,935)   (9,935)                  
Ending balance, shares at Dec. 31, 2022 23,061,673 28,663,827   (5,602,154)           28,663,827   (5,602,154)        
Net income after taxes $ 61,126       55,079   55,079 6,047                
Distributions to non-controlling interest (6,047)             (6,047)                
Stock-based compensation 4,713 $ 3 4,710       4,713                  
Withheld restricted stock for employees' tax obligations, shares   (91,169)                            
Issuance of restricted stock, net, shares   399,793                            
Forfeiture of restricted stock, net, shares   (12,807)                            
Issuance in connection with vesting of restricted stock units   23,211                            
Withheld restricted stock for employees' tax obligations, value (768)   (768)       (768)                  
Exercise of stock options,value $ 442 $ 1 441       442                  
Exercise of stock options,shares 68,945 [1] 68,945                            
Dividend paid on common stock $ (7,934)       (7,934)   (7,934)                  
Other comprehensive loss, net of tax (347)         (347) (347)                  
Ending balance at Dec. 31, 2023 $ 411,774 $ 291 $ 288,046 $ (45,538) $ 103,883 $ (3,696) $ 342,986 $ 68,788                
Ending balance, shares at Dec. 31, 2023 23,449,646 29,051,800   (5,602,154)                        
[1] The aggregate intrinsic value, which represents the difference between the price of the Company’s common stock at the exercise date and the related exercise price of the underlying options, was $0.1 million, $0.1 million, and $0.2 million for the years ended December 31, 2023, 2022, and 2021.
v3.24.0.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES      
Net income/net decrease in net assets resulting from operations $ 61,126 $ 49,887 $ 57,654
Adjustments to reconcile net income/net decrease in net assets resulting from operations to net cash provided by operating activities:      
Provision for credit losses 37,810 30,059 4,622
Paid-in-kind interest income (1,636) (724) (814)
Depreciation and amortization 5,243 5,229 6,519
Amortization of origination fees, net 9,588 8,707 7,996
(Decrease) increase in deferred and other tax liabilities, net (345) 7,281 18,327
Net change in value of loan collateral in process of foreclosure 10,597 5,738 8,966
Net gains on equity investments (5,178) (2,779) (17,380)
Stock-based compensation expense 4,713 3,476 2,261
Gain on extinguishment of debt 0 0 (4,626)
Increase in accrued interest receivable (925) (1,992) (283)
Gain on disposition of RPAC 0 0 (715)
Increase in other assets (15,470) (3,919) (5,354)
Decrease in accounts payable and accrued expenses 6,209 6,382 2,694
(Decrease) Increase in accrued interest payable 2,032 1,395 (1,141)
Net cash provided by operating activities 113,764 108,740 78,726
CASH FLOWS FROM INVESTING ACTIVITIES      
Loans originated (975,391) (1,000,785) (760,790)
Proceeds from principal receipts, sales, and maturities of loans 616,193 535,067 464,448
Purchases of investments (11,573) (20,713) (19,354)
Proceeds from disposition of RPAC, net 0 0 17,676
Proceeds from principal receipts, sales, and maturities of investments 9,444 14,762 35,647
Proceeds from the sale and principal payments on loan collateral in process of foreclosure 20,631 22,664 24,052
Net cash used for investing activities (340,696) (449,005) (238,321)
CASH FLOWS FROM FINANCING ACTIVITIES      
Proceeds from time deposits and funds borrowed 975,175 839,104 805,577
Repayments of time deposits and funds borrowed (689,920) (483,671) (627,263)
Treasury stock repurchased 0 (20,619) 0
Cash dividend paid on common stock (7,703) (7,543) 0
Distributions to non-controlling interests (6,047) (6,047) (6,516)
Payment of withholding taxes on net settlement of vested stock (768) 0 0
Proceeds from the exercise of stock options 442 155 241
Net cash provided by financing activities 271,179 321,379 172,039
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 44,247 (18,886) 12,444
Cash and cash equivalents, beginning of period 105,598 [1] 124,484 [1] 112,040
Cash and cash equivalents, end of period [1] 149,845 105,598 124,484
SUPPLEMENTAL INFORMATION      
Cash paid during the period for interest 57,509 31,976 29,867
Cash paid during the period for income taxes 25,102 8,848 5,479
NON-CASH INVESTING      
Loans transferred to loan collateral in process of foreclosure, net $ 21,181 $ 12,791 $ 15,888
[1] Includes federal funds sold.
v3.24.0.1
Pay vs Performance Disclosure - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Pay vs Performance Disclosure      
Net Income (Loss) $ 55,079 $ 43,840 $ 54,108
v3.24.0.1
Insider Trading Arrangements
3 Months Ended
Dec. 31, 2023
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
Rule 10b5-1 Arrangement Modified false
Non Rule 10b5-1 Arrangement Modified false
v3.24.0.1
Organization of Medallion Financial Corp. and its Subsidiaries
12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization of Medallion Financial Corp. and its Subsidiaries

