Medallion Financial Corp. Reports 2023 Third Quarter Results
NEW YORK, Oct. 30, 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 September 30, 2023.
2023 Third Quarter Highlights
Net income was $11.2 million, or $0.48 per share, compared to $7.6 million, or $0.32 per share, in the prior year quarter.
$5.7 million of cash was collected on taxi medallion-related assets, with recoveries resulting in earnings of $0.10 per share.
Net interest income grew 16% to $48.8 million from $42.0 million in the prior year quarter.
Net interest margin on net loans was 8.64%, compared to 8.91% in the prior year quarter, and on gross loans it was 8.35%, compared to 8.63% in the prior year quarter.
Loan originations were $217.4 million, compared to $273.7 million in the prior year quarter.
Loans grew 19% to $2.2 billion as of September 30, 2023, compared to $1.9 billion a year ago.
The credit loss provision increased to $14.5 million from $10.0 million in the prior year quarter.
Total assets grew to an all-time high of $2.6 billion at September 30, 2023, a 16% increase over September 30, 2022.
Subsequent to September 30, 2023, the board of directors increased the quarterly dividend 25% to $0.10 per share.
Executive Commentary – Andrew Murstein, President of Medallion
“We continue to be pleased with our strong results. Our earnings of nearly $41 million for the first nine months of the year were up 32% compared to last year. This is our highest net income for the nine-months through September since we went public. Net interest income grew 16% over the prior year quarter and grew 4% from the second quarter.
With over $200 million of consumer loans originated during the quarter, we continued to increase market share while taking pro-active steps to increase credit standards, increase pricing, and moderate growth to a level sustainable with our long-term strategy. Cash collections related to our taxi medallion assets were $5.7 million, adding $0.10 to our bottom line. In October, we collected an additional $9.4 million from one of larger taxi medallion borrowers, which will result in a pre-tax gain of $8.0 million in the fourth quarter.
Our board of directors has authorized a 25% increase of our quarterly dividend to $0.10 per share beginning with the upcoming dividend payment next month, another sign of our commitment to providing sustainable shareholder value over the long-term.”
Business Segment Highlights
Recreation Lending Segment
Originations were $92.6 million during the quarter, compared to $149.2 million a year ago.
Recreation loans grew 15% to $1.3 billion as of September 30, 2023, compared to $1.2 billion a year ago.
Recreation loans were 61% of total loans as of September 30, 2023, compared to 63% a year ago.
Net interest income grew 13% to $35.6 million for the quarter, from $31.5 million in in the prior year quarter.
The average interest rate was 14.73% at quarter-end, compared to 14.21% a year ago.
Recreation loans 90 days or more past due were $5.9 million, or 0.45% of gross recreation loans, as of September 30, 2023, compared to $5.1 million, or 0.45%, a year ago.
Home Improvement Lending Segment
Originations were $79.3 million during the quarter, compared to $100.5 million a year ago.
Home improvement loans grew 30% to $750.5 million as of September 30, 2023, compared to $575.2 million a year ago.
Home improvement loans were 34% of total loans as of September 30, 2023, compared to 31% a year ago.
Net interest income grew 19% to $11.4 million for the quarter, from $9.6 million in the prior year quarter.
The average interest rate was 9.38% at quarter-end, compared to 8.55% a year ago.
Home improvement loans 90 days or more past due were $1.0 million, or 0.13% of gross home improvement loans, as of September 30, 2023, compared to $0.5 million, or 0.09%, a year ago.
Commercial Lending Segment
Commercial loans were $100.3 million at September 30, 2023, compared to $93.7 million a year ago.
The average interest rate on the portfolio was 12.91%, compared to 12.26% a year ago.
Medallion Lending Segment
The Company collected $5.7 million of cash on taxi medallion-related assets during the quarter.
Total net taxi medallion assets declined to $16.2 million (comprised of $2.2 million of loans net of allowance for credit losses and $14.0 million of loan collateral in process of foreclosure), a 41% reduction from a year ago, and represented less than 1% of the Company’s total assets, as of September 30, 2023.
