XML 55 R43.htm IDEA: XBRL DOCUMENT v3.10.0.1
Fair Value of Assets and liabilities (Tables)
 6 Months Ended
Jun. 30, 2018
Fair Value Disclosures [Abstract]  
Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of June 30, 2018.

 

Bank Holding Company Accounting

(Dollars in thousands)

    Level 1      Level 2      Level 3      Total  

Assets

            

Equity investments

    $ —      $ —      $ 10,773      $ 10,773  

Available for sale investment securities(1)

      —          44,717        —          44,717  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ —      $ 44,717      $ 10,773      $ 55,490  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1)

Total unrealized losses of $255, net of tax, was included in accumulated other comprehensive income (loss) for the three months ended June 30, 2018 related to these assets.

The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2017.

 

Investment Company Accounting

(Dollars in  thousands)

    Level 1      Level 2      Level 3      Total  

Assets

            

Medallion loans

    $ —      $ —      $ 208,279      $ 208,279  

Commercial loans

      —          —          90,188        90,188  

Investments in Medallion Bank and other controlled subsidiaries

      —          —          302,147        302,147  

Equity investments

      —          —          9,521        9,521  

Investments other than securities

      —          —          7,450        7,450  

Other assets

      —          —          339        339  
  

 

 

     

 

 

     

 

 

     

 

 

  
Schedule of Changes in Fair Value of the Company's Level 3 Assets and Liabilities

The following tables provide a summary of changes in fair value of the Company’s level 3 assets and liabilities for the quarter ended June 30, 2018, under Bank Holding Company Accounting, and for the quarters ended March 31, 2018 and June 30, 2017 and the six months ended June 30, 2017 under Investment Company Accounting.

 

(Dollars in  thousands)

    Equity
Investments		  

March 31, 2018

    $ 9,458  

Gains (losses) included in earnings

      (374 ) 

Purchases, investments, and issuances

      529  

Sales, maturities, settlements, and distributions

      (217 ) 

Transfers in (1)

      1,377  
  

 

 

  

June 30, 2018

    $ 10,773  
  

 

 

  

Amounts related to held assets(2)

    ($ 374 ) 
  

 

 

  

 

(1)

Represents the removal of RPAC Racing investments eliminated in consolidation as well as the transfer of LAX from controlled subsidiaries during the 2018 second quarter.
(2)

Total realized and unrealized gains (losses) included in income for the period which relate to assets held as of June 30, 2018.

 

(Dollars in  thousands)

    Medallion
Loans		     Commercial
Loans		     Investments in
Medallion
Bank & Other
Controlled
Subsidiaries		     Equity
Investments		     Investments
Other Than
Securities		     Other
Assets		  

December 31, 2017

    $ 208,279     $ 90,188     $ 302,147     $ 9,521     $ 7,450     $ 339  

Gains (losses) included in earnings

      (38,190 )      (8 )      29,143       (993 )      (1,915 )      —    

Purchases, investments, and issuances

      7       7,252       462       935       —         —    

Sales, maturities, settlements, and distributions

      (8,941 )      (3,812 )      (583 )      (5 )      —         —    

Transfers in (out)

      —         —         —         —         —         —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

March 31, 2018

    $ 161,155     $ 93,620     $ 331,169     $ 9,458     $ 5,535     $ 339  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Amounts related to held assets(1)

    ($ 38,190 )    ($ 10 )    $ 29,143     ($ 993 )    ($ 1,915 )    $ —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(1)

Total realized and unrealized gains (losses) included in income for the period which relate to assets held as of March 31, 2018.

 

(Dollars in  thousands)

    Medallion
Loans		     Commercial
Loans		     Investments in
Medallion
Bank & Other
Controlled
Subsidiaries		     Equity
Investments		     Investments
Other Than
Securities		      Other
Assets		  

March 31, 2017

    $ 250,976     $ 73,748     $ 300,886     $ 9,640     $ 9,510      $ 354  

Gains (losses) included in earnings

      (12,452 )      (109 )      930       2,894       —          —    

Purchases, investments, and issuances

      320       7,720       402       856       —          —    

Sales, maturities, settlements, and distributions

      (5,429 )      (3,267 )      (399 )      (3,074 )      —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

June 30, 2017

    $ 233,415     $ 78,092     $ 301,819     $ 10,316     $ 9,510      $ 354  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Amounts related to held assets(1)

    ($ 12,426 )    ($ 118 )    $ 930     $ 120     $ —        $ —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

 

(1)

Total realized and unrealized gains (losses) included in income for the period which relate to assets held as of June 30, 2017.

