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RELATED PARTY TRANSACTIONS
 3 Months Ended
Mar. 31, 2014
RELATED PARTY TRANSACTIONS  
RELATED PARTY TRANSACTIONS

16.                     RELATED PARTY TRANSACTIONS

 

The Company entered into a loan referral agreement with Meridian Capital Group LLC (“Meridian”), which is an affiliate of a member of the Company’s Board of Directors and an investor in the Company.  The agreement provides for the payment of referral fees for loans originated pursuant to a formula based on the Company’s net profit on a referred loan, as defined in the agreement, payable annually in arrears.  While the arrangement gives rise to a potential conflict of interest, full disclosure is given to the borrower who, in each case, waives the conflict in writing.  This agreement is cancellable by the Company based on the occurrence of certain events, or by Meridian for nonpayment of amounts due under the agreement.  The Company terminated the loan referral agreement on April 2, 2014, as a result of the occurrence of the IPO on February 11, 2014.

 

The Company incurred no fees during the three months ended March 31, 2014 for loans originated in accordance with this agreement. As of March 31, 2014, $425,000 was payable.   The Company incurred fees of $150,000 during the three months ended March 31, 2013 for loans originated in accordance with this agreement, of which $150,000 is accrued for and payable as of March 31, 2013. These fees are reflected in fee expense in the accompanying combined consolidated statements of income.