MEDALLION FINANCIAL CORP, 10-Q filed on 06 May 25
 | XBRL Documents
v3.25.1
Document and Entity Information - shares
 3 Months Ended
Mar. 31, 2025
May 05, 2025
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Mar. 31, 2025  
Document Fiscal Year Focus 2025  
Document Fiscal Period Focus Q1  
Entity Registrant Name MEDALLION FINANCIAL CORP  
Entity Central Index Key 0001000209  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Common Stock, Shares Outstanding   23,236,480
Entity Emerging Growth Company false  
Entity Small Business true  
Entity Shell Company 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 $0.01 per share  
Trading Symbol MFIN  
Security Exchange Name NASDAQ  
v3.25.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Mar. 31, 2025
Dec. 31, 2024
Assets    
Cash and cash equivalents $ 131,512 $ 98,238
Federal funds sold 26,482 71,334
Investment securities 60,424 54,805
Equity investments 8,997 9,198
Loans held for sale, at lower of amortized cost or fair value 124,733 128,226
Loans 2,361,700 2,362,796
Allowance for credit losses (100,366) [1] (97,368) [2]
Total loans receivable 2,261,334 2,265,428
Goodwill 150,803 150,803
Intangible assets, net 18,785 19,146
Property, equipment, and right-of-use lease asset, net 12,814 13,756
Accrued interest receivable 14,437 15,314
Loan collateral in process of foreclosure 9,183 9,932
Income tax receivable 0 2,131
Other assets 28,234 30,295
Total assets 2,847,738 2,868,606
Liabilities    
Deposits [3] 2,022,828 2,090,071
Long-term debt [4] 199,665 232,159
Short-term debt [5] 111,750 49,000
Deferred tax liabilities, net 21,538 20,995
Operating lease liabilities 4,528 5,128
Accrued interest payable 6,610 8,231
Income tax payable 4,283 0
Accounts payable and accrued expenses [6] 27,524 24,064
Total liabilities 2,398,726 2,429,648
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 29,467,773 shares at March 31, 2025 and 29,308,182 shares at December 31, 2024 issued) 295 293
Additional paid in capital 293,897 293,412
Treasury stock (6,232,743 shares at March 31, 2025 and 6,172,558 shares at December 31, 2024) (50,675) (50,144)
Accumulated other comprehensive loss (3,009) (3,647)
Retained earnings 139,716 130,256
Total stockholders’ equity 380,224 370,170
Non-controlling interest in consolidated subsidiaries 68,788 68,788
Total equity 449,012 438,958
Total liabilities and equity $ 2,847,738 $ 2,868,606
Number of common shares outstanding 23,235,030 23,135,624
Book value per common share $ 16.36 $ 16
[1] As of March 31, 2025, total allowance for credit losses as a percent of nonaccrual loans was 293.37%.
[2] As of December 31, 2024, total allowance for credit losses as a percent of nonaccrual loans was 291.93%
[3] Includes $4.5 million and $4.6 million of deferred financing costs as of March 31, 2025 and December 31, 2024. Refer to Note 5 for more details.
[4] Includes $3.6 million of deferred financing costs as of both March 31, 2025 and December 31, 2024. Refer to Note 5 for more details.
[5] Includes $42.7 million and $42.8 million of deferred tax liabilities related to goodwill and intangible assets as of March 31, 2025 and December 31, 2024. Refer to Note 7 for more details.
[6] Includes the short-term portion of lease liabilities of $2.3 million as of both March 31, 2025 and December 31, 2024. Refer to Note 6 for more details.
v3.25.1
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Mar. 31, 2025
Dec. 31, 2024
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 29,467,773 29,308,182
Treasury stock, shares 6,232,743 6,172,558
Deferred tax liabilities related to goodwill and intangible assets $ 42,681 $ 42,800
Short term lease liabilities 2,300 2,300
Deferred financing costs 8,100 8,200
Deposits [Member]    
Deferred financing costs 4,500 4,600
Long-Term Debt [Member]    
Deferred financing costs $ 3,600 $ 3,600
v3.25.1
Consolidated Statements of Operations (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Income Statement [Abstract]    
Interest and fees on loans $ 73,737 $ 65,221
Non-loan interest and dividend income 1,688 1,849
Total interest income 75,425 67,070
Interest on deposits 19,615 14,752
Interest on long-term debt 3,690 4,255
Interest on short-term borrowings 708 146
Total interest expense 24,013 19,153
Net interest income 51,412 47,917
Provision for credit losses 22,014 17,201
Net interest income after provision for credit losses 29,398 30,716
Other income    
Gain on equity investments, net 9,430 4,167
Gain on taxi medallion assets, net 843 629
Strategic partnership fees 685 326
Other income 641 281
Total other income, net 11,599 5,403
Other expenses    
Salaries and employee benefits 9,993 9,457
Loan servicing fees 2,817 2,470
Collection costs 1,537 1,467
Regulatory fees 821 977
Professional fee costs, net 1,750 771
Rent expense 675 657
Amortization of intangible assets 361 361
Other expenses 2,804 2,065
Total other expenses 20,758 18,225
Income before income taxes 20,239 17,894
Income tax provision 6,713 6,358
Net income after taxes 13,526 11,536
Less: income attributable to the non-controlling interest 1,512 1,512
Net income attributable to Medallion Financial Corp. $ 12,014 $ 10,024
Basic earnings per share $ 0.53 $ 0.44
Diluted earnings per share $ 0.5 $ 0.42
Weighted average common shares outstanding    
Basic 22,570,797 22,641,385
Diluted 23,897,167 23,765,045
v3.25.1
Consolidated Statements of Other Comprehensive Income (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Statement of Comprehensive Income [Abstract]    
Net income $ 13,526 $ 11,536
Other comprehensive income (loss), net of tax 638 (150)
Total comprehensive income 14,164 11,386
Less comprehensive income attributable to the non-controlling interest 1,512 1,512
Total comprehensive income attributable to Medallion Financial Corp. $ 12,652 $ 9,874
v3.25.1
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]
Balance at Dec. 31, 2023 $ 411,774 $ 291 $ 288,046 $ (45,538) $ 103,883 $ (3,696) $ 342,986 $ 68,788
Balance, shares at Dec. 31, 2023   29,051,800            
Balance, shares at Dec. 31, 2023       (5,602,154)        
Net income 11,536       10,024   10,024 1,512
Distributions to non-controlling interest (1,512)             (1,512)
Stock-based compensation expense 1,496 $ 1 1,495       1,496  
Issuance of restricted stock, net, shares   296,178            
Withheld restricted stock for employees' tax obligations, shares   (116,275)            
Withheld restricted stock for employees' tax obligations, value (944)   (944)       (944)  
Forfeiture of restricted stock, net, shares   (1,208)            
Exercise of stock options, value 88   88       88  
Exercise of stock options, shares   13,383            
Purchase of common stock (in Shares)       (264,160)        
Purchase of common stock (2,126)     $ (2,126)     (2,126)  
Dividends paid on common stock (2,338)       (2,338)   (2,338)  
Other comprehensive income (loss), net of tax (150)         (150) (150)  
Ending balance at Mar. 31, 2024 417,824 $ 292 288,685 $ (47,664) 111,569 (3,846) 349,036 68,788
Ending balance, shares at Mar. 31, 2024   29,243,878            
Ending balance, shares at Mar. 31, 2024       (5,866,314)        
Balance at Dec. 31, 2023 $ 411,774 $ 291 288,046 $ (45,538) 103,883 (3,696) 342,986 68,788
Balance, shares at Dec. 31, 2023   29,051,800            
Balance, shares at Dec. 31, 2023       (5,602,154)        
Exercise of stock options, shares 40,865              
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            
Ending balance, shares at Dec. 31, 2024 6,172,558     (6,172,558)        
Net income $ 13,526       12,014   12,014 1,512
Distributions to non-controlling interest (1,512)             (1,512)
Stock-based compensation expense 1,688 $ 2 1,686       1,688  
Issuance of restricted stock, net, shares   307,059            
Withheld restricted stock for employees' tax obligations, shares   (144,360)            
Withheld restricted stock for employees' tax obligations, value (1,202)   (1,202)       (1,202)  
Forfeiture of restricted stock, net, shares   (3,373)            
Exercise of stock options, value $ 1   1       1  
Exercise of stock options, shares 265 [1] 265            
Purchase of common stock (in Shares)       (60,185)        
Purchase of common stock $ (531)     $ (531)     (531)  
Dividends paid on common stock (2,554)       (2,554)   (2,554)  
Other comprehensive income (loss), net of tax 638         638 638  
Ending balance at Mar. 31, 2025 $ 449,012 $ 295 $ 293,897 $ (50,675) $ 139,716 $ (3,009) $ 380,224 $ 68,788
Ending balance, shares at Mar. 31, 2025 23,235,030 29,467,773            
Ending balance, shares at Mar. 31, 2025 6,232,743     (6,232,743)        
[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 less than $0.1 million for both the three months ended March 31, 2025 and the year ended December 31, 2024.
v3.25.1
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
CASH FLOWS FROM OPERATING ACTIVITIES    
Net income resulting from operations $ 13,526 $ 11,536
Adjustments to reconcile net income resulting from operations to net cash provided by operating activities:    
Provision for credit losses 22,014 17,201
Paid-in-kind interest income (249) (608)
Depreciation and amortization 2,105 1,381
Amortization of origination fees, net 2,336 2,007
Increase in deferred and other tax liabilities, net 6,957 6,290
Net change in value of loan collateral in process of foreclosure 0 3,240
Net gains on investments (9,430) (4,167)
Stock-based compensation expense 1,688 1,496
Decrease in accrued interest receivable 877 865
Decrease in other assets 1,319 522
Decrease in accounts payable and accrued expenses (3,263) (6,763)
Decrease in accrued interest payable (1,621) (745)
Net cash provided by operating activities 36,259 32,255
CASH FLOWS FROM INVESTING ACTIVITIES    
Loans originated (284,146) (175,721)
Proceeds from principal receipts, sales, and maturities of loans 265,210 138,748
Purchases of investments (3,873) (795)
Proceeds from principal receipts, sales, and maturities of investments 14,943 1,103
Proceeds from the sale and principal payments on loan collateral in process of foreclosure 3,171 3,759
Net cash used for investing activities (4,695) (32,906)
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from time deposits and funds borrowed 582,122 212,807
Repayments of time deposits and funds borrowed (619,161) (185,900)
Cash dividend paid on common stock (2,859) (2,482)
Distributions to non-controlling interests (1,512) (1,512)
Payment of withholding taxes on net settlement of vested stock (1,202) (944)
Treasury stock repurchased (531) (2,126)
Proceeds from the exercise of stock options 1 88
Net cash (used in) provided by financing activities (43,142) 19,931
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (11,578) 19,280
Cash, and cash equivalents beginning of period [1] 169,572 149,845
Cash and cash equivalents, end of period (1) [1] 157,994 169,125
SUPPLEMENTAL INFORMATION    
Cash paid during the period for interest 24,515 18,976
Cash paid during the period for income taxes 10 10
NON-CASH INVESTING    
Loans transferred to loan collateral in process of foreclosure, net $ 6,483 $ (5,425)
[1] Includes federal funds sold.
v3.25.1
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Pay vs Performance Disclosure    
Net Income (Loss) $ 12,014 $ 10,024
v3.25.1
Insider Trading Arrangements
 3 Months Ended
Mar. 31, 2025
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
Non Rule 10b5-1 Arrangement Modified false
Rule 10b5-1 Arrangement Modified false
v3.25.1
Organization of Medallion Financial Corp. and its Subsidiaries
 3 Months Ended
Mar. 31, 2025
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 March 31, 2025, 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.
v3.25.1
Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2025
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 12 and 13 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 $9.0 million and $9.2 million as of March 31, 2025 and December 31, 2024, which 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 March 31, 2025, cumulative impairment of $5.9 million had been recorded with respect to these investments. Gross impairments on equity investments of $0.5 million were recorded during both the three months ended March 31, 2025 and 2024. The Company recognized $9.4 million and $4.2 million of net gains during the three months ended March 31, 2025 and 2024 on 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 March 31, 2025 and December 31, 2024, the fair value of these securities were $1.8 million and $1.7 million and are included in other assets on the consolidated balance sheet. For the three months ended March 31, 2025 and 2024, the Company realized less than $0.1 million of gains and 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 it 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 assesses 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 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 March 31, 2025 and December 31, 2024.

