XML 26 R14.htm IDEA: XBRL DOCUMENT v3.24.0.1
Loans and Allowance for Credit Losses
 12 Months Ended
Dec. 31, 2023
Text Block [Abstract]  
Loans and allowance for credit losses

(4) LOANS AND ALLOWANCE FOR CREDIT LOSSES

The following table shows the major classification of loans, inclusive of capitalized loan origination costs, at December 31, 2023 and 2022.

 

As of December 31,

 

 

 

2023

 

 

2022

 

(Dollars in thousands)

 

Amount

 

 

As a
Percent of
Gross Loans

 

 

Amount

 

 

As a
Percent of
Gross Loans

 

Recreation

 

$

1,336,226

 

 

 

60

%

 

$

1,183,512

 

 

 

62

%

Home improvement

 

 

760,617

 

 

 

34

 

 

 

626,399

 

 

 

33

 

Commercial

 

 

114,827

 

 

 

5

 

 

 

92,899

 

 

 

5

 

Taxi medallion

 

 

3,663

 

 

*

 

 

 

13,571

 

 

 

1

 

Strategic partnership

 

 

553

 

 

*

 

 

 

572

 

 

*

 

Total gross loans

 

 

2,215,886

 

 

 

100

%

 

 

1,916,953

 

 

 

100

%

Allowance for credit losses

 

 

(84,235

)

 

 

 

 

 

(63,845

)

 

 

 

Total net loans

 

$

2,131,651

 

 

 

 

 

$

1,853,108

 

 

 

 

(*) Less than 1%.

The following tables show the activity of the gross loans for the years ended December 31, 2023 and 2022.


(Dollars in thousands)

 

Recreation

 

 

Home
Improvement

 

 

Commercial

 

 

Taxi
Medallion

 

 

Strategic
Partnership

 

 

Total

 

Gross loans – December 31, 2022

 

$

1,183,512

 

 

$

626,399

 

 

$

92,899

 

 

$

13,571

 

 

$

572

 

 

$

1,916,953

 

Loan originations

 

 

447,039

 

 

 

357,394

 

 

 

34,850

 

 

 

2,426

 

 

 

118,338

 

 

 

960,047

 

Principal payments, sales, maturities, and recoveries

 

 

(231,158

)

 

 

(209,894

)

 

 

(13,389

)

 

 

(6,859

)

 

 

(118,357

)

 

 

(579,657

)

Charge-offs

 

 

(50,512

)

 

 

(12,308

)

 

 

(1,019

)

 

 

(3,829

)

 

 

—

 

 

 

(67,668

)

Transfer to loan collateral in process of foreclosure, net

 

 

(18,875

)

 

 

—

 

 

 

—

 

 

 

(2,306

)

 

 

—

 

 

 

(21,181

)

Amortization of origination costs

 

 

(12,270

)

 

 

2,668

 

 

 

14

 

 

 

—

 

 

 

—

 

 

 

(9,588

)

FASB origination costs, net

 

 

18,490

 

 

 

(3,642

)

 

 

(164

)

 

 

660

 

 

 

—

 

 

 

15,344

 

Paid-in-kind interest

 

 

—

 

 

 

—

 

 

 

1,636

 

 

 

—

 

 

 

—

 

 

 

1,636

 

Gross loans – December 31, 2023

 

$

1,336,226

 

 

$

760,617

 

 

$

114,827

 

 

$

3,663

 

 

$

553

 

 

$

2,215,886

 

 


(Dollars in thousands)

 

Recreation

 

 

Home
Improvement

 

 

Commercial

 

 

Taxi
Medallion

 

 

Strategic
Partnership

 

 

Total

 

Gross loans – December 31, 2021

 

$

961,320

 

 

$

436,772

 

 

$

76,696

 

 

$

14,046

 

 

$

90

 

 

$

1,488,924

 

Loan originations

 

 

513,062

 

 

 

392,543

 

 

 

28,172

 

 

 

605

 

 

 

49,526

 

 

 

983,908

 

Principal payments, sales, maturities, and recoveries

 

 

(259,326

)

 

 

(196,203

)

 

 

(6,610

)

 

 

(419

)

 

 

(49,044

)

