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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Summary of Unrealized Portion Related to Equity Securities

The following table presents the unrealized portion related to the equity securities held.


	Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands)	2023			2022			2023			2022
Net gains (losses) recognized during the period on equity securities	$	(54	)	$	(77	)	$	(54	)	$	(229	)
Less: Net gains (losses) recognized during the period on equity securities sold during the period		—			—			—			—
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date	$	(54	)	$	(77	)	$	(54	)	$	(229	)

Summary of Finalized Adoption Related to Allowance for Credit Losses on Loans

The CECL methodology transition effects on the allowance for credit losses are shown in the following table:


(Dollars in thousands)	December 31, 2022 Pre-Topic 326 Adoption		Effect of ASC 326 Adoption (Transition Amounts)		January 1, 2023 Post-ASC 326 Adoption
Assets:
Loans:
Recreation	$	41,966	$	10,037	$	52,003
Home improvement		11,340		1,518		12,858
Commercial		1,049		2,157		3,206
Medallion		9,490		—		9,490
Strategic partnership		—		—		—
Allowance for credit losses on loans	$	63,845	$	13,712	$	77,557

Schedule of Intangible Assets

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


(Dollars in thousands)	September 30, 2023		December 31, 2022
Brand-related intellectual property	$	15,950	$	16,775
Home improvement contractor relationships		5,002		5,260
Total intangible assets	$	20,952	$	22,035

Summary of the Calculation of Basic and Diluted EPS

The table below shows the calculation of basic and diluted EPS.


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands, except share and per share data)	2023		2022		2023		2022
Net income available to common stockholders	$	11,230	$	7,636	$	40,761	$	30,777
Weighted average common shares outstanding applicable to basic EPS		22,596,982		23,154,775		22,469,968		24,020,058
Effect of restricted stock grants		481,197		307,318		413,682		238,621
Effect of dilutive stock options		183,274		48,552		125,319		74,097
Effect of performance share units		131,448		—		58,975		—
Adjusted weighted average common shares outstanding applicable to diluted EPS		23,392,901		23,510,645		23,067,944		24,332,776
Basic net income per share	$	0.50	$	0.33	$	1.81	$	1.28
Diluted net income per share		0.48		0.32		1.77		1.26

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)	Minimum			Well-Capitalized			September 30, 2023			December 31, 2022
Common equity tier 1 capital							$	283,342		$	242,049
Tier 1 capital								352,130			310,837
Total capital								379,754			334,913
Average assets								2,190,234			1,917,904
Risk-weighted assets								2,162,430			1,888,530
Leverage ratio (1)		4.0	%		5.0	%		16.1	%		16.2	%
Common equity tier 1 capital ratio (2)		7.0			6.5			13.1			12.8
Tier 1 capital ratio (3)		8.5			8.0			16.3			16.5
Total capital ratio (3)		10.5			10.0			17.6			17.7

(1)

Calculated by dividing Tier 1 capital by average assets.

(2)

Calculated by subtracting preferred stock or non-controlling interest from Tier 1 capital and dividing by risk-weighted assets.

(3)

Calculated by dividing Tier 1 or total capital by risk-weighted assets. With the adoption of CECL on January 1, 2023 the Bank elected to phase in the regulatory capital effects of the transition amount, which reduced the capital impact by $6.2 million and increased the Tier 1 capital ratio by 27 basis points.