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Medallion Financial Corp. Reports 2022 Second Quarter Results

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Medallion Financial Corp.
Medallion Financial Corp.

NEW YORK, July 27, 2022 (GLOBE NEWSWIRE) -- Medallion Financial Corp. (NASDAQ: MFIN, “Medallion” or the “Company”), a finance company that originates and services loans in various consumer and commercial industries, along with offering loan origination services to fintech strategic partners, announced today its results for the quarter ended June 30, 2022.

2022 Second Quarter Highlights

  • Net income grew 30% to $13.3 million, or $0.54 per share, compared to $10.3 million, or $0.41 per share, in the prior year quarter.

  • Net interest income grew 32% to $38.9 million from $29.5 million in the prior year quarter.

  • Net interest margin was 9.07%, compared to 8.84% in the prior year quarter.

  • Loan originations increased 45% to $305.0 million from $210.9 million in the prior year quarter.

  • Total assets exceeded $2 billion for the first time, ending the quarter at $2.1 billion.

  • A cash dividend of $0.08 per share was paid on May 31, 2022.

  • The Company repurchased 1,272,150 shares of its common stock during the quarter for $10 million.

Executive Commentary – Andrew Murstein, President of Medallion

“We are very pleased with our second quarter results. The continued growth in our consumer and commercial lending businesses generated positive results. Loan originations were 45% higher this quarter over last year, which helped our recreation loan portfolio grow 24%, our home improvement loan portfolio grow 43%, and our commercial loan portfolio grow 39%. We also returned money to our shareholders with the repurchase of $10 million of our common stock under our $35 million stock repurchase program and the declaration and payment of an $0.08 per share dividend.”

Loan Detail

  • During the quarter, net charge-offs were $0.7 million, compared to $10.2 million in the prior year quarter.

  • Loans 90 days or more past due were 0.3% of loans at June 30, 2022, compared to 0.2% at June 30, 2021.

Business Segment Highlights

Consumer Lending Segments

  • Originations grew to $275.4 million during the quarter, or 40% over the $197.5 million of the prior year quarter.

  • Consumer loans were $1.6 billion as of June 30, 2022, compared to $1.3 billion a year ago.

  • Consumer loans were 94% of total loans as of June 30, 2022, similar to a year ago.

  • The loan portfolios grew 24% for recreation and 43% for home improvement from June 30, 2021.

  • Net interest income grew 16% to $38.4 million for the quarter, from $33.1 million in the prior year quarter.

  • The average interest rate on the portfolio was 12.33% at quarter-end, compared to 13.14% a year ago.

  • Consumer loans 90 days or more past due were $4.2 million, or 0.3% of gross consumer loans, as of June 30, 2022, compared to $2.8 million, or 0.2%, a year ago. Delinquencies continued to be lower than historical averages.

Commercial Lending Segment

  • The Company originated $19.3 million in loans during the second quarter, compared to $11.1 million in the prior year quarter.

  • Commercial loans were $96.9 million at June 30, 2022, compared to $69.5 million a year ago.

  • The average interest rate on the portfolio was 12.33%, compared to 12.69% a year ago.

Medallion Lending Segment

  • The Company collected $13.1 million in the second quarter.

  • Total net medallion exposure declined to $30.8 million (comprised of $4.7 million of loans net of allowance for loan losses and $26.1 million of loan collateral in process of foreclosure), representing less than 2% of the Company’s total assets, as of June 30, 2022.

Capital Allocation

Quarterly Dividend

  • The Board of Directors declared a quarterly cash dividend of $0.08 per share payable on August 31, 2022, to shareholders of record at the close of business on August 15, 2022.

Stock Repurchase Plan

  • During the second quarter, the Company repurchased 1,272,150 shares of its common stock at an average cost of $7.84 per share, for a total of $10 million.

Conference Call Information

The Company will host a conference call to discuss its second quarter financial results tomorrow, Thursday, July 28, 2022, at 9:00 a.m. Eastern time.