(1) ORGANIZATION OF MEDALLION FINANCIAL CORP. AND ITS SUBSIDIARIES

Medallion Financial Corp., or the Company, is a specialty finance company organized as a Delaware corporation that reports as a bank holding company, but is not a bank holding company for regulatory purposes. The Company conducts its business through various wholly-owned subsidiaries including its primary operating company, Medallion Bank, or the Bank, a Federal Deposit Insurance Corporation, or FDIC, insured industrial bank that originates consumer loans, raises deposits, and conducts other banking activities. The Bank is subject to competition from other financial institutions and to the regulations of certain federal and state agencies, and undergoes examinations by those agencies. The Bank was formed in May 2002 for the purpose of obtaining an industrial bank charter pursuant to the laws of the State of Utah. The Bank originates consumer loans on a national basis for the purchase of recreational vehicles, or “RVs”, boats and other consumer recreational equipment and to finance home improvements such as roofs, swimming pools, and windows. Prior to 2015, the Bank originated commercial loans to finance the purchase of taxi medallions, all of which are serviced by the Company. The loans are financed primarily with time certificates of deposit which are originated nationally through a variety of brokered deposit relationships.

The Company also conducts business through its subsidiaries Medallion Capital, Inc., or MCI, a Small Business Investment Company, or SBIC, which conducts a mezzanine financing business; Medallion Funding LLC, or MFC, an SBIC, which historically was the Company's primary taxi medallion lending company; and Freshstart Venture Capital Corp., or FSVC, which historically originated and serviced taxi medallion and commercial loans and was an SBIC through 2023. MCI, and MFC, as SBICs, are regulated by the Small Business Administration, or SBA. MCI is financed in part by the SBA.

The Company established a wholly-owned subsidiary, Medallion Financing Trust I, or Fin Trust, for the purpose of issuing unsecured trust preferred securities to investors. Fin Trust is a separate legal and corporate entity with its own creditors who, in any liquidation of Fin Trust, will be entitled to be satisfied out of Fin Trust’s assets prior to any value in Fin Trust becoming available to Fin Trust’s equity holders. The assets of Fin Trust, aggregating $34.0 million at December 31, 2023, are comprised solely of a subordinated note from the Company and are not available to pay obligations of its affiliates or any other party, and the assets of affiliates or any other party are not available to pay obligations of Fin Trust.

v3.24.0.1
Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2023
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S., or GAAP, requires management to make estimates that affect the amounts reported in the consolidated financial statements and the accompanying notes. Accounting estimates and assumptions are those that management considers to be the most critical to an understanding of the consolidated financial statements because they inherently involve significant judgments and uncertainties. All of these estimates reflect management’s best judgment about current economic and market conditions and their effects based on information available as of the date of these consolidated financial statements. If such conditions change, it is reasonably possible that the judgments and estimates could change, which may result in future impairments of loans and loan collateral in process of foreclosure, goodwill and intangible assets, and investments, among other effects.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and all of its wholly-owned and controlled subsidiaries. All significant intercompany transactions, balances, and profits (losses) have been eliminated in consolidation.

The consolidated financial statements have been prepared in accordance with GAAP. The Company consolidates all entities it controls through a majority voting interest, a controlling interest through other contractual rights, or as being identified as the primary beneficiary of VIEs. The primary beneficiary is the party who has both (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance, and (2) an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity. For consolidated entities that are less than wholly owned, the third-party’s holding is recorded as non-controlling interest.

 

Cash and Cash Equivalents

The Company considers all highly liquid instruments with an original purchased maturity of three months or less to be cash equivalents. Cash balances are generally held in accounts at large national or regional banking organizations in amounts that exceed the federally insured limits. As of December 31, 2023, cash also included $1.3 million of interest-bearing funds deposited in other banks with original terms of 5 to 6 years.