 

(Dollars in  thousands)

    Medallion
Loans		     Commercial
Loans		     Investments in
Medallion
Bank & Other
Controlled
Subs		     Equity
Investments		     Investments
Other Than
Securities		      Other
Assets		  

December 31, 2016

    $ 266,816     $ 83,634     $ 293,360     $ 8,407     $ 9,510      $ 354  

Gains (losses) included in earnings

      (21,147 )      (403 )      9,054       4,155       —          —    

Purchases, investments, and issuances

      320       7,816       402       856       —          —    

Sales, maturities, settlements, and distributions

      (12,574 )      (12,955 )      (997 )      (3,102 )      —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

June 30, 2017

    $ 233,415     $ 78,092     $ 301,819     $ 10,316     $ 9,510      $ 354  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Amounts related to held assets(1)

    ($ 21,095 )    ($ 450 )    $ 9,054     $ 1,381     $ —        $ —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

 

(1)

Total realized and unrealized gains (losses) included in income for the period which relate to assets held as of June 30, 2017.
Summary of Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2017.

 

Investment Company Accounting

(Dollars in  thousands)

    Level 1      Level 2      Level 3      Total  

Assets

            

Medallion loans

    $ —      $ —      $ 208,279      $ 208,279  

Commercial loans

      —          —          90,188        90,188  

Investments in Medallion Bank and other controlled subsidiaries

      —          —          302,147        302,147  

Equity investments

      —          —          9,521        9,521  

Investments other than securities

      —          —          7,450        7,450  

Other assets

      —          —          339        339  
  

 

 

     

 

 

     

 

 

     

 

 

  
Summary of Valuation Techniques and Significant Unobservable Inputs Used in Recurring Level 3 Fair Value Measurements of Assets and Liabilities

The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of assets and liabilities as of June 30, 2018 were as follows under Bank Holding Company Accounting.

 

(Dollars in  thousands)

    Fair Value
at 6/30/18		     

Valuation Techniques

   

Unobservable Inputs

    Range
(Weighted Average)		  
Equity Investments      6,306      Investee financial analysis    Financial condition and operating performance of the borrower      N/A  
         Collateral support      N/A  
     2,556      Investee book value adjusted for market appreciation    Financial condition and operating performance of the investee      N/A  
      Precedent arm’s length offer    Business enterprise value    $ 6,018 – $7,218  
         Business enterprise value/revenue multiples      0.94x – 4.42x  
     1,455      Precedent market transaction    Offering price    $ 8.73 / share  
     456      Investee book value    Valuation indicated by investee filings      N/A  

 

The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of assets and liabilities as of December 31, 2017 were as follows under Investment Company Accounting.

 

(Dollars in  thousands)

    Fair Value
at 12/31/17		     

Valuation Techniques

   

Unobservable Inputs

    Range
(Weighted Average)		  
Medallion Loans      $208,279      Precedent market transactions    Adequacy of collateral (loan to value)      1% - 420% (131%)  

Commercial Loans – Mezzanine and Other

      90,188      Borrower financial analysis    Financial condition and operating performance of      N/A  
        

the borrower

Portfolio yields

      2% -19.00% (12.02%)  

Investment in Medallion Bank

      290,548      Precedent M&A transactions    Price / book value multiples      2.1x to 2.5x  
         Price / earnings multiples      8.7x to 10.6x  
      Discounted cash flow    Discount rate      17.50%  
         Terminal value    $ 470,964 to $623,007  

Investment in Other Controlled Subsidiaries

      4,623      Investee financial analysis    Financial condition and operating performance      N/A  
         Enterprise value    $ 37,500 - $41,500  
         Equity value    $ 2,000 - $5,000  
     3,878      Investee book value adjusted for asset appreciation    Financial condition and operating performance of the investee      N/A  
         Third party valuation/ offer to purchase asset      N/A  
     3,001      Investee book value adjusted for market appreciation    Financial condition and operating performance of the investee      N/A  
         Third party offer to purchase investment      N/A  
     97      Investee book value and equity pickup   

Financial condition and

operating performance of the investee

      N/A  

Equity Investments

      5,417      Investee financial analysis    Financial condition and operating performance of the borrower      N/A  
         Collateral support      N/A  
     2,193      Investee financial analysis    Equity value    $ 2,000 - $5,000  
         Preferred equity yield      12%  
     1,455      Precedent market transaction    Offering price    $ 8.73/share  
     456      Investee book value    Valuation indicated by investee filings      N/A  
           

Investments Other Than Securities

      7,450      Precedent market transaction    Transfer prices of Chicago medallions      N/A  
      Cash flow analysis    Discount rate in cash flow analysis      6%  

Other Assets

      339      Borrower collateral analysis    Adequacy of collateral (loan to value)      0%