XML 22 R15.htm IDEA: XBRL DOCUMENT v3.24.1.u1
Loans and Allowance for Credit Losses
 3 Months Ended
Mar. 31, 2024
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, as of March 31, 2024 and December 31, 2023.

 

 

March 31, 2024

 

 

December 31, 2023

 

(Dollars in thousands)

 

Amount

 

 

As a
Percent of
Gross Loans

 

 

Amount

 

 

As a
Percent of
Gross Loans

 

Recreation

 

$

1,365,165

 

 

 

61

%

 

$

1,336,226

 

 

 

60

%

Home improvement

 

 

752,262

 

 

 

34

 

 

 

760,617

 

 

 

34

 

Commercial

 

 

106,570

 

 

 

5

 

 

 

114,827

 

 

 

5

 

Taxi medallion

 

 

3,560

 

 

*

 

 

 

3,663

 

 

*

 

Strategic partnership

 

 

869

 

 

*

 

 

 

553

 

 

*

 

Total gross loans

 

 

2,228,426

 

 

 

100

%

 

 

2,215,886

 

 

 

100

%

Allowance for credit losses

 

 

(83,827

)

 

 

 

 

 

(84,235

)

 

 

 

Total net loans

 

$

2,144,599

 

 

 

 

 

$

2,131,651

 

 

 

 

(*) Less than 1%.

The following tables show the activity of the gross loans for the three months ended March 31, 2024 and 2023.

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 payments, sales, maturities, and recoveries

 

 

(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 costs

 

 

(2,952

)

 

 

938

 

 

 

7

 

 

 

—

 

 

 

—

 

 

 

(2,007

)

FASB origination 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

 

 

Three Months Ended March 31, 2023
(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

 

 

101,681

 

 

 

94,981

 

 

 

3,000

 

 

 

623

 

 

 

27,006

 

 

 

227,291

 

Principal payments, sales, maturities, and recoveries

 

 

(56,217

)

 

 

(49,855

)

 

 

(834

)

 

 

(4,395

)

 

 

(25,808

)

 

 

(137,109

)

Charge-offs

 

 

(12,590

)

 

 

(1,914

)

 

 

—

 

 

 

(3,593

)

 

 

—

 

 

 

(18,097

)

Transfer to loan collateral in process of foreclosure, net

 

 

(4,357

)

 

 

—

 

 

 

—

 

 

 

(2,147

)

 

 

—

 

 

 

(6,504

)

Amortization of origination costs

 

 

(2,759

)

 

 

586

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2,173

)

FASB origination costs, net

 

 

4,110

 

 

 

(555

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,555

 

Paid-in-kind interest

 

 

—

 

 

 

—

 

 

 

264

 

 

 

—

 

 

 

—

 

 

 

264

 

Gross loans – March 31, 2023

 

$

1,213,380

 

 

$

669,642

 

 

$

95,329

 

 

$

4,059

 

 

$

1,770

 

 

$

1,984,180

 

 

The following table sets forth the activity in the allowance for credit losses for the three months ended March 31, 2024 and 2023.

 

Three Months Ended March 31,

 

(Dollars in thousands)

 

2024

 

 

2023

 

Allowance for credit losses – beginning balance (1)

 

$

84,235

 

 

$

63,845

 

CECL transition amount upon ASU 2016-13 adoption

 

 

—

 

 

 

13,712

 

Charge-offs

 

 

 

 

 

 

Recreation

 

 

(18,101

)

 

 

(12,590

)

Home improvement

 

 

(4,898

)

 

 

(1,914

)

Commercial

 

 

—

 

 

 

—

 

Taxi medallion

 

 

—

 

 

 

(3,593

)

Total charge-offs

 

 

(22,999

)

 

 

(18,097

)

Recoveries

 

 

 

 

 

 

Recreation

 

 

3,548

 

 

 

2,771

 

Home improvement

 

 

911

 

 

 

632

 

Commercial

 

 

20

 

 

 

10

 

Taxi medallion

 

 

911

 

 

 

3,369

 

Total recoveries

 

 

5,390

 

 

 

6,782

 

Net charge-offs (2)

 

 

(17,609

)

 

 

(11,315

)

Provision for credit losses

 

 

17,201

 

 

 

4,038

 

Allowance for credit losses – ending balance (3)

 

$

83,827

 

 

$

70,280

 
(1)
2023 beginning balance represents allowance prior to the adoption of ASU 2016-13.
(2)
As of March 31, 2024, cumulative net charge-offs of loans and loan collateral in process of foreclosure in the taxi medallion loan portfolio were $173.7 million, including $105.5 million related to loans secured by New York City taxi medallions, some of which may represent collection opportunities for the Company.
(3)
As of March 31, 2024 and March 31, 2023, there were no allowance for credit losses and net charge-offs related to the strategic partnership loans.