Fair Value of Assets and Liabilities

The Company follows the Financial Accounting Standards Board, or FASB, FASB Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures, or FASB ASC 820, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. FASB ASC 820 defines fair value as an exit price (i.e. a price that would be received to sell, as opposed to acquire, an asset or transfer a liability), and emphasizes that fair value is a market-based measurement. It establishes a fair value hierarchy that distinguishes between assumptions developed based on market data obtained from independent external sources and the reporting entity’s own assumptions. Further, it specifies that fair value measurement should consider adjustment for risk, such as the risk inherent in the valuation technique or its inputs. See also Notes 14 and 15 to the consolidated financial statements.

Equity Investments

The Company follows FASB ASC Topic 321, Investments – Equity Securities, or ASC 321, which requires all applicable investments in equity securities with a readily determinable fair value to be valued as such, and those without a readily determinable fair value, are measured at cost, less any impairment plus or minus any observable price changes. Equity investments of $11.4 million and $10.3 million as of December 31, 2023 and 2022, were comprised mainly of nonmarketable stock and stock warrants, are recorded at cost less any impairment plus or minus observable price changes, and a vast majority are held by our SBIC subsidiary in connection with its mezzanine lending business. As of December 31, 2023, cumulative impairment of $3.5 million had been recorded with respect to these investments.

During 2021, the Company purchased $2.0 million of equity securities with a readily determinable fair value. As a result, all unrealized gains and losses are included in gain (loss) on equity investments. As of December 31, 2023 and 2022, the fair value of these securities were $1.7 million and $1.7 million and are included in other assets on the consolidated balance sheet.

The following table presents the unrealized portion related to the equity securities held as of December 31, 2023.

 

 

Year Ended December 31,

 

(Dollars in thousands)

 

2023

 

 

2022

 

 

2021

 

Net gains (losses) recognized during the period on equity securities

 

$

24

 

 

$

(226

)

 

$

(50

)

Less: Net gains (losses) recognized during the period on equity
   securities sold during the period

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) recognized during the reporting period on
   equity securities still held at the reporting date

 

$

24

 

 

$

(226

)

 

$

(50

)

Investment Securities

The Company follows FASB ASC Topic 320, Investments – Debt Securities, or ASC 320, which requires that all applicable investments in debt securities be classified as trading securities, available-for-sale securities, or held-to-maturity securities. Investment securities are purchased from time-to-time in the open market at prices that are greater or lesser than the par value of the investment. The resulting premium or discount is deferred and recognized on a level yield basis as an adjustment to the yield of the related investment. The net premium on investment securities totaled $0.1 million as of both December 31, 2023 and 2022, and less than $0.1 million, $0.1 million, and $0.1 million was amortized to interest income for the years ended December 31, 2023, 2022, and 2021. ASC 320 further requires that held-to-maturity securities be reported at amortized cost and available-for-sale securities be reported at fair value, with unrealized gains and losses excluded from earnings at the date of the consolidated financial statements, and reported in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity, net of the effect of income taxes, until they are sold. At the time of sale, any gains or losses, calculated by the specific identification method, will be recognized as a component of operating results and any amounts previously included in stockholders’ equity, which were recorded net of the income tax effect, will be reversed. In accordance with ASC 326, we do not maintain an allowance for credit losses for accrued interest receivable.

Loans

The Company’s loans are currently reported at the principal amount outstanding, inclusive of deferred loan acquisition costs, which primarily includes deferred fees paid to loan originators, and which is amortized to interest income over the life of the loan.

Loan origination fees and certain direct origination costs are deferred and recognized as an adjustment to the yield of the related loans. As of December 31, 2023 and 2022, net loan origination costs were $40.0 million and $34.9 million. Net amortization to income for the years ended December 31, 2023, 2022, and 2021 were $8.3 million, $8.7 million, and $8.0 million.