Capital Allocation
Quarterly Dividend
The Board of Directors increased the quarterly dividend to $0.10 per share, payable on November 30, 2023 to shareholders of record at the close of business on November 15, 2023.
Conference Call Information
The Company will host a conference call to discuss its third quarter financial results tomorrow, Tuesday, October 31, 2023, at 9:00 a.m. Eastern time.
In connection with its earnings release, the Company has updated its quarterly supplement presentation, which is now available at www.medallion.com.
How to Participate
Date: Tuesday, October 31, 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 3Q23 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, November 7.
U.S. dial-in number: (844) 512-2921
International dial-in number: (412) 317-6671
Passcode: 1374 1580
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
| ||||||||||||
(Dollars in thousands, except share and per share data) |
| September 30, 2023 |
|
| December 31, 2022 |
|
| September 30, 2022 |
| |||
Assets |
|
|
|
|
|
|
|
|
| |||
Cash, cash equivalents, and federal funds sold |
| $ | 127,642 |
|
| $ | 105,598 |
|
| $ | 98,202 |
|
Investment and equity securities |
|
| 63,717 |
|
|
| 58,785 |
|
|
| 59,024 |
|
Loans |
|
| 2,203,038 |
|
|
| 1,916,953 |
|
|
| 1,855,510 |
|
Allowance for credit losses |
|
| (79,133 | ) |
|
| (63,845 | ) |
|
| (61,535 | ) |
Net loans receivable |
|
| 2,123,905 |
|
|
| 1,853,108 |
|
|
| 1,793,975 |
|
Goodwill and intangible assets, net |
|
| 171,755 |
|
|
| 172,838 |
|
|
| 173,200 |
|
Loan collateral in process of foreclosure |
|
| 15,923 |
|
|
| 21,819 |
|
|
| 24,331 |
|
Other assets |
|
| 55,685 |
|
|
| 47,731 |
|
|
| 50,809 |
|
Total assets |
| $ | 2,558,627 |
|
| $ | 2,259,879 |
|
| $ | 2,199,541 |
|
Liabilities |
|
|
|
|
|
|
|
|
| |||
Deposits |
| $ | 1,855,096 |
|
| $ | 1,607,110 |
|
| $ | 1,555,832 |
|
Long-term debt |
|
| 218,137 |
|
|
| 214,320 |
|
|
| 219,448 |
|
Short-term borrowings |
|
| 18,489 |
|
|
| 5,000 |
|
|
| — |
|
Deferred tax liabilities, net |
|
| 23,131 |
|
|
| 26,753 |
|
|
| 26,132 |
|
Operating lease liabilities |
|
| 7,075 |
|
|
| 8,408 |
|
|
| 8,580 |
|
Accounts payable and accrued expenses |
|
| 39,437 |
|
|
| 27,764 |
|
|
| 29,660 |
|
Total liabilities |
|
| 2,161,365 |
|
|
| 1,889,355 |
|
|
| 1,839,652 |
|
Total stockholders’ equity |
|
| 328,474 |
|
|
| 301,736 |
|
|
| 291,101 |
|
Non-controlling interest in consolidated subsidiaries |
|
| 68,788 |
|
|
| 68,788 |
|
|
| 68,788 |
|
Total equity |
|
| 397,262 |
|
|
| 370,524 |
|
|
| 359,889 |
|
Total liabilities and equity |
| $ | 2,558,627 |
|
| $ | 2,259,879 |
|
| $ | 2,199,541 |
|
Number of shares outstanding |
|
| 23,363,731 |
|
|
| 23,061,673 |
|
|
| 23,185,070 |
|
Book value per share |
| $ | 14.06 |
|
| $ | 13.08 |
