MEDALLION FINANCIAL CORP, 10-K filed on 13 Mar 25
 | XBRL Documents
v3.25.0.1
Document and Entity Information - USD ($)
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Mar. 12, 2025
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, 2024    
Document Fiscal Year Focus 2024    
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     23,262,103
Entity Public Float $ 139,872,752,640    
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 2025 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, 2024, are incorporated by reference into Part III of this Form 10-K.

    
Auditor Firm ID 166 339  
Auditor Name Plante & Moran, PLLC Mazars USA LLP  
Auditor Location Chicago, IL New York, NY  
Auditor Opinion

We have audited the accompanying consolidated balance sheet of Medallion Financial Corp. (the “Company”) as of December 31, 2024; the related consolidated statements of operations, comprehensive income, changes in stockholders' equity, and cash flows for the year then ended; and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

We also have audited the Company’s internal control over financial reporting as of December 31, 2024, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”), based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Our report dated March 13, 2025 expresses an unqualified opinion.

    
v3.25.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Assets    
Cash and cash equivalents $ 98,238 $ 52,591
Federal funds sold 71,334 97,254
Investment securities 54,805 54,282
Equity investments 9,198 11,430
Loans held for sale, at lower of amortized cost or fair value 128,226 0
Loans 2,362,796 2,215,886
Allowance for credit losses (97,368) (84,235)
Net loans 2,265,428 2,131,651
Goodwill 150,803 150,803
Intangible assets, net 19,146 20,591
Property, equipment, and right-of-use lease asset, net 13,756 14,076
Accrued interest receivable 15,314 13,538
Loan collateral in process of foreclosure 9,932 11,772
Income tax receivable 2,131 671
Other assets 30,295 29,168
Total assets 2,868,606 2,587,827
Liabilities    
Deposits [1] 2,090,071 1,866,657
Long-term debt [2] 232,159 235,544
Short-term debt 49,000 8,000
Deferred tax liabilities, net [3] 20,995 21,207
Operating lease liabilities 5,128 7,019
Accrued interest payable 8,231 6,822
Income tax payable 0 0
Accounts payable and accrued expenses [4] 24,064 30,804
Total liabilities 2,429,648 2,176,053
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 - 29,308,182 shares at December 31, 2024 and 29,051,800 shares at December 31, 2023 issued) 293 291
Additional paid in capital 293,412 288,046
Treasury stock (6,172,558 shares at December 31, 2024 and 5,602,154 December 31, 2023) (50,144) (45,538)
Accumulated other comprehensive income (loss) (3,647) (3,696)
Retained earnings 130,256 103,883
Total stockholders’ equity 370,170 342,986
Non-controlling interest in consolidated subsidiaries 68,788 68,788
Total equity 438,958 411,774
Total liabilities and equity $ 2,868,606 $ 2,587,827
Number of shares outstanding 23,135,624 23,449,646
Book value per share $ 16 $ 14.63
[1] Includes $4.6 million and $4.3 million of deferred financing costs as of December 31, 2024 and 2023. Refer to Note 5 for more details
[2] Includes $3.6 million and $4.2 million of deferred financing costs as of December 31, 2024 and 2023. Refer to Note 5 for more details.
[3] Includes $42.8 million and $43.0 million of deferred tax liabilities related to goodwill and intangible assets as of December 31, 2024 and 2023. Refer to Note 7 for more details.
[4] Includes the short-term portion of lease liabilities of $2.3 million and $2.5 million as of December 31, 2024 and 2023. Refer to Note 6 for more details.
v3.25.0.1
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
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 29,308,182 29,051,800
Treasury stock, Shares 6,172,558 5,602,154
Deferred tax liabilities related to goodwill and intangible assets $ 42,772 $ 43,034
Short term lease liabilities 2,300 2,500
Deferred financing costs 8,200 8,500
Deposits [Member]    
Deferred financing costs 4,600 4,300
Long-Term Debt [Member]    
Deferred financing costs $ 3,600 $ 4,200
v3.25.0.1
Consolidated Statements of Operations - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Interest and fees on loans [1] $ 283,316 $ 244,829 $ 195,074
Non-loan interest and dividend income 7,386 6,211 1,547
Total interest income 290,702 251,040 196,621
Interest on deposits 70,504 47,780 22,666
Interest on long-term debt 17,091 12,670 13,387
Interest on short-term borrowings 572 2,496 132
Total interest expense [2] 88,167 62,946 36,185
Net interest income 202,535 188,094 160,436
Provision for credit losses 76,502 37,810 30,059
Net interest income after provision for credit losses 126,033 150,284 130,377
Other income      
Gains on equity investments, net 6,917 5,178 2,779
Gains on sale of loans and taxi medallion 1,293 4,992 5,448
Write-down of loan collateral in process of foreclosure (528) (1,696) (657)
Other income 3,648 2,846 1,956
Total other income, net 11,330 11,320 9,526
Other expenses      
Salaries and employee benefits 38,344 37,562 31,130
Loan servicing fees 10,771 9,543 8,371
Collection costs 6,380 6,000 5,314
Regulatory fees 3,795 3,194 2,418
Professional fee costs (benefits), net (1,372) 5,886 13,054
Rent expense 2,682 2,472 2,378
Amortization of intangible assets 1,445 1,445 1,445
Penalties 3,000 0 0
Other expenses 9,382 9,466 7,943
Total other expenses 74,427 75,568 72,053
Income before income taxes 62,936 86,036 67,850
Income tax provision (21,011) (24,910) (17,963)
Net income after taxes 41,925 61,126 49,887
Less: income attributable to the non-controlling interest 6,047 6,047 6,047
Net income attributable to Medallion Financial Corp. $ 35,878 $ 55,079 $ 43,840
Basic earnings per share $ 1.59 $ 2.45 $ 1.86
Diluted earnings per share $ 1.52 $ 2.37 $ 1.83
Weighted average common shares outstanding      
Basic 22,546,051 22,510,435 23,583,049
Diluted 23,605,493 23,248,323 23,927,342
[1] Included in interest and dividends on investment securities is $1.8 million, $1.6 million, and $0.7 million of paid-in-kind interest for the years ended December 31, 2024, 2023, and 2022.
[2] Average borrowings outstanding were $2.2 billion, $2.0 billion and $1.7 billion as of December 31, 2024, 2023, and 2022 and the related average borrowing costs were 3.93%, 3.16%, and 2.17% for the years ended December 31, 2024, 2023, and 2022.
v3.25.0.1
Consolidated Statements of Operations (Parenthetical) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Interest paid in kind $ 1.8 $ 1.6 $ 0.7
Average borrowings outstanding $ 2,200.0 $ 2,000.0 $ 1,700.0
Average borrowing costs rate 3.93% 3.16% 2.17%
v3.25.0.1
Consolidated Statements of Other Comprehensive Income - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Statement of Comprehensive Income [Abstract]      
Net income after taxes $ 41,925 $ 61,126 $ 49,887
Other comprehensive income (loss), net of tax 49 (347) (4,383)
Total comprehensive income 41,974 60,779 45,504
Less: comprehensive income attributable to the non-controlling interest 6,047 6,047 6,047
Total comprehensive income attributable to Medallion Financial Corp. $ 35,927 $ 54,732 $ 39,457
v3.25.0.1
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, 2021 $ 355,828 $ 281 $ 280,038 $ (24,919) $ 30,606 $ 1,034 $ 287,040 $ 68,788                
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 income (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   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 income (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)                        
Net income after taxes $ 41,925       35,878   35,878 6,047                
Distributions to non-controlling interest (6,047)             (6,047)                
Stock-based compensation 6,053 $ 2 6,051       6,053                  
Withheld restricted stock for employees' tax obligations, shares   (116,275)                            
Issuance of restricted stock, net, shares   347,158                            
Forfeiture of restricted stock, net, shares   (32,521)                            
Issuance in connection with vesting of restricted stock units   17,155                            
Withheld restricted stock for employees' tax obligations, value (944)   (944)       (944)                  
Exercise of stock options,value $ 259   259       259                  
Exercise of stock options,shares 40,865 [1] 40,865                            
Purchase of common stock (in Shares)       (570,404)                        
Purchase of common stock $ (4,606)     $ (4,606)     (4,606)                  
Dividend paid on common stock (9,505)       (9,505)   (9,505)                  
Other comprehensive income (loss), net of tax 49         49 49                  
Ending balance at Dec. 31, 2024 $ 438,958 $ 293 $ 293,412 $ (50,144) $ 130,256 $ (3,647) $ 370,170 $ 68,788                
Ending balance, shares at Dec. 31, 2024 23,135,624 29,308,182   (6,172,558)                        
[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 $0.1 million for the years ended December 31, 2024, 2023, and 2022.
v3.25.0.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES      
Net income $ 41,925 $ 61,126 $ 49,887
Adjustments to reconcile net income resulting from operations to net cash provided by operating activities:      
Provision for credit losses 76,502 37,810 30,059
Paid-in-kind interest income (1,830) (1,636) (724)
Depreciation and amortization 6,217 5,243 5,229
Amortization of origination fees, net 9,173 9,588 8,707
(Decrease) increase in deferred and other tax liabilities, net (1,672) (345) 7,281
Net change in value of loan collateral in process of foreclosure 410 10,597 5,738
Net gains on equity investments (6,917) (5,178) (2,779)
Stock-based compensation expense 6,053 4,713 3,476
Increase in accrued interest receivable (1,776) (925) (1,992)
Increase in other assets (5,239) (15,470) (3,919)
(Increase) decrease in accounts payable and accrued expenses (8,742) 6,209 6,382
Increase in accrued interest payable 1,409 2,032 1,395
Net cash provided by operating activities 115,513 113,764 108,740
CASH FLOWS FROM INVESTING ACTIVITIES      
Loans originated (1,059,243) (975,391) (1,000,785)
Proceeds from principal receipts, sales, maturities, and recoveries of loans 701,274 616,193 535,067
Purchases of investments (7,741) (11,573) (20,713)
Proceeds from principal receipts, sales, and maturities of investments 16,381 9,444 14,762
Proceeds from the sale and principal payments on loan collateral in process of foreclosure 13,551 20,631 22,664
Net cash used for investing activities (335,778) (340,696) (449,005)
CASH FLOWS FROM FINANCING ACTIVITIES      
Proceeds from time deposits and funds borrowed 1,322,669 975,175 839,104
Repayments of time deposits and funds borrowed (1,061,945) (689,920) (483,671)
Cash dividend paid on common stock (9,394) (7,703) (7,543)
Distributions to non-controlling interests (6,047) (6,047) (6,047)
Payment of withholding taxes on net settlement of vested stock (944) (768) 0
Treasury stock repurchased (4,606) 0 (20,619)
Proceeds from the exercise of stock options 259 442 155
Net cash provided by financing activities 239,992 271,179 321,379
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 19,727 44,247 (18,886)
Cash and cash equivalents, beginning of period [1] 149,845 105,598 124,484
Cash and cash equivalents, end of period [1] 169,572 149,845 105,598
SUPPLEMENTAL INFORMATION      
Cash paid during the period for interest 82,760 57,509 31,976
Cash paid during the period for income taxes 22,464 25,102 8,848
NON-CASH INVESTING      
Loans transferred to loan collateral in process of foreclosure, net $ 27,542 $ 21,181 $ 12,791
[1] Includes federal funds sold.
v3.25.0.1
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Pay vs Performance Disclosure      
Net Income (Loss) $ 35,878 $ 55,079 $ 43,840
v3.25.0.1
Insider Trading Arrangements
 3 Months Ended
Dec. 31, 2024
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
v3.25.0.1
Insider Trading Policies and Procedures
 12 Months Ended
Dec. 31, 2024
Insider Trading Policies and Procedures [Line Items]  
Insider Trading Policies and Procedures Adopted true
v3.25.0.1
Cybersecurity Risk Management, Strategy and Governance
 12 Months Ended
Dec. 31, 2024
Cybersecurity Risk Management, Strategy, and Governance [Line Items]  
Cybersecurity Risk Management Processes for Assessing, Identifying, and Managing Threats [Text Block]

ITEM 1C. CYBERSECURITY

Risk Management and Strategy

Identifying, assessing, and managing material cybersecurity risks is an important function of our enterprise risk management program. Material cybersecurity risks from cybersecurity threats are managed across Medallion Financial Corp., the Bank, Medallion Capital, and third-party vendors and monitoring such risks and threats involves coordination between us as the parent company and our two main operating subsidiaries. We continue to integrate our cybersecurity programs into our enterprise risk management program, which is led by various senior representatives of the Company and overseen by the Audit Committee of the Company’s Board of Directors.

Medallion Financial Corp., the Bank and Medallion Capital are each responsible for developing cybersecurity programs appropriate for their respective entities, including as may be required by applicable law or regulation. These programs have been guided by the National Institute of Standards and Technology Cybersecurity Framework, other industry-recognized standards, and contractual requirements, as applicable, and seek to protect each entity against cybersecurity risks and provide a foundation to respond promptly to cybersecurity events. Each entity maintains technical and organizational safeguards, including, among other things, employee testing and training, incident response programs and tabletop exercises, evaluations and assessments by third parties, vulnerability scanning, vendor management, cybersecurity insurance, and business continuity mechanisms for the protection of Company assets. Our programs also assess and manage third party risks, and we perform third-party risk management to identify and mitigate risks from third parties such as vendors and other business partners associated with our use of third-party service providers.

Our business strategy, results of operations and financial condition have not been materially affected by risks from cybersecurity threats, and we currently do not expect that risks from cybersecurity threats are reasonably likely to materially affect us, but we cannot provide assurance that we will not be materially affected in the future by such risks or any future material incidents. For more information on our cybersecurity related risks, see Item 1A Risk Factors of this Annual Report on Form 10-K.

Governance

The Audit Committee of our Board of Directors is responsible for overseeing the Company’s enterprise risk management program, including overseeing the adequacy of protection of the Company’s technology, including physical security, patent and trademark program, proprietary information, and information security. The Audit Committee receives quarterly reports from our Information Security Director and third parties on cybersecurity matters. In addition, the Audit Committee receives quarterly reports addressing cybersecurity as part of our enterprise risk management program and to the extent cybersecurity matters are addressed in regular business updates. These reports include, among other things, existing and new cybersecurity risks, status on how management is addressing and/or mitigating those risks, cybersecurity and data privacy incidents, if any, and the status of key information security initiatives. Our Audit Committee members also engage in ad hoc conversations with management on cybersecurity-related news and events, and discuss any updates, as needed, to our cybersecurity risk management and strategy programs.

Medallion Financial Corp. employs a Director of Information Security, and our main operating subsidiaries have similar functions and/or roles conducted by various individuals. Such information security leadership are responsible for developing cybersecurity programs appropriate for their respective entities, including as may be required by applicable law or regulation. These individuals’ expertise in information security and cybersecurity generally has been gained from a combination of education, including relevant degrees and/or certifications, and prior work experience. They are informed by their respective cybersecurity teams and third-party vendors about, and monitor, the prevention, detection, mitigation and remediation efforts relating to any cybersecurity incidents as part of the cybersecurity programs described above.

Information regarding cybersecurity risks may be elevated from information security leadership through a variety of different channels, including discussions between or among subsidiary and parent company management, reports to subsidiary and parent company risk committees and reports to subsidiary and parent company boards and board committees. As noted above, the Audit Committee regularly receives reports on cybersecurity matters from our Information Security Director and third parties as well as part of our enterprise risk management program.
Cybersecurity Risk Management Processes Integrated [Flag] true
Cybersecurity Risk Management Processes Integrated [Text Block]

Identifying, assessing, and managing material cybersecurity risks is an important function of our enterprise risk management program. Material cybersecurity risks from cybersecurity threats are managed across Medallion Financial Corp., the Bank, Medallion Capital, and third-party vendors and monitoring such risks and threats involves coordination between us as the parent company and our two main operating subsidiaries. We continue to integrate our cybersecurity programs into our enterprise risk management program, which is led by various senior representatives of the Company and overseen by the Audit Committee of the Company’s Board of Directors.

Cybersecurity Risk Management Third Party Engaged [Flag] true
Cybersecurity Risk Third Party Oversight and Identification Processes [Flag] true
Cybersecurity Risk Materially Affected or Reasonably Likely to Materially Affect Registrant [Flag] false
Cybersecurity Risk Board of Directors Oversight [Text Block]

The Audit Committee of our Board of Directors is responsible for overseeing the Company’s enterprise risk management program, including overseeing the adequacy of protection of the Company’s technology, including physical security, patent and trademark program, proprietary information, and information security. The Audit Committee receives quarterly reports from our Information Security Director and third parties on cybersecurity matters. In addition, the Audit Committee receives quarterly reports addressing cybersecurity as part of our enterprise risk management program and to the extent cybersecurity matters are addressed in regular business updates. These reports include, among other things, existing and new cybersecurity risks, status on how management is addressing and/or mitigating those risks, cybersecurity and data privacy incidents, if any, and the status of key information security initiatives. Our Audit Committee members also engage in ad hoc conversations with management on cybersecurity-related news and events, and discuss any updates, as needed, to our cybersecurity risk management and strategy programs.

Medallion Financial Corp. employs a Director of Information Security, and our main operating subsidiaries have similar functions and/or roles conducted by various individuals. Such information security leadership are responsible for developing cybersecurity programs appropriate for their respective entities, including as may be required by applicable law or regulation. These individuals’ expertise in information security and cybersecurity generally has been gained from a combination of education, including relevant degrees and/or certifications, and prior work experience. They are informed by their respective cybersecurity teams and third-party vendors about, and monitor, the prevention, detection, mitigation and remediation efforts relating to any cybersecurity incidents as part of the cybersecurity programs described above.

Information regarding cybersecurity risks may be elevated from information security leadership through a variety of different channels, including discussions between or among subsidiary and parent company management, reports to subsidiary and parent company risk committees and reports to subsidiary and parent company boards and board committees. As noted above, the Audit Committee regularly receives reports on cybersecurity matters from our Information Security Director and third parties as well as part of our enterprise risk management program.
Cybersecurity Risk Board Committee or Subcommittee Responsible for Oversight [Text Block] The Audit Committee of our Board of Directors is responsible for overseeing the Company’s enterprise risk management program, including overseeing the adequacy of protection of the Company’s technology, including physical security, patent and trademark program, proprietary information, and information security
Cybersecurity Risk Process for Informing Board Committee or Subcommittee Responsible for Oversight [Text Block] The Audit Committee receives quarterly reports from our Information Security Director and third parties on cybersecurity matters. In addition, the Audit Committee receives quarterly reports addressing cybersecurity as part of our enterprise risk management program and to the extent cybersecurity matters are addressed in regular business updates.
Cybersecurity Risk Role of Management [Text Block]

Medallion Financial Corp. employs a Director of Information Security, and our main operating subsidiaries have similar functions and/or roles conducted by various individuals. Such information security leadership are responsible for developing cybersecurity programs appropriate for their respective entities, including as may be required by applicable law or regulation. These individuals’ expertise in information security and cybersecurity generally has been gained from a combination of education, including relevant degrees and/or certifications, and prior work experience. They are informed by their respective cybersecurity teams and third-party vendors about, and monitor, the prevention, detection, mitigation and remediation efforts relating to any cybersecurity incidents as part of the cybersecurity programs described above.