 

Interest income is recorded on the accrual basis. Taxi medallion and commercial loans are placed on nonaccrual status, and all uncollected accrued interest is reversed, when there is doubt as to the collectability of interest or principal, or if loans are 90 days or more past due, unless management has determined that they are both well-secured and in the process of collection. Interest income on nonaccrual loans is generally recognized when cash is received, unless a determination has been made to apply all cash receipts to principal. The consumer loan portfolio has different characteristics, typified by a larger number of smaller dollar loans that have similar characteristics. A loan is considered to be impaired, or nonperforming, when based on current information and events, it is unlikely the Company will be able to collect all amounts due according to the contractual terms of the original loan agreement. Management considers loans that are in bankruptcy status, but have not been charged-off, to be impaired. Consumer loans are placed on nonaccrual when they become 90 days past due, or earlier if they enter bankruptcy, and are charged-off in their entirety when deemed uncollectible, or when they become 120 days past due, whichever occurs first, at which time appropriate recovery efforts against both the borrower and the underlying collateral are initiated. For the recreation loan portfolio, the process to repossess the collateral is started at 60 days past due. If the collateral is not located and the account reaches 120 days delinquent, the account is charged-off. If the collateral is repossessed, a loss is recorded by writing the collateral down to its fair value less selling costs, and the collateral is sent to auction. When the collateral is sold, the net auction proceeds are applied to the account, and any remaining balance is written off. Proceeds collected on charged-off accounts are recorded as recoveries. Total loans 90 days or more past due were $16.8 million or 0.77% of the total loan portfolio as of December 31, 2023, as compared to $8.9 million, or 0.47% as of December 31, 2022. Beginning in the first quarter of 2023, the Company began charging off recreation loans at the point when borrowers filed for bankruptcy. This change resulted in approximately $2.5 million of loans being charged off in the first quarter of 2023.

The Company may modify the contractual cash flow of loans in situations where borrowers are experiencing financial difficulties. The Company strives to identify borrowers in financial difficulty early and work with them to modify their loans to more affordable terms before they reach nonaccrual status. These modified terms may include interest rate reductions, principal forgiveness, term extensions, payment forbearance and other actions intended to minimize the economic loss to the Company and to avoid foreclosure or repossession of the collateral. For modifications where the Company forgives principal, the entire amount of such principal forgiveness is immediately charged off. Modified loans are considered impaired loans.

Loan collateral in process of foreclosure primarily includes taxi medallion loans that have reached 120 days past due and have been charged-down to their net realizable value, in addition to consumer repossessed collateral in the process of being sold. For New York City taxi medallion loans in the process of foreclosure, the Company continued to utilize a net value of $79,500 when assessing net realizable value for these taxi medallion loans, despite fluctuating current transfer prices which may exceed that level from time to time. The "loan collateral in the process of foreclosure" designation reflects that the collection activities on these loans have transitioned from working with the borrower, to the liquidation of the collateral securing the loans.

The Company accounts for its sales of loans in accordance with FASB Accounting Standards Codification Topic 860, Transfers and Servicing, or FASB ASC 860, which provides accounting and reporting standards for transfers and servicing of financial assets and extinguishments of liabilities. In accordance with FASB ASC 860, the Company had elected the fair value measurement method for its servicing assets and liabilities. The principal portion of loans serviced for others by the Company and its affiliates was $14.0 million at December 31, 2023 and $19.5 million December 31, 2022. The Company has evaluated the servicing aspect of its business in accordance with FASB ASC 860 and determined that no material servicing asset or liability existed as of December 31, 2023 and 2022.

Allowance for Credit Losses

On January 1, 2023, the Company adopted Accounting Standards Update 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", or ASC 326, which replaced the incurred loss methodology that delayed recognition until it was probable a loss had been incurred with a lifetime expected loss methodology using "reasonable and supportable" expectations about the future, referred to as the current expected credit loss, or CECL, methodology. For consumer loans, the Company uses historical delinquency and actual loss rates modified by quantitative adjustments based on macroeconomic factors over a twelve-month reasonable and supportable forecast period. For commercial loans, the Company assesses the historical impact that macroeconomic indicators have had on the loan portfolio, to determine an approximate allowance for credit loss. Unlike consumer loans, where loans may have similar performing characteristics, each commercial loan is unique. The Company evaluates each commercial loan for specific impairment with additional allowance for credit losses recognized as necessary. For taxi medallion loans, the Company maintains specific reserves adjusting the carrying amount of loans down to net collateral value. The allowance is evaluated on a quarterly basis by management based on the collectability of the loans in light of historical experience, the nature and size of the loan portfolio, adverse situations that may affect the borrowers' ability to repay, estimated value of any underlying collateral, prevailing economic conditions, and excess concentration risks. This evaluation is inherently subjective, as it requires estimates, including those based on changes in economic conditions, that are susceptible to significant revision as more information becomes available. Credit losses are deducted from the allowance, and subsequent recoveries are added back to the allowance.