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 March 31, 2025 and December 31, 2024, net loan origination costs were $46.8 million and $46.6 million. Net amortization was $2.3 million and $2.0 million for the three months ended March 31, 2025 and 2024.

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. Changes in fair value are recognized in non-interest income. For loans transferred into the held for sale classification from the held for investment classification, any allowance for credit losses previously recorded is reversed at the transfer date, and the loans are transferred at their amortized cost basis (which is reduced by any previous charge-offs, but excludes any allowance for credit losses). As of March 31, 2025 and December 31, 2024, 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

The Company follows Accounting Standards Update 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", or ASC 326, which requires recognition of lifetime expected losses 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.

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 March 31, 2025 and December 31, 2024, the Company had goodwill of $150.8 million, all of which related to the recreation and home improvement lending segments. As of March 31, 2025 and December 31, 2024, the Company had intangible assets of $18.8 million and $19.1 million. The Company recognized $0.4 million of amortization expense on the intangible assets for the three months ended March 31, 2025 and 2024.

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.

The table below presents the intangible assets as of March 31, 2025 and December 31, 2024:

(Dollars in thousands)

 

March 31, 2025

 

 

December 31, 2024

 

Brand-related intellectual property

 

$

14,300

 

 

$

14,575

 

Home improvement contractor relationships

 

 

4,485

 

 

 

4,571

 

Total intangible assets

 

$

18,785

 

 

$

19,146

 

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 $0.6 million and $0.1 million for the three months ended March 31, 2025 and 2024.

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 $1.1 million and $0.8 million for the three months ended March 31, 2025 and 2024. 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 are amortized against income over an appropriate period, or written off. The amount on the Company’s consolidated balance sheets related to deposits and borrowing facilities were $8.1 million and $8.2 million as of March 31, 2025 and December 31, 2024, and there were no capitalized transaction costs as of March 31, 2025 and December 31, 2024.

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.

 

Three Months Ended March 31,

 

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

 

2025

 

 

2024

 

Net income attributable to common stockholders

 

$

12,014

 

 

$

10,024

 

Weighted average common shares outstanding applicable to basic EPS

 

 

22,570,797

 

 

 

22,641,385

 

Effect of restricted stock grants

 

 

576,251

 

 

 

610,334

 

Effect of dilutive stock options

 

 

234,474

 

 

 

254,793

 

Effect of performance stock unit grants

 

 

515,645

 

 

 

258,534

 

Adjusted weighted average common shares outstanding applicable to diluted EPS

 

 

23,897,167

 

 

 

23,765,045

 

Basic earnings per share

 

$

0.53

 

 

$

0.44

 

Diluted earnings per share

 

 

0.50

 

 

 

0.42

 

Potentially dilutive common shares excluded from the above calculations aggregated to 59,082 shares as of March 31, 2025 and 9,000 shares as of March 31, 2024.

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 and performance stock units are reflected in net income resulting from operations for any new grants using the grant date fair value of the shares and units granted, expensed over the vesting period of the underlying stock.

Regulatory Capital

The Bank subsidiary 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 March 31, 2025 and December 31, 2024, the Bank’s Tier 1 leverage ratio was considered well-capitalized. The Bank had excess Tier 1 leverage capital of $23.8 million over the 15% minimum required, which was $373.3 million based on our total assets as of March 31, 2025. The Bank’s actual capital amounts and ratios and the regulatory minimum ratios are presented in the following table.

 

Regulatory

 

 

 

 

 

 

 

(Dollars in thousands)

 

Adequately Capitalized

 

 

Well-
Capitalized

 

 

March 31, 2025

 

 

December 31, 2024

 

Common equity tier 1 capital

 

 

 

 

 

 

 

$

328,277

 

 

$

322,229

 

Tier 1 capital

 

 

 

 

 

 

 

 

397,064

 

 

 

391,016

 

Total capital

 

 

 

 

 

 

 

 

428,007

 

 

 

422,139

 

Average assets

 

 

 

 

 

 

 

 

2,488,507

 

 

 

2,493,857

 

Risk-weighted assets

 

 

 

 

 

 

 

 

2,414,538

 

 

 

2,429,349

 

Leverage ratio (1)

 

 

4.0

%

 

 

5.0

%

 

 

16.0

%

 

 

15.7

%

Common equity tier 1 capital ratio (2)

 

 

4.5

 

 

 

6.5

 

 

 

13.6

 

 

 

13.3

 

Tier 1 capital ratio (3)

 

 

6.0

 

 

 

8.0

 

 

 

16.4

 

 

 

16.1

 

Total capital ratio (3)

 

 

8.0

 

 

 

10.0

 

 

 

17.7

 

 

 

17.4

 
(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 March 31, 2025 and December 31, 2024 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 March 31, 2025 and 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 does not expect this update to have a material impact on the financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement, Reporting Comprehensive Income - Expense Disaggregation of Income Statement Expenses. This update requires additional disaggregation of specific types of expenses within the notes to consolidated financial statements on an annual and interim basis. In January 2025, the FASB issued ASU 2025-01 to clarify that all public business entities are required to adopt ASU 2024-03 beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. 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.
v3.25.1
Investment Securities
 3 Months Ended
Mar. 31, 2025
Schedule of Investments [Abstract]  
Investment Securities

(3) INVESTMENT SECURITIES

The following tables present details of fixed maturity securities available for sale as of March 31, 2025 and December 31, 2024:

March 31, 2025
(Dollars in thousands)

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

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

 

$

48,816

 

 

$

33

 

 

$

(4,246

)

 

$

44,603

 

State and municipalities

 

 

16,766

 

 

 

13

 

 

 

(1,124

)

 

 

15,655

 

Agency bonds

 

 

179

 

 

 

—

 

 

 

(13

)

 

 

166

 

Total

 

$

65,761

 

 

$

46

 

 

$

(5,383

)

 

$

60,424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

The amortized cost and estimated fair market value of investment securities at March 31, 2025 by contractual maturity are presented 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.

March 31, 2025
(Dollars in thousands)

 

Amortized
Cost

 

 

Fair
Value

 

Due in one year or less

 

$

1,339

 

 

$

1,338

 

Due after one year through five years

 

 

9,724

 

 

 

9,367

 

Due after five years through ten years

 

 

8,237

 

 

 

7,561

 

Due after ten years

 

 

46,461

 

 

 

42,158

 

Total

 

$

65,761

 

 

$

60,424

 

The following tables present information pertaining to securities with gross unrealized losses at March 31, 2025 and December 31, 2024, 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

 

March 31, 2025
(Dollars in thousands)

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

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

 

$

(49

)

 

$

5,379

 

 

$

(4,197

)

 

$

28,103

 

State and municipalities

 

 

(134

)

 

 

5,894

 

 

 

(990

)

 

 

9,718

 

Agency bonds

 

 

—

 

 

 

—

 

 

 

(13

)

 

 

166

 

Total

 

$

(183

)

 

$

11,273

 

 

$

(5,200

)

 

$

37,987

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

As of March 31, 2025 and December 31, 2024, the Company had 57 and 58 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 March 31, 2025 and December 31, 2024, 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.

v3.25.1
Loans and Allowance for Credit Losses
 3 Months Ended
Mar. 31, 2025
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 March 31, 2025 and December 31, 2024.

 

 

March 31, 2025

 

 

December 31, 2024

 

(Dollars in thousands)

 

Amount

 

 

As a
Percent of
Total Loans

 

 

Amount

 

 

As a
Percent of
Total Loans

 

Loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

Recreation

 

$

1,431,610

 

 

 

58

%

 

$

1,422,403

 

 

 

57

%

Home improvement

 

 

812,381

 

 

 

33

 

 

 

827,211

 

 

 

33

 

Commercial

 

 

116,059

 

 

 

5

 

 

 

111,273

 

 

 

4

 

Taxi medallion

 

 

1,650

 

 

*

 

 

 

1,909

 

 

*

 

Total loans

 

 

2,361,700

 

 

 

95

 

 

 

2,362,796

 

 

 

95

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Recreation

 

 

114,234

 

 

 

5

 

 

 

120,840

 

 

 

5

 

Strategic partnership

 

 

10,499

 

 

*

 

 

 

7,386

 

 

*

 

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

 

 

124,733

 

 

 

5

 

 

 

128,226

 

 

 

5

 

Total loans and loans held for sale

 

$

2,486,433

 

 

 

100

%

 

$

2,491,022

 

 

 

100

%

(*) Less than 1%.

The following tables present the activity of the gross loans and loans held for sale for the three months ended March 31, 2025 and 2024.

Three Months Ended March 31, 2025
(Dollars in thousands)

 

Recreation

 

 

Home
Improvement

 

 

Commercial

 

 

Taxi
Medallion

 

 

Strategic
Partnership

 

 

Total

 

Gross loans – December 31, 2024 (1)

 

$

1,543,243

 

 

$

827,211

 

 

$

111,273

 

 

$

1,909

 

 

$

7,386

 

 

$

2,491,022

 

Loan originations

 

 

86,833

 

 

 

48,796

 

 

 

9,707

 

 

 

72

 

 

 

136,240

 

 

 

281,648

 

Principal receipts, sales, and maturities

 

 

(61,507

)

 

 

(59,611

)

 

 

(5,052

)

 

 

(316

)

 

 

(133,127

)

 

 

(259,613

)

Charge-offs

 

 

(20,274

)

 

 

(4,227

)

 

 

(130

)

 

 

(15

)

 

 

—

 

 

 

(24,646

)

Transfer to loan collateral in process of foreclosure, net

 

 

(2,389

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2,389

)

Amortization of origination fees and costs, net

 

 

(3,481

)

 

 

1,133

 

 

 

12

 

 

 

—

 

 

 

—

 

 

 

(2,336

)

Origination fees and costs, net

 

 

3,419

 

 

 

(921

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,498

 

Paid-in-kind interest

 

 

—

 

 

 

—

 

 

 

249

 

 

 

—

 

 

 

—

 

 

 

249

 

Gross loans – March 31, 2025 (1)

 

$

1,545,844

 

 

$

812,381

 

 

$

116,059

 

 

$

1,650

 

 

$

10,499

 

 

$

2,486,433

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

Three Months Ended March 31, 2024
(Dollars in thousands)

 

Recreation

 

 

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

 

 

105,765

 

 

 

51,576

 

 

 

—

 

 

 

—

 

 

 

15,746

 

 

 

173,087

 

Principal receipts, sales, and maturities

 

 

(64,886

)

 

 

(54,917

)

 

 

(8,872

)

 

 

(103

)

 

 

(15,430

)

 

 

(144,208

)

Charge-offs

 

 

(18,101

)

 

 

(4,898

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(22,999

)

Transfer to loan collateral in process of foreclosure, net

 

 

5,425

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5,425

 

Amortization of origination fees and costs, net

 

 

(2,952

)

 

 

938

 

 

 

7

 

 

 

—

 

 

 

—

 

 

 

(2,007

)

Origination fees and costs, net

 

 

3,688

 

 

 

(1,054

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,634

 

Paid-in-kind interest

 

 

—

 

 

 

—

 

 

 

608

 

 

 

—

 

 

 

—

 

 

 

608

 

Gross loans – March 31, 2024

 

$

1,365,165

 

 

$

752,262

 

 

$

106,570

 

 

$

3,560

 

 

$

869

 

 

$

2,228,426

 

 

The following tables present the activity in the allowance for credit losses for the three months ended March 31, 2025 and 2024.