Information regarding cybersecurity risks may be elevated from information security leadership through a variety of different channels, including discussions between or among subsidiary and parent company management, reports to subsidiary and parent company risk committees and reports to subsidiary and parent company boards and board committees. As noted above, the Audit Committee regularly receives reports on cybersecurity matters from our Information Security Director and third parties as well as part of our enterprise risk management program.
Cybersecurity Risk Management Positions or Committees Responsible [Flag] true
Cybersecurity Risk Management Positions or Committees Responsible [Text Block] Medallion Financial Corp. employs a Director of Information Security, and our main operating subsidiaries have similar functions and/or roles conducted by various individuals. Such information security leadership are responsible for developing cybersecurity programs appropriate for their respective entities, including as may be required by applicable law or regulation
Cybersecurity Risk Management Expertise of Management Responsible [Text Block] These individuals’ expertise in information security and cybersecurity generally has been gained from a combination of education, including relevant degrees and/or certifications, and prior work experience
Cybersecurity Risk Process for Informing Management or Committees Responsible [Text Block] They are informed by their respective cybersecurity teams and third-party vendors about, and monitor, the prevention, detection, mitigation and remediation efforts relating to any cybersecurity incidents as part of the cybersecurity programs described above
Cybersecurity Risk Management Positions or Committees Responsible Report to Board [Flag] true
v3.25.0.1
Organization of Medallion Financial Corp. and its Subsidiaries
 12 Months Ended
Dec. 31, 2024
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, collector cars, 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 Medallion Capital, 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. Medallion Capital, and MFC, as SBICs, are regulated by the Small Business Administration, or SBA. Medallion Capital 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, 2024, 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.
v3.25.0.1
Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2024
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 goodwill and intangible assets and allowance for credit losses, among other effects.

Basis of Presentation

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. Cash also includes $1.3 million of interest-bearing funds deposited in other banks with original terms of 5 to 6 years that cannot be withdrawn but are salable on an active secondary market without penalty.

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 13 and 14 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 $9.2 million and $11.4 million as of December 31, 2024 and 2023, were comprised mainly of nonmarketable stock and stock warrants, are recorded at cost less any impairment plus or minus observable price changes. Substantially all of these equity investments are held by Medallion Capital, our SBIC subsidiary in connection with its mezzanine lending business. As of December 31, 2024, cumulative impairment of $5.5 million had been recorded with respect to these investments. Impairments on equity investments were on equity investments of $2.0 million and $1.1 million was recorded during the years ended December 31, 2024 and 2023. Additionally, the Company recognized $8.9 million and $6.2 million of realized gains during the year ended December 31, 2024 and 2023 on the disposition and exit of equity 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, 2024 and 2023, the fair value of these securities were $1.7 million and are included in other assets on the consolidated balance sheet. For the years ended December 31, 2024 and 2023, the Company realized less than $0.1 million of losses related to equity securities.

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 using the interest method. 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, the Company does not maintain an allowance for credit losses for accrued interest receivable.

For available-for-sale debt securities in an unrealized loss position, the Company first determines if it intends to sell the security, or if it is more likely than not that we will be required to sell it before recovering its amortized cost basis. If either condition is met, the security’s amortized cost basis is written down to its fair value through earnings. If neither condition is met, the Company assess whether the decline in fair value is the result of credit losses or other factors. This assessment includes reviewing changes in the rating of the security by a rating agency, increases in defaults on the underlying collateral, and the extent to which the securities are issued by the federal government or its agencies, including the amount of the guarantee issued by those agencies, among other factors. If a credit loss exists, the Company compares the present value of expected cash flows from the security to its amortized cost basis. If the present value is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded through earnings, but limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment not recorded through an allowance for credit losses is recognized in other comprehensive (loss) income, net of taxes.

Changes in the allowance for credit losses are recorded as a provision for, or reversal of, credit loss expense. Losses are charged against the allowance when management confirms the uncollectibility of an available-for-sale debt security or when either of the criteria regarding intent or requirement to sell is met. There were no investment securities allowance for credit losses as of December 31, 2024 and 2023.

Loans

The Company’s loans, classified as held for investment, are currently reported at amortized cost, which is the principal amount outstanding, inclusive of loan origination costs, which primarily includes deferred costs paid to loan originators, and which are amortized to interest income over the life of the loan. Loans which the Company has classified as held for sale are reported at lower of amortized cost or fair value.

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, 2024 and 2023, net loan origination costs were $46.6 million and $40.0 million. Net amortization to income for the years ended December 31, 2024, 2023, and 2022 were $9.2 million, $8.3 million, and $8.7 million.

Interest income is recorded on the accrual basis. The consumer loan portfolio is typified by a larger number of smaller dollar loans that have similar characteristics. A loan is 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 nonperforming. Loans are considered past due when a borrower fails to make a full payment by the payment due date or maturity date. 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. Commercial loans and taxi medallion 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 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.

Loan collateral in process of foreclosure primarily includes taxi medallion loans that have reached 120 days past due and have been charged down to the net realizable value of the underlying collateral, 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.

Loans Held For Sale

Loans held for sale consist of Recreation loans and Strategic Partnership loans intended to be sold in the secondary market. Loans held for sale are recorded at the lower of amortized cost or fair value. For the years ended December 31, 2024 and 2023, the Company did not recognize any fair value adjustments related to loans held for sale. Changes in fair value are recognized in non-interest income.

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 delinquent loan performance and actual loss rates modified by quantitative adjustments based on macroeconomic factors over a twelve-month reasonable and supportable forecast period followed by a six month reversion 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 individually evaluates each loan and establishes a reserve based on fair value of collateral less cost to sell. 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 has elected to exclude accrued interest from its measurement of the allowance for credit losses.

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 presented 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

Goodwill is evaluated for impairment on an annual basis at December 31 of each year or whenever events or changes in circumstances indicate the carrying value may not be recoverable. Other intangible assets with finite useful lives are amortized either on an accelerated or straight-line basis over their estimated useful lives. Other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

As of December 31, 2024 and 2023, the Company had goodwill of $150.8 million, all of which related to the recreation and home improvement lending segments. As of December 31, 2024 and 2023, the Company had intangible assets of $19.1 million and $20.6 million. The Company recognized $1.4 million of amortization expense on the intangible assets for each of the years ended December 31, 2024, 2023 and 2022.

Management engaged an independent third-party expert to perform a quantitative assessment of goodwill for impairment at December 31, 2024. The third-party expert’s assessment determined that it was more likely than not that the fair value of both the recreation lending and home improvement lending segments individually were not less than the carrying value of each of these segments. Based upon inputs and analysis deemed appropriate by the third-party expert, the third-party expert concluded that a fair value premium existed in excess of carrying value with respect to the recreation and home improvement lending segments.

In evaluating both segments, a combination of an income approach (weighted 50%), an earnings based market approach (weighted 25%), and a book value based market approach (weighted 25%) were employed by the third-party expert. For the income approach, a discounted cash flow analysis was used. Key inputs and assumptions used in the discounted cash flow analysis included future projected cash flows, risk-adjusted discount rates, capital requirements, and future economic and market conditions. For both segments a discount rate was estimated using the risk-free interest rate adjusted for specific risk and size premiums, resulting in a discount rate of 17.5% for the recreation lending segment and 16.5% for the home improvement lending segment. For both segments, growth rates consistent with our plan were employed by the third-party expert for a five year period, and a long-term growth rate of 3% was utilized in determining the terminal fair value.

Determining the fair value of a lending segment or an indefinite-lived intangible asset involves the use of significant estimates and assumptions. The Company believes that the fair value estimates determined by the third-party expert were based on reasonable assumptions and appropriate for the purpose of assessing goodwill for impairment. However, as these estimates and assumptions are unpredictable and inherently uncertain, actual future results may differ from these estimates. In addition, the Company also makes certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of the Company’s reporting units. To the extent that the Company was unable to grow either the recreation lending or home improvement lending segment at the levels it forecasted, if the Company were unable to issue new loans at rates and terms consistent with current practices, and if the Company's cost of borrowings were to increase significantly from current levels without the ability to pass along those rate increases to new borrowers, the fair value of these segments could deteriorate to a level which would require an impairment of goodwill.

The following table details the intangible assets as of the dates presented:

 

 

December 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

Brand-related intellectual property

 

$

14,575

 

 

$

15,675

 

Home improvement contractor relationships

 

 

4,571

 

 

 

4,916

 

Total intangible assets

 

$

19,146

 

 

$

20,591

 

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 $0.7 million, $0.4 million, and $0.4 million for the years ended December 31, 2024, 2023, and 2022.

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, included as interest expense in the Consolidated Statements of Operations, was $4.0 million, $3.1 million, and $2.6 million for the years ended December 31, 2024, 2023, and 2022. 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 related to deposits and borrowing facilities were $8.2 million and $8.5 million as of December 31, 2024 and 2023, and there were no capitalized transaction costs as of December 31, 2024 and 2023.

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 the enacted tax rates expected to apply in the year 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 presents the calculation of basic and diluted EPS.

 

Year Ended December 31,

 

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

 

2024

 

 

2023

 

 

2022

 

Net income attributable to common stockholders

 

$

35,878

 

 

$

55,079

 

 

$

43,840

 

Weighted average common shares outstanding applicable to basic EPS

 

 

22,546,051

 

 

 

22,510,435

 

 

 

23,583,049

 

Effect of restricted stock grants

 

 

516,694

 

 

 

461,098

 

 

 

276,469

 

Effect of dilutive stock options

 

 

214,882

 

 

 

142,216

 

 

 

67,825

 

Effect of performance stock unit grants

 

 

327,866

 

 

 

134,574

 

 

 

—

 

Adjusted weighted average common shares outstanding applicable to diluted EPS

 

$

23,605,493

 

 

$

23,248,323

 

 

$

23,927,342

 

Basic earnings per share

 

$

1.59

 

 

$

2.45

 

 

$

1.86

 

Diluted earnings per share

 

 

1.52

 

 

 

2.37

 

 

 

1.83

 

Potentially dilutive common shares excluded from the above calculations aggregated 59,902 shares, 92,310 shares, and 347,963 shares as of December 31, 2024, 2023, and 2022.

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.

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 (presented 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 affect the Bank's ability to pay dividends to the Company, and that an adequate allowance for credit losses be maintained. As of December 31, 2024 and 2023, the Bank’s Tier 1 leverage ratio was considered well-capitalized. 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)

 

Adequately Capitalized

 

 

Well-Capitalized

 

 

2024

 

 

2023

 

Common equity tier 1 capital

 

 

 

 

 

 

 

$

322,229

 

 

$

293,774

 

Tier 1 capital

 

 

 

 

 

 

 

 

391,016

 

 

 

362,561

 

Total capital

 

 

 

 

 

 

 

 

422,139

 

 

 

390,153

 

Average assets

 

 

 

 

 

 

 

 

2,493,857

 

 

 

2,232,816

 

Risk-weighted assets

 

 

 

 

 

 

 

 

2,429,349

 

 

 

2,155,641

 

Leverage ratio (1)

 

 

4.0

%

 

 

5.0

%

 

 

15.7

%

 

 

16.2

%

Common equity tier 1 capital ratio (2)

 

 

4.5

 

 

 

6.5

 

 

 

13.3

 

 

 

13.6

 

Tier 1 capital ratio (3)

 

 

6.0

 

 

 

8.0

 

 

 

16.1

 

 

 

16.8

 

Total capital ratio (3)

 

 

8.0

 

 

 

10.0

 

 

 

17.4

 

 

 

18.1

 
(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, 2024 and 2023 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, 2024 and 2023.

Recently Adopted Accounting Standards

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 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. Under ASU 2023-07, the Company is required to report significant segment income and expenses, by reportable segments, used by the Company's chief operating decision maker. The Company adopted ASU 2023-07 effective December 31, 2024.

Recently Issued Accounting Standards

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 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 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.
v3.25.0.1
Investment Securities
 12 Months Ended
Dec. 31, 2024
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, 2024 and 2023.

December 31, 2024
(Dollars in thousands)

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

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

 

$

41,475

 

 

$

28

 

 

$

(4,802

)

 

$

36,701

 

State and municipalities

 

 

17,373

 

 

 

81

 

 

 

(1,516

)

 

 

15,938

 

Agency bonds

 

 

2,179

 

 

 

2

 

 

 

(15

)

 

 

2,166

 

Total

 

$

61,027

 

 

$

111

 

 

$

(6,333

)

 

$

54,805

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

The amortized cost and estimated fair market value of investment securities as of December 31, 2024 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, 2024
(Dollars in thousands)

 

Amortized
Cost

 

 

Fair
Value

 

Due in one year or less

 

$

2,947

 

 

$

2,930

 

Due after one year through five years

 

 

4,674

 

 

 

4,354

 

Due after five years through ten years

 

 

6,322

 

 

 

5,575

 

Due after ten years

 

 

47,084

 

 

 

41,946

 

Total

 

$

61,027

 

 

$

54,805

 

The following tables present information pertaining to securities with gross unrealized losses as of December 31, 2024 and 2023, aggregated by investment category and length of time that individual securities have been in a continuous loss position.

 

Less than Twelve Months

 

 

Twelve Months and Over

 

December 31, 2024
(Dollars in thousands)

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

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

 

$

(106

)

 

$

5,423

 

 

$

(4,696

)

 

$

29,619

 

State and municipalities

 

 

(269

)

 

 

4,884

 

 

 

(1,247

)

 

 

9,939

 

Agency bonds

 

 

—

 

 

 

—

 

 

 

(15

)

 

 

166

 

Total

 

$

(375

)

 

$

10,307

 

 

$

(5,958

)

 

$

39,724

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

As of December 31, 2024 and 2023, the Company had 58 and 60 securities with unrealized losses that have not been recognized in income. The investments are mortgage-backed securities and similar instruments with lower risk characteristics. The Company regularly reviews investment securities for impairment resulting from credit loss using both qualitative and quantitative criteria, as necessary based on the composition of the portfolio at period end. Based on the Company's assessment, no material impairments for credit losses were recognized during the period. The Company does not intend to sell its investment securities that are in an unrealized loss position and believes that it is unlikely that it will be required to sell these securities before recovery of the amortized cost. As of December 31, 2024 and 2023, the Company did not hold investments in any single issuer with an aggregate book value that exceeded 10% of the Company's equity, other than U.S. Government agency residential mortgage-backed securities issued by the Federal National Mortgage Association.

v3.25.0.1
Loans and Allowance for Credit Losses
 12 Months Ended
Dec. 31, 2024
Text Block [Abstract]  
Loans and Allowance for Credit Losses

(4) LOANS AND ALLOWANCE FOR CREDIT LOSSES

The following table presents the major classification of loans, inclusive of capitalized loan origination costs, as of December 31, 2024 and 2023.

 

As of December 31,

 

 

 

2024

 

 

2023

 

(Dollars in thousands)

 

Amount

 

 

As a
Percent of
Total Loans

 

 

Amount

 

 

As a
Percent of
Total Loans

 

Loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

Recreation

 

$

1,422,403

 

 

 

57

%

 

$

1,336,226

 

 

 

60

%

Home improvement

 

 

827,211

 

 

 

33

 

 

 

760,617

 

 

 

34

 

Commercial

 

 

111,273

 

 

 

4

 

 

 

114,827

 

 

 

5

 

Taxi medallion

 

 

1,909

 

 

*

 

 

 

3,663

 

 

*

 

Strategic partnership

 

 

—

 

 

 

—

 

 

 

553

 

 

*

 

Total loans held for investment

 

 

2,362,796

 

 

 

95

 

 

 

2,215,886

 

 

 

100

 

Loans held for sale, at lower of amortized cost or fair value:

 

 

 

 

 

 

 

 

 

 

 

 

Recreation

 

 

120,840

 

 

 

5

 

 

 

—

 

 

 

—

 

Strategic partnership

 

 

7,386

 

 

*

 

 

 

—

 

 

 

—

 

Total loans held for sale, at lower of amortized cost or fair value

 

 

128,226

 

 

 

5

 

 

 

—

 

 

 

—

 

Total loans

 

$

2,491,022

 

 

 

100

%

 

$

2,215,886

 

 

 

100

%

(*) Less than 1%.

The following tables present the activity of the gross loans for the years ended December 31, 2024 and 2023.

December 31, 2024
(Dollars in thousands)

 

Recreation (1)

 

 

Home
Improvement

 

 

Commercial

 

 

Taxi
Medallion

 

 

Strategic
Partnership

 

 

Total

 

Gross loans – December 31, 2023

 

$

1,336,226

 

 

$

760,617

 

 

$

114,827

 

 

$

3,663

 

 

$

553

 

 

$

2,215,886

 

Loan originations

 

 

526,634

 

 

 

298,642

 

 

 

14,300

 

 

 

250

 

 

 

203,627

 

 

 

1,043,453

 

Principal receipts, sales, and maturities

 

 

(232,414

)

 

 

(213,600

)

 

 

(17,949

)

 

 

(886

)

 

 

(196,794

)

 

 

(661,643

)

Charge-offs

 

 

(69,349

)

 

 

(18,035

)

 

 

(71

)

 

 

(124

)

 

 

—

 

 

 

(87,579

)

Transfer to loan collateral in process of foreclosure, net

 

 

(24,921

)

 

 

—

 

 

 

(1,627

)

 

 

(994

)

 

 

—

 

 

 

(27,542

)

Amortization of origination fees and costs, net

 

 

(13,502

)

 

 

4,288

 

 

 

41

 

 

 

—

 

 

 

—

 

 

 

(9,173

)

Origination fees and costs, net

 

 

20,569

 

 

 

(4,701

)

 

 

(78

)

 

 

—

 

 

 

—

 

 

 

15,790

 

Paid-in-kind interest

 

 

—

 

 

 

—

 

 

 

1,830

 

 

 

—

 

 

 

—

 

 

 

1,830

 

Gross loans – December 31, 2024

 

$

1,543,243

 

 

$

827,211

 

 

$

111,273

 

 

$

1,909

 

 

$

7,386

 

 

$

2,491,022

 
(1)
Includes loans held for sale and loans held for investment.

