Medallion Financial Corp. Reports 2023 Second Quarter Results

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Medallion Financial Corp.

NEW YORK, July 24, 2023 (GLOBE NEWSWIRE) -- Medallion Financial Corp. (NASDAQ: MFIN, “Medallion” or the “Company”), a specialty 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, 2023.

2023 Second Quarter Highlights

  • Net income was $14.2 million, or $0.62 per share, compared to $13.3 million, or $0.54 per share, in the prior year quarter.

  • $10.6 million of cash collected on taxi medallion-related assets, with recoveries resulting in earnings of $0.22 per share.

  • Net interest income grew 20% to $46.7 million from $38.9 million in the prior year quarter.

  • Net interest margin on net loans was 8.77%, compared to 9.07% in the prior year quarter, and on gross loans it was 8.48%, compared to 8.78% in the prior year quarter.

  • Loan originations were $346 million, compared to $305 million in the prior year quarter.

  • The credit loss provision increased to $8.5 million from $7.8 million in the prior year quarter.

  • Total assets grew to an all-time high of $2.5 billion at June 30, 2023, a 19% increase over June 30, 2022.

  • The Company declared and paid a quarterly cash dividend of $0.08 per share.

Executive Commentary – Andrew Murstein, President of Medallion

“We are very pleased with our second quarter results. Net interest income grew 20% over the prior year quarter and importantly grew 7% from just one quarter ago. As we have been saying since interest rates started to increase, we believe we will be able to manage through the current interest rate environment by growing our loan portfolio and passing along a portion of those increases. Our consumer teams originated over $300 million of loans in the quarter, which is a record second quarter for us, and led to our loan portfolio exceeding $2 billion for the first time in our history. We had another strong quarter of cash collections related to our medallion assets, with over $10 million collected. This helped us deliver one of our strongest quarters ever, with earnings per share of $0.62.”

Business Segment Highlights

Recreation Lending Segment

  • Originations were $190.0 million during the quarter, compared to $170.2 million a year ago.

  • Recreation loans grew 21% to $1.3 billion as of June 30, 2023, compared to $1.1 billion a year ago.

  • Recreation loans were 62% of total loans as of June 30, 2023, compared to 63% a year ago.

  • Net interest income grew 14% to $33.5 million for the quarter, from $29.4 million in the prior year quarter.

  • The average interest rate was 14.62% at quarter-end, compared to 14.23% a year ago.

  • Recreation loans 90 days or more past due were $5.0 million, or 0.39% of gross recreation loans, as of June 30, 2023, compared to $3.8 million, or 0.36%, a year ago.

Home Improvement Lending Segment

  • Originations were $117.0 million during the quarter, compared to $105.2 million a year ago.

  • Home improvement loans grew 38% to $728.5 million as of June 30, 2023, compared to $526.3 million a year ago.

  • Home improvement loans were 34% of total loans as of June 30, 2023, compared to 30% a year ago.

  • Net interest income grew 24% to $11.1 million for the quarter, from $9.0 million in the prior year quarter.

  • The average interest rate was 9.21% at quarter-end, compared to 8.50% a year ago.

  • Home improvement loans 90 days or more past due were $1.1 million, or 0.16% of gross home improvement loans, as of June 30, 2023, compared to $0.4 million, or 0.07%, a year ago.

Commercial Lending Segment

  • Commercial loans were $92.6 million at June 30, 2023, compared to $96.9 million a year ago.

  • The average interest rate on the portfolio was 12.64%, compared to 12.33% a year ago.

Medallion Lending Segment

  • The Company collected $10.6 million of cash on taxi medallion-related assets during the quarter.

  • Total net taxi medallion assets declined to $17.7 million (comprised of $1.6 million of loans net of allowance for credit losses and $16.1 million of loan collateral in process of foreclosure), a 43% reduction from a year ago, and represented less than 1% of the Company’s total assets, as of June 30, 2023.

Capital Allocation

Quarterly Dividend

  • The Board of Directors declared a quarterly cash dividend of $0.08 per share payable on August 31, 2023 to shareholders of record at the close of business on August 15, 2023.

Conference Call Information

The Company will host a conference call to discuss its second quarter financial results tomorrow, Tuesday, July 25, 2023, at 9:00 a.m. Eastern time.

As part of its earnings release, the Company has updated its quarterly supplement presentation, which is now available at www.medallion.com.

How to Participate

  • Date: Tuesday, July 25, 2023

  • Time: 9:00 a.m. Eastern time

  • U.S. dial-in number: (877) 407-0789

  • International dial-in number: (201) 689-8562

  • Live webcast: Link to Webcast of 2Q23 Earnings Call

A link to the live audio webcast of the conference call will also be available at the Company’s IR website.

Replay Information

The webcast replay will be available at the Company's IR website until the next quarter’s results are announced.

The conference call replay will be available following the end of the call through Tuesday, August 1.

