Loans and Allowance for Loan Losses (Tables)
|
9 Months Ended |
Sep. 30, 2018 |
|---|
| Text Block [Abstract] |
|
| Summary of Inclusive Capitalized Loans |
The following table shows the major classification of loans,
inclusive of capitalized loan origination costs, at
September 30, 2018 under Bank Holding Company Accounting.
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
Amount |
|
|
As a
Percent of
Gross
Loans |
|
|
Recreation
|
|
$ |
575,875 |
|
|
|
53 |
% |
|
Home improvement
|
|
|
169,642 |
|
|
|
16 |
|
|
Commercial
|
|
|
82,558 |
|
|
|
7 |
|
|
Medallion
|
|
|
261,470 |
|
|
|
24 |
|
|
|
|
|
|
|
|
|
|
|
Total gross loans
|
|
|
1,089,545 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses
|
|
|
(29,484 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net loans
|
|
$ |
1,060,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Summary of Activity in Allowance for Loan Losses |
The following table sets forth the activity in the allowance for
loan losses for the three and six months ended September 30,
2018 under Bank Holding Company Accounting.
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
Three Months
Ended
September 30,
2018 |
|
|
Six Months
Ended
September 30,
2018 |
|
|
Allowance for loan losses – beginning balance(1)
|
|
$ |
21,425 |
|
|
$ |
— |
|
|
Charge-offs
|
|
|
|
|
|
|
|
|
|
Recreation
|
|
|
(4,825 |
) |
|
|
(9,471 |
) |
|
Home improvement
|
|
|
(659 |
) |
|
|
(1,220 |
) |
|
Commercial
|
|
|
— |
|
|
|
— |
|
|
Medallion
|
|
|
(6,457 |
) |
|
|
(12,737 |
) |
|
|
|
|
|
|
|
|
|
|
Total charge-offs
|
|
|
(11,941 |
) |
|
|
(23,428 |
) |
|
|
|
|
|
|
|
|
|
|
Recoveries
|
|
|
|
|
|
|
|
|
|
Recreation
|
|
|
1,318 |
|
|
|
3,217 |
|
|
Home improvement
|
|
|
367 |
|
|
|
606 |
|
|
Commercial
|
|
|
— |
|
|
|
4 |
|
|
Medallion
|
|
|
110 |
|
|
|
304 |
|
|
|
|
|
|
|
|
|
|
|
Total recoveries
|
|
|
1,795 |
|
|
|
4,131 |
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
|
|
|
(10,146 |
) |
|
|
(19,297 |
) |
|
|
|
|
|
|
|
|
|
|
Provision for loan losses
|
|
|
18,205 |
|
|
|
48,781 |
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses – ending balance(2)
|
|
$ |
29,484 |
|
|
$ |
29,484 |
|
|
|
|
|
|
|
|
|
|
| (1) |
Beginning balance for the six months ended
September 30, 2018 reflects the transition to Bank Holding
Company Accounting by netting previously established unrealized
depreciation against the gross loan balances resulting in a
starting point of zero for this table.
|
| (2) |
Includes $15,587 of a general reserve for current and
performing medallion loans under 90 days past due, as an additional
buffer against future losses, representing 53% of the total
allowance, and 7% of the loans in question.
|
|
| Summary of Composition of Allowance for Loan Losses by Type of Loan |
The following table sets forth the composition of the allowance for
loan losses by type as of September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Amount |
|
|
Percentage
of
Allowance |
|
|
Allowance as a
Percent of Loan
Category |
|
|
Recreation
|
|
$ |
2,880 |
|
|
|
10 |
% |
|
|
0.50 |
% |
|
Home Improvement
|
|
|
861 |
|
|
|
3 |
|
|
|
0.51 |
|
|
Commercial
|
|
|
100 |
|
|
|
— |
|
|
|
0.12 |
|
|
Medallion
|
|
|
25,643 |
|
|
|
87 |
|
|
|
9.81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
29,484 |
|
|
|
100 |
% |
|
|
2.71 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Summary of Total Nonaccrual Loans and Foregone Interest |
The following table presents total nonaccrual loans and foregone
interest, substantially all of which is in the medallion portfolio.