 

 

(511,602

)

Charge-offs

 

 

(27,055

)

 

 

(6,393

)

 

 

(6,083

)

 

 

(314

)

 

 

—

 

 

 

(39,845

)

Transfer to loan collateral in process of foreclosure, net

 

 

(12,444

)

 

 

—

 

 

 

—

 

 

 

(347

)

 

 

—

 

 

 

(12,791

)

Amortization of origination costs

 

 

(10,470

)

 

 

1,763

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(8,707

)

Amortization of loan premium

 

 

(213

)

 

 

(322

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(535

)

FASB origination costs, net

 

 

18,638

 

 

 

(1,761

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

16,877

 

Paid-in-kind interest

 

 

—

 

 

 

—

 

 

 

724

 

 

 

—

 

 

 

—

 

 

 

724

 

Gross loans – December 31, 2022

 

$

1,183,512

 

 

$

626,399

 

 

$

92,899

 

 

$

13,571

 

 

$

572

 

 

$

1,916,953

 

 

The following table sets forth the activity in the allowance for credit losses for the years ended December 31, 2023 and 2022.

 

December 31,

 

(Dollars in thousands)

 

2023

 

 

2022

 

Allowance for credit losses – beginning balance (1)

 

$

63,845

 

 

$

50,166

 

CECL transition amount upon ASU 2016-13 adoption

 

 

13,712

 

 

 

—

 

Charge-offs

 

 

 

 

 

 

Recreation

 

 

(50,512

)

 

 

(27,055

)

Home improvement

 

 

(12,308

)

 

 

(6,393

)

Commercial

 

 

(1,019

)

 

 

(6,083

)

Taxi medallion

 

 

(3,829

)

 

 

(314

)

Total charge-offs

 

 

(67,668

)

 

 

(39,845

)

Recoveries

 

 

 

 

 

 

Recreation

 

 

11,449

 

 

 

13,785

 

Home improvement

 

 

2,886

 

 

 

2,761

 

Commercial

 

 

10

 

 

 

47

 

Taxi medallion

 

 

22,191

 

 

 

6,872

 

Total recoveries

 

 

36,536

 

 

 

23,465

 

Net charge-offs (2)

 

 

(31,132

)

 

 

(16,380

)

Provision for credit losses

 

 

37,810

 

 

 

30,059

 

Allowance for credit losses – ending balance (3)

 

$

84,235

 

 

$

63,845

 
(1)
Represents allowance prior to the adoption of ASU 2016-13.
(2)
As of December 31, 2023, cumulative net charge-offs of loans and loan collateral in process of foreclosure in the taxi medallion portfolio were $176.8 million, including $107.9 million related to loans secured by New York taxi medallions, some of which may represent collection opportunities for the Company.
(3)
As of December 31, 2023 and 2022, there was no allowance for credit losses and net charge-offs related to the strategic partnership loans.

With the adoption of ASC 326, the Company also adopted ASU 2022-02, Financial Instruments – Credit Losses, or Topic 326: Troubled Debt Restructurings and Vintage Disclosures. Under this standard, the Company is required to disclose current period gross write-offs, by year of origination, for financing receivables.

(Dollars in thousands)

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Total

 

Recreation

 

$

3,136

 

 

$

18,836

 

 

$

10,857

 

 

$

5,115

 

 

$

5,001

 

 

$

7,567

 

 

$

50,512

 

Home improvement

 

 

2,196

 

 

 

5,686

 

 

 

2,662

 

 

 

702

 

 

 

435

 

 

 

627

 

 

 

12,308

 

Commercial

 

 

—

 

 

 

—

 

 

 

119

 

 

 

—

 

 

 

900

 

 

 

—

 

 

 

1,019

 

Taxi medallion

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,829

 

 

 

3,829

 

Total

 

$

5,332

 

 

$

24,522

 

 

$

13,638

 

 

$

5,817

 

 

$

6,336

 

 

$

12,023

 

 

$

67,668

 

The following tables set forth the allowance for credit losses by type as of December 31, 2023 and 2022.