(Dollars in thousands)

 

Recreation

 

 

Home
Improvement

 

 

Commercial

 

 

Taxi
Medallion (1)

 

 

Total

 

Balance at December 31, 2024

 

$

71,102

 

 

$

20,536

 

 

$

5,190

 

 

$

540

 

 

$

97,368

 

Charge-offs

 

 

(20,274

)

 

 

(4,227

)

 

 

(130

)

 

 

(15

)

 

 

(24,646

)

Recoveries

 

 

3,860

 

 

 

1,095

 

 

 

—

 

 

 

675

 

 

 

5,630

 

Provision (benefit) for credit losses

 

 

16,870

 

 

 

2,845

 

 

 

3,114

 

 

 

(815

)

 

 

22,014

 

Balance at March 31, 2025

 

$

71,558

 

 

$

20,249

 

 

$

8,174

 

 

$

385

 

 

$

100,366

 
(1)
As of March 31, 2025, cumulative net charge-offs of loans and loan collateral in process of foreclosure in the taxi medallion portfolio were $161.7 million, including $95.2 million related to loans secured by New York taxi medallions, some of which may represent collection opportunities for the Company.

(Dollars in thousands)

 

Recreation

 

 

Home
Improvement

 

 

Commercial

 

 

Taxi
Medallion

 

 

Total

 

Balance at December 31, 2023

 

$

57,532

 

 

$

21,019

 

 

$

4,148

 

 

$

1,536

 

 

$

84,235

 

Charge-offs

 

 

(18,101

)

 

 

(4,898

)

 

 

—

 

 

 

—

 

 

 

(22,999

)

Recoveries

 

 

3,548

 

 

 

911

 

 

 

20

 

 

 

911

 

 

 

5,390

 

Provision (benefit) for credit losses

 

 

17,030

 

 

 

898

 

 

 

216

 

 

 

(943

)

 

 

17,201

 

Balance at March 31, 2024

 

$

60,009

 

 

$

17,930

 

 

$

4,384

 

 

$

1,504

 

 

$

83,827

 

The following table presents the gross charge-offs for the three months ended March 31, 2025, by the year of origination:

Three Months Ended March 31, 2025
(Dollars in thousands)

 

2025

 

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

Prior

 

 

Total

 

Recreation

 

$

—

 

 

$

2,728

 

 

$

3,707

 

 

$

4,506

 

 

$

1,933

 

 

$

7,400

 

 

$

20,274

 

Home improvement

 

 

—

 

 

 

823

 

 

 

1,503

 

 

 

1,133

 

 

 

428

 

 

 

340

 

 

 

4,227

 

Commercial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

130

 

 

 

—

 

 

 

—

 

 

 

130

 

Taxi medallion

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

15

 

 

 

15

 

Total

 

$

—

 

 

$

3,551

 

 

$

5,210

 

 

$

5,769

 

 

$

2,361

 

 

$

7,755

 

 

$

24,646

 

The following table presents the gross charge-offs for the three months ended March 31, 2024, by the year of origination:

Three Months Ended March 31, 2024
(Dollars in thousands)

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

Prior

 

 

Total

 

Recreation

 

$

—

 

 

$

3,763

 

 

$

6,818

 

 

$

3,497

 

 

$

1,289

 

 

$

2,734

 

 

$

18,101

 

Home improvement

 

 

—

 

 

 

1,524

 

 

 

1,680

 

 

 

1,163

 

 

 

287

 

 

 

244

 

 

 

4,898

 

Commercial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Taxi medallion

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

—

 

 

$

5,287

 

 

$

8,498

 

 

$

4,660

 

 

$

1,576

 

 

$

2,978

 

 

$

22,999

 

The following tables present the allowance for credit losses by type as of March 31, 2025 and December 31, 2024.

March 31, 2025
(Dollars in thousands)

 

Amount

 

 

Percentage
of Allowance

 

 

Allowance as
a Percent of
Loan Category (1)

 

Recreation

 

$

71,558

 

 

 

71

%

 

 

5.00

%

Home improvement

 

 

20,249

 

 

 

20

 

 

 

2.49

 

Commercial

 

 

8,174

 

 

 

8

 

 

 

7.04

 

Taxi medallion

 

 

385

 

 

 

1

 

 

 

23.32

 

Total (2)

 

$

100,366

 

 

 

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.
(2)
As of March 31, 2025, total allowance for credit losses as a percent of nonaccrual loans was 293.37%.

December 31, 2024
(Dollars in thousands)

 

Amount

 

 

Percentage
of Allowance

 

 

Allowance as
a Percent of
Loan Category (1)

 

Recreation

 

$

71,102

 

 

 

73

%

 

 

5.00

%

Home improvement

 

 

20,536

 

 

 

21

 

 

 

2.48

 

Commercial

 

 

5,190

 

 

 

5

 

 

 

4.66

 

Taxi medallion

 

 

540

 

 

 

1

 

 

 

28.29

 

Total (2)

 

$

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.
(2)
As of December 31, 2024, total allowance for credit losses as a percent of nonaccrual loans was 291.93%

The following tables present the performance status of loans and loans held for sale as of March 31, 2025 and December 31, 2024.

March 31, 2025
(Dollars in thousands)

 

Performing

 

 

Nonperforming

 

 

Total

 

 

Percentage of
Nonperforming
to Total

 

Recreation

 

$

1,538,119

 

 

$

7,725

 

 

$

1,545,844

 

 

 

0.50

%

Home improvement

 

 

810,874

 

 

 

1,507

 

 

 

812,381

 

 

 

0.19

 

Commercial

 

 

92,730

 

 

 

23,329

 

 

 

116,059

 

 

 

20.10

 

Taxi medallion

 

 

—

 

 

 

1,650

 

 

 

1,650

 

 

 

100.00

 

Strategic partnership

 

 

10,499

 

 

 

—

 

 

 

10,499

 

 

 

—

 

Total

 

$

2,452,222

 

 

$

34,211

 

 

$

2,486,433

 

 

 

1.38

%

 

 

 

 

 

 

 

 

 

 

 

 

 

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

%

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 loans and loans held for sale as of March 31, 2025 and December 31, 2024.

March 31, 2025

 

Days Past Due

 

 

 

 

 

 

 

 

 

 

 

Recorded
Investment
90 Days and

 

(Dollars in thousands)

 

30-59

 

 

60-89

 

 

90 +

 

 

Total

 

 

Current

 

 

Total (1)

 

 

Accruing

 

Recreation

 

$

46,880

 

 

$

14,148

 

 

$

7,140

 

 

$

68,168

 

 

$

1,427,037

 

 

$

1,495,205

 

 

$

—

 

Home improvement

 

 

4,644

 

 

 

2,117

 

 

 

1,519

 

 

 

8,280

 

 

 

807,755

 

 

 

816,035

 

 

 

—

 

Commercial

 

 

—

 

 

 

—

 

 

 

20,497

 

 

 

20,497

 

 

 

95,742

 

 

 

116,239

 

 

 

—

 

Taxi medallion

 

 

46

 

 

 

67

 

 

 

—

 

 

 

113

 

 

 

1,537

 

 

 

1,650

 

 

 

—

 

Strategic partnership

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

10,499

 

 

 

10,499

 

 

 

—

 

Total

 

$

51,570

 

 

$

16,332

 

 

$

29,156

 

 

$

97,058

 

 

$

2,342,570

 

 

$

2,439,628

 

 

$

—

 
(1)
Excludes $46.8 million of capitalized loan origination costs.

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.
v3.25.1
Funds Borrowed
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Funds Borrowed

(5) FUNDS BORROWED

The following table presents outstanding balances of funds borrowed.

 

Payments Due for the Twelve Months Ending March 31,

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

2026

 

 

2027

 

 

2028

 

 

2029

 

 

2030

 

 

Thereafter

 

 

March 31,
2025 (1)

 

 

December 31, 2024 (1)

 

 

Interest
Rate (2)

 

Deposits (3)

 

$

807,514

 

 

$

466,604

 

 

$

389,848

 

 

$

173,104

 

 

$

186,054

 

 

$

—

 

 

$

2,023,124

 

 

$

2,091,663

 

 

 

3.75

%

Privately placed notes

 

 

31,250

 

 

 

—

 

 

 

53,750

 

 

 

39,000

 

 

 

—

 

 

 

22,500

 

 

 

146,500

 

 

 

146,500

 

 

 

8.12

 

SBA debentures and borrowings

 

 

15,500

 

 

 

4,500

 

 

 

—

 

 

 

2,500

 

 

 

—

 

 

 

48,000

 

 

 

70,500

 

 

 

70,250

 

 

 

3.84

 

Trust preferred securities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

33,000

 

 

 

33,000

 

 

 

33,000

 

 

 

6.69

 

Federal reserve and other borrowings

 

 

65,000

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

65,000

 

 

 

35,000

 

 

 

4.50

 

Total

 

$

919,264

 

 

$

471,104

 

 

$

443,598

 

 

$

214,604

 

 

$

186,054

 

 

$

103,500

 

 

$

2,338,124

 

 

$

2,376,413

 

 

 

4.09

%
(1)
Excludes deferred financing costs of $8.1 million and $8.2 million as of March 31, 2025 and December 31, 2024.
(2)
Weighted average contractual rate as of March 31, 2025.
(3)
Balance excludes $4.3 million and $3.0 million of strategic partner reserve deposits and includes $5.2 million and $6.0 million in retail savings deposit balances as of March 31, 2025 and December 31, 2024.

(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 March 31, 2025 and December 31, 2024, the Bank had $10.4 million in listing service deposit balances from other financial institutions. As of March 31, 2025 and December 31, 2024, the Bank had $5.2 million and $6.0 million in retail savings deposit balances. The following table presents the maturity of the deposit pools and retail savings deposits, which includes strategic partner reserve deposits, as of March 31, 2025.

(Dollars in thousands)

 

March 31, 2025

 

Three months or less

 

$

382,152

 

Over three months through six months

 

 

219,337

 

Over six months through one year

 

 

206,025

 

Over one year

 

 

1,215,610

 

Deposits

 

 

2,023,124

 

 Strategic partner collateral deposits

 

 

4,250

 

Total deposits

 

$

2,027,374

 

(B) FEDERAL RESERVE DISCOUNT WINDOW AND OTHER BORROWINGS

As of March 31, 2025, the Bank had $213.4 million in home improvement loans pledged as collateral to the Federal Reserve. The current advance rate on the pledged securities is approximately 46% of book value, for a total of approximately $97.4 million in secured borrowing capacity, of which $65.0 million was utilized as of March 31, 2025.

