(10) SEGMENT REPORTING (Bank Holding Company Accounting)

Under Bank Holding Company Accounting, 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.

Prior to April 2, 2018, the Company had one business segment, its lending and investing operations. This segment originated and serviced medallion, secured commercial and consumer loans, and invested in both marketable and nonmarketable securities.

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, with the highest concentrations in Texas, California, and Florida, at 17%, 11%, and 11% of loans outstanding and no other states over 10%. 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. The home improvement lending segment works with contractors and financial service providers to finance residential home improvements concentrated in pools, solar panels, and roofing, at 38%, 15%, 11% of total loans outstanding, and no other product lines over 10%. The commercial lending segment focuses on enterprise wide industries, including manufacturing, retail trade, information, recreation and various other industries, in which 47% of these loans are made in the Midwest. The medallion lending segment arose in connection with the financing of the taxicab medallions, taxicabs, and related assets, of which 88% were in New York City as of June 30, 2018.

In addition, our non-operating segments include RPAC which is a race car team and our corporate and other segment which includes items not allocated to our operating segments such as investment securities, equity investments, intercompany eliminations, and other corporate elements.

The following table presents segment data at June 30, 2018 and for the three months then ended.


	Consumer Lending						Commercial Lending			Medallion Lending			RPAC			Corp. and Other			Consolidated
(dollars in thousands)	Recreation			Home Improvement			Commercial Lending			Medallion Lending			RPAC			Corp. and Other			Consolidated
Total interest income	$	22,132		$	4,637		$	2,322		$	3,189		$	—		$	364		$	32,644
Total interest expense		2,136			739			655			3,373			41			981			7,925

Net interest income (loss)		19,996			3,898			1,667			(184	)		(41	)		(617	)		24,719
Provision for loan losses		4,710			877			175			24,814			—			—			30,576

Net interest income after loss provision		15,286			3,021			1,492			(24,998	)		(41	)		(617	)		(5,857	)
Sponsorship and race winning		—			—			—			—			5,228			—			5,228
Race team related expenses		—			—			—			—			(2,540	)		—			(2,540	)
Other income (expense)		(5,520	)		(1,685	)		(1,110	)		(2,811	)		(2,237	)		(1,373	)		(14,736	)

Net income before taxes		9,766			1,336			382			(27,809	)		410			(1,990	)		(17,905	)
Income tax benefit (provision)		(2,162	)		(296	)		(85	)		6,157			(43	)		450			4,021

Net Income (loss) after tax	$	7,604		$	1,040		$	297		($	21,652	)	$	367		($	1,540	)	($	13,884	)

Balance Sheet Data
Total loans net	$	595,385		$	195,321		$	79,930		$	258,062		$	—		$	—		$	1,128,698
Total assets		599,960			206,298			109,261			386,225			37,861			194,924			1,534,529
Total funds borrowed		456,955			159,913			68,224			402,955			7,578			130,717			1,226,342
Selected Financial Ratios
Return on assets		5.32	%		2.13	%		1.05	%		(21.69	%)		3.89	%		(2.99	%)		(4.53	%)
Return on equity		23.33			9.74			2.53			NM			22.38			(8.15	)		(22.00	)
Interest yield		15.62			10.02			10.54			4.43			N/A			N/A			11.23
Net interest margin		14.12			8.43			7.57			(0.26	)		N/A			N/A			8.57
Reserve coverage		0.33			0.28			0.22			6.77			N/A			N/A			1.86
Delinquency ratio		0.40			0.06			0.27			4.49			N/A			N/A			1.32
Charge off ratio		0.82			0.30			0.00			2.18			N/A			N/A			3.19