December 31, 2023
(Dollars in thousands)

 

Amount

 

 

Percentage
of Allowance

 

 

Allowance as
a Percent of
Loan Category

 

 

Allowance as
a Percent of
Nonaccrual

 

Recreation

 

$

57,532

 

 

 

68

%

 

 

4.31

%

 

 

221.50

%

Home improvement

 

 

21,019

 

 

 

25

 

 

 

2.76

 

 

 

80.92

 

Commercial

 

 

4,148

 

 

 

5

 

 

 

3.61

 

 

 

15.97

 

Taxi medallion

 

 

1,536

 

 

 

2

 

 

 

41.93

 

 

 

5.91

 

Total

 

$

84,235

 

 

 

100

%

 

 

3.80

%

 

 

324.31

%

 

December 31, 2022
(Dollars in thousands)

 

Amount

 

 

Percentage
of Allowance

 

 

Allowance as
a Percent of
Loan Category

 

 

Allowance as
a Percent of
Nonaccrual

 

Recreation

 

$

41,966

 

 

 

66

%

 

 

3.55

%

 

 

130.60

%

Home improvement

 

 

11,340

 

 

 

18

 

 

 

1.81

 

 

 

35.29

 

Commercial

 

 

1,049

 

 

 

1

 

 

 

1.13

 

 

 

3.26

 

Taxi medallion

 

 

9,490

 

 

 

15

 

 

 

69.93

 

 

 

29.53

 

Total

 

$

63,845

 

 

 

100

%

 

 

3.33

%

 

 

198.69

%

The following table presents total nonaccrual loans and foregone interest, substantially all of which is in the taxi medallion portfolio. The fluctuation in nonaccrual interest foregone is due to past due loans and market conditions.

 

Year Ended December 31,

 

(Dollars in thousands)

 

2023

 

 

2022

 

 

2021

 

Total nonaccrual loans

 

$

25,974

 

 

$

32,133

 

 

$

35,571

 

Interest foregone for the year

 

 

928

 

 

 

1,267

 

 

 

1,620

 

Amount of foregone interest applied to principal for the year

 

 

238

 

 

 

375

 

 

 

432

 

Interest foregone life-to-date

 

 

2,119

 

 

 

2,419

 

 

 

3,623

 

Amount of foregone interest applied to principal life-to-date

 

 

822

 

 

 

1,204

 

 

 

942

 

Percentage of nonaccrual loans to gross loan portfolio

 

 

1.2

%

 

 

1.7

%

 

 

2.4

%

Percentage of allowance for credit losses to nonaccrual loans

 

 

324.3

%

 

 

198.7

%

 

 

141.0

%

 

The following tables present the performance status of loans as of December 31, 2023 and 2022.

December 31, 2023
(Dollars in thousands)

 

Performing

 

 

Nonperforming

 

 

Total

 

 

Percentage of
Nonperforming
to Total

 

Recreation

 

$

1,326,567

 

 

$

9,655

 

 

$

1,336,222

 

 

 

0.72

%

Home improvement

 

 

759,128

 

 

 

1,493

 

 

 

760,621

 

 

 

0.20

 

Commercial

 

 

103,664

 

 

 

11,163

 

 

 

114,827

 

 

 

9.72

 

Taxi medallion

 

 

—

 

 

 

3,663

 

 

 

3,663

 

 

 

100.00

 

Strategic partnership

 

 

553

 

 

 

—

 

 

 

553

 

 

 

—

 

Total

 

$

2,189,912

 

 

$

25,974

 

 

$

2,215,886

 

 

 

1.17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022
(Dollars in thousands)

 

Performing

 

 

Nonperforming

 

 

Total

 

 

Percentage of
Nonperforming
to Total

 

Recreation

 

$

1,173,846

 

 

$

9,666

 

 

$

1,183,512

 

 

 

0.82

%

Home improvement

 

 

625,820

 

 

 

579

 

 

 

626,399

 

 

 

0.09

 

Commercial

 

 

84,165

 

 

 

8,734

 

 

 

92,899

 

 

 

9.40

 

Taxi medallion

 

 

—

 

 

 

13,571

 

 

 

13,571

 

 

 

100.00

 

Strategic partnership

 

 

572

 

 

 

—

 

 

 

572

 

 

 

—

 

Total

 

$

1,884,403

 

 

$

32,550

 

 

$

1,916,953

 

 

 

1.70

%

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 provide additional information on attributes of the nonperforming loan portfolio as of December 31, 2023 and 2022, all of which had an allowance recorded against the principal balance.

