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Segment Financials | 12 Months Ended
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Dec. 31, 2024
Segment Financials [Abstract] |
Segment Financials | Note T—Segment Financials The Company’s operations can be classified under three segments: fintech, specialty finance (three sub-segments), and corporate. The chief operating decision maker for these segments is the Chief Executive Officer. The fintech segment includes the deposit balances and non-interest income generated by prepaid, debit and other card accessed accounts, ACH proccessing and other payments related processing. It also includes loan balances and interest and non-interest income from credit products generated through payment relationships. Specialty finance includes: (i) REBL (real estate bridge lending) comprised primarily of apartment building rehabilitation loans (ii) institutional banking comprised primarily of security-backed lines of credit, cash value insurance policy-backed lines of credit and advisor financing and (iii) commercial loans comprised primarily of SBA loans and direct lease financing. It also includes deposits generated by those business lines. Corporate includes the Company’s investment securities, corporate overhead and expenses which have not been allocated to segments. Expenses not allocated include certain management, board oversight, administrative, legal, IT and technology infrastructure, human resouces, audit, regulatory and CRA, finance and accounting, marketing and other corporate expenses. In the segment reporting below, a non-GAAP subtotal is shown, captioned “Income before non-interest expense allocation”. That subtotal presents income before consideration of allocated corporate expenses which might be fixed, semi-fixed or otherwise resist changes without regard to a particular line of business. It also reflects a market-based allocation of interest expense to financing segments which utilize funding from deposits generated by the fintech segment, which earns offsetting interest income. That allocation is shown in the “Interest allocation” line item. The rate utilized for the allocation corresponds to an estimated average of the three year FHLB rate. The fintech segment interest expense line item consists of interest expense actually incurred to generate its deposits, which is the Company’s actual cost of funds. That actual cost is allocated to the corporate segment which requires funding for the Company’s investment securities portfolio. The more significant non-interest expense categories correspond to the Company’s consolidated statements of operations and include salaries and employee benefits, data processing and software expenses that are incurred directly by those segments. Expenses incurred by departments which provide support services to the segments also include those categories of expense and others which are allocated to segments based on estimated usage. Those support department allocations are reflected in the “Risk, financial crimes and compliance” and “Information technology and operations” line items. Other expenses not shown separately are monitored for purposes of expense management, but, unless atypically high, are ordinarily of lesser significance than the categories noted above. For the fintech segment, deposit growth and the cost thereof and non-interest income growth, are factors in the decision making process and are respectively reported in the consolidated statemens of operations. For specialty finance, loan growth and related yields are factors in decision making. Comparative loan balance information measuring loan growth is presented in Note-E Loans. In addition to consideration of the above profitability and growth aspects of its operations, decision making is focused on the management of current and future potential risks. Such risks include, but are not limited to, credit, interest rate, liquidity, regulatory, and reputation. The loan committee provides support and oversight for credit risk, while the asset liability committee provides support and oversight over pricing, duration and liquidity. The risk committee provides further oversight over those and others including regulatory, reputation and other risks. The following tables provide segment information for the periods indicated (dollars in thousands):
