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Note 3 - Segment Reporting
 3 Months Ended
Mar. 31, 2025
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:

 

Three Months Ended March 31, 2025

 

CaaS

  

Auto Finance

  

Total

 

Revenue and other income:

            

Consumer loans, including past due fees

 $238,503  $9,152  $247,655 

Fees and related income on earning assets

  78,323   18   78,341 

Other revenue

  18,698   179   18,877 

Total operating revenue and other income

  335,524   9,349   344,873 

Other non-operating income

  7   286   293 

Total revenue and other income

  335,531   9,635   345,166 

Interest expense

  (46,984)  (546)  (47,530)

Provision for credit losses

  (25)  (1,043)  (1,068)

Changes in fair value of loans

  (178,345)  —   (178,345)

Net margin

  110,177   8,046   118,223 

Operating expenses:

            

Salaries and benefits

  (14,286)  (1,217)  (15,503)

Card and loan servicing

  (28,857)  (3,295)  (32,152)

Marketing and solicitation

  (20,327)  (7)  (20,334)

Depreciation

  (778)  (19)  (797)

Other

  (7,534)  (1,035)  (8,569)

Total operating expenses

  (71,782)  (5,573)  (77,355)

Income before income taxes

 $38,395  $2,473  $40,868 

Total assets

 $3,185,715  $86,450  $3,272,165 

 

Three Months Ended March 31, 2024

 

CaaS

  

Auto Finance

  

Total

 

Revenue and other income:

            

Consumer loans, including past due fees

 $220,039  $10,335  $230,374 

Fees and related income on earning assets

  47,885   20   47,905 

Other revenue

  11,677   218   11,895 

Total operating revenue and other income

  279,601   10,573   290,174 

Other non-operating income

  282   250   532 

Total revenue and other income

  279,883   10,823   290,706 

Interest expense

  (34,236)  (827)  (35,063)

Provision for credit losses

  —   (2,944)  (2,944)

Changes in fair value of loans

  (159,171)  —   (159,171)

Net margin

  86,476   7,052   93,528 

Operating expenses:

            

Salaries and benefits

  (11,891)  (1,421)  (13,312)

Card and loan servicing

  (23,458)  (3,364)  (26,822)

Marketing and solicitation

  (10,396)  (32)  (10,428)

Depreciation

  (636)  (18)  (654)

Other

  (8,281)  (1,210)  (9,491)

Total operating expenses

  (54,662)  (6,045)  (60,707)

Income before income taxes

 $31,814  $1,007  $32,821 

Total assets

 $2,682,189  $105,026  $2,787,215