 

 

December 31,

 

 

2023

 

 

2022

 

(Dollars in thousands)

 

Recorded
Investment

 

 

Unpaid
Principal
Balance

 

 

Related
Allowance

 

 

Recorded
Investment

 

 

Unpaid
Principal
Balance

 

 

Related
Allowance

 

With an allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recreation

 

$

9,655

 

 

$

9,655

 

 

$

416

 

 

$

9,666

 

 

$

9,666

 

 

$

343

 

Home improvement

 

 

1,493

 

 

 

1,493

 

 

 

41

 

 

 

579

 

 

 

579

 

 

 

10

 

Commercial

 

 

11,163

 

 

 

11,301

 

 

 

1,897

 

 

 

8,734

 

 

 

8,823

 

 

 

963

 

Taxi medallion

 

 

3,663

 

 

 

4,347

 

 

 

1,536

 

 

 

13,571

 

 

 

14,686

 

 

 

9,490

 

Total nonperforming loans with an allowance

 

$

25,974

 

 

$

26,796

 

 

$

3,890

 

 

$

32,550

 

 

$

33,754

 

 

$

10,806

 

 

 

Year Ended December 31,

 

 

2023

 

 

2022

 

(Dollars in thousands)

 

Average
Investment
Recorded

 

 

Interest Income
Recognized

 

 

Average
Investment
Recorded

 

 

Interest Income
Recognized

 

With an allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

Recreation

 

$

9,048

 

 

$

16

 

 

$

9,093

 

 

$

401

 

Home improvement

 

 

1,382

 

 

 

1

 

 

 

514

 

 

 

4

 

Commercial

 

 

7,368

 

 

 

—

 

 

 

13,381

 

 

 

—

 

Taxi medallion

 

 

4,607

 

 

 

—

 

 

 

16,019

 

 

 

—

 

Total nonperforming loans with an allowance

 

$

22,405

 

 

$

17

 

 

$

39,007

 

 

$

405

 

 

The following tables show the aging of all loans as of December 31, 2023 and 2022.

December 31, 2023

 

Days Past Due

 

 

 

 

 

 

 

 

 

 

 

Recorded
Investment
90 Days and

 

(Dollars in thousands)

 

30-59

 

 

60-89

 

 

90 +

 

 

Total

 

 

Current

 

 

Total (1)

 

 

Accruing

 

Recreation

 

$

40,282

 

 

$

15,039

 

 

$

9,095

 

 

$

64,416

 

 

$

1,228,175

 

 

$

1,292,591

 

 

$

—

 

Home improvement

 

 

3,936

 

 

 

2,562

 

 

 

1,502

 

 

 

8,000

 

 

 

756,069

 

 

 

764,069

 

 

 

—

 

Commercial

 

 

—

 

 

 

2,156

 

 

 

6,240

 

 

 

8,396

 

 

 

107,140

 

 

 

115,536

 

 

 

—

 

Taxi medallion

 

 

201

 

 

 

—

 

 

 

—

 

 

 

201

 

 

 

3,462

 

 

 

3,663

 

 

 

—

 

Strategic partnership

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

553

 

 

 

553

 

 

 

—

 

Total

 

$

44,419

 

 

$

19,757

 

 

$

16,837

 

 

$

81,013

 

 

$

2,095,399

 

 

$

2,176,412

 

 

$

—

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

December 31, 2022

 

Days Past Due

 

 

 

 

 

 

 

 

 

 

 

Recorded
Investment
90 Days and

 

(Dollars in thousands)

 

30-59

 

 

60-89

 

 

90 +

 

 

Total

 

 

Current

 

 

Total (1)

 

 

Accruing

 

Recreation

 

$

31,781

 

 

$

11,877

 

 

$

7,365

 

 

$

51,023

 

 

$

1,095,072

 

 

$

1,146,095

 

 

$

—

 

Home improvement

 

 

3,266

 

 

 

1,256

 

 

 

579

 

