Segment Reporting

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment Reporting

(9) SEGMENT REPORTING

The Company has six business segments, which include four lending and two non-operating segments, 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 medallion. The recreation and home improvement lending segments are conducted by the Bank in all fifty states. The highest concentrations of recreation loans are in Texas, California, and Florida at 16%, 10%, and 9% of loans outstanding and with no other states over 5% as of December 31, 2021. The recreation lending segment is a consumer finance business that works with third-party dealers and financial service providers for the purpose of financing RVs, boats, and other consumer recreational equipment, of which RVs, boats, and other consumer recreational equipment make up 60%, 19%, and 9% of the segment portfolio as of December 31, 2021. 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 30%, 26%, and 13% with no other product lines exceeding 6% . The highest concentrations of home improvement loans are in Florida, Texas, and Ohio at 10%, 10%, and 8% of loans outstanding and with no other states over 5% as of December 31, 2021. The commercial lending segment focuses on enterprise wide industries, including manufacturing and various other industries, in which 51% of these loans are made in the Midwest. The medallion lending segment arose in connection with the financing of medallions, taxis, and related assets, of which 89% were in New York City as of December 31, 2021.

In addition, our non-operating segments include RPAC and our corporate and other investments segment which includes items not allocated to our operating segments such as investment securities, equity investments, intercompany eliminations, and other corporate elements. As a result of COVID-19, the prior year race season had been suspended from March 15, 2020 through May 17, 2020. As states reopened, NASCAR resumed races and completed all races scheduled in 2020. Commencing in the 2020 second quarter, the Bank began issuing loans related to its strategic partnership business, which is currently included within the corporate and other investment segment due to its small size.

As part of the segment reporting, capital ratios for all operating segments have been normalized at 20%, which approximates the percentage of consolidated total equity divided by total assets, with the net adjustment applied to corporate and other investments. In addition, the commercial segment exclusively represents the mezzanine lending business, and the legacy commercial loan business (immaterial to total) has been re-allocated to corporate and other investments.

The following tables present segment data as of and for the years ended December 31, 2021, 2020, and 2019.

Year Ended December 31, 2021	Consumer Lending
(Dollars in thousands)	Recreation			Home Improvement			Commercial Lending				Medallion Lending			RPAC (1)			Corporate and Other Investments			Consolidated
Total interest income (loss)	$	118,305		$	34,204		$	6,592			$	(1,483	)	$	—		$	1,348		$	158,966
Total interest expense		9,993			4,153			2,720				5,914			546			7,814			31,140
Net interest income (loss)		108,312			30,051			3,872				(7,397	)		(546	)		(6,466	)		127,826
Provision for loan losses		7,671			2,750			—				(7,752	)		—			1,953			4,622
Net interest income (loss) after loss provision		100,641			27,301			3,872				355			(546	)		(8,419	)		123,204
Sponsorship and race winnings		—			—			—				—			12,567			—			12,567
Race team related expenses		—			—			—				—			(9,559	)		—			(9,559	)
Other income (expense), net		(30,156	)		(11,640	)		3,101				(1,991	)		(5,108	)		1,455			(44,339	)
Net income (loss) before taxes		70,485			15,661			6,973				(1,636	)		(2,646	)		(6,964	)		81,873
Income tax (provision) benefit		(18,699	)		(4,155	)		(1,850	)			433			(1,498	)		1,552			(24,217	)
Net income (loss) after taxes	$	51,786		$	11,506		$	5,123			$	(1,203	)	$	(4,144	)	$	(5,412	)	$	57,656
Balance Sheet Data
Total loans net	$	928,885		$	429,416		$	73,713			$	4,812		$	—		$	1,933		$	1,438,759
Total assets		896,223			371,781			103,631				42,011			—			459,411			1,873,057
Total funds borrowed		710,616			294,786			82,169				69,221			—			328,358			1,485,150
Selected Financial Ratios
Return on average assets		6.00	%		3.01	%		5.85	%			(1.15	)%		20.35	%		(1.89	)%		3.12	%
Return on average equity		30.01			15.04			29.23				(5.75	)		885.29			(13.62	)		21.24
Interest yield		13.94			9.30			10.41				(18.77	)	N/A			N/A				11.48
Net interest margin		12.76			8.17			6.12				(93.60	)	N/A			N/A				9.26
Reserve coverage		3.37			1.68			1.49		(1)		65.74		N/A			N/A				3.37
Delinquency status(2)		0.41			0.03			0.10		(1)		—		N/A			N/A				0.28
Charge-off ratio(4)		0.30			0.15			—		(3)		95.40		N/A			N/A				0.85

(1)Ratio is based on total commercial lending balances, and relates solely to the legacy commercial loan business.

(2)Loans 90 days or more past due.

(3)Ratio is based on total commercial lending balances, and relates to the total loan business.

(4)Negative balances indicate recoveries for the period.

(5)The Company sold its interest in RPAC in December 2021. Selected earnings data are applicable through the date of sale.