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

(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 table sets forth the gross charge-offs for the three months ended March 31, 2023, by the year of origination:

(Dollars in thousands)

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

2019

 

 

Prior

 

 

Total

 

Recreation

 

$

—

 

 

$

3,608

 

 

$

3,070

 

 

$

1,671

 

 

$

1,554

 

 

$

2,687

 

 

$

12,590

 

Home improvement

 

 

—

 

 

 

904

 

 

 

628

 

 

 

143

 

 

 

131

 

 

 

108

 

 

 

1,914

 

Commercial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Taxi medallion

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,593

 

 

 

3,593

 

Total

 

$

—

 

 

$

4,512

 

 

$

3,698

 

 

$

1,814

 

 

$

1,685

 

 

$

6,388

 

 

$

18,097

 

The following tables set forth the allowance for credit losses by type as of March 31, 2024 and December 31, 2023.

March 31, 2024
(Dollars in thousands)

 

Amount

 

 

Percentage
of Allowance

 

 

Allowance as
a Percent of
Loan Category

 

 

Allowance as
a Percent of
Nonaccrual

 

Recreation

 

$

60,011

 

 

 

72

%

 

 

4.40

%

 

 

274.26

%

Home improvement

 

 

17,930

 

 

 

21

 

 

 

2.38

 

 

 

81.94

 

Commercial

 

 

4,384

 

 

 

5

 

 

 

4.11

 

 

 

20.04

 

Taxi medallion

 

 

1,502

 

 

 

2

 

 

 

42.20

 

 

 

6.86

 

Total

 

$

83,827

 

 

 

100

%

 

 

3.76

%

 

 

383.10

%

 

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

%

 

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.

(Dollars in thousands)

 

March 31, 2024

 

 

December 31, 2023

 

Total nonaccrual loans

 

$

21,881

 

 

$

25,974

 

Interest foregone quarter to date

 

 

309

 

 

 

928

 

Amount of foregone interest applied to principal in the quarter

 

 

64

 

 

 

238

 

Interest foregone life-to-date

 

 

1,101

 

 

 

2,119

 

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

 

 

816

 

 

 

822

 

Percentage of nonaccrual loans to gross loan portfolio

 

 

1.0

%

 

 

1.2

%

Percentage of allowance for credit losses to nonaccrual loans

 

 

383.1

%

 

 

324.3

%

The following tables present the performance status of loans as of March 31, 2024 and December 31, 2023.

March 31, 2024
(Dollars in thousands)

 

Performing

 

 

Nonperforming

 

 

Total

 

 

Percentage of
Nonperforming
to Total

 

Recreation

 

$

1,358,293

 

 

$

6,872

 

 

$

1,365,165

 

 

 

0.50

%

Home improvement

 

 

750,903

 

 

 

1,359

 

 

 

752,262

 

 

 

0.18

 

Commercial

 

 

96,480

 

 

 

10,090

 

 

 

106,570

 

 

 

9.47

 

Taxi medallion

 

 

—

 

 

 

3,560

 

 

 

3,560

 

 

 

100.00

 

Strategic partnership

 

 

869

 

 

 

—

 

 

 

869

 

 

 

—

 

Total

 

$

2,206,545

 

 

$

21,881

 

 

$

2,228,426

 

 

 

0.98

%

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2023
(Dollars in thousands)

 

Performing

 

 

Nonperforming

 

 

Total

 

 

Percentage of
Nonperforming
to Total

 

Recreation

 

$

1,326,567

 

 

$

9,659

 

 

$

1,336,226

 

 

 

0.72

%

Home improvement

 

 

759,128

 

 

 

1,489

 

 

 

760,617

 

 

 

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

%

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 March 31, 2024 and December 31, 2023, all of which had an allowance recorded against the principal balance.

 

March 31, 2024

 

 

December 31, 2023

 

(Dollars in thousands)

 

Recorded
Investment

 

 

Unpaid
Principal
Balance

 

 

Related
Allowance

 

 

Recorded
Investment

 

 

Unpaid
Principal
Balance

 

 

Related
Allowance

 

With an allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recreation

 

$

6,872

 

 

$

6,872

 

 

$

302

 

 

$

9,655

 

 

$

9,655

 

 

$

416

 

Home improvement

 

 

1,359

 

 

 

1,359

 

 

 

32

 

 

 

1,493

 

 

 

1,493

 

 

 

41

 

Commercial

 

 

10,090

 

 

 

10,243

 

 

 

2,320

 

 

 

11,163

 

 

 

11,301

 

