MFIN Medallion Financial Corporation

Medallion Bank (Nasdaq: MBNKP, the “Bank”), an FDIC-insured bank providing consumer loans for the purchase of recreational vehicles, boats, and home improvements, along with loan origination services to fintech strategic partners, announced today its results for the quarter ended March 31, 2024. The Bank is a wholly owned subsidiary of Medallion Financial Corp. (Nasdaq: MFIN).

2024 First Quarter Highlights

• Net income of $14.5 million, compared to $21.4 million in the prior year quarter.
• Net interest income of $48.2 million with a net interest margin of 8.59%, compared to $44.3 million and 9.05% in the prior year quarter.
• Total provision for credit losses was $17.0 million, compared to $3.9 million in the prior year quarter. Total provision for credit losses included $0.9 million of net taxi medallion recoveries, compared to $7.0 million of net taxi medallion recoveries in the prior year quarter.
• Annualized net charge-offs were 3.38% of average loans outstanding, compared to 2.49% in the prior year quarter.
• Annualized ROA and ROE were 2.59% and 16.47%, respectively, compared to 4.36% and 28.38% for the prior year period.
• The total loan portfolio grew 12% from March 31, 2023 to $2.1 billion as of March 31, 2024.
• Total assets were $2.3 billion and the Tier 1 leverage ratio was 16.43% at March 31, 2024.

Donald Poulton, President and Chief Executive Officer of Medallion Bank, stated, “We continue to be pleased with our earnings, growth and credit quality. Net interest income growth of 9% over the prior year quarter followed from our asset growth. Loan losses reflected the seasonality of our consumer lending business, starting relatively high early in the quarter and falling late in the quarter as delinquency declined from the December peak. The provision for credit losses, which was the major distinction between the 2023 and 2024 first quarters, was affected by the absence of medallion loan recoveries, and the higher seasonal loan losses. Without the significant benefits from taxi medallion recoveries, our ROA and ROE were lower than the prior year but remained a healthy 2.6% and 16.5%, respectively. We maintained our relatively tight credit standards, in part as a response to the effects of lifetime expected loss reserving. Our focus continues to be prudent growth, credit risk and balance sheet management.”

Recreation Lending Segment

• The Bank’s recreation loan portfolio grew 13% to $1.365 billion as of March 31, 2024, compared to $1.213 billion at March 31, 2023.
• Net interest income was $35.6 million, compared to $32.8 million in the prior year quarter.
• Recreation loans were 64% of loans receivable as of March 31, 2024, essentially unchanged from 64% at March 31, 2023.
• Annualized net charge-offs were 4.36% of average recreation loans outstanding, compared to 3.33% in the prior year quarter.
• The provision for credit losses was $17.0 million, compared to $7.8 million in the prior year quarter.

Home Improvement Lending Segment

• The Bank’s home improvement loan portfolio grew 12% to $752.3 million as of March 31, 2024, compared to $669.6 million at March 31, 2023.
• Net interest income was $12.4 million, compared to $10.8 million in the prior year quarter.
• Home improvement loans were 36% of loans receivable as of March 31, 2024, essentially unchanged from 36% at March 31, 2023.
• Annualized net charge-offs were 2.12% of average home improvement loans outstanding, compared to 0.80% in the prior year quarter.
• The provision for credit losses was $0.9 million, compared to $3.1 million in the prior year quarter.

Series F Preferred Stock Dividend

On April 25, 2024, the Bank’s Board of Directors declared a quarterly cash dividend of $0.50 per share on the Bank’s Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series F, which trades on the Nasdaq Capital Market under the ticker symbol “MBNKP.” The dividend is payable on July 1, 2024, to holders of record at the close of business on June 15, 2024.

About Medallion Bank

Medallion Bank specializes in providing consumer loans for the purchase of recreational vehicles, boats, and home improvements, along with loan origination services to fintech strategic partners. The Bank works directly with thousands of dealers, contractors and financial service providers serving their customers throughout the United States. Medallion Bank is a Utah-chartered, FDIC-insured industrial bank headquartered in Salt Lake City and is a wholly owned subsidiary of Medallion Financial Corp. (Nasdaq: MFIN).