 

The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balance-sheet credit exposures. Results for reporting periods beginning after December 15, 2022 are presented under ASC 326. The transition to the CECL methodology on January 1, 2023 resulted in an increase of $13.7 million to the Company's allowance for credit losses on loans, or ACL, and a net-of-tax cumulative-effect adjustment of $9.9 million to the beginning balance of retained earnings. The CECL methodology transition effects on the allowance for credit losses are shown in the following table:

(Dollars in thousands)

 

December 31, 2022
Pre-Topic 326
Adoption

 

 

Effect of ASC 326
Adoption
(Transition Amounts)

 

 

January 1, 2023
Post-ASC 326
Adoption

 

Assets:

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

Recreation

 

$

41,966

 

 

$

10,037

 

 

$

52,003

 

Home improvement

 

 

11,340

 

 

 

1,518

 

 

 

12,858

 

Commercial

 

 

1,049

 

 

 

2,157

 

 

 

3,206

 

Taxi medallion

 

 

9,490

 

 

 

 

 

 

9,490

 

Strategic partnership

 

 

 

 

 

 

 

 

 

Allowance for credit losses on loans

 

$

63,845

 

 

$

13,712

 

 

$

77,557

 

Prior to January 1, 2023, the Company used historical delinquency and actual loss rates with a three-year look-back period for taxi medallion loans and a one-year look-back period for recreation and home improvement loans and used historical loss experience and other projections for commercial loans. The allowance was evaluated on a quarterly basis by management based on the collectability of the loans in light of historical experience, the nature and size of the loan portfolio, adverse situations that may affect the borrowers' ability to repay, estimated value of any underlying collateral, prevailing economic conditions, and excess concentration risks. This evaluation was inherently subjective, as it required estimates that were susceptible to significant revision as more information became available.

Goodwill and Intangible Assets

The Company’s goodwill and intangible assets arose as a result of the excess of fair value over book value for several of the Company’s previously unconsolidated portfolio investment companies as of April 2, 2018. This fair value was brought forward under the Company’s new reporting, and was subject to a purchase price accounting allocation process conducted by an independent third-party expert to arrive at the current categories and amounts. Goodwill is not amortized, but is subject to quarterly review by management to determine whether additional impairment testing is needed, and such testing is performed at least on an annual basis. Intangible assets are amortized over their useful life of approximately 20 years. As of December 31, 2023 and 2022, the Company had intangible assets of $20.6 million and $22.0 million. The Company recognized $1.4 million of amortization expense on the intangible assets for each of the years ended December 31, 2023 and 2022. Additionally, loan portfolio premiums of $12.4 million were determined as of April 2, 2018, of which none were outstanding as of December 31, 2023 and 2022, and of which $0.0 million, $0.5 million, and $2.2 million was amortized to interest income for the years ended December 31, 2023, 2022, and 2021. Management performed a step 0 analysis in assessing the goodwill and intangibles for impairment at December 31, 2023 and 2022, concluding that there was no impairment of these assets.

The following table details of the intangible assets as of December 31, 2023 and 2022:

 

 

December 31,

 

(Dollars in thousands)

 

2023

 

 

2022

 

Brand-related intellectual property

 

$

4,916

 

 

$

16,775

 

Home improvement contractor relationships

 

 

15,675

 

 

 

5,260

 

Total intangible assets

 

$

20,591

 

 

$

22,035

 

Fixed Assets

Fixed assets are carried at cost less accumulated depreciation and amortization, and are depreciated on a straight-line basis over their estimated useful lives of 3 to 10 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the estimated economic useful life of the improvement. Depreciation and amortization expense was $0.4 million, $0.4 million, and $0.3 million for the years ended December 31, 2023, 2022, and 2021.

 

Deferred Costs

Deferred financing costs represent costs associated with obtaining the Company’s borrowing facilities, and are amortized on a straight line basis over the lives of the related financing agreements and life of the respective pool. Amortization expense was $3.1 million, $2.6 million, and $2.4 million for the years ended December 31, 2023, 2022, and 2021. In addition, the Company capitalizes certain costs for transactions in the process of completion (other than business combinations), including those for potential investments, and the sourcing of other financing alternatives. Upon completion or termination of the transaction, any accumulated amounts will be amortized against income over an appropriate period, or written off. The amount on the Company’s balance sheet for all of these purposes were $8.5 million and $7.0 million as of December 31, 2023 and 2022.