December 31, 2023
(Dollars in thousands)

 

Recreation

 

 

Home
Improvement

 

 

Commercial

 

 

Taxi
Medallion

 

 

Strategic
Partnership

 

 

Total

 

Gross loans – December 31, 2022

 

$

1,183,512

 

 

$

626,399

 

 

$

92,899

 

 

$

13,571

 

 

$

572

 

 

$

1,916,953

 

Loan originations

 

 

447,039

 

 

 

357,394

 

 

 

34,850

 

 

 

2,426

 

 

 

118,338

 

 

 

960,047

 

Principal receipts, sales, and maturities

 

 

(231,158

)

 

 

(209,894

)

 

 

(13,389

)

 

 

(6,859

)

 

 

(118,357

)

 

 

(579,657

)

Charge-offs

 

 

(50,512

)

 

 

(12,308

)

 

 

(1,019

)

 

 

(3,829

)

 

 

—

 

 

 

(67,668

)

Transfer to loan collateral in process of foreclosure, net

 

 

(18,875

)

 

 

—

 

 

 

—

 

 

 

(2,306

)

 

 

—

 

 

 

(21,181

)

Amortization of origination fees and costs, net

 

 

(12,270

)

 

 

2,668

 

 

 

14

 

 

 

—

 

 

 

—

 

 

 

(9,588

)

Origination fees and costs, net

 

 

18,490

 

 

 

(3,642

)

 

 

(164

)

 

 

660

 

 

 

—

 

 

 

15,344

 

Paid-in-kind interest

 

 

—

 

 

 

—

 

 

 

1,636

 

 

 

—

 

 

 

—

 

 

 

1,636

 

Gross loans – December 31, 2023

 

$

1,336,226

 

 

$

760,617

 

 

$

114,827

 

 

$

3,663

 

 

$

553

 

 

$

2,215,886

 

The following table presents the activity in the allowance for credit losses for the years ended December 31, 2024 and 2023.

(Dollars in thousands)

 

Recreation

 

 

Home
Improvement

 

 

Commercial

 

 

Taxi
Medallion (1)

 

 

Total

 

Balance at December 31, 2022

 

$

41,966

 

 

$

11,340

 

 

$

1,049

 

 

$

9,490

 

 

$

63,845

 

Charge-offs

 

 

(50,512

)

 

 

(12,308

)

 

 

(1,019

)

 

 

(3,829

)

 

 

(67,668

)

Recoveries

 

 

11,449

 

 

 

2,886

 

 

 

10

 

 

 

22,191

 

 

 

36,536

 

Provision (benefit) for credit losses

 

 

44,592

 

 

 

17,583

 

 

 

1,988

 

 

 

(26,353

)

 

 

37,810

 

CECL transition amount upon ASU 2016-13 adoption

 

 

10,037

 

 

 

1,518

 

 

 

2,120

 

 

 

37

 

 

 

13,712

 

Balance at December 31, 2023

 

 

57,532

 

 

 

21,019

 

 

 

4,148

 

 

 

1,536

 

 

 

84,235

 

Charge-offs

 

 

(69,349

)

 

 

(18,035

)

 

 

(71

)

 

 

(124

)

 

 

(87,579

)

Recoveries

 

 

14,924

 

 

 

4,094

 

 

 

29

 

 

 

5,163

 

 

 

24,210

 

Provision (benefit) for credit losses

 

 

67,995

 

 

 

13,458

 

 

 

1,084

 

 

 

(6,035

)

 

 

76,502

 

Balance at December 31, 2024

 

$

71,102

 

 

$

20,536

 

 

$

5,190

 

 

$

540

 

 

$

97,368

 
(1)
As of December 31, 2024, cumulative net charge-offs of loans and loan collateral in process of foreclosure in the taxi medallion portfolio were $165.3 million, including $98.6 million related to loans secured by New York taxi medallions, some of which may represent collection opportunities for the Company.

The following tables present the gross charge-offs for the years ended December 31, 2024 and 2023, by the year of origination:

December 31, 2024
(Dollars in thousands)

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

Prior

 

 

Total

 

Recreation

 

$

3,203

 

 

$

18,540

 

 

$

22,883

 

 

$

10,789

 

 

$

4,222

 

 

$

9,712

 

 

$

69,349

 

Home improvement

 

 

841

 

 

 

5,766

 

 

 

6,412

 

 

 

3,131

 

 

 

815

 

 

 

1,070

 

 

 

18,035

 

Commercial

 

 

—

 

 

 

71

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

71

 

Taxi medallion

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

124

 

 

 

124

 

Total

 

$

4,044

 

 

$

24,377

 

 

$

29,295

 

 

$

13,920

 

 

$

5,037

 

 

$

10,906

 

 

$

87,579

 

 

December 31, 2023
(Dollars in thousands)

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Total

 

Recreation

 

$

3,136

 

 

$

18,836

 

 

$

10,857

 

 

$

5,115

 

 

$

5,001

 

 

$

7,567

 

 

$

50,512

 

Home improvement

 

 

2,196

 

 

 

5,686

 

 

 

2,662

 

 

 

702

 

 

 

435

 

 

 

627

 

 

 

12,308

 

Commercial

 

 

—

 

 

 

—

 

 

 

119

 

 

 

—

 

 

 

900

 

 

 

—

 

 

 

1,019

 

Taxi medallion

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,829

 

 

 

3,829

 

Total

 

$

5,332

 

 

$

24,522

 

 

$

13,638

 

 

$

5,817

 

 

$

6,336

 

 

$

12,023

 

 

$

67,668

 

 

The following tables present the allowance for credit losses by type as of December 31, 2024 and 2023.

December 31, 2024
(Dollars in thousands)

 

Amount

 

 

Percentage
of Allowance

 

 

Allowance as
a Percent of
Loan Category (1)

 

 

Allowance as
a Percent of
Nonaccrual

 

Recreation

 

$

71,102

 

 

 

73

%

 

 

5.00

%

 

 

440.07

%

Home improvement

 

 

20,536

 

 

 

21

 

 

 

2.48

 

 

 

127.11

 

Commercial

 

 

5,190

 

 

 

5

 

 

 

4.66

 

 

 

32.12

 

Taxi medallion

 

 

540

 

 

 

1

 

 

 

28.29

 

 

 

3.34

 

Total

 

$

97,368

 

 

 

100

%

 

 

 

 

 

 
(1)
Does not include loans held for sale which are carried at the lower of amortized cost or fair value for which an allowance for credit loss is not established.

 

December 31, 2023
(Dollars in thousands)

 

Amount

 

 

Percentage
of Allowance

 

 

Allowance as
a Percent of
Loan Category

 

 

Allowance as
a Percent of
Nonaccrual

 

Recreation

 

$

57,532

 

 

 

68

%

 

 

4.31

%

 

 

221.50

%

Home improvement

 

 

21,019

 

 

 

25

 

 

 

2.76

 

 

 

80.92

 

Commercial

 

 

4,148

 

 

 

5

 

 

 

3.61

 

 

 

15.97

 

Taxi medallion

 

 

1,536

 

 

 

2

 

 

 

41.93

 

 

 

5.91

 

Total

 

$

84,235

 

 

 

100

%

 

 

 

 

 

 

The following tables present the performance status of loans as of December 31, 2024 and 2023.

December 31, 2024
(Dollars in thousands)

 

Performing

 

 

Nonperforming

 

 

Total

 

 

Percentage of
Nonperforming
to Total

 

Recreation

 

$

1,532,448

 

 

$

10,795

 

 

$

1,543,243

 

 

 

0.70

%

Home improvement

 

 

825,825

 

 

 

1,386

 

 

 

827,211

 

 

 

0.17

 

Commercial

 

 

92,010

 

 

 

19,263

 

 

 

111,273

 

 

 

17.31

 

Taxi medallion

 

 

—

 

 

 

1,909

 

 

 

1,909

 

 

 

100.00

 

Strategic partnership

 

 

7,386

 

 

 

—

 

 

 

7,386

 

 

 

—

 

Total

 

$

2,457,669

 

 

$

33,353

 

 

$

2,491,022

 

 

 

1.34

%

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2023
(Dollars in thousands)

 

Performing

 

 

Nonperforming

 

 

Total

 

 

Percentage of
Nonperforming
to Total

 

Recreation

 

$

1,326,567

 

 

$

9,659

 

 

$

1,336,226

 

 

 

0.72

%

Home improvement

 

 

759,128

 

 

 

1,489

 

 

 

760,617

 

 

 

0.20

 

Commercial

 

 

103,664

 

 

 

11,163

 

 

 

114,827

 

 

 

9.72

 

Taxi medallion

 

 

—

 

 

 

3,663

 

 

 

3,663

 

 

 

100.00

 

Strategic partnership

 

 

553

 

 

 

—

 

 

 

553

 

 

 

—

 

Total

 

$

2,189,912

 

 

$

25,974

 

 

$

2,215,886

 

 

 

1.17

%

For those loans aged under 90 days past due, there is a possibility that their delinquency status will continue to deteriorate and they will subsequently be placed on nonaccrual status and be reserved for, and as such, deemed nonperforming.

The following tables present the aging of all loans as of December 31, 2024 and 2023.

December 31, 2024

 

Days Past Due

 

 

 

 

 

 

 

 

 

 

 

Recorded
Investment
90 Days and

 

(Dollars in thousands)

 

30-59

 

 

60-89

 

 

90 +

 

 

Total

 

 

Current

 

 

Total (1)

 

 

Accruing

 

Recreation

 

$

54,169

 

 

$

20,376

 

 

$

10,018

 

 

$

84,563

 

 

$

1,407,977

 

 

$

1,492,540

 

 

$

—

 

Home improvement

 

 

5,407

 

 

 

2,432

 

 

 

1,386

 

 

 

9,225

 

 

 

821,852

 

 

 

831,077

 

 

 

—

 

Commercial

 

 

—

 

 

 

—

 

 

 

16,337

 

 

 

16,337

 

 

 

95,127

 

 

 

111,464

 

 

 

—

 

Taxi medallion

 

 

49

 

 

 

69

 

 

 

—

 

 

 

118

 

 

 

1,791

 

 

 

1,909

 

 

 

—

 

Strategic partnership

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

7,386

 

 

 

7,386

 

 

 

—

 

Total

 

$

59,625

 

 

$

22,877

 

 

$

27,741

 

 

$

110,243

 

 

$

2,334,133

 

 

$

2,444,376

 

 

$

—

 
(1)
Excludes $46.6 million of capitalized loan origination costs.

December 31, 2023

 

Days Past Due

 

 

 

 

 

 

 

 

 

 

 

Recorded
Investment
90 Days and

 

(Dollars in thousands)

 

30-59

 

 

60-89

 

 

90 +

 

 

Total

 

 

Current

 

 

Total (1)

 

 

Accruing

 

Recreation

 

$

40,282

 

 

$

15,039

 

 

$

9,095

 

 

$

64,416

 

 

$

1,228,175

 

 

$

1,292,591

 

 

$

—

 

Home improvement

 

 

3,936

 

 

 

2,562

 

 

 

1,502

 

 

 

8,000

 

 

 

756,069

 

 

 

764,069

 

 

 

—

 

Commercial

 

 

—

 

 

 

2,156

 

 

 

6,240

 

 

 

8,396

 

 

 

107,140

 

 

 

115,536

 

 

 

—

 

Taxi medallion

 

 

201

 

 

 

—

 

 

 

—

 

 

 

201

 

 

 

3,462

 

 

 

3,663

 

 

 

—

 

Strategic partnership

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

553

 

 

 

553

 

 

 

—

 

Total

 

$

44,419

 

 

$

19,757

 

 

$

16,837

 

 

$

81,013

 

 

$

2,095,399

 

 

$

2,176,412

 

 

$

—

 
(1)
Excludes $40.0 million of capitalized loan origination costs.

The following tables present the activity of loan collateral in process of foreclosure for the years ended December 31, 2024 and 2023.

Year Ended December 31, 2024
(Dollars in thousands)

 

Recreation

 

 

Commercial

 

 

Taxi
Medallion

 

 

Total

 

Loan collateral in process of foreclosure – December 31, 2023

 

$

1,779

 

 

$

—

 

 

$

9,993

 

 

$

11,772

 

Transfer from loans, net

 

 

24,921

 

 

 

1,627

 

 

 

994

 

 

 

27,542

 

Sales

 

 

—

 

 

 

—

 

 

 

(39

)

 

 

(39

)

Cash payments received

 

 

(9,287

)

 

 

—

 

 

 

(4,225

)

 

 

(13,512

)

Collateral valuation adjustments (1)

 

 

(15,421

)

 

 

—

 

 

 

(410

)

 

 

(15,831

)

Loan collateral in process of foreclosure – December 31, 2024

 

$

1,992

 

 

$

1,627

 

 

$

6,313

 

 

$

9,932

 
(1)
Collateral valuation adjustments for recreation loans are generally the result of the liquidation of collateral through a repossession process. Due to the short-term nature of the liquidation process, collateral valuation adjustments on recreationl loans are recorded as charge-offs to the allowance for credit losses on loans as this is an adjustment to the initial estimate on the fair value, less estimated costs to sell that was initially estimated in the preliminary charge off and amount transferred to collateral in process of foreclosure.

Year Ended December 31, 2023
(Dollars in thousands)

 

Recreation

 

 

Commercial

 

 

Taxi
Medallion

 

 

Total

 

Loan collateral in process of foreclosure – December 31, 2022

 

$

1,376

 

 

$

—

 

 

$

20,443

 

 

$

21,819

 

Transfer from loans, net

 

 

18,875

 

 

 

—

 

 

 

2,306

 

 

 

21,181

 

Sales

 

 

(7,890

)

 

 

—

 

 

 

(700

)

 

 

(8,590

)

Cash payments received

 

 

(730

)

 

 

—

 

 

 

(11,311

)

 

 

(12,041

)

Collateral valuation adjustments (1)

 

 

(9,852

)

 

 

—

 

 

 

(745

)

 

 

(10,597

)

Loan collateral in process of foreclosure – December 31, 2023

 

$

1,779

 

 

$

—

 

 

$

9,993

 

 

$

11,772

 
(1)
Collateral valuation adjustments for recreation loans are generally the result of the liquidation of collateral through a repossession process. Due to the short-term nature of the liquidation process, collateral valuation adjustments on recreation loans are recorded as charge-offs to the allowance for credit losses on loans as this is an adjustment to the initial estimate on the fair value, less estimated costs to sell that was initially estimated in the preliminary charge off and amount transferred to collateral in process of foreclosure.

As of December 31, 2024 taxi medallion loans in the process of foreclosure included 311 taxi medallions in the New York market, 187 taxi medallions in the Chicago market, 24 taxi medallions in the Newark market, and 31 taxi medallions in various other markets.
v3.25.0.1
Funds Borrowed
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Funds Borrowed

(5) FUNDS BORROWED

The following table presents outstanding balances of funds borrowed.

 

Payments Due for the Year Ending December 31,

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

2025

 

 

2026

 

 

2027

 

 

2028

 

 

2029

 

 

Thereafter

 

 

December 31, 2024 (1)

 

 

December 31, 2023 (1)

 

 

Interest
Rate (2)

 

Deposits (3)

 

$

891,078

 

 

$

443,147

 

 

$

441,555

 

 

$

146,847

 

 

$

169,036

 

 

$

—

 

 

$

2,091,663

 

 

$

1,869,439

 

 

 

3.71

%

Privately placed notes

 

 

—

 

 

 

31,250

 

 

 

53,750

 

 

 

39,000

 

 

 

—

 

 

 

22,500

 

 

 

146,500

 

 

 

139,500

 

 

 

8.12

 

SBA debentures and borrowings

 

 

14,000

 

 

 

14,000

 

 

 

2,000

 

 

 

1,250

 

 

 

1,250

 

 

 

37,750

 

 

 

70,250

 

 

 

75,250

 

 

 

3.53

 

Trust preferred securities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

33,000

 

 

 

33,000

 

 

 

33,000

 

 

 

6.83

 

Federal reserve and other borrowings

 

 

35,000

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

35,000

 

 

 

—

 

 

 

4.50

 

Total

 

$

940,078

 

 

$

488,397

 

 

$

497,305

 

 

$

187,097

 

 

$

170,286

 

 

$

93,250

 

 

$

2,376,413

 

 

$

2,117,189

 

 

 

4.03

%
(1)
Excludes deferred financing costs of $8.2 million and $8.5 million as of December 31, 2024 and 2023.
(2)
Weighted average contractual rate as of December 31, 2024.
(3)
Balance excludes $3.0 million and $1.5 million of strategic partner reserve deposits as of December 31, 2024 and 2023.

(A) DEPOSITS

Most deposits are raised through the use of investment brokerage firms that package time deposits in denominations of less than $250,000 qualifying for FDIC insurance into larger pools that are sold to the Bank. The rates paid on the deposits are highly competitive with market rates paid by other financial institutions. Additionally, a brokerage fee is paid, depending on the maturity of the deposits, the annual expense of which averages less than 0.15%. Interest on the deposits is accrued daily and paid monthly, quarterly, semiannually, or at maturity. Additionally, the Bank raises deposits through listing services, and, as of December 31, 2024 and 2023, the Bank had $10.4 million and $11.8 million in listing service deposit balances from other financial institutions. In April 2023, the Bank began to originate retail savings deposits through a third-party service provider and, as of December 31, 2024 and 2023, the Bank had $6.0 million and $14.9 million in retail savings deposit balances. The following table presents the maturity of the deposit pools, which includes strategic partner reserve deposits, as of December 31, 2024.

(Dollars in thousands)

 

December 31, 2024

 

Three months or less

 

$

302,162

 

Over three months through six months

 

 

277,218

 

Over six months through one year

 

 

311,698

 

Over one year

 

 

1,200,585

 

Deposits

 

 

2,091,663

 

 Strategic partner collateral deposits

 

 

3,000

 

Total deposits

 

$

2,094,663

 

(B) FEDERAL RESERVE DISCOUNT WINDOW AND OTHER BORROWINGS

In March 2023, the Bank established a discount window line of credit at the Federal Reserve. As of December 31, 2024, the Bank had $225.2 million in home improvement loans pledged as collateral to the Federal Reserve. The current advance rate on the pledged securities is approximately 45% of book value, for a total of approximately $101.4 million in secured borrowing capacity, of which $35.0 million was utilized as of December 31, 2024.

