v3.26.1
Note 3 - Segment Reporting
6 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Segment Reporting [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 three operating segments aggregated into one reportable segment which includes our private label credit, our general purpose credit card receivables and those general purpose credit card receivables acquired as part of our acquisition of Mercury, all of 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 June 30, 2026

 

CaaS

  

Auto Finance

  

Total

 

Revenue and other income:

            

Consumer loans, including past due fees

 $535,507  $9,579  $545,086 

Fees and related income on earning assets

  150,548   330   150,878 

Other revenue

  48,147   203   48,350 

Total operating revenue and other income

  734,202   10,112   744,314 

Other non-operating income

  9      9 

Total revenue and other income

  734,211   10,112   744,323 

Interest expense

  (123,082)  (349)  (123,431)

Provision for credit losses

  (386)  (652)  (1,038)

Changes in fair value of loans

  (396,280)     (396,280)

Net margin

  214,463   9,111   223,574 

Operating expenses:

            

Salaries and benefits

  (25,978)  (1,272)  (27,250)

Card and loan servicing

  (54,408)  (3,455)  (57,863)

Marketing and solicitation

  (48,047)  (83)  (48,130)

Depreciation and amortization

  (3,573)  (19)  (3,592)

Other

  (19,477)  (1,255)  (20,732)

Total operating expenses

  (151,483)  (6,084)  (157,567)

Income before income taxes

 $62,980  $3,027  $66,007 

 

Six Months Ended June 30, 2026

 

CaaS

  

Auto Finance

  

Total

 

Revenue and other income:

            

Consumer loans, including past due fees

 $1,055,409  $19,122  $1,074,531 

Fees and related income on earning assets

  260,637   670   261,307 

Other revenue

  87,594   416   88,010 

Total operating revenue and other income

  1,403,640   20,208   1,423,848 

Other non-operating income

  64      64 

Total revenue and other income

  1,403,704   20,208   1,423,912 

Interest expense

  (245,475)  (717)  (246,192)

Provision for credit losses

  (1,196)  (1,442)  (2,638)

Changes in fair value of loans

  (761,804)     (761,804)

Net margin

  395,229   18,049   413,278 

Operating expenses:

            

Salaries and benefits

  (53,440)  (2,456)  (55,896)

Card and loan servicing

  (95,905)  (6,876)  (102,781)

Marketing and solicitation

  (84,504)  (99)  (84,603)

Depreciation and amortization

  (7,141)  (37)  (7,178)

Other

  (35,597)  (2,368)  (37,965)

Total operating expenses

  (276,587)  (11,836)  (288,423)

Income before income taxes

 $118,642  $6,213  $124,855 

Total assets

 $7,408,285  $83,485  $7,491,770 

 

Three Months Ended June 30, 2025

 

CaaS

  

Auto Finance

  

Total

 

Revenue and other income:

            

Consumer loans, including past due fees

 $267,204  $9,146  $276,350 

Fees and related income on earning assets

  94,262   23   94,285 

Other revenue

  23,012   173   23,185 

Total operating revenue and other income

  384,478   9,342   393,820 

Other non-operating income

  6   337   343 

Total revenue and other income

  384,484   9,679   394,163 

Interest expense

  (53,162)  (522)  (53,684)

Provision for credit losses

  (189)  (1,193)  (1,382)

Changes in fair value of loans

  (216,777)     (216,777)

Net margin

  114,356   7,964   122,320 

Operating expenses:

            

Salaries and benefits

  (12,133)  (1,248)  (13,381)

Card and loan servicing

  (30,764)  (3,321)  (34,085)

Marketing and solicitation

  (24,912)  (37)  (24,949)

Depreciation and amortization

  (866)  (19)  (885)

Other

  (7,685)  (1,189)  (8,874)

Total operating expenses

  (76,360)  (5,814)  (82,174)

Income (loss) before income taxes

 $37,996  $2,150  $40,146 

 

Six Months Ended June 30, 2025

 

CaaS

  

Auto Finance

  

Total

 

Revenue and other income:

            

Consumer loans, including past due fees

 $505,707  $18,298  $524,005 

Fees and related income on earning assets

  172,585   41   172,626 

Other revenue

  41,710   352   42,062 

Total operating revenue and other income

  720,002   18,691   738,693 

Other non-operating income

  13   623   636 

Total revenue and other income

  720,015   19,314   739,329 

Interest expense

  (100,146)  (1,068)  (101,214)

Provision for credit losses

  (214)  (2,236)  (2,450)

Changes in fair value of loans

  (395,122)     (395,122)

Net margin

  224,533   16,010   240,543 

Operating expenses:

            

Salaries and benefits

  (26,419)  (2,465)  (28,884)

Card and loan servicing

  (59,621)  (6,616)  (66,237)

Marketing and solicitation

  (45,239)  (44)  (45,283)

Depreciation and amortization

  (1,644)  (38)  (1,682)

Other

  (15,219)  (2,224)  (17,443)

Total operating expenses

  (148,142)  (11,387)  (159,529)

Income before income taxes

 $76,391  $4,623  $81,014 

Total assets

 $3,555,841  $87,334  $3,643,175