v3.26.1
Funds Borrowed
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
Funds Borrowed

(5) FUNDS BORROWED

The following table presents outstanding balances of funds borrowed.

 

Payments Due for the Twelve Months Ending March 31,

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

2027

 

 

2028

 

 

2029

 

 

2030

 

 

2031

 

 

Thereafter

 

 

March 31, 2026 (1)

 

 

December 31, 2025 (1)

 

 

Interest
Rate (2)

 

Deposits (3)

 

$

700,449

 

 

$

554,188

 

 

$

446,890

 

 

$

198,831

 

 

$

227,102

 

 

$

—

 

 

$

2,127,460

 

 

$

2,083,335

 

 

 

3.88

%

Privately placed notes

 

 

—

 

 

 

53,750

 

 

 

39,000

 

 

 

—

 

 

 

—

 

 

 

22,500

 

 

 

115,250

 

 

 

146,500

 

 

 

8.35

 

SBA debentures and borrowings

 

 

4,500

 

 

 

—

 

 

 

2,500

 

 

 

—

 

 

 

3,000

 

 

 

63,500

 

 

 

73,500

 

 

 

85,000

 

 

 

4.11

 

Trust preferred securities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

33,000

 

 

 

33,000

 

 

 

33,000

 

 

 

6.06

 

Federal reserve and other borrowings

 

 

40,000

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

40,000

 

 

 

50,000

 

 

 

3.75

 

Strategic partner collateral deposits

 

 

6,250

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

6,250

 

 

 

6,081

 

 

 

3.64

 

Total

 

$

751,199

 

 

$

607,938

 

 

$

488,390

 

 

$

198,831

 

 

$

230,102

 

 

$

119,000

 

 

$

2,395,460

 

 

$

2,403,916

 

 

 

4.13

%
(1)
Excludes deferred financing costs of $8.2 million and $8.4 million as of March 31, 2026 and December 31, 2025.
(2)
Weighted average contractual rate as of March 31, 2026.
(3)
Balance includes $2.8 million and $3.7 million in retail savings deposit balances as of March 31, 2026 and December 31, 2025.

(A) DEPOSITS

Most deposits are raised through the use of investment brokerage firms that package time deposits in denominations of less than $250,000 qualifying for FDIC insurance into larger pools that are sold to the Bank. While brokered time deposits are sourced in amounts in excess of $250,000, all underlying deposits are in denominations of $250,000 or less. The rates paid on the deposits are highly competitive with market rates paid by other financial institutions. Additionally, a brokerage fee is paid, depending on the maturity of the deposits, the annual expense of which averages less than 0.15%. Interest on the deposits is accrued daily and paid monthly, quarterly, semiannually, or at maturity. Additionally, the Bank raises deposits through listing services and, as of March 31, 2026 and December 31, 2025, the Bank had $18.2 million and $17.2 million in listing service deposit balances from other financial institutions. As of March 31, 2026 and December 31, 2025, the Bank had $2.8 million and $3.7 million in retail savings deposit balances. The following table presents the maturity of the deposit pools, which includes strategic partner reserve deposits, as of March 31, 2026.

(Dollars in thousands)

 

March 31, 2026

 

Three months or less

 

$

241,634

 

Over three months through six months

 

 

159,896

 

Over six months through one year

 

 

298,919

 

Over one year

 

 

1,427,011

 

Deposits

 

 

2,127,460

 

Strategic partner collateral deposits

 

 

6,250

 

Total deposits

 

$

2,133,710

 

(B) FEDERAL RESERVE DISCOUNT WINDOW AND OTHER BORROWINGS

As of March 31, 2026, the Bank had $1.5 billion of consumer loans pledged as collateral for a discount window line of credit established at the Federal Reserve. The current advance rate on the pledged loans is approximately 58% of book value, for a total of approximately $884.2 million in secured borrowing capacity, of which $40.0 million was utilized as of March 31, 2026. The discount window facility is not committed, and any borrowings by the Bank from the discount window facility are at the discretion of the Federal Reserve. The weighted average interest rate on funds borrowed from the discount window was 3.75% as of March 31, 2026.

The Bank has borrowing arrangements with several commercial banks. These agreements are accommodations that can be terminated at any time, for any reason and allow the Bank to borrow up to $75.0 million. As of March 31, 2026, there was no outstanding amount with respect to these arrangements.

(C) PRIVATELY PLACED NOTES

The Company has entered into various private placements with certain institutional investors over time. The following table presents the private placement notes outstanding as of March 31, 2026 and December 31, 2025.