  • U.S. dial-in number: (844) 512-2921

  • International dial-in number: (412) 317-6671

  • Passcode: 1374 0079

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, the impact of the pending SEC litigation, expectations regarding our loan portfolio, including collections on our medallion loans, 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 current economy, whether inflation or the risk of recession, 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.  In addition to risks relating to the current economy, 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 2022 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, 
2023

 

December 31, 
2022

 

June 30, 
2022

Assets

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents, and federal funds sold

 

$

124,554

 

 

$

105,598

 

 

$

126,330

 

Equity investments and investment securities

 

 

65,096

 

 

 

58,785

 

 

 

61,300

 

Loans

 

 

2,156,998

 

 

 

1,916,953

 

 

 

1,734,621

 

Allowance for credit losses

 

 

(74,971

)

 

 

(63,845

)

 

 

(59,152

)

Net loans receivable

 

 

2,082,027

 

 

 

1,853,108

 

 

 

1,675,469

 

Goodwill and intangible assets

 

 

172,118

 

 

 

172,838

 

 

 

173,562

 

Loan collateral in process of foreclosure

 

 

16,803

 

 

 

21,819

 

 

 

26,974

 

Other assets

 

 

58,539

 

 

 

47,731

 

 

 

48,496

 

Total assets

 

$

2,519,137

 

 

$

2,259,879

 

 

$

2,112,131

 

Liabilities

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

1,813,785

 

 

$

1,607,110

 

 

$

1,469,241

 

Long-term debt

 

 

178,128

 

 

 

214,320

 

 

 

219,377

 

Short-term borrowings

 

 

67,880

 

 

 

5,000

 

 

 

 

Deferred tax liabilities and other tax payables

 

 

26,840

 

 

 

26,753

 

 

 

24,048

 

Operating lease liabilities

 

 

7,629

 

 

 

8,408

 

 

 

9,078

 

Accounts payable and other liabilities

 

 

37,111

 

 

 

27,764

 

 

 

27,546

 

Total liabilities

 

 

2,131,373

 

 

 

1,889,355

 

 

 

1,749,290

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

318,976

 

 

 

301,736

 

 

 

294,053

 

Non-controlling interest in consolidated subsidiaries

 

 

68,788

 

 

 

68,788

 

 

 

68,788

 

Total equity

 

 

387,764

 

 

 

370,524

 

 

 

362,841

 

Total liabilities and equity

 

$

2,519,137

 

 

$

2,259,879

 

 

$

2,112,131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares outstanding

 

 

23,345,017

 

 

 

23,061,673

 

 

 

24,239,320

 

Book value per share

 

$

13.66

 

 

$

13.08

 

 

$

12.13

 

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)

 

2023

 

2022

 

2023

 

2022

Total interest income

 

$

61,726

 

 

$

47,111

 

 

$

117,568

 

 

$

90,414

 

Total interest expense

 

 

15,035

 

 

 

8,230

 

 

 

27,275

 

 

 

15,605

 

Net interest income

 

 

46,691

 

 

 

38,881

 

 

 

90,293

 

 

 

74,809

 

Provision for loan losses

 

 

8,476

 

 

 

7,759

 

 

 

12,514

 

 

 

10,999

 

Net interest income after provision for loan losses

 

 

38,215

 

 

 

31,122

 

 

 

77,779

 

 

 

63,810

 

Other income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of loans and medallions

 

 

1,306

 

 

 

2,667

 

 

 

3,161

 

 

 

4,543

 

Gain on equity investments

 

 

99

 

 

 

4,241

 

 

 

9

 

 

 

4,108

 

Write-down of loan collateral in process of foreclosure

 

 

(21

)

 

 

(128

)

 

 

(273

)

 

 

(514

)

Other income

 

 

558

 

 

 

578

 

 

 

1,128

 

 

 

750

 

Total other income, net

 

 

1,942

 

 

 

7,358

 

 

 

4,025

 

 

 

8,887

 

Other expenses

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

9,339

 

 

 

7,730

 

 

 

18,175

 

 

 

15,298

 

Loan servicing fees

 

 

2,361

 

 

 

2,119

 

 

 

4,583

 

 

 

4,072

 

Collection costs

 

 

1,608

 

 

 

999

 

 

 

3,146

 

 

 

2,342

 

Professional fees

 

 

1,368

 

 

 

4,392

 

 

 

3,075

 

 

 

8,384

 

Other expenses

 

 

4,327

 

 

 

3,573

 

 

 

8,416

 

 

 

6,749

 

Total other expenses

 

 

19,003

 

 

 

18,813

 

 

 

37,395

 

 

 

36,845

 

Income before income taxes

 

 

21,154

 

 

 

19,667

 

 

 

44,409

 

 

 

35,852

 

Income tax provision

 

 

5,472

 

 

 

4,856

 

 

 

11,854

 

 

 

9,687

 

Net income after taxes

 

 

15,682

 

 

 

14,811

 

 

 

32,555

 

 

 

26,165

 

Less: income attributable to the non-controlling interest

 

 

1,512

 

 

 

1,511

 

 

 

3,024

 

 

 

3,024

 

Total net income attributable to Medallion Financial Corp.

 

$

14,170

 

 

$

13,300

 

 

$

29,531

 

 

$

23,141

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.63

 

 

$

0.55

 

 

$

1.32

 

 

$

0.95

 

Diluted

 

$

0.62

 

 

$

0.54

 

 

$

1.29

 

 

$

0.93

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

22,488,463

 

 

 

24,153,015

 

 

 

22,416,089

 

 

 

24,459,870

 

Diluted

 

 

22,853,927

 

 

 

24,421,867

 

 

 

22,915,094

 

 

 

24,751,012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.08

 

 

$

0.08

 

 

$

0.16

 

 

$

0.16

 


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