The Bank has borrowing arrangements with several commercial banks. These agreements are accommodations that can be terminated at any time, for any reason and allow the Bank to borrow up to $75.0 million. As of December 31, 2024, there were no outstanding amounts with respect to these arrangements.

(C) PRIVATELY PLACED NOTES

The Company has entered into various private placements with certain institutional investors over time. The following table presents the private placement notes outstanding for the years ended December 31, 2024 and 2023.

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

December 31,

 

 

Date of Notes

 

Maturity

 

Interest Rate

 

 

Interest Payable

 

2024

 

 

2023

 

 

March 2019

 

March 2024

 

 

8.250

%

 

Semi-annually

 

$

—

 

 

$

3,000

 

 

December 2020

 

December 2027

 

 

7.500

%

 

Semi-annually

 

 

53,750

 

 

 

53,750

 

 

February 2021

 

February 2026

 

 

7.250

%

 

Semi-annually

 

 

31,250

 

 

 

31,250

 

 

September 2023

 

September 2028

 

 

9.250

%

 

Semi-annually

 

 

39,000

 

 

 

39,000

 

 

December 2023

 

December 2033

 

 

9.000

%

 

Semi-annually

 

 

—

 

 

 

12,500

 

 

June 2024

 

June 2039

 

 

8.875

%

 

Semi-annually

 

 

17,500

 

 

 

—

 

 

August 2024

 

August 2039

 

 

8.625

%

 

Semi-annually

 

 

5,000

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

$

146,500

 

 

$

139,500

 

 

(D) SBA DEBENTURES AND BORROWINGS

Over the years, the SBA has approved commitments for Medallion Capital and FSVC, typically for a four and a half year term and a 1% fee. On July 10, 2023, Medallion Capital accepted a commitment from the SBA for $20.0 million in debenture financing. Medallion Capital can draw funds under the commitment, in whole or in part, until September 30, 2027. In connection with the commitment, Medallion Capital paid the SBA a leverage fee of $0.2 million, with an additional $0.4 million fee to be paid pro-rata as Medallion Capital draws under the commitment. As of December 31, 2024, $9.8 million of the commitment had been drawn and $10.2 million was drawable.

On February 28, 2024, Medallion Capital accepted a commitment from the SBA for $18.5 million in debenture financing with a ten-year term. Medallion Capital can draw funds under the commitment, in whole or in part, until September 30, 2028. In connection with the commitment, Medallion Capital paid the SBA a leverage fee of $0.2 million, with the remaining $0.4 million of the fee to be paid pro rata as Medallion Capital draws under the commitment. As of December 31, 2024, none of the commitment had been drawn, $0.3 million was drawable, with the balance of $18.2 million drawable upon the infusion of $9.1 million of capital from either a capital infusion into Medallion Capital from the Company or the capitalization of retained earnings of which Medallion Capital had $14.4 million as of December 31, 2024.

The following table presents the SBA debentures and borrowings for the years ended December 31, 2024 and 2023.

(Dollars in thousands)

 

 

 

 

 

 

 

 

December 31,

 

Date of Notes

 

Maturity

 

Interest Rate

 

 

Interest Payable

 

2024

 

 

2023

 

March 2014

 

March 2024

 

 

3.95

%

 

Semi-annually

 

$

—

 

 

$

2,500

 

September 2014

 

September 2024

 

 

3.78

%

 

Semi-annually

 

 

—

 

 

 

2,500

 

March 2015

 

March 2025

 

 

2.87

%

 

Semi-annually

 

 

10,000

 

 

 

10,000

 

September 2015

 

September 2025

 

 

3.57

%

 

Semi-annually

 

 

4,000

 

 

 

4,000

 

March 2016

 

March 2026

 

 

3.25

%

 

Semi-annually

 

 

1,500

 

 

 

1,500

 

March 2016

 

March 2026

 

 

3.18

%

 

Semi-annually

 

 

10,000

 

 

 

10,000

 

May 2016

 

September 2026

 

 

2.72

%

 

Semi-annually

 

 

2,500

 

 

 

2,500

 

March 2017

 

March 2027

 

 

3.52

%

 

Semi-annually

 

 

2,000

 

 

 

2,000

 

September 2018

 

September 2028

 

 

4.22

%

 

Semi-annually

 

 

1,250

 

 

 

1,250

 

March 2019

 

March 2029

 

 

3.79

%

 

Semi-annually

 

 

1,250

 

 

 

1,250

 

September 2020

 

September 2030

 

 

1.71

%

 

Semi-annually

 

 

3,000

 

 

 

3,000

 

June 2021

 

September 2031

 

 

1.58

%

 

Semi-annually

 

 

8,500

 

 

 

8,500

 

October 2021

 

March 2032

 

 

3.21

%

 

Semi-annually

 

 

7,000

 

 

 

7,000

 

October 2022

 

March 2033

 

 

5.44

%

 

Semi-annually

 

 

4,750

 

 

 

4,750

 

April 2023

 

September 2033

 

 

5.96

%

 

Semi-annually

 

 

4,750

 

 

 

4,750

 

September 2023

 

March 2034

 

 

5.08

%

 

Semi-annually

 

 

4,750

 

 

 

4,750

 

November 2023

 

March 2034

 

 

5.08

%

 

Semi-annually

 

 

5,000

 

 

 

5,000

 

 

 

 

 

 

 

 

 

 

$

70,250

 

 

$

75,250

 

(E) TRUST PREFERRED SECURITIES

In June 2007, the Company issued and sold $36.1 million aggregate principal amount of unsecured junior subordinated notes to Fin Trust which, in turn, sold $35.0 million of trust preferred securities to Merrill Lynch International and issued 1,083 shares of common stock to the Company. Interest is calculated using the Secured Overnight Financing Rate (SOFR) adjusted by a relevant spread adjustment of approximately 26 basis points, plus 2.13%. The notes mature in September 2037 and are prepayable at par. Interest is payable quarterly in arrears. The terms of the trust preferred securities and the notes are substantially identical. In December 2007, $2.0 million of the trust preferred securities were repurchased from a third-party investor. As of December 31, 2024, $33.0 million was outstanding on the trust preferred securities.

(F) OTHER BORROWINGS

In January 2024, Medallion Capital entered into a $7.5 million revolving credit facility with a regional bank. The facility allowed Medallion Capital to finance, on a short-term basis, investments for which it anticipates receiving financing from the SBA. The facility bore interest at a rate of 2.75% plus one month SOFR, had an annual facility fee of 0.1%, matured on January 1, 2025, and required that Medallion Capital have total commitments available from the SBA of at least the total requested advance.

(G) COVENANT COMPLIANCE

Certain of the Company's debt agreements contain financial covenants that require the Company to maintain certain financial ratios and minimum tangible net worth. As of December 31, 2024, the Company was in compliance with all such covenants.
v3.25.0.1
Leases
 12 Months Ended
Dec. 31, 2024
Leases [Abstract]  
Leases

(6) LEASES

The Company has leased premises that expire at various dates through February 28, 2031 subject to various operating leases.

The following table presents the operating lease costs and additional information for the years ended December 31, 2024, 2023, and 2022.

 

 

December 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

 

2022

 

Operating lease costs

 

$

2,422

 

 

$

2,390

 

 

$

2,216

 

Cash paid for amounts included in the measurement of lease liabilities

 

 

 

 

 

 

 

 

 

Operating cash flows from operating leases

 

 

2,682

 

 

 

2,472

 

 

 

2,378

 

Right-of-use asset obtained in exchange for lease liability

 

 

(237

)

 

 

(226

)

 

 

(187

)

The following table presents the breakout of the operating leases as of December 31, 2024 and 2023.

 

 

December 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

Operating lease right-of-use assets

 

$

6,922

 

 

$

8,785

 

Other current liabilities

 

 

2,294

 

 

 

2,472

 

Operating lease liabilities

 

 

5,128

 

 

 

7,019

 

Total operating lease liabilities

 

 

7,422

 

 

 

9,491

 

Weighted average remaining lease term

 

4.1 years

 

 

4.9 years

 

Weighted average discount rate

 

5.56%

 

 

 

5.47

%

At December 31, 2024, maturities of the lease liabilities were as follows:

(Dollars in thousands)

 

 

 

2025

 

$

2,546

 

2026

 

 

2,567

 

2027

 

 

1,342

 

2028

 

 

575

 

2029

 

 

590

 

Thereafter

 

 

548

 

Total lease payments

 

 

8,168

 

Less imputed interest

 

 

746

 

Total operating lease liabilities

 

$

7,422

 
v3.25.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

(7) INCOME TAXES

The Company is subject to federal and applicable state corporate income taxes on its taxable ordinary income and capital gains. As a corporation taxed under Subchapter C of the Internal Revenue Code, the Company is able, and intends, to file a consolidated federal income tax return with corporate subsidiaries in which it holds 80% or more of the outstanding equity interest measured by both vote and fair value.

The following table presents the significant components of the Company's deferred tax assets and liabilities as of December 31, 2024 and 2023.

 

 

December 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

Deferred tax assets:

 

 

 

 

 

 

Provision for credit losses

 

$

14,530

 

 

$

13,032

 

Accrued expenses, compensation, and other assets

 

 

5,612

 

 

 

6,976

 

Net operating loss carryforwards (1)

 

 

3,168

 

 

 

3,802

 

Other investments and investment securities

 

 

2,885

 

 

 

1,877

 

Valuation allowance

 

 

(4,418

)

 

 

(3,860

)

Total deferred tax assets

 

 

21,777

 

 

 

21,827

 

Deferred tax liabilities:

 

 

 

 

 

 

Goodwill and other intangibles

 

 

42,772

 

 

 

43,034

 

Total deferred tax liabilities

 

 

42,772

 

 

 

43,034

 

Deferred tax liability, net

 

$

20,995

 

 

$

21,207

 
(1)
As of December 31, 2024, the Company had an estimated $11.1 million of net operating loss carryforwards, $1.7 million of which expires at various dates between December 31, 2026 and December 31, 2035, which had a net carrying value of $0.6 million of December 31, 2024.

The following table presents the components of the Company's tax provision for the years ended December 31, 2024, 2023, and 2022.

 

 

Year Ended December 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

 

2022

 

Current

 

 

 

 

 

 

 

 

 

Federal

 

$

15,634

 

 

$

18,634

 

 

$

5,213

 

State

 

 

4,789

 

 

 

6,014

 

 

 

560

 

Deferred

 

 

 

 

 

 

 

 

 

Federal

 

 

1,455

 

 

 

(52

)

 

 

8,090

 

State

 

 

(867

)

 

 

314

 

 

 

4,100

 

Net provision for income taxes

 

$

21,011

 

 

$

24,910

 

 

$

17,963

 

The following table presents a reconciliation of statutory federal income tax provision to consolidated actual income tax provision reported for the years ended December 31, 2024, 2023, and 2022.

 

 

Year Ended December 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

 

2022

 

Statutory Federal income tax provision at 21%

 

$

13,217

 

 

$

18,068

 

 

$

14,249

 

State and local income taxes, net of federal income tax benefit

 

 

2,623

 

 

 

3,534

 

 

 

2,787

 

Valuation allowance against deferred tax assets

 

 

558

 

 

 

1,565

 

 

 

—

 

Change in effective state income tax rates and accrual

 

 

109

 

 

 

(222

)

 

 

(811

)

Non-deductible expenses

 

 

3,899

 

 

 

2,024

 

 

 

1,987

 

Other

 

 

605

 

 

 

(59

)

 

 

(249

)

Total income tax provision

 

$

21,011

 

 

$

24,910

 

 

$

17,963

 

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible pursuant to ASC 740. The Company considers the reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The Company’s evaluation of the realizability of deferred tax assets must consider both positive and negative evidence. The weight given to the potential effects of positive and negative evidence is based on the extent to which it can be objectively verified. The Company has determined that a valuation allowance is necessary for net operating losses which the Company does not believe will be utilized as well as for deferred compensation in excess of statutory limits. Based upon these considerations, the Company determined the necessary valuation allowance as of December 31, 2024.

The Company has filed tax returns in many states. Federal, New York State, New York City, and Utah State tax filings of the Company for the tax years 2021 through the present are the more significant filings that are open for examination.
v3.25.0.1
Stock Options and Restricted Stock
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Stock Options and Restricted Stock

(8) STOCK OPTIONS AND RESTRICTED STOCK

The Company’s Board of Directors approved the 2018 Equity Incentive Plan, or the 2018 Plan, which was approved by the Company’s stockholders on June 15, 2018. The terms of 2018 Plan provide for grants of a variety of different type of stock awards to the Company’s employees and non-employee directors, including options, restricted stock, restricted stock units, performance stock units, and stock appreciation rights, etc. On April 22, 2020, the Company’s Board of Directors approved an amendment to the 2018 Plan to increase the number of shares of the Company’s common stock authorized for issuance thereunder, which was approved by the Company’s stockholders on June 19, 2020, and subsequently on April 26, 2022, the Company’s Board of Directors approved an additional amendment to the 2018 Plan to further increase the number of shares of the Company’s common stock authorized for issuance thereunder, which was approved by the Company’s stockholders on June 14, 2022. A total of 5,710,968 shares of the Company’s common stock are issuable under the 2018 Plan, and 1,341,382 shares remained issuable as of December 31, 2024. Awards under the 2018 Plan are subject to certain limitations as set forth in the 2018 Plan, which will terminate when all shares of common stock authorized for delivery have been delivered and the forfeiture restrictions on all awards have lapsed, or by action of the Board of Directors pursuant to the 2018 Plan, whichever occurs first.

The Company’s Board of Directors approved the 2015 Non-Employee Director Stock Option Plan, or the 2015 Director Plan, on March 12, 2015, which was approved by the Company’s shareholders on June 5, 2015, and on which exemptive relief to implement the 2015 Director Plan was received from the SEC on February 29, 2016. A total of 300,000 shares of the Company’s common stock were issuable under the 2015 Director Plan, and 258,334 remained issuable as of June 15, 2018. Effective June 15, 2018, the 2018 Plan was approved, and these remaining shares were rolled into the 2018 Plan. Under the 2015 Director Plan, unless otherwise determined by a committee of the Board of Directors comprised of directors who are not eligible for grants under the 2015 Director Plan, the Company granted options to purchase 12,000 shares of the Company’s common stock to a non-employee director upon election to the Board of Directors, with an adjustment for directors who were elected to serve less than a full term. The option price per share could not be less than the current market value of the Company’s common stock on the date the option was granted. Options granted under the 2015 Director Plan vested annually, as defined in the 2015 Director Plan. The term of the options could not exceed ten years.

The Company’s Board of Directors approved the First Amended and Restated 2006 Director Plan, or the Amended Director Plan, on April 16, 2009, which was approved by the Company’s shareholders on June 5, 2009, and on which exemptive relief to implement the Amended Director Plan was received from the SEC on July 17, 2012. A total of 200,000 shares of the Company’s common stock were issuable under the Amended Director Plan. No additional shares are available for issuance under the Amended Director Plan. Under the Amended Director Plan, unless otherwise determined by a committee of the Board of Directors comprised of directors who are not eligible for grants under the Amended Director Plan, the Company would grant options to purchase 9,000 shares of the Company’s common stock to an Eligible Director upon election to the Board of Directors, with an adjustment for directors who were elected to serve less than a full term. The option price per share could not be less than the current market value of the Company’s common stock on the date the option was granted. Options granted under the Amended Director Plan vested annually, as defined in the Amended Director Plan. The term of the options could not exceed ten years.

Additional shares are only available for future issuance under the 2018 Plan. At December 31, 2024, 913,909 options on the Company’s common stock were outstanding under the Company’s plans, of which 829,286 options were vested. Additionally, as of December 31, 2024, there were 909,028 unvested shares of restricted stock, 512,131 unvested performance stock units, 94,576 unvested restricted stock units, and 239,974 vested, unissued restricted stock units outstanding under the 2018 Plan. As of December 31, 2024, the total remaining unrecognized compensation cost related to unvested stock options, restricted stock units, and performance share units was $5.8 million, which is expected to be recognized over the next 9 quarters. Total stock-based compensation expense was $6.1 million, $4.7 million, and $3.5 million for the years ended December 31, 2024, 2023, and 2022.

The fair value of each restricted stock grant is determined on the date of grant by the closing market price of the Company’s common stock on the grant date. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. There were no options granted during the year ended December 31, 2024.

During 2023, the Company’s Compensation Committee of the Board of Directors began granting performance stock units, or PSUs, to certain officers and employees of the Company. Granted PSUs are subject to specified performance criteria for a particular performance period. The number of PSUs that vest can range from zero to 200% of the grant amount. In addition, dividends that accrue during the vesting period are reinvested in dividend equivalent PSUs. PSUs and the related dividend equivalent PSUs are converted into shares of common stock after vesting. Once the PSUs and dividend equivalent PSUs have vested, shares of common stock are delivered.

The following table presents the PSU activity for the years ended December 31, 2024 and 2023. The PSUs have vesting conditions based upon certain levels of total pre-tax income as well as return on common equity attained over a three-year period. The PSUs cliff vest after three years based upon the performance of the Company. Dividend equivalent PSUs accumulate and convert to additional shares for the benefit of the grantee at the vesting date or are forfeited if the performance conditions are not met.

 

Number of
Shares

 

 

 

Grant
Price Per
Share

 

 

Weighted
Average
Grant Price

 

Outstanding at December 31, 2022

 

 

—

 

 

$

 

—

 

 

$

—

 

Granted

 

 

296,444

 

 

 

 

6.08

 

 

 

6.08

 

Cancelled

 

 

—

 

 

 

 

—

 

 

 

—

 

Vested

 

 

—

 

 

 

 

—

 

 

 

—

 

Outstanding at December 31, 2023

 

 

296,444

 

 

$

 

6.08

 

 

$

6.08

 

Granted

 

 

215,687

 

 

 

 

8.97

 

 

 

8.97

 

Cancelled

 

 

—

 

 

 

 

—

 

 

 

—

 

Vested

 

 

—

 

 

 

 

—

 

 

 

—

 

Outstanding at December 31, 2024

 

 

512,131

 

 

$

6.08 - 8.97

 

 

$

7.30

 

 

The following table presents the activity for the restricted stock programs for the years ended December 31, 2024, 2023, and 2022.