The Bank has borrowing arrangements with several correspondent 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 March 31, 2025, 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 as of March 31, 2025 and December 31, 2024.

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Date of Notes

 

Maturity

 

Interest Rate

 

 

Interest Payable

 

March 31, 2025

 

 

December 31, 2024

 

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

 

June 2024

 

June 2039

 

 

8.875

%

 

Semi-annually

 

 

17,500

 

 

 

17,500

 

August 2024

 

August 2039

 

 

8.625

%

 

Semi-annually

 

 

5,000

 

 

 

5,000

 

 

 

 

 

 

 

 

 

 

$

146,500

 

 

$

146,500

 

 

(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 February 28, 2024, Medallion Capital accepted a commitment from the SBA for $18.5 million in debenture financing. 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 March 31, 2025, none of the commitment had been drawn, $10.3 million was drawable, with the balance of $8.2 million drawable upon the infusion of $4.1 million of capital from a capital infusion into Medallion Capital from the Company or the capitalization of retained earnings of which Medallion Capital had $25.7 million as of March 31, 2025.

The following table presents the SBA debentures and borrowings as of March 31, 2025 and December 31, 2024.

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Date of Notes

 

Maturity

 

Interest Rate

 

 

Interest Payable

 

March 31, 2025

 

 

December 31, 2024

 

March 2015

 

March 2025

 

 

2.87

%

 

Semi-annually

 

$

—

 

 

$

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

 

March 2025

 

September 2035

 

*

 

 

Semi-annually

 

 

10,250

 

 

 

—

 

 

 

 

 

 

 

 

 

 

$

70,500

 

 

$

70,250

 

(*) Interest rate will price in September 2025 and will accrue interest at a rate which approximates 5% until that time.

(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, or 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 March 31, 2025, $33.0 million was outstanding on the trust preferred securities.

(F) 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 March 31, 2025, the Company was in compliance with all such covenants.
v3.25.1
Leases
 3 Months Ended
Mar. 31, 2025
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 three months ended March 31, 2025 and 2024.

 

 

Three Months Ended March 31,

 

(Dollars in thousands)

 

2025

 

 

2024

 

Operating lease costs

 

$

588

 

 

$

604

 

Cash paid for amounts included in the measurement of lease liabilities

 

 

 

 

 

 

Operating cash flows from operating leases

 

 

675

 

 

 

657

 

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

 

 

(63

)

 

 

(59

)

 

The following table presents the breakout of the operating leases as of March 31, 2025 and December 31, 2024.

(Dollars in thousands)

 

March 31, 2025

 

 

December 31, 2024

 

Operating lease right-of-use assets

 

$

6,435

 

 

$

6,922

 

Other current liabilities

 

 

2,349

 

 

 

2,294

 

Operating lease liabilities

 

 

4,528

 

 

 

5,128

 

Total operating lease liabilities

 

 

6,877

 

 

 

7,422

 

Weighted average remaining lease term

 

3.6 years

 

 

4.1 years

 

Weighted average discount rate

 

 

5.55

%

 

5.56%

 

At March 31, 2025, maturities of the lease liabilities were as follows:

(Dollars in thousands)

 

 

 

Remainder of 2025

 

$

1,911

 

2026

 

 

2,567

 

2027

 

 

1,342

 

2028

 

 

575

 

2029

 

 

589

 

Thereafter

 

 

548

 

Total lease payments

 

 

7,532

 

Less imputed interest

 

 

655

 

Total operating lease liabilities

 

$

6,877

 
v3.25.1
Income Taxes
 3 Months Ended
Mar. 31, 2025
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 March 31, 2025 and December 31, 2024.

(Dollars in thousands)

 

March 31, 2025

 

 

December 31, 2024

 

Deferred tax assets:

 

 

 

 

 

 

Provision for credit losses

 

$

15,477

 

 

$

14,530

 

Accrued expenses, compensation, and other assets

 

 

4,022

 

 

 

5,612

 

Net operating loss carryforwards (1)

 

 

3,168

 

 

 

3,168

 

Other investments and investment securities

 

 

2,704

 

 

 

2,885

 

Valuation allowance

 

 

(4,228

)

 

 

(4,418

)

Total deferred tax assets

 

 

21,143

 

 

 

21,777

 

Deferred tax liabilities:

 

 

 

 

 

 

Goodwill and other intangibles

 

 

42,681

 

 

 

42,772

 

Total deferred tax liabilities

 

 

42,681

 

 

 

42,772

 

Deferred tax liability, net

 

$

21,538

 

 

$

20,995

 
(1)
As of March 31, 2025, 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 $0.5 million as of March 31, 2025.

The following table presents the components of the Company's tax provision for the three months ended March 31, 2025 and 2024:

 

 

Three Months Ended March 31,

 

(Dollars in thousands)

 

2025

 

 

2024

 

Current

 

 

 

 

 

 

Federal

 

$

4,661

 

 

$

1,729

 

State

 

 

1,522

 

 

 

643

 

Deferred

 

 

 

 

 

 

Federal

 

 

261

 

 

 

3,116

 

State

 

 

269

 

 

 

870

 

Net provision for income taxes

 

$

6,713

 

 

$

6,358

 

 

The following table presents a reconciliation of statutory federal income tax provision to consolidated actual income tax provision reported for the three months ended March 31, 2025 and 2024.

 

 

Three Months Ended March 31,

 

(Dollars in thousands)

 

2025

 

 

2024

 

Statutory Federal income tax provision at 21%

 

$

4,250

 

 

$

3,758

 

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

 

 

923

 

 

 

735

 

Non-deductible expenses

 

 

1,572

 

 

 

1,780

 

Valuation allowance against deferred tax assets

 

 

(190

)

 

 

—

 

Other

 

 

158

 

 

 

85

 

Total income tax provision

 

$

6,713

 

 

$

6,358

 

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 March 31, 2025.

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.

v3.25.1
Stock Options and Restricted Stock
 3 Months Ended
Mar. 31, 2025
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 399,439 shares remained issuable as of March 31, 2025. 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. As of March 31, 2025, 889,928 options on the Company’s common stock were outstanding under the Company’s plans, all of which have previously vested and are exercisable. Additionally, as of March 31, 2025, there were 727,891 unvested shares of restricted stock, 823,854 unvested performance stock units, 95,766 unvested restricted stock units, and 242,991 vested, unissued restricted stock units outstanding under the 2018 Plan. As of March 31, 2025, the total remaining unrecognized compensation cost related to unvested restricted stock, restricted stock units, and performance stock units was $9.0 million, which is expected to be recognized over the next 12 quarters. Total stock-based compensation expense was $1.7 million, or $0.07 per diluted common share, for the three months ended March 31, 2025 and $1.5 million, or $0.06 per diluted common share, for the three months ended March 31, 2024.

The fair value of each restricted stock grant, each restricted stock unit, and each performance stock unit 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 three months ended March 31, 2025 and 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 three months ended March 31, 2025 and the year ended December 31, 2024. 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, 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

 

Granted

 

 

311,723

 

 

 

 

8.47

 

 

 

8.47

 

Cancelled

 

 

—

 

 

 

 

—

 

 

 

—

 

Vested

 

 

—

 

 

 

 

—

 

 

 

—

 

Outstanding at March 31, 2025

 

 

823,854

 

 

$

6.08 - 8.97

 

 

$

7.74

 

 

The following table presents the activity for the restricted stock programs for the three months ended March 31, 2025 and the year ended December 31, 2024.

 

Number of
Shares

 

 

 

Grant Price
Per Share

 

 

Weighted
Average
Grant Price

 

Outstanding at December 31, 2023

 

 

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

 

 

909,028

 

 

 

4.89 - 10.32

 

 

 

8.30

 

Granted

 

 

307,059

 

 

 

 

8.47

 

 

 

8.47

 

Cancelled

 

 

(3,373

)

 

 

4.89 - 10.32

 

 

 

8.86

 

Vested (1)

 

 

(484,823

)

 

 

4.89 - 8.97

 

 

 

7.70

 

Outstanding at March 31, 2025 (2)

 

 

727,891

 

 

$

8.08 - 10.32

 

 

$

8.77

 
(1)
The aggregate fair value of the restricted stock vested was $4.2 million for the three months ended March 31, 2025 and $2.7 million for the year ended December 31, 2024.
(2)
The aggregate fair value of the restricted stock was $6.3 million as of March 31, 2025. The remaining vesting period was 2.9 years at March 31, 2025.

 

The following table presents the activity for the stock option programs for the three months ended March 31, 2025 and the year ended December 31, 2024.

 

Number of
Options

 

 

 

Exercise Price
Per Share

 

 

Weighted
Average
Exercise Price

 

Outstanding at December 31, 2023

 

 

959,522

 

 

$

2.14 - 9.38

 

 

$

6.51

 

Granted

 

 

—

 

 

 

 

—

 

 

 

—

 

Cancelled

 

 

(4,748

)

 

 

4.89 - 7.25

 

 

 

6.15

 

Exercised

 

 

(40,865

)

 

 

4.89 - 7.25

 

 

 

6.35

 

Outstanding at December 31, 2024

 

 

913,909

 

 

 

2.14 - 9.38

 

 

$

6.52

 

Granted

 

 

—

 

 

 

 

—

 

 

 

—

 

Cancelled

 

 

(23,716

)

 

 

4.89 - 7.25

 

 

 

6.67

 

Exercised (1)

 

 

(265

)

 

 

 

4.89

 

 

 

4.89

 

Outstanding at March 31, 2025 (2)

 

 

889,928

 

 

$

2.14 - 9.38

 

 

$

6.51

 

Options exercisable at:

 

 

 

 

 

 

 

 

 

 

December 31, 2024

 

 

829,286

 

 

 

2.14 - 9.38

 

 

$

6.53

 

March 31, 2025 (2)

 

 

889,928

 

 

$

2.14 - 9.38

 

 

$

6.51

 
(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 less than $0.1 million for both the three months ended March 31, 2025 and the year ended December 31, 2024.
(2)
The aggregate intrinsic value of outstanding options, which represents the difference between the price of the Company’s common stock at March 31, 2025 and the related exercise price of the underlying options, was $1.9 million for outstanding options, all of which had previously vested. The remaining contractual life was 4.9 years for outstanding options at March 31, 2025.

The following table presents the activity for the unvested options outstanding under the plans described above for the three months ended March 31, 2025 and the year ended December 31, 2024.

 

Number of
Options

 

 

 

Exercise Price
Per Share

 

 

Weighted
Average
Exercise Price

 

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

 

Granted

 

 

—

 

 

 

 

—

 

 

 

—

 

Cancelled

 

 

(119

)

 

 

 

4.89

 

 

 

4.89

 

Vested

 

 

(84,504

)

 

 

4.89 - 6.79

 

 

 

6.37

 

Outstanding at March 31, 2025

 

 

—

 

 

$

 

—

 

 

$

—

 

The intrinsic value of the options vested was $0.1 million for the three months ended March 31, 2025.