Year Ended December 31, 2020	Consumer Lending
(Dollars in thousands)	Recreation			Home Improvement			Commercial Lending				Medallion Lending			RPAC			Corporate and Other Investments			Consolidated
Total interest income (loss)	$	110,706		$	27,273		$	6,926			$	(1,518	)	$	—		$	1,575		$	144,962
Total interest expense		13,013			5,699			2,538				3,610			163			9,128			34,151
Net interest income (loss)		97,693			21,574			4,388				(5,128	)		(163	)		(7,553	)		110,811
Provision for loan losses		23,736			3,778			—				42,276			—			27			69,817
Net interest income (loss) after loss provision		73,957			17,796			4,388				(47,404	)		(163	)		(7,580	)		40,994
Sponsorship and race winnings		—			—			—				—			20,042			—			20,042
Race team related expenses		—			—			—				—			(8,366	)		—			(8,366	)
Other income (expense), net		(27,341	)		(9,611	)		(3,196	)			(30,366	)		(7,973	)		(11,164	)		(89,651	)
Net income (loss) before taxes		46,616			8,185			1,192				(77,770	)		3,540			(18,744	)		(36,981	)
Income tax (provision) benefit		(12,004	)		(2,108	)		(299	)			19,520			(889	)		5,854			10,074
Net income (loss) after taxes	$	34,612		$	6,077		$	893			$	(58,250	)	$	2,651		$	(12,890	)	$	(26,907	)
Balance Sheet Data
Total loans net	$	765,338		$	328,876		$	62,037			$	12,725		$	—		$	3,314		$	1,172,290
Total assets		777,605			340,494			80,622				124,554			33,711			285,425			1,642,411
Total funds borrowed		621,735			272,284			65,924				98,636			8,689			244,987			1,312,255
Selected Financial Ratios
Return on average assets		4.59	%		2.07	%		1.07	%			(33.21	)%		7.98	%		(5.06	)%		(2.16	)%
Return on average equity		22.93			10.35			5.17				(165.21	)		(363.66	)		(23.29	)		(10.90	)
Interest yield		14.90			9.66			10.51				(2.11	)	N/A			N/A				11.32
Net interest margin		13.15			7.62			6.66				(7.14	)	N/A			N/A				8.65
Reserve coverage		3.45			1.54			0.00		(1)		66.31		N/A			N/A				4.68
Delinquency status(2)		0.70			0.05			0.11		(1)		3.57		N/A			N/A				0.57
Charge-off ratio		1.95			0.44			0.04		(3)		59.38		N/A			N/A				5.00

(1)Ratio is based on total commercial lending balances, and relates solely to the legacy commercial loan business.

(2)Loans 90 days or more past due.

(3)Ratio is based on total commercial lending balances, and relates to the total loan business.

Year Ended December 31, 2019	Consumer Lending
(Dollars in thousands)	Recreation			Home Improvement			Commercial Lending				Medallion Lending			RPAC			Corporate and Other Investments			Consolidated
Total interest income	$	99,463		$	19,943		$	7,183			$	3,665		$	—		$	2,308		$	132,562
Total interest expense		13,304			4,757			2,833				7,962			159			6,030			35,045
Net interest income (loss)		86,159			15,186			4,350				(4,297	)		(159	)		(3,722	)		97,517
Provision for loan losses		28,638			1,598			364				16,331			—			455			47,386
Net interest income (loss) after loss provision		57,521			13,588			3,986				(20,628	)		(159	)		(4,177	)		50,131
Sponsorship and race winnings		—			—			—				—			18,742			—			18,742
Race team related expenses		—			—			—				—			(8,996	)		—			(8,996	)
Other income (expense), net		(23,490	)		(7,520	)		(1,149	)			(10,493	)		(6,942	)		(7,946	)		(57,540	)
Net income (loss) before taxes		34,031			6,068			2,837				(31,121	)		2,645			(12,123	)		2,337
Income tax (provision) benefit		(8,813	)		(1,572	)		(684	)			7,596			(329	)		3,461			(341	)
Net income (loss) after taxes	$	25,218		$	4,496		$	2,153			$	(23,525	)	$	2,316		$	(8,662	)	$	1,996
Balance Sheet Data
Total loans net	$	695,257		$	244,716		$	66,405			$	105,022		$	—		$	3,362		$	1,114,762
Total assets		707,377			252,704			84,924				217,483			31,538			247,641			1,541,667
Total funds borrowed		563,805			201,605			68,666				176,825			7,794			150,898			1,169,593
Selected Financial Ratios
Return on average assets		3.84	%		2.20	%		2.44	%			(9.73	)%		7.28	%		(3.71	)%		(0.12	)%
Return on average equity		17.19			10.22			12.21				(48.49	)		(96.37	)		(14.26	)		(0.59	)
Interest yield		15.39			9.50			11.39				2.88		N/A			N/A				11.75
Net interest margin		13.33			7.24			6.90				(3.38	)	N/A			N/A				8.64
Reserve coverage		2.53			1.05			0.00		(1)		19.48		N/A			N/A				3.97
Delinquency status(2)		0.84			0.07			0.15		(1)		2.04		N/A			N/A				0.76
Charge-off ratio		2.69			0.37			1.30		(3)		14.68		N/A			N/A				3.60

(1)Ratio is based on total commercial lending balances, and relates solely to the legacy commercial loan business.

(2)Loans 90 days or more past due.

(3)Ratio is based on total commercial lending balances, and relates to the total loan business.