 

Number of
Shares

 

 

 

Grant
Price Per
Share

 

Weighted
Average
Grant Price

 

Outstanding at December 31, 2021 (2)

 

 

493,326

 

 

 

4.89 - 7.25

 

$

6.87

 

Granted

 

 

522,475

 

 

 

6.86 -7.68

 

 

7.46

 

Cancelled

 

 

(29,373

)

 

 

4.89 - 8.40

 

 

7.32

 

Vested (1)

 

 

(129,140

)

 

 

4.89 - 7.25

 

 

6.53

 

Outstanding at December 31, 2022 (2)

 

 

857,288

 

 

 

4.89 - 7.25

 

 

7.27

 

Granted

 

 

399,793

 

 

 

7.67 - 9.37

 

 

8.34

 

Cancelled

 

 

(12,807

)

 

 

4.89 - 8.40

 

 

7.24

 

Vested (1)

 

 

(248,898

)

 

 

4.89 - 7.68

 

 

7.10

 

Outstanding at December 31, 2023 (2)

 

 

995,376

 

 

$

4.89 - 9.37

 

 

7.74

 

Granted

 

 

347,158

 

 

 

8.97 - 10.32

 

 

9.17

 

Cancelled

 

 

(32,521

)

 

 

4.89 - 10.32

 

 

8.07

 

Vested (1)

 

 

(400,985

)

 

 

4.89 - 8.40

 

 

7.69

 

Outstanding at December 31, 2024 (2)

 

 

909,028

 

 

$

4.89 - 10.32

 

$

8.30

 
(1)
The aggregate fair value of the restricted stock vested was $2.7 million, $2.1 million, and $1.0 million for the years ended December 31, 2024, 2023, and 2022.
(2)
The aggregate fair value of the restricted stock was $8.5 million as of December 31, 2024. The remaining vesting period was 2.2 years at December 31, 2024.

The following table presents the activity for the stock option programs for the years ended December 31, 2024, 2023, and 2022.

 

Number of
Options

 

 

 

Exercise
Price Per
Share

 

 

Weighted
Average
Exercise Price

 

Outstanding at December 31, 2021 (2)

 

 

1,111,687

 

 

 

2.14-12.55

 

 

 

6.41

 

Granted

 

 

—

 

 

 

 

—

 

 

 

—

 

Cancelled

 

 

(26,093

)

 

 

4.89 - 12.55

 

 

 

7.08

 

Exercised (1)

 

 

(23,745

)

 

 

4.89 - 7.25

 

 

 

6.51

 

Outstanding at December 31, 2022 (2)

 

 

1,061,849

 

 

 

2.14 - 9.38

 

 

 

6.51

 

Granted

 

 

—

 

 

 

 

—

 

 

 

—

 

Cancelled

 

 

(33,382

)

 

 

4.89 - 9.38

 

 

 

6.80

 

Exercised (1)

 

 

(68,945

)

 

 

4.89 - 7.25

 

 

 

6.44

 

Outstanding at December 31, 2023 (2)

 

 

959,522

 

 

 

2.14 - 9.38

 

 

 

6.51

 

Granted

 

 

—

 

 

 

 

—

 

 

 

—

 

Cancelled

 

 

(4,748

)

 

 

4.89 - 7.25

 

 

 

6.15

 

Exercised (1)

 

 

(40,865

)

 

 

4.89 - 7.25

 

 

 

6.35

 

Outstanding at December 31, 2024 (2)

 

 

913,909

 

 

$

2.14 - 9.38

 

 

$

6.52

 

Options exercisable at

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

 

548,426

 

 

 

2.14 - 9.38

 

 

$

6.51

 

December 31, 2023

 

 

697,647

 

 

 

2.14 - 9.38

 

 

 

6.51

 

December 31, 2024

 

 

829,286

 

 

 

2.14 - 9.38

 

 

 

6.53

 
(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 $0.1 million for the years ended December 31, 2024, 2023, and 2022.
(2)
The aggregate intrinsic value of outstanding options, which represents the difference between the price of the Company’s common stock at December 31, 2024 and the related exercise price of the underlying options, was $2.6 million for outstanding options and $2.4 million for vested options. The remaining contractual life was 5.1 years for outstanding options and 5.0 years for vested options at December 31, 2024.

The following table presents the activity for the unvested options outstanding under the plans for the year ended December 31, 2024.

 

Number of
Options

 

 

 

Exercise Price
Per Share

 

 

Weighted
Average
Exercise Price

 

Outstanding at December 31, 2022

 

 

513,423

 

 

$

4.89 - 7.25

 

 

$

6.52

 

Granted

 

 

—

 

 

 

 

—

 

 

 

—

 

Cancelled

 

 

(3,336

)

 

 

4.89 - 7.25

 

 

 

5.51

 

Vested

 

 

(248,212

)

 

 

4.89 - 7.25

 

 

 

6.55

 

Outstanding at December 31, 2023

 

 

261,875

 

 

 

4.89 - 7.25

 

 

 

6.49

 

Granted

 

 

—

 

 

 

 

—

 

 

 

—

 

Cancelled

 

 

(3,822

)

 

 

4.89 - 7.25

 

 

 

6.22

 

Vested

 

 

(173,430

)

 

 

4.89 - 7.25

 

 

 

6.56

 

Outstanding at December 31, 2024

 

 

84,623

 

 

$

4.89 - 6.79

 

 

$

6.37

 

The intrinsic value of the options vested was $0.4 million, $0.4 million, and $0.3 million for the years ended December 31, 2024, 2023, and 2022.

During the year ended December 31, 2024, the Company granted 92,350 restricted stock units, or RSUs, with a vesting date of June 11, 2025 at a grant price of $8.23, During the year ended December 31, 2023, the Company granted 83,158 RSUs with a vesting date of June 22, 2024 at a grant price of $9.14. No PSUs were granted during the year ended December 31, 2022. For the RSUs granted in 2024 and 2023, unitholders had the option of deferring settlement until a future date if the recipient makes a formal election under the guidelines of IRC Section 409A. As of December 31, 2024, there were 334,550 RSUs outstanding, including 239,974 which had previously vested.
v3.25.0.1
Segment Reporting
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Segment Reporting

(9) SEGMENT REPORTING

The Company has five business segments, which include four lending segments and one non-operating segment, which are reflective of how Company management makes decisions about its business and operations.

The four lending segments reflect the main types of lending performed at the Company, which are recreation, home improvement, commercial, and taxi medallion lending. The recreation and home improvement lending segments are operated by the Bank and loans are made to borrowers residing nationwide. The recreation lending segment is a consumer finance business that works with third-party dealers, contractors, and financial service providers for the purpose of financing RVs, boats, collector cars, and other consumer recreational equipment, of which RVs, boats, and collector cars make up 55%, 20%, and 11% of the segment portfolio, with no other product lines equal to or exceeding 10%, as of December 31, 2024. The highest concentrations of recreation loans are in Texas and Florida at 16% and 10% of loans outstanding and with no other states at or above 10% as of December 31, 2024. The home improvement lending segment works with contractors and financial service providers to finance residential home improvement with the largest product lines being roofs, swimming pools, and windows at 36%, 27%, and 13% of total home improvement loans outstanding, and with no other product lines exceeding 10% as of December 31, 2024. The highest concentrations of home improvement loans are in Florida and Texas at 12% and 11% of loans outstanding and with no other states at or above 10% as of December 31, 2024. The commercial lending segment focuses on serving a wide variety of industries, with concentrations in manufacturing, construction, and wholesale trade making up 57%, 12%, and 12% of the loans outstanding as of December 31, 2024, with no other product lines exceeding 10% as of December 31, 2024. The commercial lending segment invests across the United States with concentrations in California, Wisconsin, and Texas having 28%, 10%, and 10% of the segment portfolio, and no other states having a concentration at or greater than 10% as of December 31, 2024. The taxi medallion lending segment arose in connection with the financing of taxi medallions, taxis, and related assets, primarily all of which are located in the New York City metropolitan area as of December 31, 2024.

The Company's corporate and other investments segment is a non-operating segment that includes items not allocated to the Company's operating segments such as investment securities, equity investments, intercompany eliminations, goodwill, and other corporate elements. The Company allocates portions of centrally incurred costs inclusive of overhead and interest expense formulaically based upon overall capital allocated to the lending segments.

As part of segment reporting, capital ratios for all operating segments have been normalized as a percentage of consolidated total equity divided by total assets, with the net adjustment applied to corporate and other investments. In addition, the commercial segment primarily represents the mezzanine lending business, with certain legacy commercial loans (immaterial to total) allocated to corporate and other investments.

The Company's chief operating decision maker (CODM) is a group comprised of the Chief Executive Officer, Chief Financial Officer, President, Chief Operating Officer, and other senior members of management. The CODM primarily uses segment information to identify areas to improve efficiency of resources allocation, determine where to reinvest profits, and minimize unnecessary expenses. The CODM assesses segment performance mainly through selected financial ratios such as returns on average assets and net interest margin, which identifies areas requiring action.

 

The following table presents segment data as of and for the year ended December 31, 2024.

Year Ended December 31, 2024

 

Consumer Lending

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

Recreation

 

 

Home
Improvement

 

 

Commercial
Lending

 

 

Taxi Medallion
Lending

 

 

Corporate and Other Investments

 

 

Consolidated

 

Total interest income

 

$

194,131

 

 

$

74,036

 

 

$

14,007

 

 

$

659

 

 

$

7,869

 

 

$

290,702

 

Total interest expense

 

 

46,123

 

 

 

26,277

 

 

 

4,294

 

 

 

102

 

 

 

11,371

 

 

 

88,167

 

Net interest income (loss)

 

 

148,008

 

 

 

47,759

 

 

 

9,713

 

 

 

557

 

 

 

(3,502

)

 

 

202,535

 

Provision (benefit) for credit losses

 

 

67,995

 

 

 

13,458

 

 

 

1,093

 

 

 

(6,035

)

 

 

(9

)

 

 

76,502

 

Net interest income (loss) after loss provision

 

 

80,013

 

 

 

34,301

 

 

 

8,620

 

 

 

6,592

 

 

 

(3,493

)

 

 

126,033

 

Other income

 

 

756

 

 

 

11

 

 

 

7,860

 

 

 

910

 

 

 

1,793

 

 

 

11,330

 

Operating expenses

 

 

(33,128

)

 

 

(15,586

)

 

 

(4,992

)

 

 

(4,573

)

 

 

(16,148

)

 

 

(74,427

)

Net income (loss) before taxes

 

 

47,641

 

 

 

18,726

 

 

 

11,488

 

 

 

2,929

 

 

 

(17,848

)

 

 

62,936

 

Income tax (provision) benefit

 

 

(15,181

)

 

 

(5,967

)

 

 

(3,661

)

 

 

(933

)

 

 

4,731

 

 

 

(21,011

)

Net income (loss) after taxes

 

 

32,460

 

 

 

12,759

 

 

 

7,827

 

 

 

1,996

 

 

 

(13,117

)

 

 

41,925

 

Income attributable to the non-controlling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,047

 

Total net income attributable to Medallion Financial Corp.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

35,878

 

Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loan, gross (1)

 

$

1,543,243

 

 

$

827,211

 

 

$

111,273

 

 

$

1,909

 

 

$

7,386

 

 

$

2,491,022

 

Total assets

 

 

1,494,445

 

 

 

811,442

 

 

 

106,258

 

 

 

6,573

 

 

 

449,888

 

 

 

2,868,606

 

Total funds borrowed

 

 

1,239,592

 

 

 

673,064

 

 

 

88,137

 

 

 

5,452

 

 

 

373,168

 

 

 

2,379,413

 

Selected Financial Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

2.29

%

 

 

1.66

%

 

 

7.38

%

 

 

24.25

%

 

 

(2.95

)%

 

 

1.54

%

Return on average stockholders' equity

 

*

 

 

*

 

 

*

 

 

*

 

 

*

 

 

 

10.12

 

Return on average equity

 

 

15.11

 

 

 

10.76

 

 

 

47.93

 

 

 

151.76

 

 

 

(18.94

)

 

 

9.89

 

Interest yield

 

 

13.30

 

 

 

9.45

 

 

 

12.71

 

 

 

23.39

 

 

NM

 

 

 

11.58

 

Net interest margin, gross

 

 

10.14

 

 

 

6.09

 

 

 

8.81

 

 

 

16.99

 

 

NM

 

 

 

8.05

 

Net interest margin, net of allowance

 

 

10.58

 

 

 

6.24

 

 

 

9.18

 

 

 

28.15

 

 

NM

 

 

 

8.35

 

Reserve coverage (2)

 

 

5.00

 

 

 

2.48

 

 

 

4.66

 

 

 

28.29

 

 

NM

 

 

 

4.12

 

Delinquency status (3)

 

 

0.67

 

 

 

0.17

 

 

 

14.66

 

 

 

—

 

 

NM

 

 

 

1.13

 

Charge-off (recovery) ratio (4)

 

 

3.72

 

 

 

1.78

 

 

 

0.04

 

 

 

(153.72

)

 

NM

 

 

 

2.69

 

 

(1) Inclusive of recreation and strategic partnership loans held for sale, at lower of amortized cost or fair value.

(2) Allowance for credit loss as a percent of gross loans held for investment and excludes loans held for sale.

(3) Loans 90 days or more past due as a percent of total loans.

(4) Net charge-offs as a percent of annual average gross loans.

(NM) Not meaningful.

(*) Line item is not applicable to segments.

The following table presents segment data as of and for the year ended December 31, 2023.

Year Ended December 31, 2023

 

Consumer Lending

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

Recreation

 

 

Home
Improvement

 

 

Commercial
Lending

 

 

Taxi Medallion
Lending

 

 

Corporate and Other Investments

 

 

Consolidated

 

Total interest income

 

$

167,765

 

 

$

62,703

 

 

$

12,719

 

 

$

1,596

 

 

$

6,257

 

 

$

251,040

 

Total interest expense

 

 

31,436

 

 

 

18,137

 

 

 

3,597

 

 

 

72

 

 

 

9,704

 

 

 

62,946

 

Net interest income (loss)

 

 

136,329

 

 

 

44,566

 

 

 

9,122

 

 

 

1,524

 

 

 

(3,447

)

 

 

188,094

 

Provision (benefit) for credit losses

 

 

44,592

 

 

 

17,583

 

 

 

1,988

 

 

 

(26,318

)

 

 

(35

)

 

 

37,810

 

Net interest income (loss) after loss provision

 

 

91,737

 

 

 

26,983

 

 

 

7,134

 

 

 

27,842

 

 

 

(3,412

)

 

 

150,284

 

Other income

 

 

376

 

 

 

6

 

 

 

5,971

 

 

 

3,358

 

 

 

1,609

 

 

 

11,320

 

Operating expenses

 

 

(32,601

)

 

 

(16,752

)

 

 

(3,547

)

 

 

(7,256

)

 

 

(15,412

)

 

 

(75,568

)

Net income (loss) before taxes

 

 

59,512

 

 

 

10,237

 

 

 

9,558

 

 

 

23,944

 

 

 

(17,215

)

 

 

86,036

 

Income tax (provision) benefit

 

 

(17,231

)

 

 

(2,964

)

 

 

(2,767

)

 

 

(6,933

)

 

 

4,985

 

 

 

(24,910

)

Net income (loss) after taxes

 

 

42,281

 

 

 

7,273

 

 

 

6,791

 

 

 

17,011

 

 

 

(12,230

)

 

 

61,126

 

Income attributable to the non-controlling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,047

 

Total net income attributable to Medallion Financial Corp.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

55,079

 

Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans, gross

 

$

1,336,222

 

 

$

760,621

 

 

$

114,827

 

 

$

3,663

 

 

$

553

 

 

$

2,215,886

 

Total assets

 

 

1,297,870

 

 

 

744,904

 

 

 

110,850

 

 

 

12,247

 

 

 

421,956

 

 

 

2,587,827

 

Total funds borrowed

 

 

1,062,584

 

 

 

609,863

 

 

 

90,754

 

 

 

10,027

 

 

 

345,462

 

 

 

2,118,690

 

Selected Financial Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

3.36

%

 

 

1.04

%

 

 

6.65

%

 

 

91.25

%

 

 

(3.13

)%

 

 

2.51

%

Return on average stockholders' equity

 

*

 

 

*

 

 

*

 

 

*

 

 

*

 

 

 

17.33

 

Return on average equity

 

 

21.24

 

 

 

6.60

 

 

 

41.51

 

 

 

574.86

 

 

 

(19.78

)

 

 

15.79

 

Interest yield

 

 

13.07

 

 

 

8.86

 

 

 

12.80

 

 

 

26.94

 

 

NM

 

 

 

11.19

 

Net interest margin, gross

 

 

10.62

 

 

 

6.29

 

 

 

9.18

 

 

 

25.73

 

 

NM

 

 

 

8.38

 

Net interest margin, net of allowance

 

 

11.09

 

 

 

6.45

 

 

 

9.45

 

 

 

61.60

 

 

NM

 

 

 

8.68

 

Reserve coverage (1)

 

 

4.31

 

 

 

2.76

 

 

 

3.61

 

 

 

41.93

 

 

NM

 

 

 

3.80

 

Delinquency status (2)

 

 

0.70

 

 

 

0.20

 

 

 

5.40

 

 

 

—

 

 

NM

 

 

 

0.77

 

Charge-off (recovery) ratio (3)

 

 

3.04

 

 

 

1.33

 

 

 

1.02

 

 

 

(309.96

)

 

NM

 

 

 

1.48

 

 

(1) Allowance for credit loss as a percent of gross loans.

(2) Loans 90 days or more past due as a percent of total loans.

(3) Net charge-offs as a percent of annual average gross loans.

(NM) Not meaningful.

(*) Line item is not applicable to segments.

 

The following table presents segment data as of and for the year ended December 31, 2022.