 

During the three months ended March 31, 2025, the Company did not grant any restricted stock units, or RSUs, and during the year ended December 31, 2024, granted 92,350 RSUs with a vesting date of June 11, 2025 at a grant price of $8.23. For the RSUs granted in 2024, 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 March 31, 2025, there were 338,757 RSUs outstanding, including 242,991 which had previously vested.
v3.25.1
Segment Reporting
 3 Months Ended
Mar. 31, 2025
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 and financial service providers to finance RVs, boats, collector cars, and other consumer recreational equipment, of which RVs, boats, and collector cars make up 55%, 19%, and 11% of the segment portfolio, with no other product lines at or above 10%, as of March 31, 2025. 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 March 31, 2025. 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 35%, 29%, and 13% of total home improvement loans outstanding, and with no other product lines at or above 10% as of March 31, 2025. The highest concentrations of home improvement loans are in Florida and Texas at 13% and 11% of loans outstanding, with no other states at or above 10% as of March 31, 2025. The commercial lending segment focuses on serving a wide variety of industries, with concentrations in manufacturing, construction, and wholesale trade making up 58%, 13%, and 12% of the loans outstanding as of March 31, 2025, with no other product lines exceeding 10% as of March 31, 2025. The commercial lending segment invests across the United States with concentrations in California and Illinois having 31% and 10% of the segment portfolio, with no other states having a concentration at or above 10% as of March 31, 2025. 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 March 31, 2025.

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 percent 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 three months ended March 31, 2025.

Three Months Ended March 31, 2025

 

Consumer Lending

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

Recreation

 

 

Home
Improvement

 

 

Commercial
Lending

 

 

Taxi Medallion
Lending

 

 

Corporate and Other Investments

 

 

Consolidated

 

Total interest income

 

$

50,466

 

 

$

19,771

 

 

$

3,343

 

 

$

80

 

 

$

1,765

 

 

$

75,425

 

Total interest expense

 

 

12,041

 

 

 

6,964

 

 

 

1,053

 

 

 

12

 

 

 

3,943

 

 

 

24,013

 

Net interest income (loss)

 

 

38,425

 

 

 

12,807

 

 

 

2,290

 

 

 

68

 

 

 

(2,178

)

 

 

51,412

 

Provision (benefit) for credit losses

 

 

16,870

 

 

 

2,845

 

 

 

3,114

 

 

 

(815

)

 

 

—

 

 

 

22,014

 

Net interest income (loss) after credit loss provision

 

 

21,555

 

 

 

9,962

 

 

 

(824

)

 

 

883

 

 

 

(2,178

)

 

 

29,398

 

Other income, net

 

 

400

 

 

 

2

 

 

 

9,642

 

 

 

844

 

 

 

711

 

 

 

11,599

 

Operating expenses

 

 

(9,964

)

 

 

(4,984

)

 

 

(1,473

)

 

 

(983

)

 

 

(3,354

)

 

 

(20,758

)

Net income (loss) before taxes

 

 

11,991

 

 

 

4,980

 

 

 

7,345

 

 

 

744

 

 

 

(4,821

)

 

 

20,239

 

Income tax (provision) benefit

 

 

(3,977

)

 

 

(1,652

)

 

 

(2,436

)

 

 

(247

)

 

 

1,599

 

 

 

(6,713

)

Net income (loss) after taxes

 

$

8,014

 

 

$

3,328

 

 

$

4,909

 

 

$

497

 

 

$

(3,222

)

 

$

13,526

 

Income attributable to the non-controlling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,512

 

Total net income attributable to Medallion Financial Corp.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

12,014

 

Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans, gross (1)

 

$

1,545,844

 

 

$

812,381

 

 

$

116,059

 

 

$

1,650

 

 

$

10,499

 

 

$

2,486,433

 

Total assets

 

 

1,495,150

 

 

 

795,868

 

 

 

109,565

 

 

 

6,855

 

 

 

440,300

 

 

 

2,847,738

 

Total funds borrowed

 

 

1,229,818

 

 

 

654,632

 

 

 

90,121

 

 

 

5,638

 

 

 

362,164

 

 

 

2,342,373

 

Selected Financial Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

2.17

%

 

 

1.68

%

 

 

18.45

%

 

 

30.14

%

 

 

(2.94

)%

 

 

1.93

%

Return on average stockholders' equity

 

*

 

 

*

 

 

*

 

 

*

 

 

*

 

 

 

12.96

 

Return on average equity

 

 

13.37

 

 

 

10.33

 

 

 

113.46

 

 

 

185.45

 

 

 

(18.04

)

 

 

12.32

 

Interest yield

 

 

13.27

 

 

 

9.78

 

 

 

12.05

 

 

 

19.12

 

 

NM

 

 

 

11.65

 

Net interest margin, gross

 

 

10.10

 

 

 

6.33

 

 

 

8.25

 

 

 

16.25

 

 

NM

 

 

 

7.94

 

Net interest margin, net of allowance

 

 

10.59

 

 

 

6.50

 

 

 

8.71

 

 

 

21.87

 

 

NM

 

 

 

8.25

 

Reserve coverage (2)

 

 

5.00

 

 

 

2.49

 

 

 

7.04

 

 

 

23.32

 

 

NM

 

 

 

4.25

 

Delinquency status (3)

 

 

0.48

 

 

 

0.19

 

 

 

17.63

 

 

 

—

 

 

NM

 

 

 

1.20

 

Charge-off (recovery) ratio (4)

 

 

4.67

 

 

 

1.55

 

 

 

0.47

 

 

 

(157.97

)

 

NM

 

 

 

3.10

 

 

(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) Charge-off ratio in the recreation lending segment was 4.32% when including loans held for sale.

(NM) Not meaningful.

(*) Line item is not applicable to segments.

The following table presents segment data as of and for the three months ended March 31, 2024.

Three Months Ended March 31, 2024

 

Consumer Lending

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

Recreation

 

 

Home
Improvement

 

 

Commercial
Lending

 

 

Taxi Medallion
Lending

 

 

Corporate and Other Investments

 

 

Consolidated

 

Total interest income

 

$

43,927

 

 

$

17,447

 

 

$

3,645

 

 

$

140

 

 

$

1,911

 

 

$

67,070

 

Total interest expense

 

 

9,645

 

 

 

5,634

 

 

 

1,098

 

 

 

28

 

 

 

2,748

 

 

 

19,153

 

Net interest income (loss)

 

 

34,282

 

 

 

11,813

 

 

 

2,547

 

 

 

112

 

 

 

(837

)

 

 

47,917

 

Provision (benefit) for credit losses

 

 

17,030

 

 

 

898

 

 

 

216

 

 

 

(944

)

 

 

1

 

 

 

17,201

 

Net interest income (loss) after credit loss provision

 

 

17,252

 

 

 

10,915

 

 

 

2,331

 

 

 

1,056

 

 

 

(838

)

 

 

30,716

 

Other income, net

 

 

250

 

 

 

2

 

 

 

4,202

 

 

 

639

 

 

 

310

 

 

 

5,403

 

Operating expenses

 

 

(8,287

)

 

 

(4,114

)

 

 

(985

)

 

 

(743

)

 

 

(4,096

)

 

 

(18,225

)

Net income (loss) before taxes

 

 

9,215

 

 

 

6,803

 

 

 

5,548

 

 

 

952

 

 

 

(4,624

)

 

 

17,894

 

Income tax (provision) benefit

 

 

(3,274

)

 

 

(2,417

)

 

 

(1,971

)

 

 

(338

)

 

 

1,642

 

 

 

(6,358

)

Net income (loss) after taxes

 

$

5,941

 

 

$

4,386

 

 

$

3,577

 

 

$

614

 

 

$

(2,982

)

 

$

11,536

 

Income attributable to the non-controlling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,512

 

Total net income attributable to Medallion Financial Corp.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

10,024

 

Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans, gross

 

$

1,365,165

 

 

$

752,262

 

 

$

106,570

 

 

$

3,560

 

 

$

869

 

 

$

2,228,426

 

Total assets

 

 

1,322,761

 

 

 

738,551

 

 

 

102,331

 

 

 

8,611

 

 

 

446,508

 

 

 

2,618,762

 

Total funds borrowed

 

 

1,083,760

 

 

 

605,107

 

 

 

83,842

 

 

 

7,055

 

 

 

365,832

 

 

 

2,145,596

 

Selected Financial Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.82

%

 

 

2.38

%

 

 

13.50

%

 

 

23.68

%

 

 

(2.78

)%

 

 

1.80

%

Return on average stockholders' equity

 

*

 

 

*

 

 

*

 

 

*

 

 

*

 

 

 

11.65

 

Return on average equity

 

 

11.44

 

 

 

14.93

 

 

 

84.71

 

 

 

148.65

 

 

 

(17.47

)

 

 

11.18

 

Interest yield

 

 

13.17

 

 

 

9.28

 

 

 

12.99

 

 

 

15.59

 

 

NM

 

 

 

11.34

 

Net interest margin, gross

 

 

10.28

 

 

 

6.28

 

 

 

9.08

 

 

 

12.47

 

 

NM

 

 

 

8.10

 

Net interest margin, net of allowance

 

 

10.75

 

 

 

6.45

 

 

 

9.43

 

 

 

21.57

 

 

NM

 

 

 

8.39

 

Reserve coverage (1)

 

 

4.40

 

 

 

2.38

 

 

 

4.11

 

 

 

42.19

 

 

NM

 

 

 

3.76

 

Delinquency status (2)

 

 

0.48

 

 

 

0.18

 

 

 

7.80

 

 

 

—

 

 

NM

 

 

 

0.74

 

Charge-off (recovery) ratio (3)

 

 

4.36

 

 

 

2.12

 

 

 

(0.07

)

 

 

(101.47

)

 

NM

 

 

 

3.20

 

 

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

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

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

(NM) Not meaningful.

(*) Line item is not applicable to segments.
v3.25.1
Commitments and Contingencies
 3 Months Ended
Mar. 31, 2025
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.

As of March 31, 2025, employment agreements expire at various dates through 2027, with future minimum payments under these agreements of approximately $7.8 million.

(B) OTHER COMMITMENTS

As of March 31, 2025, 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.
v3.25.1
Related Party Transactions
 3 Months Ended
Mar. 31, 2025
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, serves as the Company’s Senior Vice President at a salary of $269,000 per year, an increase from $260,988 per year in 2024. Mr. Rudnick received an annual cash bonus of $75,000 and $95,000 as well as an equity bonus in the amount of $50,000 and $52,000, during the three months ended March 31, 2025 and 2024.
v3.25.1
Fair Value of Financial Instruments
 3 Months Ended
Mar. 31, 2025
Investments, All Other Investments [Abstract]  
Fair Value of Financial Instruments

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

(i) 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. As of March 31, 2025 and December 31, 2024, 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 March 31, 2025 and December 31, 2024.

 

 

March 31, 2025

 

(Dollars in thousands)

 

Carrying
Amount

 

 

Fair
Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Financial assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

157,994

 

 

$

157,994

 

 

$

156,744

 

 

$

1,250

 

 

$

—

 

Investment securities

 

 

60,424

 

 

 

60,424

 

 

 

—

 

 

 

60,424

 

 

 

—

 

Loans held for investment, net of allowance

 

 

2,261,334

 

 

 

2,215,944

 

 

 

—

 

 

 

—

 

 

 

2,215,944

 

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

 

 

124,733

 

 

 

130,659

 

 

 

—

 

 

 

—

 

 

 

130,659

 

Accrued interest receivable (2)

 

 

14,437

 

 

 

14,437

 

 

 

14,437

 

 

 

—

 

 

 

—

 

Equity securities

 

 

1,758

 

 

 

1,758

 

 

 

1,758

 

 

 

—

 

 

 

—

 

Financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds borrowed (3)

 

 

2,342,374

 

 

 

2,347,445

 

 

 

—

 

 

 

2,347,445

 

 

 

—

 

Accrued interest payable

 

 

6,610

 

 

 

6,610

 

 

 

6,610

 

 

 

—

 

 

 

—

 
(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 $8.1 million as of March 31, 2025.