The decline reflects the charge-offs of certain loans and their
movement to loan collateral in process of foreclosure. The
fluctuation in nonaccrual interest foregone is due to past due
loans and market conditions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Bank Holding Company
Accounting |
|
|
Investment Company
Accounting |
|
|
(Dollars in thousands)
|
|
September 30, 2018 |
|
|
June 30, 2018 |
|
|
December 31, 2017 (1) |
|
|
September 30, 2017 (2) |
|
|
Total nonaccrual loans
|
|
$ |
45,765 |
|
|
$ |
47,904 |
|
|
$ |
98,494 |
|
|
$ |
132,316 |
|
|
Interest foregone quarter to date
|
|
|
563 |
|
|
|
770 |
|
|
|
823 |
|
|
|
1,845 |
|
|
Amount of foregone interest applied to principal in the quarter
|
|
|
350 |
|
|
|
400 |
|
|
|
52 |
|
|
|
574 |
|
|
Interest foregone life to date
|
|
|
8,530 |
|
|
|
8,281 |
|
|
|
12,485 |
|
|
|
16,286 |
|
|
Amount of foregone interest applied to principal life to date
|
|
|
3,412 |
|
|
|
3,748 |
|
|
|
3,495 |
|
|
|
9,750 |
|
|
Percentage of nonaccrual loans to gross loan portfolio
|
|
|
4 |
% |
|
|
4 |
% |
|
|
31 |
% |
|
|
36 |
% |
| (1) |
Does not include Medallion Bank nonaccrual loans of
$32,668, $1,487 of interest income foregone and $1,221 of foregone
interest paid and applied to principal.
|
| (2) |
Does not include Medallion Bank nonaccrual loans of
$39,626, $1,278 of interest income foregone and $1,102 of foregone
interest paid and applied to principal.
|
|
| Summary of Performance Status of Loan |
The following presents our performance status of loans as of
September 30, 2018 under Bank Holding Company Accounting.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
Performing |
|
|
Non-Performing |
|
|
Total |
|
|
Recreation
|
|
$ |
570,800 |
|
|
$ |
5,075 |
|
|
$ |
575,875 |
|
|
Home improvement
|
|
|
169,475 |
|
|
|
167 |
|
|
|
169,642 |
|
|
Commercial
|
|
|
77,155 |
|
|
|
5,403 |
|
|
|
82,558 |
|
|
Medallion
|
|
|
223,413 |
|
|
|
38,057 |
|
|
|
261,470 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
1,040,843 |
|
|
$ |
48,702 |
|
|
$ |
1,089,545 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Summary of Attributes of Nonperforming Loan Portfolio |
The following table provides additional information on attributes
of the nonperforming loan portfolio as of September 30, 2018
under Bank Holding Company Accounting, all of which had an
allowance recorded against the principal balance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
September 30, 2018 |
|
|
Three Months Ended
September 30,
2018 |
|
|
Six Months Ended
September 30, 2018 |
|
|
(Dollars in thousands)
|
|
Recorded
Investment |
|
|
Unpaid
Principal
Balance |
|
|
Related
Allowance |
|
|
Average Recorded
Investment |
|
|
Interest Income
Recognized |
|
|
Average
Recorded
Investment |
|
|
Interest Income
Recognized |
|
|
With an allowance recorded
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recreation
|
|
$ |
5,075 |
|
|
$ |
5,075 |
|
|
$ |
180 |
|
|
$ |
5,494 |
|
|
$ |
106 |
|
|
$ |
4,496 |
|
|
$ |
231 |
|
|
Home improvement
|
|
|
167 |
|
|
|
167 |
|
|
|
3 |
|
|
|
178 |
|
|
|
— |
|
|
|
119 |
|
|
|
— |
|
|
Commercial
|
|
|
5,403 |
|
|
|
5,814 |
|
|
|
100 |
|
|
|
7,047 |
|
|
|
(82 |
) |
|
|
5,838 |
|
|
|
(12 |
) |
|
Medallion
|
|
|
38,057 |
|
|
|
39,038 |
|
|
|
10,085 |
|
|
|
55,065 |
|
|
|
101 |
|
|
|
54,917 |
|
|
|
215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonperforming loans with an allowance
|
|
$ |
48,702 |
|
|
$ |
50,094 |
|
|
$ |
10,368 |
|
|
$ |
67,784 |
|
|
$ |
125 |
|
|
$ |
65,370 |
|
|
$ |
434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table provides additional information on attributes
of the nonperforming loan portfolio as of December 31, 2017
and September 30, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
Recorded
Investment (1) (2) |
|
|
Unpaid Principal
Balance |
|
|
Average Recorded
Investment |
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medallion(3)
|
|
$ |
79,871 |
|
|
$ |
82,612 |
|
|
$ |
128,671 |
|
|
Commercial(3)
|
|
|
18,623 |
|
|
|
20,491 |
|
|
|
18,792 |
|
|
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medallion(3)
|
|
$ |
120,716 |
|
|
$ |
123,199 |
|
|
$ |
124,944 |
|
|
Commercial(3)
|
|
|
11,600 |
|
|
|
18,867 |
|
|
|
11,951 |
|
| (1) |
As of December 31, 2017 and September 30,
2017, $20,851 and $55,871 of unrealized depreciation was recorded
as a valuation allowance on these loans.
|
| (2) |
Interest income of $124 and $1,383 was recognized on
loans for the three and nine months ended September 30,
2017.
|
| (3) |
Included in the unpaid principal balance is unearned
paid-in-kind interest on
nonaccrual loans of $4,609 and $9,750 as of December 31, 2017
and September 30, 2017, which is included in the nonaccrual
disclosures on page 25.