Year Ended December 31, 2022

 

Consumer Lending

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

Recreation

 

 

Home
Improvement

 

 

Commercial
Lending

 

 

Taxi Medallion
Lending

 

 

Corporate and Other Investments

 

 

Consolidated

 

Total interest income

 

$

139,145

 

 

$

44,703

 

 

$

9,348

 

 

$

632

 

 

$

2,793

 

 

$

196,621

 

Total interest expense

 

 

17,932

 

 

 

7,697

 

 

 

3,040

 

 

 

508

 

 

 

7,008

 

 

 

36,185

 

Net interest income (loss)

 

 

121,213

 

 

 

37,006

 

 

 

6,308

 

 

 

124

 

 

 

(4,215

)

 

 

160,436

 

Provision (benefit) for credit losses

 

 

22,802

 

 

 

7,616

 

 

 

5,963

 

 

 

(6,474

)

 

 

152

 

 

 

30,059

 

Net interest income (loss) after loss provision

 

 

98,411

 

 

 

29,390

 

 

 

345

 

 

 

6,598

 

 

 

(4,367

)

 

 

130,377

 

Other income

 

 

—

 

 

 

14

 

 

 

3,306

 

 

 

4,341

 

 

 

1,865

 

 

 

9,526

 

Operating expenses

 

 

(30,463

)

 

 

(13,514

)

 

 

(4,910

)

 

 

(10,520

)

 

 

(12,646

)

 

 

(72,053

)

Net income (loss) before taxes

 

 

67,948

 

 

 

15,890

 

 

 

(1,259

)

 

 

419

 

 

 

(15,148

)

 

 

67,850

 

Income tax (provision) benefit

 

 

(17,989

)

 

 

(4,207

)

 

 

333

 

 

 

(111

)

 

 

4,011

 

 

 

(17,963

)

Net income (loss) after taxes

 

 

49,959

 

 

 

11,683

 

 

 

(926

)

 

 

308

 

 

 

(11,137

)

 

 

49,887

 

Income attributable to the non-controlling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,047

 

Total net income attributable to Medallion Financial Corp.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

43,840

 

Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans, gross

 

$

1,183,512

 

 

$

626,399

 

 

$

92,899

 

 

$

13,571

 

 

$

572

 

 

$

1,916,953

 

Total assets

 

 

1,154,680

 

 

 

618,923

 

 

 

101,447

 

 

 

25,496

 

 

 

359,333

 

 

 

2,259,879

 

Total funds borrowed

 

 

936,789

 

 

 

502,131

 

 

 

82,304

 

 

 

20,685

 

 

 

291,526

 

 

 

1,833,435

 

Selected Financial Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

4.38

%

 

 

1.95

%

 

 

(0.91

)%

 

 

1.18

%

 

 

(3.02

)%

 

 

2.40

%

Return on average stockholders' equity

 

*

 

 

*

 

 

*

 

 

*

 

 

*

 

 

 

14.92

 

Return on average equity

 

 

26.66

 

 

 

12.08

 

 

 

(5.50

)

 

 

6.97

 

 

 

(18.40

)

 

 

13.74

 

Interest yield

 

 

12.82

 

 

 

8.49

 

 

 

10.63

 

 

 

4.58

 

 

NM

 

 

 

10.70

 

Net interest margin, gross

 

 

11.17

 

 

 

7.03

 

 

 

7.17

 

 

 

0.90

 

 

NM

 

 

 

8.73

 

Net interest margin, net of allowance

 

 

11.57

 

 

 

7.16

 

 

 

7.28

 

 

 

2.76

 

 

NM

 

 

 

9.05

 

Reserve coverage (1)

 

 

3.55

 

 

 

1.81

 

 

 

1.13

 

 

 

69.93

 

 

NM

 

 

 

3.33

 

Delinquency status (2)

 

 

0.64

 

 

 

0.09

 

 

 

0.08

 

 

 

6.52

 

 

NM

 

 

 

0.47

 

Charge-off (recovery) ratio (3)

 

 

1.22

 

 

 

0.69

 

 

 

6.86

 

 

 

(47.51

)

 

NM

 

 

 

0.96

 

 

(1) Allowance for credit loss as a percent of gross loans.

(2) Loans 90 days or more past due as a percent of total loans.

(3) Net charge-offs as a percent of annual average gross loans.

(NM) Not meaningful.

(*) Line item is not applicable to segments.
v3.25.0.1
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

(10) COMMITMENTS AND CONTINGENCIES

(A) EMPLOYMENT AGREEMENTS

The Company has employment agreements with certain key officers, including Mr. Alvin Murstein and Mr. Andrew Murstein, for either a one-, two-, or three-year term. Typically, the contracts with a one- or two-year term will renew for new one- or two-year terms unless prior to the term either the Company or the executive provides notice to the other party of its intention not to extend the employment period beyond the current one or two-year term (as applicable); however, in addition to Mr. Andrew Murstein's employment agreement, as further described below, there is currently one agreement that renews after two years for additional one-year terms and one agreement with a three-year term that does not have a renewal period. In the event of a change in control, as defined, during the employment period, the agreements provide for severance compensation to the executive in an amount equal to the balance of the salary, bonus, and value of fringe benefits which the executive would be entitled to receive for the remainder of the employment period.

On April 25, 2023, Mr. Alvin Murstein, the Company’s Chairman of the Board and Chief Executive Officer, notified the Company of his election not to renew the term of his employment pursuant to the First Amended and Restated Employment Agreement, dated May 29, 1998, as amended, between him and the Company. Accordingly, the term of his employment as Chief Executive Officer of the Company will expire on May 28, 2027, unless sooner terminated in accordance with the provisions thereof.

In addition, on April 27, 2023, Mr. Andrew Murstein, the Company’s President and Chief Operating Officer, entered into an amendment to the First Amended and Restated Employment Agreement, dated May 29, 1998, as amended, between him and the Company. Pursuant to such amendment, effective as of May 29, 2023, (i) the expiration of his then current term of employment shall be revised to end on May 28, 2027, and (ii) on May 29, 2024, and on each May 29 thereafter, such term of employment shall automatically renew each year for a three-year term unless, prior to the end of the first year of the then-applicable three-year term, either Mr. Murstein or the Company provides at least 30 days’ advance notice to the other party of its intention not to renew the then-applicable term of employment for a new three-year term, in each case unless such employment term is otherwise terminated pursuant to the terms thereof.

Employment agreements expire at various dates through 2027, with future minimum payments under these agreements of approximately $7.5 million as follows:

(Dollars in thousands)

 

 

 

2025

 

$

4,097

 

2026

 

 

2,465

 

2027

 

 

904

 

Total

 

$

7,466

 

(B) OTHER COMMITMENTS

As of December 31, 2024 the Company had no other commitments. Generally, any commitments would be on the same terms as loans to or investments in existing borrowers or investees, and generally have fixed expiration dates. Since some commitments would be expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

(C) SEC LITIGATION

On December 29, 2021, the SEC filed a civil complaint in the U.S. District Court for the Southern District of New York against the Company and its President and Chief Operating Officer alleging certain violations of the anti-fraud, books and records, internal controls and anti-touting provisions of the federal securities laws. The litigation relates to certain issues that occurred during the period 2015 to 2017, including (i) the Company’s retention of third parties in 2015 and 2016 concerning posting information about the Company on certain financial websites and (ii) the Company’s financial reporting and disclosures concerning certain assets, including Medallion Bank, in 2016 and 2017, a period when the Company had previously reported as a business development company (BDC) under the Investment Company Act of 1940. In December 2024, the Company and its President and Chief Operating Officer reached an agreement in principle with the Division of Enforcement of the SEC, that if approved by the Commissioners of the SEC and the Court, would resolve this litigation.

Depending on the outcome of the litigation, and/or in the event that the Commissioners of the SEC or the Court were to decline to approve the settlement in principle, the Company could incur a loss and other penalties that could be material to the Company, its results of operations and/or financial condition, as well as a bar against its President and Chief Operating Officer. In addition, the Company has and may further incur significant legal fees and expenses in defending against such charges by the SEC and the Company may be subject to shareholder litigation relating to these SEC matters.

(D) OTHER LITIGATION AND REGULATORY MATTERS

The Company and its subsidiaries are subject to inquiries from certain regulators and are currently involved in various legal proceedings incident to the normal course of business, including collection matters with respect to certain loans. The Company intends to vigorously defend any outstanding claims and pursue its legal rights. In the opinion of management, based on the advice of legal counsel, except for the pending SEC litigation, as described above, there is no proceeding pending, or to the knowledge of management threatened, which in the event of an adverse decision could result in a material adverse impact on the financial condition or results of operations of the Company.
v3.25.0.1
Related Party Transactions
 12 Months Ended
Dec. 31, 2024
Related Party Transactions [Abstract]  
Related Party Transactions

(11) RELATED PARTY TRANSACTIONS

Certain directors, officers, and stockholders of the Company are also directors and officers of its main consolidated subsidiaries, MFC, Medallion Capital, FSVC, and the Bank, as well as other subsidiaries. Officer salaries are set by the Board of Directors of the Company.

Jeffrey Rudnick, the son of one of the Company’s directors, served as the Company’s Senior Vice President at a salary of $260,988, $250,950, and $239,000 for the years ended December 31, 2024, 2023, and 2022, which was increased to $269,000 effective January 1, 2025. Mr. Rudnick received an annual cash bonus of $75,000, $95,000, and $85,000 as well as an equity grants in the amount of $50,000, $52,000, and $50,000 for the years ended December 31, 2024, 2023, and 2022.
v3.25.0.1
Employee Benefit Plans
 12 Months Ended
Dec. 31, 2024
Postemployment Benefits [Abstract]  
Employee Benefit Plans

(12) EMPLOYEE BENEFIT PLANS

The Company has a 401(k) Investment Plan, or the 401(k) Plan, which, effective June 1, 2022, covers all full-time and part-time employees of the Company who have attained the age of 18 and have a minimum of thirty (30) days of service. Under the 401(k) Plan, an employee may elect to defer not less than 1% of total annual compensation, up to the applicable limits set forth in the Internal Revenue Code. Employee contributions are invested in various mutual funds according to the directions of the employee. Once eligible full-time employees have completed a minimum of ninety (90) days of service, and part time employees have worked at least 1,000 hours, the Company matches employee contributions to the 401(k) Plan in an amount per employee equal to fifty percent of the first 8% of the employee’s annual contributions, subject to legal limits. Prior to June 1, 2022, the 401(k) Plan covered full- and part-time employees of the Company aged 21 and older that had completed a minimum of thirty (30) days of service, with the Company matching one-third of the first 6% of the contributions of eligible employees that had completed at least one (1) year of service (in the case of full-time employees) or 1,000 hours (in the case of part-time employees). The Company’s 401(k) plan expense was approximately $0.6 million, $0.5 million, and $0.3 million for the years ended December 31, 2024, 2023, and 2022.
v3.25.0.1
Fair Value of Financial Instruments
 12 Months Ended
Dec. 31, 2024
Investments, All Other Investments [Abstract]  
Fair Value of Financial Instruments

(13) FAIR VALUE OF FINANCIAL INSTRUMENTS

FASB ASC Topic 825, “Financial Instruments,” requires disclosure of fair value information about certain financial instruments, whether assets, liabilities, or off-balance-sheet commitments, if practicable. The following methods and assumptions were used to estimate the fair value of each class of financial instrument. Fair value estimates that were derived from broker quotes cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument.

(a) Cash and cash equivalents – Book value equals fair value.

(b) Investment securities – The Company’s investments are recorded at the estimated fair value of such investments.

(c) Loans receivable – A discounted cash flow method under the income approach is utilized to estimate the market value of the loan portfolio. The discounted cash flow method relies upon assumptions about the amount and timing of scheduled principal and interest payments, principal prepayments, and current market rates. The loan portfolio is aggregated into categories based on loan type and credit quality. For each loan category, weighted average statistics, such as coupon rate, age, and remaining term are calculated. These are Level 3 valuations. Prior to the second quarter of 2024, fair value was reported as approximating book value.

(d) Loans held for sale – Loans held for sale consist of Recreation loans and Strategic Partnership loans intended to be sold on the secondary market. Loans held for sale are recorded at the lower of amortized cost or fair value.

(e) Accrued interest receivable – Book value equals market value.

(f) Floating rate borrowings – Due to the short-term nature of these instruments, the carrying amount approximates fair value.

(g) Fixed rate borrowings – The fair value for certificates of deposit is estimated by using discounted cash flow analyses, based on market spreads to benchmark rates, and are considered Level 2 valuations. Prior to the second quarter of 2024, fair value was reported as approximating book value.

(h) Fixed rate borrowings – The fair value for certificates of deposit is estimated by using discounted cash flow analyses, based on market spreads to benchmark rates, and are considered Level 2 valuations. Prior to the second quarter of 2024, fair value was reported as approximating book value.

(i) Accrued interest payable – Due to the short-term nature of these instruments, the carrying amount approximates fair value.

(j) Commitments to extend credit – The fair value of commitments to extend credit is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and present creditworthiness of the counter parties. For fixed rate loan commitments, fair value also includes a consideration of the difference between the current levels of interest rates and the committed rates. At December 31, 2024 and 2023, the estimated fair value of these off-balance-sheet instruments was not material.

The following tables present the carrying amounts and fair values of the Company’s financial instruments as of December 31, 2024 and 2023.

 

 

December 31, 2024

 

 

 

Carrying
Amount

 

 

Fair
Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Financial assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents, and federal funds sold (1)

 

$

169,572

 

 

$

169,572

 

 

$

168,322

 

 

$

1,250

 

 

$

—

 

Investment securities

 

 

54,805

 

 

 

54,805

 

 

 

—

 

 

 

54,805

 

 

 

—

 

Loans held for investment, net of allowance

 

 

2,265,428

 

 

 

2,238,645

 

 

 

—

 

 

 

—

 

 

 

2,238,645

 

Loans held for sale, at lower of amortized cost or fair value

 

 

128,226

 

 

 

133,244

 

 

 

—

 

 

 

—

 

 

 

133,244

 

Accrued interest receivable (2)

 

 

15,314

 

 

 

15,314

 

 

 

15,314

 

 

 

—

 

 

 

—

 

Equity securities

 

 

1,732

 

 

 

1,732

 

 

 

1,732

 

 

 

—

 

 

 

—

 

Financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds borrowed (3)

 

 

2,379,413

 

 

 

2,371,434

 

 

 

—

 

 

 

2,371,434

 

 

 

—

 

Accrued interest payable

 

 

8,231

 

 

 

8,231

 

 

 

8,231

 

 

 

—

 

 

 

—

 
(1)
Includes federal funds sold and interest bearing deposits in other banks.
(2)
Included within other assets on the balance sheet.
(3)
Excludes deferred financing costs of $8.2 million as of December 31, 2024.

 

 

December 31, 2023

 

(Dollars in thousands)

 

Carrying
Amount

 

 

Fair
Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Financial assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents, and federal funds sold (1)

 

$

149,845

 

 

$

149,845

 

 

$

148,595

 

 

$

1,250

 

 

$

—

 

Investment securities

 

 

54,282

 

 

 

54,282

 

 

 

—

 

 

 

54,282

 

 

 

—

 

Loans held for investment, net of allowance

 

 

2,131,651

 

 

 

2,131,651

 

 

 

—

 

 

 

—

 

 

 

2,131,651

 

Accrued interest receivable (2)

 

 

13,538

 

 

 

13,538

 

 

 

13,538

 

 

 

—

 

 

 

—

 

Equity securities

 

 

1,748

 

 

 

1,748

 

 

 

1,748

 

 

 

—

 

 

 

—

 

Financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds borrowed (3)

 

 

2,118,689

 

 

 

2,118,689

 

 

 

—

 

 

 

2,118,689

 

 

 

—

 

Accrued interest payable

 

 

6,822

 

 

 

6,822

 

 

 

6,822

 

 

 

—

 

 

 

—

 
(1)
Includes federal funds sold and interest bearing deposits in other banks.
(2)
Included within other assets on the balance sheet.
(3)
Excludes deferred financing costs of $8.5 million as of December 31, 2023.
v3.25.0.1
Fair Value of Assets and Liabilities
 12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value of Assets and Liabilities

(14) FAIR VALUE OF ASSETS AND LIABILITIES

The Company follows the provisions of FASB ASC 820, which defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and enhances disclosure requirements for fair value measurements.

In accordance with FASB ASC 820, the Company has categorized its assets and liabilities measured at fair value, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3). The Company's assessment and classification of an investment within a level can change over time based upon maturity or liquidity of the investment and would be reflected at the beginning of the quarter in which the change occurred.

As required by FASB ASC 820, when the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a level 3 fair value measurement may include inputs that are observable (levels 1 and 2) and unobservable (level 3). Therefore, gains and losses for such assets and liabilities categorized within the level 3 table below may include changes in fair value that are attributable to both observable inputs (levels 1 and 2) and unobservable inputs (level 3).

Assets and liabilities measured at fair value, recorded on the consolidated balance sheets, are categorized based on the inputs to the valuation techniques as follows:

Level 1. Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company has the ability to access (examples include active exchange-traded equity securities, exchange-traded derivatives, most U.S. Government and agency securities, and certain other sovereign government obligations).

Level 2. Assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following:

a)
Quoted prices for similar assets or liabilities in active markets (for example, restricted stock);
b)
Quoted price for identical or similar assets or liabilities in non-active markets (for example, corporate and municipal bonds, which trade infrequently);
c)
Pricing models whose inputs are observable for substantially the full term of the asset or liability (examples include most over-the-counter derivatives, including interest rate and currency swaps); and
d)
Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability (examples include certain residential and commercial mortgage-related assets, including loans, securities, and derivatives).

Level 3. Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the assets or liability (examples include certain private equity investments, and certain residential and commercial mortgage-related assets, including loans, securities, and derivatives).

A review of fair value hierarchy classification is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain assets or liabilities. Reclassifications impacting level 3 of the fair value hierarchy are reported as transfers in/out of the level 3 category as of the beginning of the quarter in which the reclassifications occur.

Equity investments were recorded at cost less impairment plus or minus observable price changes. Commencing in 2020, the Company elected to measure equity investments at fair value on a non-recurring basis.

The following tables present the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2024 and 2023.

December 31, 2024
(Dollars in thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

 

—

 

 

 

54,805

 

 

 

—

 

 

 

54,805

 

Equity securities

 

 

1,732

 

 

 

—

 

 

 

—

 

 

 

1,732

 

Total

 

$

1,732

 

 

$

56,055

 

 

$

—

 

 

$

57,787

 
(1)
Total unrealized gains of less than $0.1 million, net of tax, was included in comprehensive loss for the year ended December 31, 2024 related to these assets.

December 31, 2023
(Dollars in thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

$

—

 

 

$

54,282

 

 

$

—

 

 

$

54,282

 

Interest-bearing deposits

 

 

—

 

 

 

1,250

 

 

 

—

 

 

 

1,250

 

Equity securities

 

 

1,748

 

 

 

—

 

 

 

—

 

 

 

1,748

 

Total

 

$

1,748

 

 

$

55,532

 

 

$

—

 

 

$

57,280

 
(1)
Total unrealized losses of $0.3 million, net of tax, was included in other comprehensive loss for the year ended December 31, 2023 related to these assets.

The following tables present the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2024 and 2023.