Income Taxes

Income taxes are accounted for using the asset and liability approach in accordance with FASB ASC Topic 740, Income Taxes, or ASC 740. Deferred tax assets and liabilities reflect the impact of temporary differences between the carrying amount of assets and liabilities and their tax basis and are stated at tax rates expected to be in effect when taxes are actually paid or recovered. Deferred tax assets are also recorded for net operating losses, capital losses and any tax credit carryforwards. A valuation allowance is provided against a deferred tax asset when it is more likely than not that some or all of the deferred tax assets will not be realized. All available evidence, both positive and negative, is considered to determine whether a valuation allowance for deferred tax assets is needed. Items considered in determining the Company’s valuation allowance include expectations of future earnings of the appropriate tax character, recent historical financial results, tax planning strategies, the length of statutory carryforward periods and the expected timing of the reversal of temporary differences. The Company recognizes tax benefits of uncertain tax positions only when the position is more likely than not to be sustained assuming examination by tax authorities. The Company records income tax related interest and penalties, if applicable, within current income tax expense.

Earnings Per Share (EPS)

Basic earnings per share are computed by dividing net income resulting from operations available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if option contracts to issue common stock were exercised, or if restricted stock vests, and has been computed after considering the weighted average dilutive effect of the Company’s stock options and restricted stock. The Company uses the treasury stock method to calculate diluted EPS, which is a method of recognizing the use of proceeds that could be obtained upon exercise of options and warrants, including unvested compensation expense related to the shares, in computing diluted EPS. It assumes that any proceeds would be used to purchase common stock at the average market price during the period. The table below shows the calculation of basic and diluted EPS.

 

Year Ended December 31,

 

(Dollars in thousands, except share and per share data)

 

2023

 

 

2022

 

 

2021

 

Net income attributable to common stockholders

 

$

55,079

 

 

$

43,840

 

 

$

54,108

 

Weighted average common shares outstanding applicable to basic EPS

 

 

22,510,435

 

 

 

23,583,049

 

 

 

24,599,804

 

Effect of restricted stock grants

 

 

461,098

 

 

 

276,469

 

 

 

250,763

 

Effect of dilutive stock options

 

 

142,216

 

 

 

67,825

 

 

 

92,602

 

Effect of performance stock unit grants

 

 

134,574

 

 

 

 

 

 

 

Adjusted weighted average common shares outstanding applicable to diluted EPS

 

 

23,248,323

 

 

 

23,927,342

 

 

 

24,943,169

 

Basic income per share

 

$

2.45

 

 

$

1.86

 

 

$

2.20

 

Diluted income per share

 

 

2.37

 

 

 

1.83

 

 

 

2.17

 

Potentially dilutive common shares excluded from the above calculations aggregated 92,310 shares, 347,963 shares, and 421,190 shares as of December 31, 2023, 2022, and 2021.

Stock Compensation

The Company follows FASB ASC Topic 718, or ASC 718, Compensation – Stock Compensation, for its equity incentive, stock option, and restricted stock plans, and accordingly, the Company recognizes the expense of these grants as required. Stock-based employee compensation costs pertaining to stock options are reflected in net income resulting from operations for any new grants using the fair values established by usage of the Black-Scholes option pricing model, expensed over the vesting period of the underlying option. Stock-based employee compensation costs pertaining to restricted stock are reflected in net income resulting from operations for any new grants using the grant date fair value of the shares granted, expensed over the vesting period of the underlying stock.

During the years ended December 31, 2023, 2022, and 2021, the Company issued 399,793, 522,475, and 258,120 restricted shares of stock-based compensation awards, 296,444, 0, and 0 performance stock units, 83,158, 129,638, and 16,803 restricted stock units, and 0, 0, and 317,398 shares of other stock-based compensation awards; and recognized $4.7 million, $3.5 million, and $2.3 million, or $0.20, $0.15, and $0.09 per diluted common share for each respective year, of non-cash stock-based compensation expense related to the grants. As of December 31, 2023, the total remaining unrecognized compensation cost related to unvested stock options and restricted stock was $5.0 million, which is expected to be recognized over the next 9 quarters.

 

Regulatory Capital

The Bank is subject to various regulatory capital requirements administered by the FDIC and the Utah Department of Financial Institutions. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classifications are also subject to qualitative judgments by the bank regulators about components, risk weightings, and other factors.