| For the year ended December 31, 2024
|  | Fintech |  | REBL |  | Institutional Banking |  | Commercial |  |  | Corporate |  | Total
Interest income |  | $ | 214 |  | $ | 207,062 |  | $ | 121,522 |  | $ | 124,490 |  |  | $ | 98,304 |  | $ | 551,592
Interest allocation |  |  | 261,484 |  |  | (98,064) |  |  | (69,942) |  |  | (69,960) |  |  |  | (23,518) |  |  | —
Interest expense |  |  | 156,271 |  |  | — |  |  | 3,962 |  |  | 35 |  |  |  | 15,083 |  |  | 175,351
Net interest income |  |  | 105,427 |  |  | 108,998 |  |  | 47,618 |  |  | 54,495 |  |  |  | 59,703 |  |  | 376,241
Provision for credit losses(1) |  |  | 19,619 |  |  | 2,159 |  |  | 763 |  |  | 6,416 |  |  |  | (1,615) |  |  | 27,342
Non-interest income(1) |  |  | 136,542 |  |  | 3,264 |  |  | 211 |  |  | 5,541 |  |  |  | 924 |  |  | 146,482
Direct non-interest expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and employee benefits |  |  | 15,577 |  |  | 3,996 |  |  | 9,659 |  |  | 18,323 |  |  |  | 84,042 |  |  | 131,597
Data processing expense |  |  | 1,552 |  |  | 169 |  |  | 2,329 |  |  | 7 |  |  |  | 1,609 |  |  | 5,666
Software |  |  | 486 |  |  | 104 |  |  | 2,962 |  |  | 1,777 |  |  |  | 12,584 |  |  | 17,913
Other |  |  | 9,203 |  |  | 4,719 |  |  | 2,093 |  |  | 7,698 |  |  |  | 24,336 |  |  | 48,049
Income before non-interest expense allocations |  |  | 195,532 |  |  | 101,115 |  |  | 30,023 |  |  | 25,815 |  |  |  | (60,329) |  |  | 292,156
Non-interest expense allocations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk, financial crimes, and compliance |  |  | 26,922 |  |  | 2,177 |  |  | 3,017 |  |  | 4,921 |  |  |  | (37,037) |  |  | —
Information technology and operations |  |  | 13,732 |  |  | 723 |  |  | 5,993 |  |  | 7,444 |  |  |  | (27,892) |  |  | —
Other allocated expenses |  |  | 15,814 |  |  | 3,021 |  |  | 6,574 |  |  | 7,070 |  |  |  | (32,479) |  |  | —
Total non-interest expense allocations |  |  | 56,468 |  |  | 5,921 |  |  | 15,584 |  |  | 19,435 |  |  |  | (97,408) |  |  | —
Income before taxes |  |  | 139,064 |  |  | 95,194 |  |  | 14,439 |  |  | 6,380 |  |  |  | 37,079 |  |  | 292,156
Income tax expense |  |  | 35,516 |  |  | 24,312 |  |  | 3,688 |  |  | 1,629 |  |  |  | 9,471 |  |  | 74,616
Net income |  | $ | 103,548 |  | $ | 70,882 |  | $ | 10,751 |  | $ | 4,751 |  |  | $ | 27,608 |  | $ | 217,540
(1) In 2024, lending agreements related to consumer fintech loans had certain charge-offs accounted for as freestanding credit enhancements which resulted in the Company recording a $19.6 million provision for credit losses and a correlated amount in non-interest income resulting in no impact to net income.
| For the year ended December 31, 2023 as restated
|  | Fintech |  | REBL |  | Institutional Banking |  | Commercial |  |  | Corporate |  | Total
Interest income |  | $ | 110 |  | $ | 194,419 |  | $ | 136,069 |  | $ | 102,596 |  |  | $ | 76,313 |  | $ | 509,507
Interest allocation |  |  | 264,820 |  |  | (97,941) |  |  | (84,807) |  |  | (68,487) |  |  |  | (13,585) |  |  | —
Interest expense |  |  | 139,500 |  |  | 507 |  |  | 4,355 |  |  | — |  |  |  | 11,093 |  |  | 155,455
Net interest income |  |  | 125,430 |  |  | 95,971 |  |  | 46,907 |  |  | 34,109 |  |  |  | 51,635 |  |  | 354,052
Provision for credit losses |  |  | — |  |  | 1,529 |  |  | (25) |  |  | 7,222 |  |  |  | 9,604 |  |  | 18,330
Non-interest income |  |  | 99,376 |  |  | 6,037 |  |  | 760 |  |  | 6,881 |  |  |  | (960) |  |  | 112,094
Direct non-interest expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and employee benefits |  |  | 13,666 |  |  | 3,607 |  |  | 9,680 |  |  | 16,480 |  |  |  | 77,622 |  |  | 121,055
Data processing expense |  |  | 1,309 |  |  | 153 |  |  | 2,358 |  |  | 5 |  |  |  | 1,622 |  |  | 5,447
Software |  |  | 552 |  |  | 99 |  |  | 2,951 |  |  | 1,341 |  |  |  | 12,406 |  |  | 17,349
Other |  |  | 9,554 |  |  | 3,693 |  |  | 1,923 |  |  | 8,310 |  |  |  | 23,711 |  |  | 47,191
