Medallion Bank Reports 2023 Third Quarter Results and Declares Series F Preferred Stock Dividend
SALT LAKE CITY, Oct. 30, 2023 (GLOBE NEWSWIRE) -- 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 September 30, 2023. The Bank is a wholly owned subsidiary of Medallion Financial Corp. (Nasdaq: MFIN).
2023 Third Quarter Highlights
Quarterly net income of $17.2 million, compared to $18.3 million in the prior year quarter.
Net interest income of $48.7 million with a net interest margin of 8.7%, compared to $43.0 million and 9.3% in the prior year quarter.
Total provision for credit losses was $14.0 million, compared to $8.2 million in the prior year quarter.
Annualized net charge-offs were 2.0% of average loans outstanding, compared to 1.3% in the prior year quarter.
Annualized ROA and ROE were 3.06% and 20.46%, respectively, compared to 3.92% and 25.31% for the prior year period.
The total loan portfolio grew 19.3% from September 30, 2022 to $2.102 billion as of September 30, 2023.
Total assets were $2.258 billion and the Tier 1 leverage ratio was 16.08% at September 30, 2023.
Donald Poulton, President and Chief Executive Officer of Medallion Bank, stated, “Measured loan portfolio growth contributed to strong quarterly earnings of $17 million. The restrictive underwriting requirements we introduced over the last two quarters had the effect of moderating third quarter loan volumes in both recreation and home improvement lending. Compared to the prior year quarter, the provision for credit losses increased as consumer loan losses continued trending to more normal levels. Our ability to access brokered deposits, which has always been our primary source of deposits, remains unhindered. We believe we are positioned prudently for both the immediate and long-term future.”
Recreation Lending Segment
The Bank’s recreation loan portfolio grew 14.8% to $1.346 billion as of September 30, 2023, compared to $1.173 billion at September 30, 2022.
Net interest income was $36.5 million, compared to $32.5 million in the prior year quarter.
Recreation loans were 64.1% of loans receivable as of September 30, 2023, compared to 66.6% at September 30, 2022.
Annualized net charge-offs were 2.7% of average recreation loans outstanding, compared to 1.8% in the prior year quarter.
The provision for recreation credit losses was $11.9 million, compared to a $7.2 million provision for loan losses in the prior year quarter.
Home Improvement Lending Segment
The Bank’s home improvement loan portfolio grew 30.5% to $750.5 million as of September 30, 2023, compared to $575.3 million at September 30, 2022.
Net interest income was $11.9 million, compared to $10.1 million in the prior year quarter.
Home improvement loans were 35.7% of loans receivable as of September 30, 2023, compared to 32.7% at September 30, 2022.
Annualized net charge-offs were 1.6% of average home improvement loans outstanding, compared to 0.9% in the prior year quarter.
The provision for home improvement credit losses was $3.9 million, compared to a $2.0 million provision for loan losses in the prior year quarter.
Series F Preferred Stock Dividend
On October 26, 2023, 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 January 2, 2024, to holders of record at the close of business on December 15, 2023.
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 “believe” or the negative version of this word or other comparable words or phrases of a future or forward-looking nature, such as “continuing.” 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, 2022, 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. In addition, 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 Relations
212-328-2176