For more information, visit www.medallionbank.com

Please note that this press release contains forward-looking statements that involve risks and uncertainties relating to business performance, cash flow, costs, sales, net investment income, earnings, returns and growth. These statements are often, but not always, made through the use of words or phrases such as “continues” or the negative version of this word or other comparable words or phrases of a future or forward-looking nature. These statements may relate to our future earnings, returns, capital levels, sources of funding, growth prospects, asset quality and pursuit and execution of our strategy. Medallion Bank’s actual results may differ significantly from the results discussed in such forward-looking statements. For a description of certain risks to which Medallion Bank is or may be subject, please refer to the factors discussed under the captions “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” included in Medallion Bank’s Form 10-K for the year ended December 31, 2023, and in its Quarterly Reports on Form 10-Q, filed with the FDIC. Medallion Bank’s Form 10-K, Form 10-Qs and other FDIC filings are available in the Investor Relations section of Medallion Bank’s website. Medallion Bank’s financial results for any period are not necessarily indicative of Medallion Financial Corp.’s results for the same period.  

Company Contact:Investor Relations212-328-2176InvestorRelations@medallion.com

MEDALLION BANK STATEMENTS OF OPERATIONS (UNAUDITED)
	For the Three Months Ended March 31,
(In thousands)		2024				2023
Total interest income	$	62,968			$	52,934
Total interest expense		14,753				8,600
Net interest income		48,215				44,334
Provision for credit losses		17,002				3,859
Net interest income after provision for loan losses		31,213				40,475
Other non-interest income		602				32
Non-interest expense
Salaries and benefits		4,984				4,392
Loan servicing		2,867				2,815
Collection costs		1,404				1,458
Regulatory fees		977				682
Professional fees		432				667
Information Technology		267				231
Occupancy and equipment		207				202
Other		752				870
Total non-interest expense		11,890				11,317
Income before income taxes		19,925				29,190
Provision for income taxes		5,445				7,765
Net income	$	14,480			$	21,425
Less: Preferred stock dividends		1,512				1,512
Net income attributable to common shareholder	$	12,968			$	19,913

MEDALLION BANKBALANCE SHEETS(UNAUDITED)
(In thousands)	March 31, 2024				December 31, 2023				March 31, 2023
Assets
Cash and federal funds sold	$	136,705			$	110,043			$	113,257
Investment securities, available-for-sale		53,038				54,282				48,529
Loans, inclusive of net deferred loan acquisition fees and costs		2,121,180				2,100,338				1,887,627
Allowance for losses		(78,648	)			(79,283	)			(65,661	)
Loans, net		2,042,532				2,021,055				1,821,966
Loan collateral in process of foreclosure		3,263				4,165				9,610
Fixed assets and right-of-use lease assets, net		8,417				8,140				6,983
Deferred tax assets		12,500				12,761				9,788
Accrued interest receivable and other assets		50,061				51,610				48,501
Total assets	$	2,306,516			$	2,262,056			$	2,058,634
Liabilities and Shareholders’ Equity
Liabilities
Deposits and other funds borrowed	$	1,899,061			$	1,866,657			$	1,695,300
Accrued interest payable		4,191				4,029				2,455
Income tax payable		26,336				21,219				28,294
Other liabilities		17,837				17,509				18,212
Due to affiliates		481				849				618
Total liabilities		1,947,906				1,910,263				1,744,879
Shareholder’s Equity
Series E Preferred stock		26,303				26,303				26,303
Series F Preferred stock		42,485				42,485				42,485
Common stock		1,000				1,000				1,000
Additional paid in capital		77,500				77,500				77,500
Accumulated other comprehensive loss, net of tax		(4,680	)			(4,529	)			(3,676	)
Retained earnings		216,002				209,034				170,143
Total shareholders’ equity		358,610				351,793				313,755
Total liabilities and shareholders’ equity	$	2,306,516			$	2,262,056			$	2,058,634