Segment Reporting

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Segment Reporting

(9) SEGMENT REPORTING

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.

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, Florida, and California at 16%, 10%, and 9% of loans outstanding and with no other states over 9% as of September 30, 2020. 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, of which RVs, boats, and trailers make up 61%, 20%, and 12% of the segment portfolio as of September 30, 2020. The home improvement lending segment works with contractors and financial service providers to finance residential home improvements concentrated in swimming pools, roofs, windows, and solar panels, at 28%, 24%, 12%, and 9% of total home improvement loans outstanding, and with no other product lines over 9% as of September 30, 2020. The commercial lending segment focuses on enterprise wide industries, including manufacturing services, and various other industries, in which 54% of these loans are made in the Midwest. The medallion lending segment arose in connection with the financing of the medallions, taxis, and related assets, of which 90% were in New York City as of September 30, 2020.

In addition, our non-operating segments include RPAC, which is a race car team, and our corporate and other investments segment which includes items not allocated to our operating segments such as investment securities, equity investments, intercompany eliminations, and other corporate elements. As a result of COVID-19, the current year race season had been suspended from March 15, 2020 through May 17, 2020. As states began to reopen, NASCAR resumed races and expects to complete all races scheduled. Commencing the second quarter 2020, the Bank began issuing loans related to the new strategic partnership business, which is currently included within the corporate and other investment segment due to its small size.

As part of the segment reporting, capital ratios for all operating segments have been normalized at 20%, which approximates the percentage of consolidated total equity divided by total assets, with the net adjustment applied to corporate and other investments. In addition, the commercial segment exclusively represents the mezzanine lending business, and the legacy commercial loan business (immaterial to total) has been allocated to corporate and other investments.

The following tables present segment data as of and for the three and nine months ended September 30, 2020 and 2019.

	Consumer Lending															Corp.
Three Months Ended September 30, 2020 (Dollars in thousands)	Recreation			Home Improvement			Commercial Lending			Medallion Lending			RPAC			and Other Investments			Consolidated
Total interest income	$	28,962		$	7,218		$	1,791		$	(909	)	$	—		$	378		$	37,440
Total interest expense		3,476			1,655			663			(56	)		42			2,604			8,384
Net interest income (loss)		25,486			5,563			1,128			(853	)		(42	)		(2,226	)		29,056
Provision for loan losses		1,812			745			—			37,196			—			(4	)		39,749
Net interest income (loss)    after loss provision		23,674			4,818			1,128			(38,049	)		(42	)		(2,222	)		(10,693	)
Sponsorship and race winnings		—			—			—			—			8,962			—			8,962
Race team related expenses		—			—			—			—			(2,636	)		—			(2,636	)
Other income (expense), net		(7,246	)		(2,700	)		(712	)		(9,738	)		(2,503	)		(1,148	)		(24,047	)
Net income (loss) before taxes		16,428			2,118			416			(47,787	)		3,781			(3,370	)		(28,414	)
Income tax (provision)  benefit		(4,201	)		(541	)		(104	)		11,908			(942	)		2,261			8,381
Net income (loss)	$	12,227		$	1,577		$	312		$	(35,879	)	$	2,839		$	(1,109	)	$	(20,033	)
Balance Sheet Data
Total loans, net	$	774,956		$	310,691		$	68,042		$	33,521		$	—		$	3,334		$	1,190,544
Total assets		788,459			321,084			80,247			142,450			40,112			231,923			1,604,275
Total funds borrowed		628,528			255,778			65,906			113,009			8,652			199,312			1,271,185
Selected Financial Ratios
Return on average assets		6.22	%		2.06	%		1.49	%		(85.70	)%		31.97	%		(8.78	)%		(5.69	)%
Return on average equity		31.11			10.29			6.82		NM			NM				(54.58	)		(29.77	)
Interest yield		14.97			9.73			10.51			(5.34	)	N/A			N/A				11.23
Net interest margin		13.18			7.50			6.62			(3.89	)	N/A			N/A				8.72
Reserve coverage		3.48			1.51			0.00			63.28		N/A			N/A				7.07
Delinquency status(2)		0.52			0.03			2.67			8.31		N/A			N/A				1.07
Charge-off ratio		0.44			0.09			(0.02	)		89.89		N/A			N/A				5.36

(1) Ratio is based on total commercial lending balances, and relates solely to the legacy commercial loan business.