 

 

December 31, 2024

 

(Dollars in thousands)

 

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.
v3.25.1
Fair Value of Assets and Liabilities
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value of Assets and Liabilities

(13) 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 March 31, 2025 and December 31, 2024.

March 31, 2025
(Dollars in thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities (1)

 

$

—

 

 

$

60,424

 

 

$

—

 

 

$

60,424

 

Equity securities

 

 

1,758

 

 

 

—

 

 

 

—

 

 

 

1,758

 

Total

 

$

1,758

 

 

$

60,424

 

 

$

—

 

 

$

62,182

 
(1)
Total unrealized losses of $0.1 million, net of tax, related to these assets was included in comprehensive loss for the three months ended March 31, 2025.

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

 

 

$

54,805

 

 

$

—

 

 

$

56,537

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

 

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 March 31, 2025 and December 31, 2024.

March 31, 2025
(Dollars in thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Equity investments

 

$

—

 

 

$

—

 

 

$

650

 

 

$

650

 

Total

 

$

—

 

 

$

—

 

 

$

650

 

 

$

650

 

 

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

 

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 March 31, 2025 and December 31, 2024.

(Dollars in thousands)

 

Fair Value
at March 31, 2025

 

 

Valuation Techniques

 

Unobservable Inputs

 

Range
(Weighted Average)

Equity investments

 

$

650

 

 

Investee financial analysis

 

Financial condition and operating performance of the borrower (1)

 

N/A
(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.

 

(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
(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.
v3.25.1
Medallion Bank Preferred Stock (Non-controlling Interest)
 3 Months Ended
Mar. 31, 2025
Medallion Bank Preferred Stock (Non-controlling Interest)

(14) 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 ("Series F") with a $46.0 million aggregate liquidation amount, or $25 per share, 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 three-month Term 90 day 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.
v3.25.1
Subsequent Events
 3 Months Ended
Mar. 31, 2025
Subsequent Events [Abstract]  
Subsequent Events

(15) SUBSEQUENT EVENTS

On April 30, 2025, the Bank closed a sale of $52.8 million in Recreation loans held for sale. The total proceeds received, which reflected a sales price at a premium and accrued but unpaid interest, were $55.9 million. The sale was structured as a 90/10 loan participation on a pool of $58.6 million in loans, $5.9 million of which were retained by the Bank. Loan servicing was also retained by the Bank.

The Company has evaluated the effects of events that have occurred subsequent to March 31, 2025 through the date of financial statement issuance for potential recognition or disclosure. As of such date there were no additional subsequent events that required recognition or disclosure.
v3.25.1
Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Mar. 31, 2025
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 12 and 13 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 $9.0 million and $9.2 million as of March 31, 2025 and December 31, 2024, which 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 March 31, 2025, cumulative impairment of $5.9 million had been recorded with respect to these investments. Gross impairments on equity investments of $0.5 million were recorded during both the three months ended March 31, 2025 and 2024. The Company recognized $9.4 million and $4.2 million of net gains during the three months ended March 31, 2025 and 2024 on 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 March 31, 2025 and December 31, 2024, the fair value of these securities were $1.8 million and $1.7 million and are included in other assets on the consolidated balance sheet. For the three months ended March 31, 2025 and 2024, the Company realized less than $0.1 million of gains and 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 it 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 assesses 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 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 March 31, 2025 and December 31, 2024.
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 March 31, 2025 and December 31, 2024, net loan origination costs were $46.8 million and $46.6 million. Net amortization was $2.3 million and $2.0 million for the three months ended March 31, 2025 and 2024.

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. Changes in fair value are recognized in non-interest income. For loans transferred into the held for sale classification from the held for investment classification, any allowance for credit losses previously recorded is reversed at the transfer date, and the loans are transferred at their amortized cost basis (which is reduced by any previous charge-offs, but excludes any allowance for credit losses). As of March 31, 2025 and December 31, 2024, 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

The Company follows Accounting Standards Update 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", or ASC 326, which requires recognition of lifetime expected losses 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.
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 March 31, 2025 and December 31, 2024, the Company had goodwill of $150.8 million, all of which related to the recreation and home improvement lending segments. As of March 31, 2025 and December 31, 2024, the Company had intangible assets of $18.8 million and $19.1 million. The Company recognized $0.4 million of amortization expense on the intangible assets for the three months ended March 31, 2025 and 2024.

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.

The table below presents the intangible assets as of March 31, 2025 and December 31, 2024:

(Dollars in thousands)

 

March 31, 2025

 

 

December 31, 2024

 

Brand-related intellectual property

 

$

14,300

 

 

$

14,575

 

Home improvement contractor relationships

 

 

4,485

 

 

 

4,571

 

Total intangible assets

 

$

18,785

 

 

$

19,146

 
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 $0.6 million and $0.1 million for the three months ended March 31, 2025 and 2024.
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 $1.1 million and $0.8 million for the three months ended March 31, 2025 and 2024. 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 are amortized against income over an appropriate period, or written off. The amount on the Company’s consolidated balance sheets related to deposits and borrowing facilities were $8.1 million and $8.2 million as of March 31, 2025 and December 31, 2024, and there were no capitalized transaction costs as of March 31, 2025 and December 31, 2024.
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.

 

Three Months Ended March 31,

 

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

 

2025

 

 

2024

 

Net income attributable to common stockholders

 

$

12,014

 

 

$

10,024

 

Weighted average common shares outstanding applicable to basic EPS

 

 

22,570,797

 

 

 

22,641,385

 

Effect of restricted stock grants

 

 

576,251

 

 

 

610,334

 

Effect of dilutive stock options

 

 

234,474

 

 

 

254,793

 

Effect of performance stock unit grants

 

 

515,645

 

 

 

258,534

 

Adjusted weighted average common shares outstanding applicable to diluted EPS

 

 

23,897,167

 

 

 

23,765,045

 

Basic earnings per share

 

$

0.53

 

 

$

0.44

 

Diluted earnings per share

 

 

0.50

 

 

 

0.42

 

Potentially dilutive common shares excluded from the above calculations aggregated to 59,082 shares as of March 31, 2025 and 9,000 shares as of March 31, 2024.

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 and performance stock units are reflected in net income resulting from operations for any new grants using the grant date fair value of the shares and units granted, expensed over the vesting period of the underlying stock.
Regulatory Capital

Regulatory Capital

The Bank subsidiary 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 March 31, 2025 and December 31, 2024, the Bank’s Tier 1 leverage ratio was considered well-capitalized. The Bank had excess Tier 1 leverage capital of $23.8 million over the 15% minimum required, which was $373.3 million based on our total assets as of March 31, 2025. The Bank’s actual capital amounts and ratios and the regulatory minimum ratios are presented in the following table.

 

Regulatory

 

 

 

 

 

 

 

(Dollars in thousands)

 

Adequately Capitalized

 

 

Well-
Capitalized

 

 

March 31, 2025

 

 

December 31, 2024

 

Common equity tier 1 capital

 

 

 

 

 

 

 

$

328,277

 

 

$

322,229

 

Tier 1 capital

 

 

 

 

 

 

 

 

397,064

 

 

 

391,016

 

Total capital

 

 

 

 

 

 

 

 

428,007

 

 

 

422,139

 

Average assets

 

 

 

 

 

 

 

 

2,488,507

 

 

 

2,493,857

 

Risk-weighted assets

 

 

 

 

 

 

 

 

2,414,538

 

 

 

2,429,349

 

Leverage ratio (1)

 

 

4.0

%

 

 

5.0

%

 

 

16.0

%

 

 

15.7

%

Common equity tier 1 capital ratio (2)

 

 

4.5

 

 

 

6.5

 

 

 

13.6

 

 

 

13.3

 

Tier 1 capital ratio (3)

 

 

6.0

 

 

 

8.0

 

 

 

16.4

 

 

 

16.1

 

Total capital ratio (3)

 

 

8.0

 

 

 

10.0

 

 

 

17.7

 

 

 

17.4

 
(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 March 31, 2025 and December 31, 2024 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 March 31, 2025 and December 31, 2024.
Recently Issued Accounting Standards

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 does not expect this update to have a material impact on the financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement, Reporting Comprehensive Income - Expense Disaggregation of Income Statement Expenses. This update requires additional disaggregation of specific types of expenses within the notes to consolidated financial statements on an annual and interim basis. In January 2025, the FASB issued ASU 2025-01 to clarify that all public business entities are required to adopt ASU 2024-03 beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. 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.
v3.25.1
Summary of Significant Accounting Policies (Tables)
 3 Months Ended
Mar. 31, 2025
Accounting Policies [Abstract]  
Schedule of Intangible Assets

The table below presents the intangible assets as of March 31, 2025 and December 31, 2024:

(Dollars in thousands)

 

March 31, 2025

 

 

December 31, 2024

 

Brand-related intellectual property

 

$

14,300

 

 

$

14,575

 

Home improvement contractor relationships

 

 

4,485

 

 

 

4,571

 

Total intangible assets

 

$

18,785

 

 

$

19,146

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

 

Three Months Ended March 31,

 

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

 

2025

 

 

2024

 

Net income attributable to common stockholders

 

$

12,014

 

 

$

10,024

 

Weighted average common shares outstanding applicable to basic EPS

 

 

22,570,797

 

 

 

22,641,385

 

Effect of restricted stock grants

 

 

576,251

 

 

 

610,334

 

Effect of dilutive stock options

 

 

234,474

 

 

 

254,793

 

Effect of performance stock unit grants

 

 

515,645

 

 

 

258,534

 

Adjusted weighted average common shares outstanding applicable to diluted EPS

 

 

23,897,167

 

 

 

23,765,045

 

Basic earnings per share

 

$

0.53

 

 

$

0.44

 

Diluted earnings per share

 

 

0.50

 

 

 

0.42

 
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

 

 

 

 

 

 

 

(Dollars in thousands)

 

Adequately Capitalized

 

 

Well-
Capitalized

 

 

March 31, 2025

 

 

December 31, 2024

 

Common equity tier 1 capital

 

 

 

 

 

 

 

$

328,277

 

 

$

322,229

 

Tier 1 capital

 

 

 

 

 

 

 

 

397,064

 

 

 

391,016

 

Total capital

 

 

 

 

 

 

 

 

428,007

 

 

 

422,139

 

Average assets

 

 

 

 

 

 

 

 

2,488,507

 

 

 

2,493,857

 

Risk-weighted assets

 

 

 

 

 

 

 

 

2,414,538

 

 

 

2,429,349

 

Leverage ratio (1)

 

 

4.0

%

 

 

5.0

%

 

 

16.0

%

 

 

15.7

%

Common equity tier 1 capital ratio (2)

 

 

4.5

 

 

 

6.5

 

 

 

13.6

 

 

 

13.3

 

Tier 1 capital ratio (3)

 

 

6.0

 

 

 

8.0

 

 

 

16.4

 

 

 

16.1

 

Total capital ratio (3)

 

 

8.0

 

 

 

10.0

 

 

 

17.7

 

 

 

17.4

 
(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.
v3.25.1
Investment Securities (Tables)
 3 Months Ended
Mar. 31, 2025
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 March 31, 2025 and December 31, 2024:

March 31, 2025
(Dollars in thousands)

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

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

 

$

48,816

 

 

$

33

 

 

$

(4,246

)

 

$

44,603

 

State and municipalities

 

 

16,766

 

 

 

13

 

 

 

(1,124

)

 

 

15,655

 

Agency bonds

 

 

179

 

 

 

—

 

 

 

(13

)

 

 

166

 

Total

 

$

65,761

 

 

$

46

 

 

$

(5,383

)

 

$

60,424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 
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 at March 31, 2025 by contractual maturity are presented 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.