December 31, 2024
(Dollars in thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Equity investments

 

$

—

 

 

$

—

 

 

$

1,374

 

 

$

1,374

 

Total

 

$

—

 

 

$

—

 

 

$

1,374

 

 

$

1,374

 

 

December 31, 2023
(Dollars in thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Equity investments

 

$

—

 

 

$

—

 

 

$

11,430

 

 

$

11,430

 

Nonaccrual loans

 

 

—

 

 

 

—

 

 

 

25,974

 

 

 

25,974

 

Loan collateral in process of foreclosure

 

 

—

 

 

 

—

 

 

 

11,772

 

 

 

11,772

 

Total

 

$

—

 

 

$

—

 

 

$

49,176

 

 

$

49,176

 

Significant Unobservable Inputs

ASC Topic 820 requires disclosure of quantitative information about the significant unobservable inputs used in the valuation of assets and liabilities classified as level 3 within the fair value hierarchy. The tables below are not intended to be all-inclusive, but rather to provide information on significant unobservable inputs and valuation techniques used by the Company.

The valuation techniques and significant unobservable inputs used in non-recurring level 3 fair value measurements of assets and liabilities as of December 31, 2024 and 2023.

(Dollars in thousands)

 

Fair Value
at December 31, 2024

 

 

Valuation Techniques

 

Unobservable Inputs

 

Range
(Weighted Average)

Equity investments

 

$

1,374

 

 

Investee financial analysis

 

Financial condition and operating performance of the borrower (1)

 

N/A

 

(Dollars in thousands)

 

Fair Value
at December 31, 2023

 

 

Valuation Techniques

 

Unobservable Inputs

 

Range
(Weighted Average)

Equity investments

 

$

11,157

 

 

Investee financial analysis

 

Financial condition and operating performance of the borrower (1)

 

N/A

 

 

 

 

 

 

 

Collateral support

 

N/A

 

 

 

273

 

 

Precedent market transaction

 

Offering price

 

$8.73 / share

Nonaccrual loans

 

 

25,974

 

 

Market approach

 

Historical and actual loss experience

 

0.00% - 28.48%

 

 

 

 

 

 

 

 

 

60% of balance

 

 

 

 

 

 

 

Transfer prices (2)

 

$0.0 - $79.5

 

 

 

 

 

 

 

Collateral value

 

N/A

Loan collateral in process of foreclosure

 

 

11,772

 

 

Market approach

 

Transfer prices (2)

 

$0.0 - $79.5

 

 

 

 

 

 

 

Collateral value (3)

 

$2.3 - $45.0
(1)
Includes projections based on revenue, EBITDA, leverage and liquidation amounts. These assumptions are based on a variety of factors, including economic conditions, industry and market developments, market valuations of comparable companies, and company-specific developments, including exit strategies and realization opportunities.
(2)
Represents amount net of liquidation costs.
(3)
Relates to the recreation loan portfolio.
v3.25.0.1
Medallion Bank Preferred Stock (Non-controlling Interest)
 12 Months Ended
Dec. 31, 2024
Medallion Bank Preferred Stock (Non-controlling Interest)

(15) MEDALLION BANK PREFERRED STOCK (Non-controlling interest)

On December 17, 2019, the Bank closed an initial public offering of 1,840,000 shares of its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series F, with a $46.0 million aggregate liquidation amount, yielding net proceeds of $42.5 million, which were recorded in the Bank’s shareholders’ equity. Dividends are payable quarterly from the date of issuance to, but excluding April 1, 2025, at a rate of 8% per annum, and from and including April 1, 2025, at a floating rate equal to a benchmark rate (which is expected to be the three-month Secured Overnight Financing Rate, or SOFR) plus a spread of 6.46% per annum.

On July 21, 2011, the Bank issued, and the U.S. Treasury purchased, 26,303 shares of Senior Non-Cumulative Perpetual Preferred Stock, Series E for an aggregate purchase price of $26.3 million under the Small Business Lending Fund Program, or SBLF, with a liquidation amount of $1,000 per share. The SBLF is a voluntary program intended to encourage small business lending by providing capital to qualified smaller banks at favorable rates. The Bank pays a dividend rate of 9% on the Series E.
v3.25.0.1
Parent Company Only Condensed Financial Statements
 12 Months Ended
Dec. 31, 2024
Condensed Financial Information Disclosure [Abstract]  
Parent Company Only Condensed Financial Statements

(16) PARENT COMPANY ONLY CONDENSED FINANCIAL STATEMENTS

The following presents the condensed financial information of Medallion Financial Corp. (parent company only).

Condensed Balance Sheets

 

 

December 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

Assets

 

 

 

 

 

 

Cash

 

$

26,395

 

 

$

31,001

 

Investment in bank subsidiary (1)

 

 

552,326

 

 

 

523,189

 

Investment in non-bank subsidiaries

 

 

96,653

 

 

 

88,931

 

Income tax receivable

 

 

21,870

 

 

 

21,951

 

Net loans

 

 

361

 

 

 

2,403

 

Loan collateral in process of foreclosure

 

 

782

 

 

 

795

 

Other assets

 

 

4,933

 

 

 

6,613

 

Total assets

 

$

703,320

 

 

$

674,883

 

Liabilities

 

 

 

 

 

 

Long-term borrowings (2)

 

$

177,169

 

 

$

166,625

 

Short-term borrowings

 

 

—

 

 

 

3,000

 

Deferred tax liabilities

 

 

38,096

 

 

 

35,719

 

Intercompany payables

 

 

31,435

 

 

 

32,600

 

Other liabilities

 

 

17,662

 

 

 

25,165

 

Total liabilities

 

 

264,362

 

 

 

263,109

 

Parent company equity

 

 

370,170

 

 

 

342,986

 

Non-controlling interest

 

 

68,788

 

 

 

68,788

 

Total stockholders’ equity

 

 

438,958

 

 

 

411,774

 

Total liabilities and equity

 

$

703,320

 

 

$

674,883

 
(1)
Includes $169.9 million and $171.4 million of goodwill and intangible assets of the Company which relate specifically to the Bank and $68.8 million related to non-controlling interests in consolidated subsidiaries as of December 31, 2024 and 2023.
(2)
Includes $2.3 million and $2.8 million of deferred financing costs as of December 31, 2024 and 2023.

Condensed Statements of Operations

 

Year Ended December 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

 

2022

 

Dividend income

 

$

25,600

 

 

$

25,125

 

 

$

24,750

 

Interest income (loss)

 

 

1,260

 

 

 

1,243

 

 

 

(119

)

Total Dividend and interest income

 

 

26,860

 

 

 

26,368

 

 

 

24,631

 

Interest expense

 

 

14,800

 

 

 

12,771

 

 

 

11,289

 

Net interest income

 

 

12,060

 

 

 

13,597

 

 

 

13,342

 

Allowance for credit losses

 

 

(133

)

 

 

(310

)

 

 

(353

)

Net interest income after allowance for credit losses

 

 

12,193

 

 

 

13,907

 

 

 

13,695

 

Other income, net (1)

 

 

997

 

 

 

2,625

 

 

 

3,939

 

Other expense, net

 

 

18,656

 

 

 

22,781

 

 

 

22,362

 

Income (loss) before income taxes and undistributed earnings of subsidiaries

 

 

(5,466

)

 

 

(6,249

)

 

 

(4,728

)

Income tax benefit

 

 

3,095

 

 

 

5,291

 

 

 

7,940

 

Income (loss) before undistributed earnings of subsidiaries

 

 

(2,371

)

 

 

(958

)

 

 

3,212

 

Undistributed earnings of subsidiaries

 

 

38,249

 

 

 

56,037

 

 

 

40,628

 

Net income attributable to parent company

 

$

35,878

 

 

$

55,079

 

 

$

43,840

 
(1)
Includes $1.0 million, $3.1 million, and $4.9 million of net gains on the disposition of taxi medallion assets for the years ended December 31, 2024, 2023, and 2022.

Condensed Statements of Other Comprehensive Income

 

Year Ended December 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

 

2022

 

Net income

 

$

35,878

 

 

$

55,079

 

 

$

43,840

 

Other comprehensive loss, net of tax

 

 

49

 

 

 

(347

)

 

 

(4,383

)

Total comprehensive income attributable to Medallion
   Financial Corp.

 

$

35,927

 

 

$

54,732

 

 

$

39,457

 

Condensed Statements of Cash Flow

 

Year Ended December 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

 

2022

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

Net income/net decrease in net assets resulting from operations

 

$

35,878

 

 

$

55,079

 

 

$

43,840

 

Adjustments to reconcile net income/net decrease in net assets resulting from
operations to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Equity in undistributed (earnings) losses of subsidiaries

 

 

(63,846

)

 

 

(81,164

)

 

 

(64,300

)

Benefit for credit losses

 

 

(133

)

 

 

(310

)

 

 

(353

)

Depreciation and amortization

 

 

2,252

 

 

 

2,198

 

 

 

2,740

 

Change in deferred and other tax assets/liabilities, net

 

 

2,458

 

 

 

(947

)

 

 

(1,780

)

Net change in loan collateral in process of foreclosure

 

 

—

 

 

 

252

 

 

 

64

 

Stock-based compensation expense

 

 

6,053

 

 

 

4,713

 

 

 

3,476

 

Decrease (increase) in other assets

 

 

1,680

 

 

 

990

 

 

 

1,055

 

Increase in deferred financing costs

 

 

(272

)

 

 

(1,437

)

 

 

(39

)

Decrease in intercompany payables

 

 

(1,165

)

 

 

(778

)

 

 

(6,325

)

(Decrease) increase in other liabilities

 

 

(7,614

)

 

 

(134

)

 

 

5,430

 

Net cash used for operating activities

 

 

(24,709

)

 

 

(21,538

)

 

 

(16,192

)

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

Loans originated

 

 

(110

)

 

 

(1,612

)

 

 

(92

)

Proceeds from principal receipts, sales, and maturities of loans and investments

 

 

1,864

 

 

 

2,057

 

 

 

723

 

Proceeds from sale and principal payments of loan collateral in process of foreclosure

 

 

434

 

 

 

954

 

 

 

3,697

 

Investment in subsidiaries

 

 

—

 

 

 

(5,125

)

 

 

(4,750

)

Dividends from subsidiaries

 

 

25,600

 

 

 

25,125

 

 

 

24,750

 

Net cash provided by investing activities

 

 

27,788

 

 

 

21,399

 

 

 

24,328

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

Proceeds from funds borrowed

 

 

10,000

 

 

 

51,500

 

 

 

—

 

Repayments of funds borrowed

 

 

(3,000

)

 

 

(33,000

)

 

 

—

 

Treasury stock repurchased

 

 

(4,606

)

 

 

—

 

 

 

(20,619

)

Dividends paid to shareholders

 

 

(9,394

)

 

 

(7,703

)

 

 

(7,543

)

Payment of withholding taxes on net settlement of vested stock

 

 

(944

)

 

 

(768

)

 

 

—

 

Proceeds from the exercise of stock options

 

 

259

 

 

 

442

 

 

 

155

 

Net cash (used for) provided by financing activities

 

 

(7,685

)

 

 

10,471

 

 

 

(28,007

)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

 

 

(4,606

)

 

 

10,332

 

 

 

(19,871

)

Cash and cash equivalents, beginning of period

 

 

31,001

 

 

 

20,669

 

 

 

40,540

 

Cash and cash equivalents, end of period

 

$

26,395

 

 

$

31,001

 

 

$

20,669

 
v3.25.0.1
Subsequent Events
 12 Months Ended
Dec. 31, 2024
Subsequent Events [Abstract]  
Subsequent Events

(17) SUBSEQUENT EVENTS

The Company has evaluated the effects of events that have occurred subsequent to December 31, 2024, through the date of financial statement issuance for potential recognition or disclosure. As of such date, there were no subsequent events that required recognition or disclosure.
v3.25.0.1
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2024
Accounting Policies [Abstract]  
Use of Estimates

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 goodwill and intangible assets and allowance for credit losses, among other effects.

Basis of Presentation

Basis of Presentation

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

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. Cash also includes $1.3 million of interest-bearing funds deposited in other banks with original terms of 5 to 6 years that cannot be withdrawn but are salable on an active secondary market without penalty.
Fair Value of Assets and Liabilities

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 13 and 14 to the consolidated financial statements.

Equity Investments

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 $9.2 million and $11.4 million as of December 31, 2024 and 2023, were comprised mainly of nonmarketable stock and stock warrants, are recorded at cost less any impairment plus or minus observable price changes. Substantially all of these equity investments are held by Medallion Capital, our SBIC subsidiary in connection with its mezzanine lending business. As of December 31, 2024, cumulative impairment of $5.5 million had been recorded with respect to these investments. Impairments on equity investments were on equity investments of $2.0 million and $1.1 million was recorded during the years ended December 31, 2024 and 2023. Additionally, the Company recognized $8.9 million and $6.2 million of realized gains during the year ended December 31, 2024 and 2023 on the disposition and exit of equity 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, 2024 and 2023, the fair value of these securities were $1.7 million and are included in other assets on the consolidated balance sheet. For the years ended December 31, 2024 and 2023, the Company realized less than $0.1 million of losses related to equity securities.
Investment Securities

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 using the interest method. 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, the Company does not maintain an allowance for credit losses for accrued interest receivable.

For available-for-sale debt securities in an unrealized loss position, the Company first determines if it intends to sell the security, or if it is more likely than not that we will be required to sell it before recovering its amortized cost basis. If either condition is met, the security’s amortized cost basis is written down to its fair value through earnings. If neither condition is met, the Company assess whether the decline in fair value is the result of credit losses or other factors. This assessment includes reviewing changes in the rating of the security by a rating agency, increases in defaults on the underlying collateral, and the extent to which the securities are issued by the federal government or its agencies, including the amount of the guarantee issued by those agencies, among other factors. If a credit loss exists, the Company compares the present value of expected cash flows from the security to its amortized cost basis. If the present value is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded through earnings, but limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment not recorded through an allowance for credit losses is recognized in other comprehensive (loss) income, net of taxes.

Changes in the allowance for credit losses are recorded as a provision for, or reversal of, credit loss expense. Losses are charged against the allowance when management confirms the uncollectibility of an available-for-sale debt security or when either of the criteria regarding intent or requirement to sell is met. There were no investment securities allowance for credit losses as of December 31, 2024 and 2023.
Loans

Loans

The Company’s loans, classified as held for investment, are currently reported at amortized cost, which is the principal amount outstanding, inclusive of loan origination costs, which primarily includes deferred costs paid to loan originators, and which are amortized to interest income over the life of the loan. Loans which the Company has classified as held for sale are reported at lower of amortized cost or fair value.

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, 2024 and 2023, net loan origination costs were $46.6 million and $40.0 million. Net amortization to income for the years ended December 31, 2024, 2023, and 2022 were $9.2 million, $8.3 million, and $8.7 million.

Interest income is recorded on the accrual basis. The consumer loan portfolio is typified by a larger number of smaller dollar loans that have similar characteristics. A loan is 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 nonperforming. Loans are considered past due when a borrower fails to make a full payment by the payment due date or maturity date. 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. Commercial loans and taxi medallion 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 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.

Loan collateral in process of foreclosure primarily includes taxi medallion loans that have reached 120 days past due and have been charged down to the net realizable value of the underlying collateral, 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.

Loans Held For Sale

Loans Held For Sale

Loans held for sale consist of Recreation loans and Strategic Partnership loans intended to be sold in the secondary market. Loans held for sale are recorded at the lower of amortized cost or fair value. For the years ended December 31, 2024 and 2023, the Company did not recognize any fair value adjustments related to loans held for sale. Changes in fair value are recognized in non-interest income.
Allowance for Credit Losses

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 delinquent loan performance and actual loss rates modified by quantitative adjustments based on macroeconomic factors over a twelve-month reasonable and supportable forecast period followed by a six month reversion 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 individually evaluates each loan and establishes a reserve based on fair value of collateral less cost to sell. 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 has elected to exclude accrued interest from its measurement of the allowance for credit losses.

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 presented 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

Goodwill and Intangible Assets

Goodwill is evaluated for impairment on an annual basis at December 31 of each year or whenever events or changes in circumstances indicate the carrying value may not be recoverable. Other intangible assets with finite useful lives are amortized either on an accelerated or straight-line basis over their estimated useful lives. Other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

As of December 31, 2024 and 2023, the Company had goodwill of $150.8 million, all of which related to the recreation and home improvement lending segments. As of December 31, 2024 and 2023, the Company had intangible assets of $19.1 million and $20.6 million. The Company recognized $1.4 million of amortization expense on the intangible assets for each of the years ended December 31, 2024, 2023 and 2022.

Management engaged an independent third-party expert to perform a quantitative assessment of goodwill for impairment at December 31, 2024. The third-party expert’s assessment determined that it was more likely than not that the fair value of both the recreation lending and home improvement lending segments individually were not less than the carrying value of each of these segments. Based upon inputs and analysis deemed appropriate by the third-party expert, the third-party expert concluded that a fair value premium existed in excess of carrying value with respect to the recreation and home improvement lending segments.

In evaluating both segments, a combination of an income approach (weighted 50%), an earnings based market approach (weighted 25%), and a book value based market approach (weighted 25%) were employed by the third-party expert. For the income approach, a discounted cash flow analysis was used. Key inputs and assumptions used in the discounted cash flow analysis included future projected cash flows, risk-adjusted discount rates, capital requirements, and future economic and market conditions. For both segments a discount rate was estimated using the risk-free interest rate adjusted for specific risk and size premiums, resulting in a discount rate of 17.5% for the recreation lending segment and 16.5% for the home improvement lending segment. For both segments, growth rates consistent with our plan were employed by the third-party expert for a five year period, and a long-term growth rate of 3% was utilized in determining the terminal fair value.

Determining the fair value of a lending segment or an indefinite-lived intangible asset involves the use of significant estimates and assumptions. The Company believes that the fair value estimates determined by the third-party expert were based on reasonable assumptions and appropriate for the purpose of assessing goodwill for impairment. However, as these estimates and assumptions are unpredictable and inherently uncertain, actual future results may differ from these estimates. In addition, the Company also makes certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of the Company’s reporting units. To the extent that the Company was unable to grow either the recreation lending or home improvement lending segment at the levels it forecasted, if the Company were unable to issue new loans at rates and terms consistent with current practices, and if the Company's cost of borrowings were to increase significantly from current levels without the ability to pass along those rate increases to new borrowers, the fair value of these segments could deteriorate to a level which would require an impairment of goodwill.

The following table details the intangible assets as of the dates presented:

 

 

December 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

Brand-related intellectual property

 

$

14,575

 

 

$

15,675

 

Home improvement contractor relationships

 

 

4,571

 

 

 

4,916

 

Total intangible assets

 

$

19,146

 

 

$

20,591

 
Fixed Assets

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 $0.7 million, $0.4 million, and $0.4 million for the years ended December 31, 2024, 2023, and 2022.
Deferred Costs

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, included as interest expense in the Consolidated Statements of Operations, was $4.0 million, $3.1 million, and $2.6 million for the years ended December 31, 2024, 2023, and 2022. 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 related to deposits and borrowing facilities were $8.2 million and $8.5 million as of December 31, 2024 and 2023, and there were no capitalized transaction costs as of December 31, 2024 and 2023.