 

 

5,101

 

 

 

623,776

 

 

 

628,877

 

 

 

—

 

Commercial

 

 

—

 

 

 

—

 

 

 

74

 

 

 

74

 

 

 

93,396

 

 

 

93,470

 

 

 

—

 

Taxi medallion

 

 

142

 

 

 

393

 

 

 

885

 

 

 

1,420

 

 

 

12,151

 

 

 

13,571

 

 

 

—

 

Strategic partnership

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

572

 

 

 

572

 

 

 

—

 

Total

 

$

35,189

 

 

$

13,526

 

 

$

8,903

 

 

$

57,618

 

 

$

1,824,967

 

 

$

1,882,585

 

 

$

—

 
(1)
Excludes $34.9 million of capitalized loan origination costs.

The Company estimates that the weighted average loan-to-value ratio of the taxi medallion loans was approximately 183% and 339% as of December 31, 2023 and 2022.

Under ASU 2022-02, "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures," concurrent with the elimination of troubled debt restructuring, or TDR, disclosures, the Company must disclose loans to borrowers experiencing financial difficulty that were modified during the reporting period. The Company did not have any such loan modifications on January 1, 2023 or during the year ended December 31, 2023.

The following table shows the TDRs, which the Company entered into during the year ended December 31, 2022.

(Dollars in thousands)

 

Number of Loans

 

 

Pre-
Modification
Investment

 

 

Post-
Modification
Investment

 

Recreation loans

 

 

80

 

 

 

1,203

 

 

 

1,203

 

Taxi medallion loans

 

 

2

 

 

 

252

 

 

 

252

 

As of December 31, 2022, no taxi medallion loans and two commercial loans were modified as TDRs in the previous 12 months. Modified taxi medallion loans and commercial loans had a respective investment value of $0.9 million and $5.3 million. As of December 31, 2022, 63 recreation loans modified as TDRs were in default and had an investment value of $0.9 million.

The following tables show the activity of the loan collateral in process of foreclosure, which relates only to the recreation and taxi medallion loans, for the years ended December 31, 2023 and 2022.

Year Ended December 31, 2023
(Dollars in thousands)

 

Recreation

 

 

Taxi
Medallion (1)

 

 

Total

 

Loan collateral in process of foreclosure – December 31, 2022

 

$

1,376

 

 

$

20,443

 

 

$

21,819

 

Transfer from loans, net

 

 

18,875

 

 

 

2,306

 

 

 

21,181

 

Sales

 

 

(7,890

)

 

 

(700

)

 

 

(8,590

)

Cash payments received

 

 

(730

)

 

 

(11,311

)

 

 

(12,041

)

Collateral valuation adjustments

 

 

(9,852

)

 

 

(745

)

 

 

(10,597

)

Loan collateral in process of foreclosure – December 31, 2023

 

$

1,779

 

 

$

9,993

 

 

$

11,772

 
(1)
As of December 31, 2023, taxi medallion loans in the process of foreclosure included 333 taxi medallions in the New York market, 206 taxi medallions in the Chicago market, 31 taxi medallions in the Newark market, and 31 taxi medallions in various other markets.

Year Ended December 31, 2022
(Dollars in thousands)

 

Recreation

 

 

Taxi
Medallion (1)

 

 

Total

 

Loan collateral in process of foreclosure – December 31, 2021

 

$

1,720

 

 

$

35,710

 

 

$

37,430

 

Transfer from loans, net

 

 

12,444

 

 

 

347

 

 

 

12,791

 

Sales

 

 

(7,707

)

 

 

(2,668

)

 

 

(10,375

)

Cash payments received

 

 

—

 

 

 

(12,289

)

 

 

(12,289

)

Collateral valuation adjustments

 

 

(5,081

)

 

 

(657

)

 

 

(5,738

)

Loan collateral in process of foreclosure – December 31, 2022

 

$

1,376

 

 

$

20,443

 

 

$

21,819

 
(1)
As of December 31, 2022, taxi medallion loans in the process of foreclosure included 452 taxi medallions in the New York market, 335 taxi medallions in the Chicago market, 54 taxi medallions in the Newark market, and 39 taxi medallions in various other markets.