March 31, 2025
(Dollars in thousands)

 

Amortized
Cost

 

 

Fair
Value

 

Due in one year or less

 

$

1,339

 

 

$

1,338

 

Due after one year through five years

 

 

9,724

 

 

 

9,367

 

Due after five years through ten years

 

 

8,237

 

 

 

7,561

 

Due after ten years

 

 

46,461

 

 

 

42,158

 

Total

 

$

65,761

 

 

$

60,424

 
Summary of Securities with Gross Unrealized Losses

The following tables present information pertaining to securities with gross unrealized losses at March 31, 2025 and December 31, 2024, 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

 

March 31, 2025
(Dollars in thousands)

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

 

Gross
Unrealized
Losses

 

 

Fair
Value

 

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

 

$

(49

)

 

$

5,379

 

 

$

(4,197

)

 

$

28,103

 

State and municipalities

 

 

(134

)

 

 

5,894

 

 

 

(990

)

 

 

9,718

 

Agency bonds

 

 

—

 

 

 

—

 

 

 

(13

)

 

 

166

 

Total

 

$

(183

)

 

$

11,273

 

 

$

(5,200

)

 

$

37,987

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 
v3.25.1
Loans and Allowance for Credit Losses (Tables)
 3 Months Ended
Mar. 31, 2025
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 March 31, 2025 and December 31, 2024.

 

 

March 31, 2025

 

 

December 31, 2024

 

(Dollars in thousands)

 

Amount

 

 

As a
Percent of
Total Loans

 

 

Amount

 

 

As a
Percent of
Total Loans

 

Loans held for investment:

 

 

 

 

 

 

 

 

 

 

 

 

Recreation

 

$

1,431,610

 

 

 

58

%

 

$

1,422,403

 

 

 

57

%

Home improvement

 

 

812,381

 

 

 

33

 

 

 

827,211

 

 

 

33

 

Commercial

 

 

116,059

 

 

 

5

 

 

 

111,273

 

 

 

4

 

Taxi medallion

 

 

1,650

 

 

*

 

 

 

1,909

 

 

*

 

Total loans

 

 

2,361,700

 

 

 

95

 

 

 

2,362,796

 

 

 

95

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Recreation

 

 

114,234

 

 

 

5

 

 

 

120,840

 

 

 

5

 

Strategic partnership

 

 

10,499

 

 

*

 

 

 

7,386

 

 

*

 

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

 

 

124,733

 

 

 

5

 

 

 

128,226

 

 

 

5

 

Total loans and loans held for sale

 

$

2,486,433

 

 

 

100

%

 

$

2,491,022

 

 

 

100

%

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

The following tables present the activity of the gross loans and loans held for sale for the three months ended March 31, 2025 and 2024.

Three Months Ended March 31, 2025
(Dollars in thousands)

 

Recreation

 

 

Home
Improvement

 

 

Commercial

 

 

Taxi
Medallion

 

 

Strategic
Partnership

 

 

Total

 

Gross loans – December 31, 2024 (1)

 

$

1,543,243

 

 

$

827,211

 

 

$

111,273

 

 

$

1,909

 

 

$

7,386

 

 

$

2,491,022

 

Loan originations

 

 

86,833

 

 

 

48,796

 

 

 

9,707

 

 

 

72

 

 

 

136,240

 

 

 

281,648

 

Principal receipts, sales, and maturities

 

 

(61,507

)

 

 

(59,611

)

 

 

(5,052

)

 

 

(316

)

 

 

(133,127

)

 

 

(259,613

)

Charge-offs

 

 

(20,274

)

 

 

(4,227

)

 

 

(130

)

 

 

(15

)

 

 

—

 

 

 

(24,646

)

Transfer to loan collateral in process of foreclosure, net

 

 

(2,389

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2,389

)

Amortization of origination fees and costs, net

 

 

(3,481

)

 

 

1,133

 

 

 

12

 

 

 

—

 

 

 

—

 

 

 

(2,336

)

Origination fees and costs, net

 

 

3,419

 

 

 

(921

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,498

 

Paid-in-kind interest

 

 

—

 

 

 

—

 

 

 

249

 

 

 

—

 

 

 

—

 

 

 

249

 

Gross loans – March 31, 2025 (1)

 

$

1,545,844

 

 

$

812,381

 

 

$

116,059

 

 

$

1,650

 

 

$

10,499

 

 

$

2,486,433

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

Three Months Ended March 31, 2024
(Dollars in thousands)

 

Recreation

 

 

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

 

 

105,765

 

 

 

51,576

 

 

 

—

 

 

 

—

 

 

 

15,746

 

 

 

173,087

 

Principal receipts, sales, and maturities

 

 

(64,886

)

 

 

(54,917

)

 

 

(8,872

)

 

 

(103

)

 

 

(15,430

)

 

 

(144,208

)

Charge-offs

 

 

(18,101

)

 

 

(4,898

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(22,999

)

Transfer to loan collateral in process of foreclosure, net

 

 

5,425

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5,425

 

Amortization of origination fees and costs, net

 

 

(2,952

)

 

 

938

 

 

 

7

 

 

 

—

 

 

 

—

 

 

 

(2,007

)

Origination fees and costs, net

 

 

3,688

 

 

 

(1,054

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,634

 

Paid-in-kind interest

 

 

—

 

 

 

—

 

 

 

608

 

 

 

—

 

 

 

—

 

 

 

608

 

Gross loans – March 31, 2024

 

$

1,365,165

 

 

$

752,262

 

 

$

106,570

 

 

$

3,560

 

 

$

869

 

 

$

2,228,426

 

 
Summary of Activity in Allowance for Loan Losses

The following tables present the activity in the allowance for credit losses for the three months ended March 31, 2025 and 2024.

(Dollars in thousands)

 

Recreation

 

 

Home
Improvement

 

 

Commercial

 

 

Taxi
Medallion (1)

 

 

Total

 

Balance at December 31, 2024

 

$

71,102

 

 

$

20,536

 

 

$

5,190

 

 

$

540

 

 

$

97,368

 

Charge-offs

 

 

(20,274

)

 

 

(4,227

)

 

 

(130

)

 

 

(15

)

 

 

(24,646

)

Recoveries

 

 

3,860

 

 

 

1,095

 

 

 

—

 

 

 

675

 

 

 

5,630

 

Provision (benefit) for credit losses

 

 

16,870

 

 

 

2,845

 

 

 

3,114

 

 

 

(815

)

 

 

22,014

 

Balance at March 31, 2025

 

$

71,558

 

 

$

20,249

 

 

$

8,174

 

 

$

385

 

 

$

100,366

 
(1)
As of March 31, 2025, cumulative net charge-offs of loans and loan collateral in process of foreclosure in the taxi medallion portfolio were $161.7 million, including $95.2 million related to loans secured by New York taxi medallions, some of which may represent collection opportunities for the Company.

(Dollars in thousands)

 

Recreation

 

 

Home
Improvement

 

 

Commercial

 

 

Taxi
Medallion

 

 

Total

 

Balance at December 31, 2023

 

$

57,532

 

 

$

21,019

 

 

$

4,148

 

 

$

1,536

 

 

$

84,235

 

Charge-offs

 

 

(18,101

)

 

 

(4,898

)

 

 

—

 

 

 

—

 

 

 

(22,999

)

Recoveries

 

 

3,548

 

 

 

911

 

 

 

20

 

 

 

911

 

 

 

5,390

 

Provision (benefit) for credit losses

 

 

17,030

 

 

 

898

 

 

 

216

 

 

 

(943

)

 

 

17,201

 

Balance at March 31, 2024

 

$

60,009

 

 

$

17,930

 

 

$

4,384

 

 

$

1,504

 

 

$

83,827

 
Summary of Gross Charge Offs

The following table presents the gross charge-offs for the three months ended March 31, 2025, by the year of origination:

Three Months Ended March 31, 2025
(Dollars in thousands)

 

2025

 

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

Prior

 

 

Total

 

Recreation

 

$

—

 

 

$

2,728

 

 

$

3,707

 

 

$

4,506

 

 

$

1,933

 

 

$

7,400

 

 

$

20,274

 

Home improvement

 

 

—

 

 

 

823

 

 

 

1,503

 

 

 

1,133

 

 

 

428

 

 

 

340

 

 

 

4,227

 

Commercial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

130

 

 

 

—

 

 

 

—

 

 

 

130

 

Taxi medallion

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

15

 

 

 

15

 

Total

 

$

—

 

 

$

3,551

 

 

$

5,210

 

 

$

5,769

 

 

$

2,361

 

 

$

7,755

 

 

$

24,646

 

The following table presents the gross charge-offs for the three months ended March 31, 2024, by the year of origination:

Three Months Ended March 31, 2024
(Dollars in thousands)

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

Prior

 

 

Total

 

Recreation

 

$

—

 

 

$

3,763

 

 

$

6,818

 

 

$

3,497

 

 

$

1,289

 

 

$

2,734

 

 

$

18,101

 

Home improvement

 

 

—

 

 

 

1,524

 

 

 

1,680

 

 

 

1,163

 

 

 

287

 

 

 

244

 

 

 

4,898

 

Commercial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Taxi medallion

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

—

 

 

$

5,287

 

 

$

8,498

 

 

$

4,660

 

 

$

1,576

 

 

$

2,978

 

 

$

22,999

 
Summary of Allowance for Loan Losses by Type

The following tables present the allowance for credit losses by type as of March 31, 2025 and December 31, 2024.

March 31, 2025
(Dollars in thousands)

 

Amount

 

 

Percentage
of Allowance

 

 

Allowance as
a Percent of
Loan Category (1)

 

Recreation

 

$

71,558

 

 

 

71

%

 

 

5.00

%

Home improvement

 

 

20,249

 

 

 

20

 

 

 

2.49

 

Commercial

 

 

8,174

 

 

 

8

 

 

 

7.04

 

Taxi medallion

 

 

385

 

 

 

1

 

 

 

23.32

 

Total (2)

 

$

100,366

 

 

 

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.
(2)
As of March 31, 2025, total allowance for credit losses as a percent of nonaccrual loans was 293.37%.

December 31, 2024
(Dollars in thousands)

 

Amount

 

 

Percentage
of Allowance

 

 

Allowance as
a Percent of
Loan Category (1)

 

Recreation

 

$

71,102

 

 

 

73

%

 

 

5.00

%

Home improvement

 

 

20,536

 

 

 

21

 

 

 

2.48

 

Commercial

 

 

5,190

 

 

 

5

 

 

 

4.66

 

Taxi medallion

 

 

540

 

 

 

1

 

 

 

28.29

 

Total (2)

 

$

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.
(2)
As of December 31, 2024, total allowance for credit losses as a percent of nonaccrual loans was 291.93%
Summary of Performance Status of Loan and Loans Held for Sale

The following tables present the performance status of loans and loans held for sale as of March 31, 2025 and December 31, 2024.