Income Taxes

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 the enacted tax rates expected to apply in the year 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)

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 presents the calculation of basic and diluted EPS.

 

Year Ended December 31,

 

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

 

2024

 

 

2023

 

 

2022

 

Net income attributable to common stockholders

 

$

35,878

 

 

$

55,079

 

 

$

43,840

 

Weighted average common shares outstanding applicable to basic EPS

 

 

22,546,051

 

 

 

22,510,435

 

 

 

23,583,049

 

Effect of restricted stock grants

 

 

516,694

 

 

 

461,098

 

 

 

276,469

 

Effect of dilutive stock options

 

 

214,882

 

 

 

142,216

 

 

 

67,825

 

Effect of performance stock unit grants

 

 

327,866

 

 

 

134,574

 

 

 

—

 

Adjusted weighted average common shares outstanding applicable to diluted EPS

 

$

23,605,493

 

 

$

23,248,323

 

 

$

23,927,342

 

Basic earnings per share

 

$

1.59

 

 

$

2.45

 

 

$

1.86

 

Diluted earnings per share

 

 

1.52

 

 

 

2.37

 

 

 

1.83

 

Potentially dilutive common shares excluded from the above calculations aggregated 59,902 shares, 92,310 shares, and 347,963 shares as of December 31, 2024, 2023, and 2022.
Stock Compensation

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.
Regulatory Capital

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 (presented 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 affect the Bank's ability to pay dividends to the Company, and that an adequate allowance for credit losses be maintained. As of December 31, 2024 and 2023, the Bank’s Tier 1 leverage ratio was considered well-capitalized. 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)

 

Adequately Capitalized

 

 

Well-Capitalized

 

 

2024

 

 

2023

 

Common equity tier 1 capital

 

 

 

 

 

 

 

$

322,229

 

 

$

293,774

 

Tier 1 capital

 

 

 

 

 

 

 

 

391,016

 

 

 

362,561

 

Total capital

 

 

 

 

 

 

 

 

422,139

 

 

 

390,153

 

Average assets

 

 

 

 

 

 

 

 

2,493,857

 

 

 

2,232,816

 

Risk-weighted assets

 

 

 

 

 

 

 

 

2,429,349

 

 

 

2,155,641

 

Leverage ratio (1)

 

 

4.0

%

 

 

5.0

%

 

 

15.7

%

 

 

16.2

%

Common equity tier 1 capital ratio (2)

 

 

4.5

 

 

 

6.5

 

 

 

13.3

 

 

 

13.6

 

Tier 1 capital ratio (3)

 

 

6.0

 

 

 

8.0

 

 

 

16.1

 

 

 

16.8

 

Total capital ratio (3)

 

 

8.0

 

 

 

10.0

 

 

 

17.4

 

 

 

18.1

 
(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, 2024 and 2023 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, 2024 and 2023.
Recently Adopted Accounting Standards And Recently Issued Accounting Standards

Recently Adopted Accounting Standards

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 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. Under ASU 2023-07, the Company is required to report significant segment income and expenses, by reportable segments, used by the Company's chief operating decision maker. The Company adopted ASU 2023-07 effective December 31, 2024.

Recently Issued Accounting Standards

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 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 the annual periods beginning after December 15, 2024. The Company is assessing the impact of the update on the accompanying financial statements.
Reclassifications

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.
v3.25.0.1
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2024
Accounting Policies [Abstract]  
Summary of Finalized Adoption Related to Allowance for Credit Losses on Loans The CECL methodology transition effects on the allowance for credit losses are presented 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

 
Schedule of Intangible Assets

The following table details the intangible assets as of the dates presented:

 

 

December 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

Brand-related intellectual property

 

$

14,575

 

 

$

15,675

 

Home improvement contractor relationships

 

 

4,571

 

 

 

4,916

 

Total intangible assets

 

$

19,146

 

 

$

20,591

 
Summary of the Calculation of Basic and Diluted EPS The table below presents the calculation of basic and diluted EPS.

 

Year Ended December 31,

 

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

 

2024

 

 

2023

 

 

2022

 

Net income attributable to common stockholders

 

$

35,878

 

 

$

55,079

 

 

$

43,840

 

Weighted average common shares outstanding applicable to basic EPS

 

 

22,546,051

 

 

 

22,510,435

 

 

 

23,583,049

 

Effect of restricted stock grants

 

 

516,694

 

 

 

461,098

 

 

 

276,469

 

Effect of dilutive stock options

 

 

214,882

 

 

 

142,216

 

 

 

67,825

 

Effect of performance stock unit grants

 

 

327,866

 

 

 

134,574

 

 

 

—

 

Adjusted weighted average common shares outstanding applicable to diluted EPS

 

$

23,605,493

 

 

$

23,248,323

 

 

$

23,927,342

 

Basic earnings per share

 

$

1.59

 

 

$

2.45

 

 

$

1.86

 

Diluted earnings per share

 

 

1.52

 

 

 

2.37

 

 

 

1.83

 
Summary of Bank's Actual Capital Amounts and Ratios, and the Regulatory Minimum Ratios 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)

 

Adequately Capitalized

 

 

Well-Capitalized

 

 

2024

 

 

2023

 

Common equity tier 1 capital

 

 

 

 

 

 

 

$

322,229

 

 

$

293,774

 

Tier 1 capital

 

 

 

 

 

 

 

 

391,016

 

 

 

362,561

 

Total capital

 

 

 

 

 

 

 

 

422,139

 

 

 

390,153

 

Average assets

 

 

 

 

 

 

 

 

2,493,857

 

 

 

2,232,816

 

Risk-weighted assets

 

 

 

 

 

 

 

 

2,429,349

 

 

 

2,155,641

 

Leverage ratio (1)

 

 

4.0

%

 

 

5.0

%

 

 

15.7

%

 

 

16.2

%

Common equity tier 1 capital ratio (2)

 

 

4.5

 

 

 

6.5

 

 

 

13.3

 

 

 

13.6

 

Tier 1 capital ratio (3)

 

 

6.0

 

 

 

8.0

 

 

 

16.1

 

 

 

16.8

 

Total capital ratio (3)

 

 

8.0

 

 

 

10.0

 

 

 

17.4

 

 

 

18.1

 
(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.
v3.25.0.1
Investment Securities (Tables)
 12 Months Ended
Dec. 31, 2024
Schedule of Investments [Abstract]  
Summary of Fixed Maturity Securities Available for Sale

The following tables present details of fixed maturity securities available for sale as of December 31, 2024 and 2023.

December 31, 2024
(Dollars in thousands)

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

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

 

$

41,475

 

 

$

28

 

 

$

(4,802

)

 

$

36,701

 

State and municipalities

 

 

17,373

 

 

 

81

 

 

 

(1,516

)

 

 

15,938

 

Agency bonds

 

 

2,179

 

 

 

2

 

 

 

(15

)

 

 

2,166

 

Total

 

$

61,027

 

 

$

111

 

 

$

(6,333

)

 

$

54,805

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 
Summary of Amortized Cost and Estimated Market Value of Investment Securities by Contractual Maturity

The amortized cost and estimated fair market value of investment securities as of December 31, 2024 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, 2024
(Dollars in thousands)

 

Amortized
Cost

 

 

Fair
Value

 

Due in one year or less

 

$

2,947

 

 

$

2,930

 

Due after one year through five years

 

 

4,674

 

 

 

4,354

 

Due after five years through ten years

 

 

6,322

 

 

 

5,575

 

Due after ten years

 

 

47,084

 

 

 

41,946

 

Total

 

$

61,027

 

 

$

54,805

 
Summary of Securities with Gross Unrealized Losses

The following tables present information pertaining to securities with gross unrealized losses as of December 31, 2024 and 2023, aggregated by investment category and length of time that individual securities have been in a continuous loss position.

 

Less than Twelve Months

 

 

Twelve Months and Over

 

December 31, 2024
(Dollars in thousands)

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

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

 

$

(106

)

 

$

5,423

 

 

$

(4,696

)

 

$

29,619

 

State and municipalities

 

 

(269

)

 

 

4,884

 

 

 

(1,247

)

 

 

9,939

 

Agency bonds

 

 

—

 

 

 

—

 

 

 

(15

)

 

 

166

 

Total

 

$

(375

)

 

$

10,307

 

 

$

(5,958

)

 

$

39,724

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 
v3.25.0.1
Loans and Allowance for credit Losses (Tables)
 12 Months Ended
Dec. 31, 2024
Text Block [Abstract]  
Summary of Inclusive Capitalized Loans

The following table presents the major classification of loans, inclusive of capitalized loan origination costs, as of December 31, 2024 and 2023.

 

As of December 31,

 

 

 

2024

 

 

2023

 

(Dollars in thousands)

 

Amount

 

 

As a
Percent of
Total Loans

 

 

Amount

 

 

As a
Percent of
Total Loans

 

Loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

Recreation

 

$

1,422,403

 

 

 

57

%

 

$

1,336,226

 

 

 

60

%

Home improvement

 

 

827,211

 

 

 

33

 

 

 

760,617

 

 

 

34

 

Commercial

 

 

111,273

 

 

 

4

 

 

 

114,827

 

 

 

5

 

Taxi medallion

 

 

1,909

 

 

*

 

 

 

3,663

 

 

*

 

Strategic partnership

 

 

—

 

 

 

—

 

 

 

553

 

 

*

 

Total loans held for investment

 

 

2,362,796

 

 

 

95

 

 

 

2,215,886

 

 

 

100

 

Loans held for sale, at lower of amortized cost or fair value:

 

 

 

 

 

 

 

 

 

 

 

 

Recreation

 

 

120,840

 

 

 

5

 

 

 

—

 

 

 

—

 

Strategic partnership

 

 

7,386

 

 

*

 

 

 

—

 

 

 

—

 

Total loans held for sale, at lower of amortized cost or fair value

 

 

128,226

 

 

 

5

 

 

 

—

 

 

 

—

 

Total loans

 

$

2,491,022

 

 

 

100

%

 

$

2,215,886

 

 

 

100

%

(*) Less than 1%.
Schedule of Activity of Gross Loans

The following tables present the activity of the gross loans for the years ended December 31, 2024 and 2023.

December 31, 2024
(Dollars in thousands)

 

Recreation (1)

 

 

Home
Improvement

 

 

Commercial

 

 

Taxi
Medallion

 

 

Strategic
Partnership

 

 

Total

 

Gross loans – December 31, 2023

 

$

1,336,226

 

 

$

760,617

 

 

$

114,827

 

 

$

3,663

 

 

$

553

 

 

$

2,215,886

 

Loan originations

 

 

526,634

 

 

 

298,642

 

 

 

14,300

 

 

 

250

 

 

 

203,627

 

 

 

1,043,453

 

Principal receipts, sales, and maturities

 

 

(232,414

)

 

 

(213,600

)

 

 

(17,949

)

 

 

(886

)

 

 

(196,794

)

 

 

(661,643

)

Charge-offs

 

 

(69,349

)

 

 

(18,035

)

 

 

(71

)

 

 

(124

)

 

 

—

 

 

 

(87,579

)

Transfer to loan collateral in process of foreclosure, net

 

 

(24,921

)

 

 

—

 

 

 

(1,627

)

 

 

(994

)

 

 

—

 

 

 

(27,542

)

Amortization of origination fees and costs, net

 

 

(13,502

)

 

 

4,288

 

 

 

41

 

 

 

—

 

 

 

—

 

 

 

(9,173

)

Origination fees and costs, net

 

 

20,569

 

 

 

(4,701

)

 

 

(78

)

 

 

—

 

 

 

—

 

 

 

15,790

 

Paid-in-kind interest

 

 

—

 

 

 

—

 

 

 

1,830

 

 

 

—

 

 

 

—

 

 

 

1,830

 

Gross loans – December 31, 2024

 

$

1,543,243

 

 

$

827,211

 

 

$

111,273

 

 

$

1,909

 

 

$

7,386

 

 

$

2,491,022

 
(1)
Includes loans held for sale and loans held for investment.

December 31, 2023
(Dollars in thousands)

 

Recreation

 

 

Home
Improvement

 

 

Commercial

 

 

Taxi
Medallion

 

 

Strategic
Partnership

 

 

Total

 

Gross loans – December 31, 2022

 

$

1,183,512

 

 

$

626,399

 

 

$

92,899

 

 

$

13,571

 

 

$

572

 

 

$

1,916,953

 

Loan originations

 

 

447,039

 

 

 

357,394

 

 

 

34,850

 

 

 

2,426

 

 

 

118,338

 

 

 

960,047

 

Principal receipts, sales, and maturities

 

 

(231,158

)

 

 

(209,894

)

 

 

(13,389

)

 

 

(6,859

)

 

 

(118,357

)

 

 

(579,657

)

Charge-offs

 

 

(50,512

)

 

 

(12,308

)

 

 

(1,019

)

 

 

(3,829

)

 

 

—

 

 

 

(67,668

)

Transfer to loan collateral in process of foreclosure, net

 

 

(18,875

)

 

 

—

 

 

 

—

 

 

 

(2,306

)

 

 

—

 

 

 

(21,181

)

Amortization of origination fees and costs, net

 

 

(12,270

)

 

 

2,668

 

 

 

14

 

 

 

—

 

 

 

—

 

 

 

(9,588

)

Origination fees and costs, net

 

 

18,490

 

 

 

(3,642

)

 

 

(164

)

 

 

660

 

 

 

—

 

 

 

15,344

 

Paid-in-kind interest

 

 

—

 

 

 

—

 

 

 

1,636

 

 

 

—

 

 

 

—

 

 

 

1,636

 

Gross loans – December 31, 2023

 

$

1,336,226

 

 

$

760,617

 

 

$

114,827

 

 

$

3,663

 

 

$

553

 

 

$

2,215,886

 
Summary of Activity in Allowance for Loan Losses

The following table presents the activity in the allowance for credit losses for the years ended December 31, 2024 and 2023.

(Dollars in thousands)

 

Recreation

 

 

Home
Improvement

 

 

Commercial

 

 

Taxi
Medallion (1)

 

 

Total

 

Balance at December 31, 2022

 

$

41,966

 

 

$

11,340

 

 

$

1,049

 

 

$

9,490

 

 

$

63,845

 

Charge-offs

 

 

(50,512

)

 

 

(12,308

)

 

 

(1,019

)

 

 

(3,829

)

 

 

(67,668

)

Recoveries

 

 

11,449

 

 

 

2,886

 

 

 

10

 

 

 

22,191

 

 

 

36,536

 

Provision (benefit) for credit losses

 

 

44,592

 

 

 

17,583

 

 

 

1,988

 

 

 

(26,353

)

 

 

37,810

 

CECL transition amount upon ASU 2016-13 adoption

 

 

10,037

 

 

 

1,518

 

 

 

2,120

 

 

 

37

 

 

 

13,712

 

Balance at December 31, 2023

 

 

57,532

 

 

 

21,019

 

 

 

4,148

 

 

 

1,536

 

 

 

84,235

 

Charge-offs

 

 

(69,349

)

 

 

(18,035

)

 

 

(71

)

 

 

(124

)

 

 

(87,579

)

Recoveries

 

 

14,924

 

 

 

4,094

 

 

 

29

 

 

 

5,163

 

 

 

24,210

 

Provision (benefit) for credit losses

 

 

67,995

 

 

 

13,458

 

 

 

1,084

 

 

 

(6,035

)

 

 

76,502

 

Balance at December 31, 2024

 

$

71,102

 

 

$

20,536

 

 

$

5,190

 

 

$

540

 

 

$

97,368

 
(1)
As of December 31, 2024, cumulative net charge-offs of loans and loan collateral in process of foreclosure in the taxi medallion portfolio were $165.3 million, including $98.6 million related to loans secured by New York taxi medallions, some of which may represent collection opportunities for the Company.
Summary of Gross Charge Offs

The following tables present the gross charge-offs for the years ended December 31, 2024 and 2023, by the year of origination:

December 31, 2024
(Dollars in thousands)

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

Prior

 

 

Total

 

Recreation

 

$

3,203

 

 

$

18,540

 

 

$

22,883

 

 

$

10,789

 

 

$

4,222

 

 

$

9,712

 

 

$

69,349

 

Home improvement

 

 

841

 

 

 

5,766

 

 

 

6,412

 

 

 

3,131

 

 

 

815

 

 

 

1,070

 

 

 

18,035

 

Commercial

 

 

—

 

 

 

71

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

71

 

Taxi medallion

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

124

 

 

 

124

 

Total

 

$

4,044

 

 

$

24,377

 

 

$

29,295

 

 

$

13,920

 

 

$

5,037

 

 

$

10,906

 

 

$

87,579

 

 

December 31, 2023
(Dollars in thousands)

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Total

 

Recreation

 

$

3,136

 

 

$

18,836

 

 

$

10,857

 

 

$

5,115

 

 

$

5,001

 

 

$

7,567

 

 

$

50,512

 

Home improvement

 

 

2,196

 

 

 

5,686

 

 

 

2,662

 

 

 

702

 

 

 

435

 

 

 

627

 

 

 

12,308

 

Commercial

 

 

—

 

 

 

—

 

 

 

119

 

 

 

—

 

 

 

900

 

 

 

—

 

 

 

1,019

 

Taxi medallion

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,829

 

 

 

3,829

 

Total

 

$

5,332

 

 

$

24,522

 

 

$

13,638

 

 

$

5,817

 

 

$

6,336

 

 

$

12,023

 

 

$

67,668

 

 
Summary of Allowance for Loan Losses by Type

The following tables present the allowance for credit losses by type as of December 31, 2024 and 2023.

December 31, 2024
(Dollars in thousands)

 

Amount

 

 

Percentage
of Allowance

 

 

Allowance as
a Percent of
Loan Category (1)

 

 

Allowance as
a Percent of
Nonaccrual

 

Recreation

 

$

71,102

 

 

 

73

%

 

 

5.00

%

 

 

440.07

%

Home improvement

 

 

20,536

 

 

 

21

 

 

 

2.48

 

 

 

127.11

 

Commercial

 

 

5,190

 

 

 

5

 

 

 

4.66

 

 

 

32.12

 

Taxi medallion

 

 

540

 

 

 

1

 

 

 

28.29

 

 

 

3.34

 

Total

 

$

97,368

 

 

 

100

%

 

 

 

 

 

 
(1)
Does not include loa