Segment Financials

9 Months Ended

Sep. 30, 2020

Note 14. Segment Financials

The Company performed a strategic evaluation of its businesses in the third quarter of 2014. As a result of the evaluation, the Company decided to discontinue its commercial lending operations, as described in Note 15, Discontinued Operations. The shift from a traditional bank balance sheet led the Company to evaluate its continuing operations. Based on the continuing operations of the Company, it was determined that there would be four segments of the business: specialty finance, payments, corporate and discontinued operations. The chief decision maker for these segments is the Chief Executive Officer. Specialty finance includes commercial loan sales and securitization, or the retention of such loans if not sold or securitized, SBA loans, direct lease financing and security-backed lines of credit, cash value insurance policy-backed lines of credit and deposits generated by those business lines. Payments include prepaid card accounts, card payments, ACH processing and deposits generated by those business lines. Corporate includes the Company’s investment portfolio, corporate overhead and non-allocated expenses. Investment income is reallocated to the payments segment. These operating segments reflect the way the Company views its current operations.

The following tables provide segment information for the periods indicated:



	For the three months ended September 30, 2020
	Specialty finance	Payments	Corporate	Discontinued operations	Total
	(in thousands)
Interest income	$ 44,408	$ -	$ 8,070	$ -	$ 52,478
Interest allocation	-	8,070	(8,070)	-	-
Interest expense	232	1,234	1,016	-	2,482
Net interest income (loss)	44,176	6,836	(1,016)	-	49,996
Provision for credit losses	1,297	-	-	-	1,297
Non-interest income	2,395	21,933	24	-	24,352
Non-interest expense	17,236	16,939	7,851	-	42,026
Income (loss) from continuing operations before taxes	28,038	11,830	(8,843)	-	31,025
Income tax expense	-	-	7,894	-	7,894
Income (loss) from continuing operations	28,038	11,830	(16,737)	-	23,131
Income from discontinued operations	-	-	-	123	123
Net income (loss)	$ 28,038	$ 11,830	$ (16,737)	$ 123	$ 23,254



	For the three months ended September 30, 2019
	Specialty finance	Payments	Corporate	Discontinued operations	Total
	(in thousands)
Interest income	$ 35,210	$ -	$ 13,165	$ -	$ 48,375
Interest allocation	-	13,165	(13,165)	-	-
Interest expense	353	7,236	3,226	-	10,815
Net interest income (loss)	34,857	5,929	(3,226)	-	37,560
Provision for credit losses	650	-	-	-	650
Non-interest income	14,719	18,767	29	-	33,515
Non-interest expense	15,791	16,289	9,971	-	42,051
Income (loss) from continuing operations before taxes	33,135	8,407	(13,168)	-	28,374
Income tax expense	-	-	7,975	-	7,975
Income (loss) from continuing operations	33,135	8,407	(21,143)	-	20,399
Income from discontinued operations	-	-	-	26	26
Net income (loss)	$ 33,135	$ 8,407	$ (21,143)	$ 26	$ 20,425



	For the nine months ended September 30, 2020
	Specialty finance	Payments	Corporate	Discontinued operations	Total
	(in thousands)
Interest income	$ 125,254	$ -	$ 30,589	$ -	$ 155,843
Interest allocation	-	30,589	(30,589)	-	-
Interest expense	791	7,381	4,518	-	12,690
Net interest income (loss)	124,463	23,208	(4,518)	-	143,153
Provision for credit losses	5,798	-	-	-	5,798
Non-interest income	(1,622)	62,770	169	-	61,317
Non-interest expense	51,742	51,345	19,977	-	123,064
Income (loss) from continuing operations before taxes	65,301	34,633	(24,326)	-	75,608
Income tax expense	-	-	19,033	-	19,033
Income (loss) from continuing operations	65,301	34,633	(43,359)	-	56,575
Loss from discontinued operations	-	-	-	(662)	(662)
Net income (loss)	$ 65,301	$ 34,633	$ (43,359)	$ (662)	$ 55,913



	For the nine months ended September 30, 2019
	Specialty finance	Payments	Corporate	Discontinued operations	Total
	(in thousands)
Interest income	$ 95,573	$ -	$ 40,460	$ -	$ 136,033
Interest allocation	-	40,460	(40,460)	-	-
Interest expense	1,087	23,947	4,890	-	29,924
Net interest income (loss)	94,486	16,513	(4,890)	-	106,109
Provision for credit losses	2,950	-	-	-	2,950
Non-interest income	27,794	55,733	102	-	83,629
Non-interest expense	47,196	50,211	23,392	-	120,799
Income (loss) from continuing operations before taxes	72,134	22,035	(28,180)	-	65,989
Income tax expense	-	-	17,585	-	17,585
Income (loss) from continuing operations	72,134	22,035	(45,765)	-	48,404
Income from discontinued operations	-	-	-	1,301	1,301
Net income (loss)	$ 72,134	$ 22,035	$ (45,765)	$ 1,301	$ 49,705



	September 30, 2020
	Specialty finance	Payments	Corporate	Discontinued operations	Total
	(in thousands)
Total assets	$ 4,378,815	$ 37,547	$ 1,630,687	$ 122,253	$ 6,169,302
Total liabilities	$ 286,610	$ 4,752,944	$ 571,289	$ -	$ 5,610,843



	December 31, 2019
	Specialty finance	Payments	Corporate	Discontinued operations	Total
	(in thousands)
Total assets	$ 3,008,304	$ 57,746	$ 2,450,256	$ 140,657	$ 5,656,963
Total liabilities	$ 247,485	$ 4,030,921	$ 894,060	$ -	$ 5,172,466