The Company will release an updated quarterly supplement presentation in conjunction with the earnings call. The presentation is now available at www.medallion.com and will also be discussed during the call.

  • Conference Call Dial-In: (800) 919-0370 (U.S.) or (212) 231-2915 (international).

  • Live Webcast: available on Medallion’s website at http://www.medallion.com/investors.html

  • Call Replay: available following the end of the call through Thursday, August 4, 2022, by telephone at (844) 512-2921 (U.S.) or (412) 317-6671 (international), passcode 2201 9899.

  • Webcast Replay: available at http://www.medallion.com/investors.html until the next quarter’s results are announced.

About Medallion Financial Corp.
Medallion Financial Corp. (NASDAQ:MFIN) and its subsidiaries originate and service a growing portfolio of consumer loans and mezzanine loans in various industries. Key industries served include recreation (towable RVs and marine) and home improvement (replacement roofs, swimming pools, and windows). Medallion Financial Corp. is headquartered in New York City, NY, and its largest subsidiary, Medallion Bank, is headquartered in Salt Lake City, Utah. For more information, please visit www.medallion.com.

Forward-Looking Statements
Please note that this press release contains forward-looking statements that involve risks and uncertainties relating to business performance, cash flow, net interest income and expenses, other expenses, earnings, growth, and our growth strategy. These statements are often, but not always, made using words or phrases such as “will” and “continue” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These statements relate to future public announcements of our earnings, expectations regarding medallion loan portfolio, the potential for future asset growth and market share opportunities. Medallion’s actual results may differ significantly from the results discussed in such forward-looking statements. For example, statements about the effects of the COVID-19 pandemic on Medallion’s business, operations, financial performance and prospects constitute forward-looking statements and are subject to the risk that the actual impacts may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond Medallion’s control, the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on Medallion, its customers and third parties.  In addition to risks related to the ongoing COVID-19 pandemic, for a description of certain risks to which Medallion is or may be subject, including risks related to the pending SEC litigation, please refer to the factors discussed under the heading “Risk Factors” in Medallion’s 2021 Annual Report on Form 10-K.

Company Contact:

Investor Relations
212-328-2176
InvestorRelations@medallion.com


MEDALLION FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

 

 

 

 

 

 

 

 

(Dollars in thousands, except share and per share data)

 

June 30,
2022

 

 

December 31,
2021

 

 

June 30,
2021

 

Assets

 

 

 

 

 

 

 

 

 

Cash, cash equivalents, and federal funds sold

$

126,330

 

 

$

124,484

 

 

$

91,553

 

Equity investments and investment securities

 

61,300

 

 

 

54,498

 

 

 

58,397

 

Loans

 

1,734,621

 

 

 

1,488,924

 

 

 

1,340,567

 

Allowance for loan losses

 

(59,152

)

 

 

(50,166

)

 

 

(46,946

)

Net loans receivable

 

1,675,469

 

 

 

1,438,758

 

 

 

1,293,621

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan collateral in process of foreclosure

 

26,974

 

 

 

37,430

 

 

 

49,039

 

Goodwill and intangible assets

 

173,562

 

 

 

174,283

 

 

 

201,171

 

Other assets

 

48,496

 

 

 

43,604

 

 

 

45,966

 

Total assets

$

2,112,131

 

 

$

1,873,057

 

 

$

1,739,747

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Deposits

$

1,469,241

 

 

$

1,250,880

 

 

$

1,152,068

 

Long-term debt

 

219,377

 

 

 

219,973

 

 

 

214,971

 

Accounts payable and other liabilities

 

27,546

 

 

 

19,113

 

 

 

23,398

 

Deferred tax liabilities and other tax payables

 

24,048

 

 

 

18,210

 

 

 

8,591

 

Operating lease liabilities

 

9,078

 

 

 

9,053

 

 

 

9,889

 

Short-term borrowings

 

 

 

 

 

 

 

8,016

 

Total liabilities

 

1,749,290

 

 

 

1,517,229

 

 

 

1,416,933

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

294,053

 

 

 

287,040

 

 

 

250,718

 

