Segment Reporting

3 Months Ended

Mar. 31, 2022

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 operated by the Bank and include loans in all fifty states. The highest concentrations of recreation loans are in Texas, Florida, and California at 16%, 10%, and 10% of loans outstanding and with no other states over 5% as of March 31, 2022. 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 trailers make up 59%, 19%, and 8% of the segment portfolio as of March 31, 2022. The home improvement lending segment works with contractors and financial service providers to finance residential home improvements

concentrated in roofs, swimming pools, and windows at 33%, 26%, and 12% of total home improvement loans outstanding, and with no other product lines over 10% as of March 31, 2022. The highest concentrations of home improvement loans are in Texas, Florida, and Ohio at 12%, 10%, and 8% of loans outstanding and with no other states over 6% as of March 31, 2022. The commercial lending segment focuses on enterprise wide industries, including manufacturing services, and various other industries, in which 49% of these loans are made in the Midwest. The medallion lending segment arose in connection with the financing of taxi medallions, taxis, and related assets, substantially all of which are located in the New York City metropolitan area as of March 31, 2022.

In addition, our non-operating segments include 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 well as RPAC, a race car team through our disposition on December 1, 2021.

As part of 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 allocated to corporate and other investments.

The following tables present segment data as of and for the three months ended March 31, 2022 and 2021.

Three Months Ended March 31, 2022	Consumer Lending
(Dollars in thousands)	Recreation			Home Improvement			Commercial Lending				Medallion Lending			Corporate and Other Investments			Consolidated
Total interest income (loss)	$	31,135		$	9,700		$	1,930			$	146		$	392		$	43,303
Total interest expense		3,601			1,341			722				153			1,558			7,375
Net interest income (loss)		27,534			8,359			1,208				(7	)		(1,166	)		35,928
Provision (recoveries) for loan losses		1,680			1,204			1,255				(869	)		(30	)		3,240
Net interest income (loss) after loss provision		25,854			7,155			(47	)			862			(1,136	)		32,688
Other income (expense), net		(6,820	)		(2,896	)		(1,330	)			(806	)		(4,652	)		(16,504	)
Net income (loss) before taxes		19,034			4,259			(1,377	)			56			(5,788	)		16,184
Income tax (provision) benefit		(5,681	)		(1,271	)		411				(17	)		1,727			(4,831	)
Net income (loss) after taxes	$	13,353		$	2,988		$	(966	)		$	39		$	(4,061	)	$	11,353
Balance Sheet Data
Total loans, net	$	971,533		$	465,349		$	76,787			$	4,608		$	478		$	1,518,755
Total assets		984,535			469,886			86,461				37,752			387,991			1,966,625
Total funds borrowed		780,621			372,565			68,553				29,933			307,632			1,559,304
Selected Financial Ratios
Return on average assets		5.62	%		2.66	%		(3.83	)%			0.25	%		(4.80	)%		2.41	%
Return on average equity		29.27			13.85			(12.33	)			1.30			(28.30	)		13.70
Interest yield		13.30			8.71			10.12				12.49		N/A				11.06
Net interest margin		11.76			7.50			6.34				(0.67	)	N/A				9.20
Reserve coverage		3.24			1.70			1.06		(1)		66.73		N/A				3.23
Delinquency status(2)		0.39			0.06			0.10		(1)		—		N/A				0.27
Charge-off ratio(4)		0.67			0.46			8.13		(3)		(76.13	)	N/A				0.75

(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.

Three Months Ended March 31, 2021	Consumer Lending
(Dollars in thousands)	Recreation			Home Improvement			Commercial Lending				Medallion Lending			RPAC			Corporate and Other Investments			Consolidated
Total interest income (loss)	$	27,442		$	7,918		$	1,482			$	(69	)	$	—		$	307		$	37,080
Total interest expense		2,794			1,208			572				1,370			41			2,422			8,407
Net interest income (loss)		24,648			6,710			910				(1,439	)		(41	)		(2,115	)		28,673
Provision for loan losses		3,613			450			—				(1,044	)		—			—			3,019
Net interest income (loss) after loss provision		21,035			6,260			910				(395	)		(41	)		(2,115	)		25,654
Sponsorship and race winnings		—			—			—				—			2,473			—			2,473
Race team related expenses		—			—			—				—			(2,122	)		—			(2,122	)
Other income (expense), net		(5,463	)		(1,914	)		(460	)			(2,144	)		(1,761	)		(1,314	)		(13,056	)
Net income (loss) before taxes		15,572			4,346			450				(2,539	)		(1,451	)		(3,429	)		12,949
Income tax (provision) benefit		(4,010	)		(1,119	)		(113	)			637			364			363			(3,878	)
Net income (loss) after taxes	$	11,562		$	3,227		$	337			$	(1,902	)	$	(1,087	)	$	(3,066	)	$	9,071
Balance Sheet Data
Total loans net	$	794,554		$	336,763		$	55,567			$	11,177		$	—		$	3,345		$	1,201,406
Total assets		807,244			348,456			71,922				116,639			32,724			311,765			1,688,750
Total funds borrowed		641,993			277,672			59,533				92,469			8,726			266,366			1,346,759
Selected Financial Ratios
Return on average assets		5.92	%		3.80	%		1.79	%			(6.40	)%		(13.27	)%		(4.16	)%		2.08	%
Return on average equity		29.59			19.00			8.96				(31.98	)		(378.20	)		(30.80	)		11.09
Interest yield		14.36			9.66			10.37				(2.34	)	N/A			N/A				11.84
Net interest margin		12.90			8.19			6.37				(48.86	)	N/A			N/A				9.18
Reserve coverage		3.45			1.57			0.00		(1)		68.29		N/A			N/A				4.59
Delinquency status(2)		0.40			0.04			0.13		(1)		2.20		N/A			N/A				0.33
Charge-off ratio(4)		1.35			0.30			0.00		(3)		(2.55	)	N/A			N/A				0.95

(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.