|
| $ | 12.56 |
|
MEDALLION FINANCIAL CORP. | ||||||||||||||||
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| ||||||||||
(Dollars in thousands, except share and per share data) |
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
Total interest income |
| $ | 65,886 |
|
| $ | 51,694 |
|
| $ | 183,455 |
|
| $ | 142,108 |
|
Total interest expense |
|
| 17,102 |
|
|
| 9,654 |
|
|
| 44,379 |
|
|
| 25,258 |
|
Net interest income |
|
| 48,784 |
|
|
| 42,040 |
|
|
| 139,076 |
|
|
| 116,850 |
|
Provision for credit losses |
|
| 14,532 |
|
|
| 10,047 |
|
|
| 27,045 |
|
|
| 21,046 |
|
Net interest income after provision for credit losses |
|
| 34,252 |
|
|
| 31,993 |
|
|
| 112,031 |
|
|
| 95,804 |
|
Other income (loss) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gain on sale of loans and medallion |
|
| 1,417 |
|
|
| 518 |
|
|
| 4,578 |
|
|
| 5,061 |
|
Gain (loss) on equity investments |
|
| 2,180 |
|
|
| (1,123 | ) |
|
| 2,189 |
|
|
| 2,985 |
|
Write-down of loan collateral in process of foreclosure |
|
| (30 | ) |
|
| (94 | ) |
|
| (303 | ) |
|
| (608 | ) |
Other income, net |
|
| 739 |
|
|
| 468 |
|
|
| 1,868 |
|
|
| 1,217 |
|
Total other income (loss), net |
|
| 4,306 |
|
|
| (231 | ) |
|
| 8,332 |
|
|
| 8,655 |
|
Other expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Salaries and employee benefits |
|
| 9,630 |
|
|
| 8,411 |
|
|
| 27,805 |
|
|
| 23,709 |
|
Loan servicing fees |
|
| 2,501 |
|
|
| 2,159 |
|
|
| 7,084 |
|
|
| 6,231 |
|
Collection costs |
|
| 1,583 |
|
|
| 1,593 |
|
|
| 4,729 |
|
|
| 3,935 |
|
Professional fees |
|
| 1,148 |
|
|
| 3,722 |
|
|
| 4,223 |
|
|
| 12,106 |
|
Other expenses |
|
| 4,227 |
|
|
| 3,524 |
|
|
| 12,643 |
|
|
| 10,274 |
|
Total other expenses |
|
| 19,089 |
|
|
| 19,409 |
|
|
| 56,484 |
|
|
| 56,255 |
|
Income before income taxes |
|
| 19,469 |
|
|
| 12,353 |
|
|
| 63,879 |
|
|
| 48,204 |
|
Income tax provision |
|
| 6,727 |
|
|
| 3,205 |
|
|
| 18,582 |
|
|
| 12,892 |
|
Net income after taxes |
|
| 12,742 |
|
|
| 9,148 |
|
|
| 45,297 |
|
|
| 35,312 |
|
Less: income attributable to the non-controlling interest |
|
| 1,512 |
|
|
| 1,512 |
|
|
| 4,536 |
|
|
| 4,535 |
|
Total net income attributable to Medallion Financial Corp. |
| $ | 11,230 |
|
| $ | 7,636 |
|
| $ | 40,761 |
|
| $ | 30,777 |
|
Basic net income per share |
| $ | 0.50 |
|
| $ | 0.33 |
|
| $ | 1.81 |
|
| $ | 1.28 |
|
Diluted net income per share |
| $ | 0.48 |
|
| $ | 0.32 |
|
| $ | 1.77 |
|
| $ | 1.26 |
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic |
|
| 22,596,982 |
|
|
| 23,154,775 |
|
|
| 22,469,968 |
|
|
| 24,020,058 |
|
Diluted |
|
| 23,392,901 |
|
|
| 23,510,645 |
|
|
| 23,067,944 |
|
|
| 24,332,776 |
|
Dividends declared per common share |
| $ | 0.08 |
|
| $ | 0.08 |
|
| $ | 0.24 |
|
| $ | 0.24 |
|