(2) Loans 90 days or more past due.

(3) Ratio is based on total commercial lending balances, and relates to the total loan business.

	Consumer Lending															Corp.
Nine Months Ended September 30, 2020 (Dollars in thousands)	Recreation			Home Improvement			Commercial Lending			Medallion Lending			RPAC			and Other Investments			Consolidated
Total interest income	$	82,525		$	19,431		$	5,275		$	86		$	—		$	1,253		$	108,570
Total interest expense		10,268			4,178			1,937			2,781			122			6,933			26,219
Net interest income (loss)		72,257			15,253			3,338			(2,695	)		(122	)		(5,680	)		82,351
Provision for loan losses		20,705			3,041			—			49,489			—			(4	)		73,231
Net interest income (loss)    after loss provision		51,552			12,212			3,338			(52,184	)		(122	)		(5,676	)		9,120
Sponsorship and race winnings		—			—			—			—			15,161			—			15,161
Race team related expenses		—			—			—			—			(6,584	)		—			(6,584	)
Other income (expense), net		(21,115	)		(7,002	)		(2,191	)		(20,603	)		(5,726	)		(8,842	)		(65,479	)
Net income (loss) before taxes		30,437			5,210			1,147			(72,787	)		2,729			(14,518	)		(47,782	)
Income tax (provision) benefit		(7,783	)		(1,332	)		(286	)		18,138			(680	)		4,426			12,483
Net income (loss)	$	22,654		$	3,878		$	861		$	(54,649	)	$	2,049		$	(10,092	)	$	(35,299	)
Balance Sheet Data
Total loans, net	$	774,956		$	310,691		$	68,042		$	33,521		$	—		$	3,334		$	1,190,544
Total assets		788,459			321,084			80,247			142,450			40,112			231,923			1,604,275
Total funds borrowed		628,528			255,778			65,906			113,009			8,652			199,312			1,271,185
Selected Financial Ratios
Return on average assets		4.04	%		1.84	%		1.37	%		(38.80	)%		8.27	%		(5.45	)%		(3.43	)%
Return on average equity		20.20			9.19			6.56			(192.88	)	NM				(22.64	)		(17.02	)
Interest yield		14.99			9.62			10.58			0.13		N/A			N/A				11.31
Net interest margin		13.13			7.53			6.69			(4.12	)	N/A			N/A				8.58
Reserve coverage		3.48			1.51			0.00			63.28		N/A			N/A				7.07
Delinquency status(2)		0.52			0.03			2.67			8.31		N/A			N/A				1.07
Charge-off ratio		1.96			0.44			(0.01	)		26.21		N/A			N/A				3.30

(1) Ratio is based on total commercial lending balances, and relates solely to the legacy commercial loan business.

(2) Loans 90 days or more past due.

(3) Ratio is based on total commercial lending balances, and relates to the total loan business.

	Consumer Lending																Corp.
Three Months Ended September 30, 2019 (Dollars in thousands)	Recreation			Home Improvement			Commercial Lending				Medallion Lending			RPAC			and Other Investments			Consolidated
Total interest income	$	26,147		$	5,184		$	1,842			$	975		$	—		$	492		$	34,640
Total interest expense		3,578			1,309			741				1,935			47			1,615			9,225
Net interest income (loss)		22,569			3,875			1,101				(960	)		(47	)		(1,123	)		25,415
Provision for loan losses		6,744			(629	)		364				1,858			—			—			8,337
Net interest income (loss) after loss    provision		15,825			4,504			737				(2,818	)		(47	)		(1,123	)		17,078
Sponsorship and race winning		—			—			—				—			7,940			—			7,940
Race team related expenses		—			—			—				—			(2,663	)		—			(2,663	)
Other income (expense), net		(6,181	)		(2,000	)		563				(2,762	)		(1,784	)		(2,591	)		(14,755	)
Net income (loss) before taxes		9,644			2,504			1,300				(5,580	)		3,446			(3,714	)		7,600
Income tax (provision) benefit		(2,497	)		(648	)		(314	)			1,345			(831	)		2,780			(165	)
Net income (loss)	$	7,147		$	1,856		$	986			$	(4,235	)	$	2,615		$	(934	)	$	7,435
Balance Sheet Data
Total loans, net	$	690,466		$	228,491		$	64,646			$	112,003		$	—		$	3,563		$	1,099,169
Total assets		702,541			239,991			87,486				226,868			33,134			229,734			1,519,754
Total funds borrowed		559,995			190,871			69,658				180,040			7,758			178,793			1,187,115
Selected Financial Ratios
Return on average assets		4.14	%		3.22	%		4.49	%			(7.26	)%		31.13	%		(1.54	)%		1.31	%
Return on average equity		20.69			16.09			22.45				(36.30	)	NM				(7.81	)		6.81
Interest yield		15.35			9.46			11.09				3.30		N/A			N/A				11.87
Net interest margin		13.25			7.07			6.63				(3.25	)	N/A			N/A				8.71
Reserve coverage		2.25			0.97			0.00		(1)		18.22		N/A			N/A				3.77
Delinquency status(2)		0.69			0.11			0.40		(1)		2.41		N/A			N/A				0.73
Charge-off ratio		2.05			0.09			4.93		(3)		5.20		N/A			N/A				2.17