Non-controlling interest in consolidated subsidiaries

 

68,788

 

 

 

68,788

 

 

 

72,096

 

Total equity

 

362,841

 

 

 

355,828

 

 

 

322,814

 

Total liabilities and equity

$

2,112,131

 

 

$

1,873,057

 

 

$

1,739,747

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares outstanding

 

24,239,320

 

 

 

25,173,386

 

 

 

25,061,764

 

Book value per share

$

12.13

 

 

$

11.40

 

 

$

10.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MEDALLION FINANCIAL CORP.‌
CONSOLIDATED STATEMENTS OF OPERATIONS‌
(UNAUDITED)

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

(Dollars in thousands, except share and per share data)

2022

 

 

2021

 

 

2022

 

 

2021

 

Total Interest Income

$

47,111

 

 

$

37,375

 

 

$

90,414

 

 

$

74,455

 

Total Interest Expense

 

8,230

 

 

 

7,884

 

 

 

15,605

 

 

 

16,292

 

Net Interest Income

 

38,881

 

 

 

29,491

 

 

 

74,809

 

 

 

58,163

 

Provision (benefit) for loan losses

 

7,759

 

 

 

(682

)

 

 

10,999

 

 

 

2,336

 

Net interest income after provision for loan losses

 

31,122

 

 

 

30,173

 

 

 

63,810

 

 

 

55,827

 

Other income (loss)

 

 

 

 

 

 

 

 

 

 

 

Gain on equity investments

 

4,241

 

 

 

3,205

 

 

 

4,108

 

 

 

3,205

 

Write-down of loan collateral in process of foreclosure

 

(128

)

 

 

(2,162

)

 

 

(514

)

 

 

(4,947

)

Gain on extinguishment of debt

 

 

 

2,859

 

 

 

 

 

4,626

 

Sponsorship and race winnings, net

 

 

 

4,345

 

 

 

 

 

6,818

 

Other income (loss)

 

3,245

 

 

 

(480

)

 

 

5,293

 

 

 

1

 

Total other income, net

 

7,358

 

 

 

7,767

 

 

 

8,887

 

 

 

9,703

 

Other expenses

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

7,730

 

 

 

7,901

 

 

 

15,298

 

 

 

13,586

 

Professional fees

 

4,392

 

 

 

2,224

 

 

 

8,384

 

 

 

2,730

 

Other expenses

 

3,573

 

 

 

3,649

 

 

 

6,749

 

 

 

7,098

 

Loan servicing fees

 

2,119

 

 

 

1,731

 

 

 

4,072

 

 

 

3,378

 

Collection costs

 

999

 

 

 

1,641

 

 

 

2,342

 

 

 

2,874

 

Race team related expenses

 

 

 

2,674

 

 

 

 

 

4,796

 

Total other expenses

 

18,813

 

 

 

19,820

 

 

 

36,845

 

 

 

34,462

 

Income before income taxes

 

19,667

 

 

 

18,120

 

 

 

35,852

 

 

 

31,068

 

Income tax provision

 

4,856

 

 

 

6,528

 

 

 

9,687

 

 

 

10,406

 

Net income after taxes

 

14,811

 

 

 

11,592

 

 

 

26,165

 

 

 

20,662

 

Less: income attributable to the non-controlling interest

 

1,511

 

 

 

1,325

 

 

 

3,024

 

 

 

1,964

 

Total net income attributable to Medallion Financial Corp.

$

13,300

 

 

$

10,267

 

 

$

23,141

 

 

$

18,698

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per common share:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.55

 

 

$

0.42

 

 

$

0.95

 

 

$

0.76

 

Diluted

$

0.54

 

 

$

0.41

 

 

$

0.93

 

 

$

0.75

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

24,153,015

 

 

 

24,595,822

 

 

 

24,459,870

 

 

 

24,557,511

 

Diluted

 

24,421,867

 

 

 

24,950,512

 

 

 

24,751,012

 

 

 

24,923,023

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared

$

0.08

 

 

$

0.00

 

 

$

0.16

 

 

$

0.00