Income before non-interest expense allocations |  |  | 199,725 |  |  | 92,927 |  |  | 30,780 |  |  | 7,632 |  |  |  | (74,290) |  |  | 256,774
Non-interest expense allocations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk, financial crimes, and compliance |  |  | 25,803 |  |  | 1,221 |  |  | 1,741 |  |  | 2,473 |  |  |  | (31,238) |  |  | —
Information technology and operations |  |  | 13,189 |  |  | 805 |  |  | 6,928 |  |  | 6,488 |  |  |  | (27,410) |  |  | —
Other allocated expenses |  |  | 11,598 |  |  | 2,284 |  |  | 5,895 |  |  | 5,928 |  |  |  | (25,705) |  |  | —
Total non-interest expense allocations |  |  | 50,590 |  |  | 4,310 |  |  | 14,564 |  |  | 14,889 |  |  |  | (84,353) |  |  | —
Income before taxes |  |  | 149,135 |  |  | 88,617 |  |  | 16,216 |  |  | (7,257) |  |  |  | 10,063 |  |  | 256,774
Income tax expense |  |  | 37,449 |  |  | 22,252 |  |  | 4,072 |  |  | (1,822) |  |  |  | 2,527 |  |  | 64,478
Net income (loss) |  | $ | 111,686 |  | $ | 66,365 |  | $ | 12,144 |  | $ | (5,435) |  |  | $ | 7,536 |  | $ | 192,296
| For the year ended December 31, 2022 as restated
|  | Fintech |  | REBL |  | Institutional Banking |  | Commercial |  |  | Corporate |  | Total
Interest income |  | $ | 113 |  | $ | 108,934 |  | $ | 89,623 |  | $ | 74,834 |  |  | $ | 34,791 |  | $ | 308,295
Interest allocation |  |  | 205,174 |  |  | (73,050) |  |  | (82,414) |  |  | (49,326) |  |  |  | (384) |  |  | —
Interest expense |  |  | 42,883 |  |  | 1,004 |  |  | 2,079 |  |  | — |  |  |  | 13,488 |  |  | 59,454
Net interest income |  |  | 162,404 |  |  | 34,880 |  |  | 5,130 |  |  | 25,508 |  |  |  | 20,919 |  |  | 248,841
Provision for credit losses |  |  | — |  |  | 2,056 |  |  | 659 |  |  | 2,593 |  |  |  | 1,800 |  |  | 7,108
Non-interest income |  |  | 86,313 |  |  | 11,494 |  |  | 98 |  |  | 5,200 |  |  |  | 2,578 |  |  | 105,683
Direct non-interest expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and employee benefits |  |  | 11,553 |  |  | 1,974 |  |  | 8,953 |  |  | 14,440 |  |  |  | 68,448 |  |  | 105,368
Data processing expense |  |  | 1,018 |  |  | 157 |  |  | 2,164 |  |  | 5 |  |  |  | 1,628 |  |  | 4,972
Software |  |  | 555 |  |  | 99 |  |  | 2,600 |  |  | 1,233 |  |  |  | 11,724 |  |  | 16,211
Other |  |  | 9,463 |  |  | 1,816 |  |  | 2,182 |  |  | 7,457 |  |  |  | 22,033 |  |  | 42,951
Income before non-interest expense allocations |  |  | 226,128 |  |  | 40,272 |  |  | (11,330) |  |  | 4,980 |  |  |  | (82,136) |  |  | 177,914
Non-interest expense allocations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk, financial crimes, and compliance |  |  | 23,466 |  |  | 1,035 |  |  | 1,474 |  |  | 2,089 |  |  |  | (28,064) |  |  | —
Information technology and operations |  |  | 12,263 |  |  | 797 |  |  | 5,805 |  |  | 5,247 |  |  |  | (24,112) |  |  | —
Other allocated expenses |  |  | 11,212 |  |  | 2,150 |  |  | 4,902 |  |  | 5,388 |  |  |  | (23,652) |  |  | —
Total non-interest expense allocations |  |  | 46,941 |  |  | 3,982 |  |  | 12,181 |  |  | 12,724 |  |  |  | (75,828) |  |  | —
Income (loss) before taxes |  |  | 179,187 |  |  | 36,290 |  |  | (23,511) |  |  | (7,744) |  |  |  | (6,308) |  |  | 177,914
Income tax expense (benefit) |  |  | 48,042 |  |  | 9,730 |  |  | (6,304) |  |  | (2,076) |  |  |  | (1,691) |  |  | 47,701
Net income (loss) |  | $ | 131,145 |  | $ | 26,560 |  | $ | (17,207) |  | $ | (5,668) |  |  | $ | (4,617) |  | $ | 130,213
| December 31, 2024
|  | Fintech |  | REBL |  | Institutional Banking |  | Commercial |  | Corporate |  | Total
Total assets |  | $ | 518,371 |  | $ | 2,300,817 |  | $ | 1,855,016 |  | $ | 1,676,241 |  |  | $ | 2,377,098 |  | $ | 8,727,543
Total liabilities |  | $ | 6,885,456 |  | $ | 2,116 |  | $ | 434,283 |  | $ | 8,309 |  |  | $ | 607,596 |  | $ | 7,937,760
| December 31, 2023 as restated
|  | Fintech |  | REBL |  | Institutional Banking |  | Commercial |  |  | Corporate |  | Total
Total assets |  | $ | 42,769 |  | $ | 2,208,030 |  | $ | 1,867,702 |  | $ | 1,468,654 |  |  | $ | 2,118,540 |  | $ | 7,705,695
Total liabilities |  | $ | 6,412,911 |  | $ | 3,258 |  | $ | 186,503 |  | $ | 9,718 |  |  | $ | 286,024 |  | $ | 6,898,414

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