|
|
| Summary of Aging of Loans |
The following tables show the aging of all loans as of
September 30, 2018 and December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank Holding Company Accounting
|
|
Days Past Due |
|
|
|
|
|
|
|
|
Recorded
Investment >
90 Days and
Accruing |
|
|
September 30, 2018
(Dollars in thousands)
|
|
31-60 |
|
|
61-90 |
|
|
91 + |
|
|
Total |
|
|
Current |
|
|
Total (1) |
|
|
Recreation
|
|
$ |
14,974 |
|
|
$ |
4,095 |
|
|
$ |
3,164 |
|
|
$ |
22,233 |
|
|
$ |
534,065 |
|
|
$ |
556,298 |
|
|
$ |
— |
|
|
Home improvement
|
|
|
782 |
|
|
|
212 |
|
|
|
175 |
|
|
|
1,169 |
|
|
|
170,825 |
|
|
|
171,994 |
|
|
|
— |
|
|
Commercial
|
|
|
471 |
|
|
|
95 |
|
|
|
421 |
|
|
|
987 |
|
|
|
81,571 |
|
|
|
82,558 |
|
|
|
— |
|
|
Medallion
|
|
|
11,012 |
|
|
|
4,993 |
|
|
|
10,301 |
|
|
|
26,306 |
|
|
|
227,187 |
|
|
|
253,493 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
27,239 |
|
|
$ |
9,395 |
|
|
$ |
14,061 |
|
|
$ |
50,695 |
|
|
$ |
1,013,648 |
|
|
$ |
1,064,343 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Excludes loan premiums of $10,606 resulting from
purchase price accounting and $14,596 of capitalized loan
origination costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Company Accounting
|
|
Days Past Due |
|
|
|
|
|
|
|
|
|
|
|
Recorded
Investment >
90 Days and
Accruing |
|
|
December 31, 2017
(Dollars in thousands)
|
|
31-60 |
|
|
61-90 |
|
|
91 + |
|
|
Total |
|
|
Current |
|
|
Total |
|
|
Medallion loans
|
|
$ |
16,049 |
|
|
$ |
12,387 |
|
|
$ |
59,701 |
|
|
$ |
88,137 |
|
|
$ |
140,279 |
|
|
$ |
228,416 |
|
|
$ |
265 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured mezzanine
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
88,334 |
|
|
|
88,334 |
|
|
|
— |
|
|
Other secured commercial
|
|
|
— |
|
|
|
— |
|
|
|
749 |
|
|
|
749 |
|
|
|
1,728 |
|
|
|
2,477 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial loans
|
|
|
— |
|
|
|
— |
|
|
|
749 |
|
|
|
749 |
|
|
|
90,062 |
|
|
|
90,811 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
16,049 |
|
|
$ |
12,387 |
|
|
$ |
60,450 |
|
|
$ |
88,886 |
|
|
$ |
230,341 |
|
|
$ |
319,227 |
|
|
$ |
265 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Summary of Troubled Debt Restructurings |
The following table shows the troubled debt restructurings which
the Company entered into during the three months ended
September 30, 2018 under Bank Holding Company Accounting.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
Number of Loans |
|
|
Pre-
Modification
Investment |
|
|
Post-
Modification
Investment |
|
|
Medallion loans
|
|
|
10 |
|
|
$ |
4,810 |
|
|
$ |
4,810 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table shows the troubled debt restructurings which
the Company entered into during the nine months ended
September 30, 2018 under a combined accounting approach.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
Number of Loans |
|
|
Pre-
Modification
Investment |
|
|
Post-
Modification
Investment |
|
|
Medallion loans
|
|
|
17 |
|
|
$ |
7,505 |
|
|
$ |
7,505 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the twelve months ended September 30, 2018, three loans
modified as troubled debt restructurings were in default and had an
investment value of $1,305,000 as of September 30, 2018, net
of $773,000 of an allowance for loan loss under Bank Holding
Company Accounting.
The following table shows troubled debt restructurings which the
Company entered into during the quarter ended September 30,
2017 under Investment Company Accounting.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
Number of Loans |
|
|
Pre-
Modification
Investment |
|
|
Post-
Modification
Investment |
|
|
Medallion loans
|
|
|
7 |
|
|
$ |
2,994 |
|
|
$ |
2,994 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table shows troubled debt restructurings which the
Company entered into during the nine months ended
September 30, 2017 under Investment Company Accounting.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
Number of Loans |
|
|
Pre-
Modification
Investment |
|
|
Post-
Modification
Investment |
|
|
Medallion loans
|
|
|
54 |
|
|
$ |
34,905 |
|
|
$ |
34,831 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans
|
|
|
2 |
|
|
|
6,547 |
|
|
|
6,547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
56 |
|
|
$ |
41,452 |
|
|
$ |
41,378 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|