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Date of Notes

 

Maturity

 

Interest Rate

 

 

Interest Payable

 

March 31, 2026

 

 

December 31, 2025

 

December 2020

 

December 2027

 

 

7.500

%

 

Semi-annually

 

$

53,750

 

 

$

53,750

 

February 2021

 

February 2026

 

 

7.250

%

 

Semi-annually

 

 

—

 

 

 

31,250

 

September 2023

 

September 2028

 

 

9.250

%

 

Semi-annually

 

 

39,000

 

 

 

39,000

 

June 2024

 

June 2039

 

 

8.875

%

 

Semi-annually

 

 

17,500

 

 

 

17,500

 

August 2024

 

August 2039

 

 

8.625

%

 

Semi-annually

 

 

5,000

 

 

 

5,000

 

 

 

 

 

 

 

 

 

 

$

115,250

 

 

$

146,500

 

(D) SBA DEBENTURES AND BORROWINGS

Over the years, the SBA has approved commitments for Medallion Capital, typically for a four and a half year term and a 1% fee. On February 28, 2024, Medallion Capital accepted a commitment from the SBA for $18.5 million in debenture financing, all of which had been utilized during 2025. The Company does not currently have any commitments available from the SBA.

In 2025, the SBA informed Medallion Capital that it needs to have Medallion Capital’s management team reviewed through the SBA’s licensing division; until successful completion of that review, Medallion Capital is not deemed by the SBA to have a qualified management team. Medallion Capital submitted a management team for review through the SBA’s licensing division on March 31, 2026 and on the same day, the SBA notified Medallion Capital that it has declared an event of default with respect to outstanding debentures and directed Medallion Capital, within 120 days, to identify and submit at least one qualified candidate for consideration as a full-time principal and investment committee member of Medallion Capital. The SBA’s notice and event of default do not trigger any cross-default clauses in any of the Company's debt arrangements. In subsequent discussions with the SBA, the SBA has indicated that Medallion Capital must supplement its submission by identifying and submitting at least one qualified candidate for consideration. Medallion Capital is currently in the process of identifying and submitting at least one qualified candidate in response to the above notice and discussions.

The following table presents the SBA debentures and borrowings as of March 31, 2026 and December 31, 2025.

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Date of Notes

 

Maturity

 

Interest Rate

 

 

Interest Payable

 

March 31, 2026

 

 

December 31, 2025

 

March 2016

 

March 2026

 

 

3.25

%

 

Semi-annually

 

 

—

 

 

 

1,500

 

March 2016

 

March 2026

 

 

3.18

%

 

Semi-annually

 

 

—

 

 

 

10,000

 

May 2016

 

September 2026

 

 

2.72

%

 

Semi-annually

 

 

2,500

 

 

 

2,500

 

March 2017

 

March 2027

 

 

3.52

%

 

Semi-annually

 

 

2,000

 

 

 

2,000

 

September 2018

 

September 2028

 

 

4.22

%

 

Semi-annually

 

 

1,250

 

 

 

1,250

 

March 2019

 

March 2029

 

 

3.79

%

 

Semi-annually

 

 

1,250

 

 

 

1,250

 

September 2020

 

September 2030

 

 

1.71

%

 

Semi-annually

 

 

3,000

 

 

 

3,000

 

June 2021

 

September 2031

 

 

1.58

%

 

Semi-annually

 

 

8,500

 

 

 

8,500

 

October 2021

 

March 2032

 

 

3.21

%

 

Semi-annually

 

 

7,000

 

 

 

7,000

 

October 2022

 

March 2033

 

 

5.44

%

 

Semi-annually

 

 

4,750

 

 

 

4,750

 

April 2023

 

September 2033

 

 

5.96

%

 

Semi-annually

 

 

4,750

 

 

 

4,750

 

September 2023

 

March 2034

 

 

5.08

%

 

Semi-annually

 

 

4,750

 

 

 

4,750

 

November 2023

 

March 2034

 

 

5.08

%

 

Semi-annually

 

 

5,000

 

 

 

5,000

 

March 2025

 

September 2035

 

 

4.58

%

 

Semi-annually

 

 

10,250

 

 

 

10,250

 

August 2025

 

September 2035

 

 

4.66

%

 

Semi-annually

 

 

18,500

 

 

 

18,500

 

 

 

 

 

 

 

 

 

 

$

73,500

 

 

$

85,000

 

(E) TRUST PREFERRED SECURITIES

In June 2007, the Company issued and sold $36.1 million aggregate principal amount of unsecured junior subordinated notes to Fin Trust which, in turn, sold $35.0 million of trust preferred securities to Merrill Lynch International and issued 1,083 shares of common stock to the Company. Interest is calculated using the Secured Overnight Financing Rate, or SOFR, adjusted by a relevant spread adjustment of approximately 26 basis points, plus 2.13%. The notes mature in September 2037 and are prepayable at par. Interest is payable quarterly in arrears. The terms of the trust preferred securities and the notes are substantially identical. In December 2007, $2.0 million of the trust preferred securities were repurchased from a third-party investor. As of March 31, 2026, $33.0 million was outstanding on the trust preferred securities.

(F) COVENANT COMPLIANCE

Certain of the Company's debt agreements contain financial covenants that require the Company to maintain certain financial ratios and minimum tangible net worth. As of March 31, 2026, the Company was in compliance with all such covenants.