March 31, 2025
(Dollars in thousands)

 

Performing

 

 

Nonperforming

 

 

Total

 

 

Percentage of
Nonperforming
to Total

 

Recreation

 

$

1,538,119

 

 

$

7,725

 

 

$

1,545,844

 

 

 

0.50

%

Home improvement

 

 

810,874

 

 

 

1,507

 

 

 

812,381

 

 

 

0.19

 

Commercial

 

 

92,730

 

 

 

23,329

 

 

 

116,059

 

 

 

20.10

 

Taxi medallion

 

 

—

 

 

 

1,650

 

 

 

1,650

 

 

 

100.00

 

Strategic partnership

 

 

10,499

 

 

 

—

 

 

 

10,499

 

 

 

—

 

Total

 

$

2,452,222

 

 

$

34,211

 

 

$

2,486,433

 

 

 

1.38

%

 

 

 

 

 

 

 

 

 

 

 

 

 

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

%
Summary of Aging of Loans

The following tables present the aging of loans and loans held for sale as of March 31, 2025 and December 31, 2024.

March 31, 2025

 

Days Past Due

 

 

 

 

 

 

 

 

 

 

 

Recorded
Investment
90 Days and

 

(Dollars in thousands)

 

30-59

 

 

60-89

 

 

90 +

 

 

Total

 

 

Current

 

 

Total (1)

 

 

Accruing

 

Recreation

 

$

46,880

 

 

$

14,148

 

 

$

7,140

 

 

$

68,168

 

 

$

1,427,037

 

 

$

1,495,205

 

 

$

—

 

Home improvement

 

 

4,644

 

 

 

2,117

 

 

 

1,519

 

 

 

8,280

 

 

 

807,755

 

 

 

816,035

 

 

 

—

 

Commercial

 

 

—

 

 

 

—

 

 

 

20,497

 

 

 

20,497

 

 

 

95,742

 

 

 

116,239

 

 

 

—

 

Taxi medallion

 

 

46

 

 

 

67

 

 

 

—

 

 

 

113

 

 

 

1,537

 

 

 

1,650

 

 

 

—

 

Strategic partnership

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

10,499

 

 

 

10,499

 

 

 

—

 

Total

 

$

51,570

 

 

$

16,332

 

 

$

29,156

 

 

$

97,058

 

 

$

2,342,570

 

 

$

2,439,628

 

 

$

—

 
(1)
Excludes $46.8 million of capitalized loan origination costs.

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.
v3.25.1
Funds Borrowed (Tables)
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Schedule of Outstanding Balances of Funds Borrowed

The following table presents outstanding balances of funds borrowed.

 

Payments Due for the Twelve Months Ending March 31,

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

2026

 

 

2027

 

 

2028

 

 

2029

 

 

2030

 

 

Thereafter

 

 

March 31,
2025 (1)

 

 

December 31, 2024 (1)

 

 

Interest
Rate (2)

 

Deposits (3)

 

$

807,514

 

 

$

466,604

 

 

$

389,848

 

 

$

173,104

 

 

$

186,054

 

 

$

—

 

 

$

2,023,124

 

 

$

2,091,663

 

 

 

3.75

%

Privately placed notes

 

 

31,250

 

 

 

—

 

 

 

53,750

 

 

 

39,000

 

 

 

—

 

 

 

22,500

 

 

 

146,500

 

 

 

146,500

 

 

 

8.12

 

SBA debentures and borrowings

 

 

15,500

 

 

 

4,500

 

 

 

—

 

 

 

2,500

 

 

 

—

 

 

 

48,000

 

 

 

70,500

 

 

 

70,250

 

 

 

3.84

 

Trust preferred securities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

33,000

 

 

 

33,000

 

 

 

33,000

 

 

 

6.69

 

Federal reserve and other borrowings

 

 

65,000

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

65,000

 

 

 

35,000

 

 

 

4.50

 

Total

 

$

919,264

 

 

$

471,104

 

 

$

443,598

 

 

$

214,604

 

 

$

186,054

 

 

$

103,500

 

 

$

2,338,124

 

 

$

2,376,413

 

 

 

4.09

%
(1)
Excludes deferred financing costs of $8.1 million and $8.2 million as of March 31, 2025 and December 31, 2024.
(2)
Weighted average contractual rate as of March 31, 2025.
(3)
Balance excludes $4.3 million and $3.0 million of strategic partner reserve deposits and includes $5.2 million and $6.0 million in retail savings deposit balances as of March 31, 2025 and December 31, 2024.
Summary of Maturity of Deposit Pools and Savings Deposits, Including Strategic Partner Reserve Deposits The following table presents the maturity of the deposit pools and retail savings deposits, which includes strategic partner reserve deposits, as of March 31, 2025.

(Dollars in thousands)

 

March 31, 2025

 

Three months or less

 

$

382,152

 

Over three months through six months

 

 

219,337

 

Over six months through one year

 

 

206,025

 

Over one year

 

 

1,215,610

 

Deposits

 

 

2,023,124

 

 Strategic partner collateral deposits

 

 

4,250

 

Total deposits

 

$

2,027,374

 
Schedule of Private Placement Notes The following table presents the private placement notes outstanding as of March 31, 2025 and December 31, 2024.

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Date of Notes

 

Maturity

 

Interest Rate

 

 

Interest Payable

 

March 31, 2025

 

 

December 31, 2024

 

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

 

June 2024

 

June 2039

 

 

8.875

%

 

Semi-annually

 

 

17,500

 

 

 

17,500

 

August 2024

 

August 2039

 

 

8.625

%

 

Semi-annually

 

 

5,000

 

 

 

5,000

 

 

 

 

 

 

 

 

 

 

$

146,500

 

 

$

146,500

 

 
Schedule of SBA Debentures and Borrowings

The following table presents the SBA debentures and borrowings as of March 31, 2025 and December 31, 2024.

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Date of Notes

 

Maturity

 

Interest Rate

 

 

Interest Payable

 

March 31, 2025

 

 

December 31, 2024

 

March 2015

 

March 2025

 

 

2.87

%

 

Semi-annually

 

$

—

 

 

$

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

 

March 2025

 

September 2035

 

*

 

 

Semi-annually

 

 

10,250

 

 

 

—

 

 

 

 

 

 

 

 

 

 

$

70,500

 

 

$

70,250

 

(*) Interest rate will price in September 2025 and will accrue interest at a rate which approximates 5% until that time.
v3.25.1
Leases (Tables)
 3 Months Ended
Mar. 31, 2025
Leases [Abstract]  
Schedule of Operating Lease Costs and Additional Information

The following table presents the operating lease costs and additional information for the three months ended March 31, 2025 and 2024.

 

 

Three Months Ended March 31,

 

(Dollars in thousands)

 

2025

 

 

2024

 

Operating lease costs

 

$

588

 

 

$

604

 

Cash paid for amounts included in the measurement of lease liabilities

 

 

 

 

 

 

Operating cash flows from operating leases

 

 

675

 

 

 

657

 

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

 

 

(63

)

 

 

(59

)

 
Schedule of Breakout of Operating Leases

The following table presents the breakout of the operating leases as of March 31, 2025 and December 31, 2024.

(Dollars in thousands)

 

March 31, 2025

 

 

December 31, 2024

 

Operating lease right-of-use assets

 

$

6,435

 

 

$

6,922

 

Other current liabilities

 

 

2,349

 

 

 

2,294

 

Operating lease liabilities

 

 

4,528

 

 

 

5,128

 

Total operating lease liabilities

 

 

6,877

 

 

 

7,422

 

Weighted average remaining lease term

 

3.6 years

 

 

4.1 years

 

Weighted average discount rate

 

 

5.55

%

 

5.56%

 
Schedule of Maturities of the Lease Liabilities

At March 31, 2025, maturities of the lease liabilities were as follows:

(Dollars in thousands)

 

 

 

Remainder of 2025

 

$

1,911

 

2026

 

 

2,567

 

2027

 

 

1,342

 

2028

 

 

575

 

2029

 

 

589

 

Thereafter

 

 

548

 

Total lease payments

 

 

7,532

 

Less imputed interest

 

 

655

 

Total operating lease liabilities

 

$

6,877

 
v3.25.1
Income Taxes (Tables)
 3 Months Ended
Mar. 31, 2025
Income Tax Disclosure [Abstract]  
Summary of Components of Deferred Tax Assets and Liabilities

The following table presents the significant components of the Company's deferred tax assets and liabilities as of March 31, 2025 and December 31, 2024.

(Dollars in thousands)

 

March 31, 2025

 

 

December 31, 2024

 

Deferred tax assets:

 

 

 

 

 

 

Provision for credit losses

 

$

15,477

 

 

$

14,530

 

Accrued expenses, compensation, and other assets

 

 

4,022

 

 

 

5,612

 

Net operating loss carryforwards (1)

 

 

3,168

 

 

 

3,168

 

Other investments and investment securities

 

 

2,704

 

 

 

2,885

 

Valuation allowance

 

 

(4,228

)

 

 

(4,418

)

Total deferred tax assets

 

 

21,143

 

 

 

21,777

 

Deferred tax liabilities:

 

 

 

 

 

 

Goodwill and other intangibles

 

 

42,681

 

 

 

42,772

 

Total deferred tax liabilities

 

 

42,681

 

 

 

42,772

 

Deferred tax liability, net

 

$

21,538

 

 

$

20,995

 
(1)
As of March 31, 2025, 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 $0.5 million as of March 31, 2025.
Summary of Components of Tax Provision

The following table presents the components of the Company's tax provision for the three months ended March 31, 2025 and 2024:

 

 

Three Months Ended March 31,

 

(Dollars in thousands)

 

2025

 

 

2024

 

Current

 

 

 

 

 

 

Federal

 

$

4,661

 

 

$

1,729

 

State

 

 

1,522

 

 

 

643

 

Deferred

 

 

 

 

 

 

Federal

 

 

261

 

 

 

3,116

 

State

 

 

269

 

 

 

870

 

Net provision for income taxes

 

$

6,713

 

 

$

6,358

 

 
Summary of Reconciliation of Statutory Federal Income Tax Provision to Consolidated Actual Income Tax Provision

The following table presents a reconciliation of statutory federal income tax provision to consolidated actual income tax provision reported for the three months ended March 31, 2025 and 2024.

 

 

Three Months Ended March 31,

 

(Dollars in thousands)

 

2025

 

 

2024

 

Statutory Federal income tax provision at 21%

 

$

4,250

 

 

$

3,758

 

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

 

 

923

 

 

 

735

 

Non-deductible expenses

 

 

1,572

 

 

 

1,780

 

Valuation allowance against deferred tax assets

 

 

(190

)

 

 

—

 

Other

 

 

158

 

 

 

85

 

Total income tax provision

 

$

6,713

 

 

$

6,358

 
v3.25.1
Stock Options and Restricted Stock (Tables)
 3 Months Ended
Mar. 31, 2025
Share-Based Payment Arrangement [Abstract]  
Summary of Activity for Performance Stock Units and Restricted Stock Programs

The following table presents the PSU activity for the three months ended March 31, 2025 and the year ended December 31, 2024. 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, 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

 

Granted

 

 

311,723

 

 

 

 

8.47

 

 

 

8.47

 

Cancelled

 

 

—

 

 

 

 

—

 

 

 

—

 

Vested

 

 

—

 

 

 

 

—

 

 

 

—

 

Outstanding at March 31, 2025

 

 

823,854

 

 

$

6.08 - 8.97

 

 

$

7.74

 

 

The following table presents the activity for the restricted stock programs for the three months ended March 31, 2025 and the year ended December 31, 2024.

 

Number of
Shares

 

 

 

Grant Price
Per Share

 

 

Weighted
Average
Grant Price

 

Outstanding at December 31, 2023

 

 

995,376

 

 

$

4.89 - 9.37

 

 

$

7.74

 

Granted

 

 

347,158