Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2018

The Company’s goodwill and intangible assets arose as a result of the excess of fair value over book value for several of the Company’s previously unconsolidated portfolio investment companies as of April 2, 2018. This fair value was brought forward under the Company’s new Bank Holding Company reporting, and was subject to a purchase price accounting allocation process conducted by an independent third party expert to arrive at the current categories and amounts. Goodwill is not amortized, but is subject to impairment testing on an annual basis. Intangible assets are amortized over their useful life of approximately 20 years. See below for detailed information on the fair value allocation as of April 2, 2018.


(in thousands)	Fair Value as of March 31, 2018		Allocation as of April 2, 2018
Medallion Bank
Assets
Net loans ⁽¹⁾	$		$	890,000
Other assets				130,393

Liabilities
Funds borrowed and other liabilities				(853,650	)

Total fair value excluding goodwill and intangibles				166,743
Goodwill				150,803
Intangibles				28,900

Total fair value ⁽²⁾	$	346,446	$	346,446

(1)	Includes $12,387 of premiums associated with the loan portfolio.

(2)	Includes $26,303 of preferred stock held by the US Treasury. See Note 17 for details.


(in thousands)	Fair Value as of March 31, 2018		Allocation as of April 2, 2018
RPAC Racing LLC
Assets
Cash	$		$	1,647
Net fixed assets				774
Race cars and parts, net				203
Race cars held for sale				916
Other assets				1,902
Liabilities
Deferred revenue				(6,531	)
Notes payable ⁽¹⁾				(27,220	)
Other liabilities				(2,275	)

Total fair value excluding goodwill and intangibles				(30,584	)
Intangibles				31,779

Total fair value⁽²⁾	$	1,195	$	1,195

(1)	Includes $20,177 due to the Company and its affiliates as of March 31, 2018.

(2)	Fair value as of March 31, 2018 represents the Company’s investment in RPAC Racing LLC series D units.

Summary of the Calculation of Basic and Diluted EPS

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


	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands, except per share data)	2018			2017			2018			2017
Net loss/ net decrease in net assets resulting from operations available to common shareholders	($	14,647	)	($	4,797	)	($	29,521	)	($	3,686	)

Weighted average common shares outstanding applicable to basic EPS		24,230,815			23,925,567			24,193,057			23,909,344
Effect of dilutive stock options		—			—			—			—
Effect of restricted stock grants		—			—			—			—

Adjusted weighted average common shares outstanding applicable to diluted EPS		24,230,815			23,925,567			24,193,057			23,909,344

Basic loss per share	($	0.60	)	($	0.20	)	($	1.22	)	($	0.15	)
Diluted loss per share		(0.60	)		(0.20	)		(1.22	)		(0.15	)

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			June 30, 2018			December 31, 2017
Common equity tier 1 capital		—			—		$	127,258		$	137,494
Tier 1 capital		—			—			153,561			163,797
Total capital		—			—			167,344			176,876
Average assets		—			—			1,027,419			1,127,087
Risk-weighted assets		—			—			1,045,884			995,145
Leverage ratio ⁽¹⁾		4.0	%		5.0	%		14.9	%		14.5	%
Common equity tier 1 capital ratio ⁽²⁾		4.5			6.5			12.2			13.8
Tier 1 capital ratio ⁽³⁾		6.0			8.0			14.7			16.5
Total capital ratio ⁽³⁾		8.0			10.0			16.0			17.8

(1)	Calculated by dividing Tier 1 capital by average assets.

(2)	Calculated by subtracting preferred stock or non-controlling interests from Tier 1 capital and dividing by risk-weighted assets.

(3)	Calculated by dividing Tier 1 or total capital by risk-weighted assets.