FDIC-insured banks, including the Bank, are subject to certain federal laws, which impose various legal limitations on the extent to which banks may finance or otherwise supply funds to certain of their affiliates. In particular, the Bank is subject to certain restrictions on any extensions of credit to, or other covered transactions with, such as certain purchases of assets, the Company or its affiliates.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios as defined in the regulations (set forth in the table below). Additionally, as conditions of granting the Bank’s application for federal deposit insurance, the FDIC ordered that the Tier 1 leverage capital to total assets ratio, as defined, be not less than 15%, a level which could preclude its ability to pay dividends to the Company, and that an adequate allowance for credit losses be maintained. As of December 31, 2023, the Bank’s Tier 1 leverage ratio was 16.2%. The Bank’s actual capital amounts and ratios, and the regulatory minimum ratios are presented in the following table.

 

Regulatory

 

 

December 31,

 

(Dollars in thousands)

 

Minimum

 

 

Well-Capitalized

 

 

2023

 

 

2022

 

Common equity tier 1 capital

 

 

 

 

 

 

 

$

293,774

 

 

$

242,049

 

Tier 1 capital

 

 

 

 

 

 

 

 

362,561

 

 

 

310,837

 

Total capital

 

 

 

 

 

 

 

 

390,153

 

 

 

334,913

 

Average assets

 

 

 

 

 

 

 

 

2,232,816

 

 

 

1,917,904

 

Risk-weighted assets

 

 

 

 

 

 

 

 

2,155,641

 

 

 

1,888,530

 

Leverage ratio (1)

 

 

4.0

%

 

 

5.0

%

 

 

16.2

%

 

 

16.2

%

Common equity tier 1 capital ratio (2)

 

 

7.0

 

 

 

6.5

 

 

 

13.6

 

 

 

12.8

 

Tier 1 capital ratio (3)

 

 

8.5

 

 

 

8.0

 

 

 

16.8

 

 

 

16.5

 

Total capital ratio (3)

 

 

10.5

 

 

 

10.0

 

 

 

18.1

 

 

 

17.7

 

(1)
Calculated by dividing Tier 1 capital by average assets.
(2)
Calculated by subtracting preferred stock or non-controlling interest from Tier 1 capital and dividing by risk-weighted assets.
(3)
Calculated by dividing Tier 1 or total capital by risk-weighted assets.

In the table above, the minimum risk-based ratios as of December 31, 2023 and 2022 reflect the capital conservation buffer of 2.5%. The minimum regulatory requirements, inclusive of the capital conservation buffer, were the binding requirements for the risk-based requirements, and the “well-capitalized” requirements were the binding requirements for Tier 1 leverage capital as of both December 31, 2023 and 2022.

Recently Issued Accounting Standards

On January 1, 2023, the Company adopted ASC 326. Please refer to Allowance for Credit Losses, within this footnote, for the impact of adopting this standard.

In March 2023, the FASB issued ASU 2023-02, Investments - Equity Method and Joint Ventures, or Topic 323: Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method. The main objective of this new standard is to allow reporting entities to consistently account for equity investments made primarily for the purpose of receiving income tax credits and other income tax benefits. The amendments in this update are effective for fiscal years beginning after December 15, 2023. The Company is assessing the impact of the update on the accompanying financial statements.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements. The amendments in this update seek to clarify or improve disclosure and presentation requirements. The Company is assessing the impact of the update on the accompanying financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting, or Topic 280: Improvements to Reportable Segment Disclosures. The main objective of this update is to provide transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments in this update are effective for fiscal years beginning after December 15, 2023. The Company is assessing the impact of the update on the accompanying financial statements.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes, or Topic 740: Improvements to Income Tax Disclosures. The main objective of this update is to improve financial reporting disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The amendments in this update are effective for the annual periods beginning after December 15, 2024. The Company is assessing the impact of the update on the accompanying financial statements.

Reclassifications

Certain reclassifications have been made to prior year balances to conform with the current year presentation. These reclassifications have no effect on the previously reported results of operations.

v3.24.0.1
Investment Securities
12 Months Ended
Dec. 31, 2023
Schedule of Investments [Abstract]  
Investment Securities

(3) INVESTMENT SECURITIES

The following tables present details of fixed maturity securities available for sale as of December 31, 2023 and 2022.