(1) Ratio is based on total commercial lending balances, and relates solely to the legacy commercial loan business.

(2) Loans 90 days or more past due.

(3) Ratio is based on total commercial lending balances, and relates to the total loan business.

	Consumer Lending																Corp.
Nine Months Ended September 30, 2019 (Dollars in thousands)	Recreation			Home Improvement			Commercial Lending				Medallion Lending			RPAC			and Other Investments			Consolidated
Total interest income	$	72,996		$	14,187		$	5,359			$	2,482		$	—		$	1,674		$	96,698
Total interest expense		9,541			3,252			2,108				5,435			119			5,313			25,768
Net interest income (loss)		63,455			10,935			3,251				(2,953	)		(119	)		(3,639	)		70,930
Provision for loan losses		19,925			733			364				15,374			—			455			36,851
Net interest income (loss) after loss    provision		43,530			10,202			2,887				(18,327	)		(119	)		(4,094	)		34,079
Sponsorship and race winning		—			—			—				—			16,008			—			16,008
Race team related expenses		—			—			—				—			(7,211	)		—			(7,211	)
Other income (expense), net		(17,501	)		(5,356	)		(532	)			(8,106	)		(5,298	)		(5,822	)		(42,615	)
Net income (loss) before taxes		26,029			4,846			2,355				(26,433	)		3,380			(9,916	)		261
Income tax (provision) benefit		(6,741	)		(1,255	)		(568	)			6,375			(815	)		4,930			1,926
Net income (loss)	$	19,288		$	3,591		$	1,787			$	(20,058	)	$	2,565		$	(4,986	)	$	2,187
Balance Sheet Data as of September 30, 2019
Total loans, net	$	690,466		$	228,491		$	64,646			$	112,003		$	—		$	3,563		$	1,099,169
Total assets		702,541			239,991			87,486				226,868			33,134			229,734			1,519,754
Total funds borrowed		559,995			190,871			69,658				180,040			7,758			178,793			1,187,115
Balance Sheet Data as of December 31, 2019
Total loans, net	$	695,257		$	244,716		$	66,405			$	105,022		$	—		$	3,362		$	1,114,762
Total assets		707,377			252,704			84,924				217,483			31,538			247,641			1,541,667
Total funds borrowed		563,805			201,605			68,666				176,825			7,794			150,898			1,169,593
Selected Financial Ratios as of September 30, 2019
Return on average assets		4.01	%		2.50	%		2.69	%			(10.82	)%		10.76	%		(2.90	)%		(0.12	)%
Return on average equity		17.42			11.34			13.43				(54.12	)	NM				(11.52	)		(0.60	)
Interest yield		15.45			9.44			11.59				2.50		N/A			N/A				11.68
Net interest margin		13.43			7.27			7.03				(2.97	)	N/A			N/A				8.57
Reserve coverage		2.25			0.97			0.00		(1)		18.22		N/A			N/A				3.77
Delinquency status(2)		0.69			0.11			0.40		(1)		2.41		N/A			N/A				0.73
Charge-off ratio		2.30			0.20			1.77		(3)		18.29		N/A			N/A				3.92

(1) Ratio is based on total commercial lending balances, and relates solely to the legacy commercial loan business.

(2) Loans 90 days or more past due.

(3) Ratio is based on total commercial lending balances, and relates to the total loan business.