InvestorRelations@medallion.com
MEDALLION BANK | |||||||||||||||
| For the Three Months Ended September 30, |
| For the Nine Months Ended September 30, | ||||||||||||
(In thousands) |
| 2023 |
|
|
| 2022 |
|
|
| 2023 |
|
|
| 2022 |
|
Total interest income | $ | 62,193 |
|
| $ | 49,249 |
|
| $ | 173,414 |
|
| $ | 135,499 |
|
Total interest expense |
| 13,446 |
|
|
| 6,240 |
|
|
| 33,384 |
|
|
| 15,307 |
|
Net interest income |
| 48,747 |
|
|
| 43,009 |
|
|
| 140,030 |
|
|
| 120,192 |
|
|
|
|
|
|
|
|
| ||||||||
Provision for credit losses |
| 14,024 |
|
|
| 8,171 |
|
|
| 26,740 |
|
|
| 16,301 |
|
Net interest income after provision for loan losses |
| 34,723 |
|
|
| 34,838 |
|
|
| 113,290 |
|
|
| 103,891 |
|
|
|
|
|
|
|
|
| ||||||||
Other income (loss) |
|
|
|
|
|
|
| ||||||||
Write-downs of loan collateral in process of foreclosure and other assets |
| (30 | ) |
|
| (94 | ) |
|
| (303 | ) |
|
| (533 | ) |
Other non-interest income |
| 998 |
|
|
| 409 |
|
|
| 1,566 |
|
|
| 957 |
|
Total other income (loss) |
| 968 |
|
|
| 315 |
|
|
| 1,263 |
|
|
| 424 |
|
|
|
|
|
|
|
|
| ||||||||
Non-interest expense |
|
|
|
|
|
|
| ||||||||
Salaries and benefits |
| 5,024 |
|
|
| 3,686 |
|
|
| 14,004 |
|
|
| 10,656 |
|
Loan servicing |
| 3,007 |
|
|
| 2,816 |
|
|
| 8,723 |
|
|
| 8,272 |
|
Collection costs |
| 1,509 |
|
|
| 1,462 |
|
|
| 4,473 |
|
|
| 3,940 |
|
Regulatory fees |
| 1,021 |
|
|
| 610 |
|
|
| 2,484 |
|
|
| 1,621 |
|
Professional fees |
| 450 |
|
|
| 503 |
|
|
| 1,612 |
|
|
| 1,308 |
|
Occupancy and equipment |
| 211 |
|
|
| 214 |
|
|
| 625 |
|
|
| 584 |
|
Other |
| 1,091 |
|
|
| 946 |
|
|
| 3,455 |
|
|
| 3,092 |
|
Total non-interest expense |
| 12,313 |
|
|
| 10,237 |
|
|
| 35,376 |
|
|
| 29,473 |
|
|
|
|
|
|
|
|
| ||||||||
Income before income taxes |
| 23,378 |
|
|
| 24,916 |
|
|
| 79,177 |
|
|
| 74,842 |
|
Provision for income taxes |
| 6,222 |
|
|
| 6,644 |
|
|
| 21,268 |
|
|
| 19,927 |
|
|
|
|
|
|
|
|
| ||||||||
Net income | $ | 17,156 |
|
|
| 18,272 |
|
| $ | 57,909 |
|
|
| 54,915 |
|
MEDALLION BANK | |||||||||||
(In thousands) | September 30, 2023 |
| December 31, 2022 |
| September 30, 2022 | ||||||
Assets |
|
|
|
|
| ||||||
Cash and federal funds sold | $ | 100,192 |
|
| $ | 74,078 |
|
| $ | 75,107 |
|
Investment securities, available-for-sale |
| 53,175 |
|
|
| 48,492 |
|
|
| 48,354 |
|
Loans, inclusive of net deferred loan acquisition costs |
| 2,101,786 |
|
|
| 1,822,737 |
|
|
| 1,761,563 |
|
Allowance for losses |
| (75,094 | ) |
|
| (61,630 | ) |
|
| (60,792 | ) |
Loans, net |
| 2,026,692 |
|
|
| 1,761,107 |
|
|
| 1,700,771 |
|
|
|
|
|
|
| ||||||
Loan collateral in process of foreclosure |
| 7,658 |
|
|
| 10,381 |
|
|
| 12,200 |
|
Fixed assets and right-of-use lease assets, net |
| 7,705 |
|
|
| 6,600 |
|
|
| 6,188 |
|
Deferred tax assets |
| 11,634 |
|
|
| 9,241 |
|
|
| 9,402 |
|
Accrued interest receivable and other assets |
| 51,000 |
|
|
| 40,928 |
|
|
| 42,806 |
|
Total assets | $ | 2,258,056 |
|
| $ | 1,950,827 |
|
| $ | 1,894,828 |
|
Liabilities and Shareholders’ Equity |
|
|
|
|
| ||||||
Liabilities |
|
|
|
|
| ||||||
Deposits and other funds borrowed | $ | 1,865,088 |
|
| $ | 1,607,110 |
|
| $ | 1,555,832 |
|
Accrued interest payable |
| 3,052 |
|
|
| 2,422 |
|
|
| 1,882 |
|
Income tax payable |
| 30,472 |
|
|
| 23,165 |
|
|
| 30,357 |
|
Other liabilities |
| 18,405 |
|
|
| 10,614 |
|
|
| 12,731 |
|
Due to affiliates |
| 942 |
|
|
| 861 |
|
|
| 795 |
|
Total liabilities |
| 1,917,959 |
|
|
| 1,644,172 |
|
|
| 1,601,597 |
|
|
|
|
|
|
| ||||||
Total shareholders’ equity |
| 340,097 |
|
|
| 306,655 |
|
|
| 293,231 |
|
Total liabilities and shareholders’ equity | $ | 2,258,056 |
|
| $ | 1,950,827 |
|
| $ | 1,894,828 |
|