December 31, 2023
(Dollars in thousands)

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

Mortgage-backed securities, principally obligations of U.S. federal agencies

 

$

44,653

 

 

$

 

 

$

(4,791

)

 

$

39,862

 

State and municipalities

 

 

13,733

 

 

 

21

 

 

 

(1,501

)

 

 

12,253

 

Agency bonds

 

 

2,187

 

 

 

 

 

 

(20

)

 

 

2,167

 

Total

 

$

60,573

 

 

$

21

 

 

$

(6,312

)

 

$

54,282

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022
(Dollars in thousands)

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

Mortgage-backed securities, principally obligations of U.S. federal agencies

 

$

43,286

 

 

$

 

 

$

(4,933

)

 

$

38,353

 

State and municipalities

 

 

11,015

 

 

 

13

 

 

 

(889

)

 

 

10,139

 

Total

 

$

54,301

 

 

$

13

 

 

$

(5,822

)

 

$

48,492

 

The amortized cost and estimated market value of investment securities as of December 31, 2023 by contractual maturity are shown below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

December 31, 2023
(Dollars in thousands)

 

Amortized
Cost

 

 

Fair
Value

 

Due in one year or less

 

$

2,395

 

 

$

2,336

 

Due after one year through five years

 

 

7,313

 

 

 

7,049

 

Due after five years through ten years

 

 

8,833

 

 

 

7,808

 

Due after ten years

 

 

42,032

 

 

 

37,089

 

Total

 

$

60,573

 

 

$

54,282

 

The following tables show information pertaining to securities with gross unrealized losses as of December 31, 2023 and 2022, aggregated by investment category and length of time that individual securities have been in a continuous loss position follows.

 

Less than Twelve Months

 

 

Twelve Months and Over

 

December 31, 2023
(Dollars in thousands)

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

Mortgage-backed securities, principally obligations of U.S. federal agencies

 

$

(78

)

 

$

5,797

 

 

$

(4,714

)

 

$

33,971

 

State and municipalities

 

$

(204

)

 

$

4,839

 

 

$

(1,296

)

 

$

7,371

 

Agency bonds

 

 

 

 

 

 

 

 

(20

)

 

 

2,167

 

Total

 

$

(282

)

 

$

10,636

 

 

$

(6,030

)

 

$

43,509

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less than Twelve Months

 

 

Twelve Months and Over

 

December 31, 2022
(Dollars in thousands)

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

Mortgage-backed securities, principally obligations of U.S. federal agencies

 

$

(731

)

 

$

12,321

 

 

$

(4,202

)

 

$

26,023

 

State and municipalities

 

 

(286

)

 

 

4,628

 

 

 

(603

)

 

 

3,502

 

Total

 

$

(1,017

)

 

$

16,949

 

 

$

(4,805

)

 

$

29,525

 

As of December 31, 2023 and 2022, the Company had 60 and 57 securities with unrealized losses that have not been recognized in income because the issuers' bonds are of high credit quality, and the Company has the intent and ability to hold the securities for the foreseeable future. The fair value is expected to recover as the bonds approach the maturity date.

v3.24.0.1
Loans and Allowance for Credit Losses
12 Months Ended
Dec. 31, 2023
Text Block [Abstract]  
Loans and allowance for credit losses

(4) LOANS AND ALLOWANCE FOR CREDIT LOSSES

The following table shows the major classification of loans, inclusive of capitalized loan origination costs, at December 31, 2023 and 2022.

 

As of December 31,

 

 

 

2023

 

 

2022

 

(Dollars in thousands)

 

Amount

 

 

As a
Percent of
Gross Loans

 

 

Amount

 

 

As a
Percent of
Gross Loans

 

Recreation

 

$

1,336,226

 

 

 

60

%

 

$

1,183,512

 

 

 

62

%

Home improvement

 

 

760,617

 

 

 

34

 

 

 

626,399

 

 

 

33

 

Commercial

 

 

114,827

 

 

 

5

 

 

 

92,899

 

 

 

5

 

Taxi medallion

 

 

3,663

 

 

*

 

 

 

13,571

 

 

 

1

 

Strategic partnership

 

 

553

 

 

*

 

 

 

572

 

 

*

 

Total gross loans

 

 

2,215,886

 

 

 

100

%

 

 

1,916,953

 

 

 

100

%

Allowance for credit losses

 

 

(84,235

)