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Note 3 - Segment Reporting
 12 Months Ended
Dec. 31, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

3.

Segment Reporting

 

We operate primarily within one industry consisting of two reportable segments by which we manage our business. Our two reportable segments are: CaaS and Auto Finance. The Company defines operating segments to be components of the Company for which discrete financial information is evaluated regularly by the Company’s Chief Executive Officer (our chief operating decision maker, "CODM") to allocate resources and evaluate financial performance. The CODM uses GAAP Income before income taxes to evaluate segment profitability as it provides the best insight into the segments overall economic performance. Income before income taxes is used regularly in the forecasting and budgeting process when assessing performance on a quarterly basis and making decisions about capital and personnel allocations. 

 

Our CaaS segment includes the operations of two operating segments aggregated into one reportable segment which includes our private label credit and general purpose credit cards, which, through our bank partners, provide financing solutions to consumers. Our Auto Finance reportable segment purchases and/or service loans secured by automobiles and provides other financing options to independent automotive dealers and automotive finance companies. These two reportable segments were determined by management based on the characteristics of the underlying products, management structures and expected returns. 

 

We have no material amounts of long lived assets located outside of the U.S. and all revenue is generated within the U.S.

 

We measure the profitability of our reportable segments based on their income after allocation of specific costs and corporate overhead (Income before income taxes); however, our segment results do not reflect any charges for internal capital allocations among our segments. Company revenues, expenses and profitability are aggregated into these segments and presented to the CODM as detailed below. Overhead costs are allocated based on headcounts and other applicable measures to better align costs with the associated revenues. Income taxes are allocated to the individual segments whereby each operating segment determines income tax expense or benefit as if it filed a separate tax return.

 

Reportable segment information (in thousands) is as follows:

 

Year Ended December 31, 2024

 

CaaS

  

Auto Finance

  

Total

 

Revenue and other income:

            

Consumer loans, including past due fees

 $939,514  $40,300  $979,814 

Fees and related income on earning assets

  269,688   83   269,771 

Other revenue

  59,561   809   60,370 

Total operating revenue and other income

  1,268,763   41,192   1,309,955 

Other non-operating income

  334   1,155   1,489 

Total revenue and other income

  1,269,097   42,347   1,311,444 

Interest expense

  (157,178)  (2,995)  (160,173)

Provision for credit losses

  (5,832)  (10,536)  (16,368)

Changes in fair value of loans

  (733,471)  —   (733,471)

Net margin

  372,616   28,816   401,432 

Operating expenses:

            

Salaries and benefits

  (45,283)  (4,860)  (50,143)

Card and loan servicing

  (105,149)  (13,251)  (118,400)

Marketing and solicitation

  (56,062)  (124)  (56,186)

Depreciation

  (2,641)  (74)  (2,715)

Other

  (31,082)  (4,329)  (35,411)

Total operating expenses

  (240,217)  (22,638)  (262,855)

Income before income taxes

  132,399   6,178   138,577 

Total assets

 $3,181,428  $89,279  $3,270,707 

 

Year Ended December 31, 2023

 

CaaS

  

Auto Finance

  

Total

 

Revenue and other income:

            

Consumer loans, including past due fees

 $839,995  $39,128  $879,123 

Fees and related income on earning assets

  238,691   84   238,775 

Other revenue

  36,524   824   37,348 

Total operating revenue and other income

  1,115,210   40,036   1,155,246 

Other non-operating income

  422   208   630 

Total revenue and other income

  1,115,632   40,244   1,155,876 

Interest expense

  (105,990)  (3,352)  (109,342)

Provision for credit losses

  —   (2,152)  (2,152)

Changes in fair value of loans

  (689,577)  —   (689,577)

Net margin

  320,065   34,740   354,805 

Operating expenses:

            

Salaries and benefits

  (38,894)  (5,012)  (43,906)

Card and loan servicing

  (87,772)  (12,848)  (100,620)

Marketing and solicitation

  (52,301)  (120)  (52,421)

Depreciation

  (2,508)  (52)  (2,560)

Other

  (22,068)  (4,672)  (26,740)

Total operating expenses

  (203,543)  (22,704)  (226,247)

Income before income taxes

  116,522   12,036   128,558 

Total assets

 $2,602,615  $103,830  $2,706,445