 

 

1,897

 

Taxi medallion

 

 

3,560

 

 

 

4,223

 

 

 

1,502

 

 

 

3,663

 

 

 

4,347

 

 

 

1,536

 

Total nonperforming loans with an allowance

 

$

21,881

 

 

$

22,697

 

 

$

4,156

 

 

$

25,974

 

 

$

26,796

 

 

$

3,890

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

(Dollars in thousands)

 

Average
Investment
Recorded

 

 

Interest Income
Recognized

 

 

Average
Investment
Recorded

 

 

Interest Income
Recognized

 

With an allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

Recreation

 

$

6,721

 

 

$

16

 

 

$

4,656

 

 

$

13

 

Home improvement

 

 

1,363

 

 

 

1

 

 

 

441

 

 

 

1

 

Commercial

 

 

10,243

 

 

 

—

 

 

 

5,652

 

 

 

—

 

Taxi medallion

 

 

4,254

 

 

 

—

 

 

 

6,093

 

 

 

—

 

Total nonperforming loans with an allowance

 

$

22,581

 

 

$

17

 

 

$

16,842

 

 

$

14

 

 

The following tables show the aging of all loans as of March 31, 2024 and December 31, 2023.

March 31, 2024

 

Days Past Due

 

 

 

 

 

 

 

 

 

 

 

Recorded
Investment
90 Days and

 

(Dollars in thousands)

 

30-59

 

 

60-89

 

 

90 +

 

 

Total

 

 

Current

 

 

Total (1)

 

 

Accruing

 

Recreation

 

$

37,205

 

 

$

11,905

 

 

$

6,374

 

 

$

55,484

 

 

$

1,265,310

 

 

$

1,320,794

 

 

$

—

 

Home improvement

 

 

3,495

 

 

 

1,680

 

 

 

1,362

 

 

 

6,537

 

 

 

749,294

 

 

 

755,831

 

 

 

—

 

Commercial

 

 

—

 

 

 

—

 

 

 

8,396

 

 

 

8,396

 

 

 

99,190

 

 

 

107,586

 

 

 

—

 

Taxi medallion

 

 

—

 

 

 

100

 

 

 

—

 

 

 

100

 

 

 

3,460

 

 

 

3,560

 

 

 

—

 

Strategic partnership

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

869

 

 

 

869

 

 

 

—

 

Total

 

$

40,700

 

 

$

13,685

 

 

$

16,132

 

 

$

70,517

 

 

$

2,118,123

 

 

$

2,188,640

 

 

$

—

 
(1)
Excludes $40.7 million of capitalized loan origination costs.

 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.

The Company estimates that the weighted average loan-to-value ratio of the taxi medallion loans was approximately 188% and 183% as of March 31, 2024 and December 31, 2023.

The following tables show the activity of loan collateral in process of foreclosure, which relate only to the recreation and taxi medallion loans, for the three months ended March 31, 2024 and 2023.

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

 

Recreation

 

 

Taxi
Medallion

 

 

Total

 

Loan collateral in process of foreclosure – December 31, 2023

 

$

1,779

 

 

$

9,993

 

 

$

11,772

 

Transfer from loans, net

 

 

5,425

 

 

 

—

 

 

 

5,425

 

Sales

 

 

—

 

 

 

(39

)

 

 

(39

)

Cash payments received

 

 

(2,447

)

 

 

(1,273

)

 

 

(3,720

)

Collateral valuation and other adjustments

 

 

(3,282

)

 

 

42

 

 

 

(3,240

)

Loan collateral in process of foreclosure – March 31, 2024

 

$

1,475

 

 

$

8,723

 

 

$

10,198

 

 

Three Months Ended March 31, 2023
(Dollars in thousands)

 

Recreation

 

 

Taxi
Medallion

 

 

Total

 

Loan collateral in process of foreclosure – December 31, 2022

 

$

1,376

 

 

$

20,443

 

 

$

21,819

 

Transfer from loans, net

 

 

4,357

 

 

 

2,147

 

 

 

6,504

 

Sales

 

 

(2,195

)

 

 

(15

)

 

 

(2,210

)

Cash payments received

 

 

—

 

 

 

(3,317

)

 

 

(3,317

)

Collateral valuation adjustments

 

 

(2,077

)

 

 

(252

)

 

 

(2,329

)

Loan collateral in process of foreclosure – March 31, 2023

 

$

1,461

 

 

$

19,006

 

 

$

20,467

 

As of March 31, 2024, taxi medallion loans in the process of foreclosure included 329 taxi medallions in the New York City market, 193 taxi medallions in the Chicago market, 25 taxi medallions in the Newark market, and 31 taxi medallions in various other markets.