• Medallion Financial Corp. Reports 2024 Second Quarter Results

    Source: Nasdaq GlobeNewswire / 30 Jul 2024 15:03:00   America/Chicago

    NEW YORK, July 30, 2024 (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, 2024.

    2024 Second Quarter Highlights

    • Net income was $7.1 million, or $0.30 per share, compared to $14.2 million, or $0.62 per share, in the prior year quarter.
    • $2.3 million of cash was collected on taxi medallion-related assets, compared to $10.6 million of cash collected, in the prior year quarter.
    • Net interest income grew 7% to $49.9 million from $46.7 million in the prior year quarter.
    • Net interest margin on net loans was 8.42%, compared to 8.77% in the prior year quarter, and on gross loans it was 8.12%, compared to 8.48% in the prior year quarter.
    • Loan originations were $309.1 million, compared to $346.3 million in the prior year quarter.
    • Loans grew 11% to $2.4 billion as of June 30, 2024, compared to $2.2 billion a year ago.
    • The credit loss provision increased to $18.6 million from $8.5 million in the prior year quarter. The total provision included $1.0 million of net taxi medallion recoveries in the current quarter compared to $5.3 million of net taxi medallion recoveries in the prior year quarter.
    • The Company repurchased 183,900 shares of common stock at an average cost of $8.24 per share.
    • The Company declared and paid a quarterly cash dividend of $0.10 per share.

    Executive Commentary – Andrew Murstein, President of Medallion

    "Overall this was another solid quarter for us. Notable in the quarter, our earnings included approximately $0.12 per share of additional allowance tied to the growth of our loan portfolio, primarily within our recreation segment, which grew 10% from the first quarter to $1.5 billion, with over $200 million in originations this quarter. We continue to be pleased with the credit performance of that segment. Additionally, our results reflect atypical professional fees in the quarter associated with our successful defense of an activist proxy campaign.

    Our net interest income reached $49.9 million, an all-time high, grew 4% from the prior quarter, and we saw our net charge-offs drop from what we experienced in the first quarter. We remain cautiously optimistic that the solid performance of our loans and the strong credit quality of our overall loan portfolio will continue. Despite some contraction over the past few years, due mainly to the current interest rate environment, our net interest margin increased two basis points from the first quarter.

    Lastly, unlike the first quarter, our commercial division did not have any significant equity gains this quarter. Their net interest margin was more than 9% as they grew their loan portfolio by 19% from last year.”

    Business Segment Highlights

    Recreation Lending Segment

    • Originations were $209.6 million during the quarter, compared to $190.0 million a year ago.
    • Recreation loans grew 12% to $1.5 billion as of June 30, 2024, compared to $1.3 billion a year ago.
    • Recreation loans were 63% of total loans as of June 30, 2024, compared to 62% a year ago.
    • Net interest income grew 9% to $36.5 million for the quarter, from $33.5 million in the prior year quarter.
    • The average interest rate was 14.80% at quarter-end, compared to 14.62% a year ago.
    • Recreation loans 90 days or more past due were $5.9 million, or 0.41% of gross recreation loans, as of June 30, 2024, compared to $5.0 million, or 0.39%, a year ago.
    • Allowance for credit loss rate was 4.35% as of June 30, 2024, compared to 4.07% a year ago.

    Home Improvement Lending Segment

    • Originations were $68.0 million during the quarter, compared to $117.0 million a year ago.
    • Home improvement loans grew 6% to $773.2 million as of June 30, 2024, compared to $728.5 million a year ago.
    • Home improvement loans were 32% of total loans as of June 30, 2024, compared to 34% a year ago.
    • Net interest income grew 4% to $11.5 million for the quarter, from $11.1 million in the prior year quarter.
    • The average interest rate was 9.71% at quarter-end, compared to 9.21% a year ago.
    • Home improvement loans 90 days or more past due were $1.3 million, or 0.17% of gross home improvement loans, as of June 30, 2024, compared to $1.1 million, or 0.16%, a year ago.
    • Allowance for credit loss rate was 2.38% as of June 30, 2024, compared to 2.26% a year ago.

    Commercial Lending Segment

    • Commercial loans were $110.2 million at June 30, 2024, compared to $92.6 million a year ago.
    • The average interest rate on the portfolio was 13.05%, compared to 12.64 % a year ago.

    Taxi Medallion Lending Segment

    • The Company collected $2.3 million of cash on taxi medallion-related assets during the quarter.
    • Total net taxi medallion assets declined to $10.0 million (comprised of $2.1 million of loans net of allowance for credit losses and $7.9 million of loan collateral in process of foreclosure), a 44% reduction from a year ago, and represented less than half a percent of the Company’s total assets as of June 30, 2024.

    Capital Allocation

    Quarterly Dividend

    • The Board of Directors declared a quarterly dividend of $0.10 per share, payable on August 30, 2024 to shareholders of record at the close of business on August 15, 2024.

    Stock Repurchase Plan

    • During the second quarter, the Company repurchased 183,900 shares of its common stock at an average cost of $8.24 per share, for a total of $1.5 million.
    • As of June 30, 2024 the Company had $16.4 million remaining under its $40 million share repurchase program

    Conference Call Information

    The Company will host a conference call to discuss its second quarter financial results tomorrow, Wednesday, July 31, 2024 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: Wednesday, July 31, 2024
    • Time: 9:00 a.m. Eastern time
    • U.S. dial-in number: (833) 816-1412
    • International dial-in number: (412) 317-0504
    • Live webcast: Link to Webcast of 2Q24 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 Wednesday, August 7.

    • U.S. dial-in number: (844) 512-2921
    • International dial-in number: (412) 317-6671
    • Access ID: 1019 0811

    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 2023 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, 2024  December 31, 2023  June 30, 2023 
    Assets         
    Cash, cash equivalents, and federal funds sold $157,961  $149,845  $124,554 
    Investment and equity securities  66,625   65,712   65,096 
    Loans  2,385,590   2,215,886   2,156,998 
    Allowance for credit losses  (89,788)  (84,235)  (74,971)
    Net loans receivable  2,295,802   2,131,651   2,082,027 
    Goodwill and intangible assets, net  170,672   171,394   172,118 
    Property, equipment, and right-of-use lease asset, net  14,094   14,076   13,343 
    Accrued interest receivable  13,299   13,538   13,345 
    Loan collateral in process of foreclosure  9,359   11,772   16,803 
    Other assets  33,064   29,839   31,851 
    Total assets $2,760,876  $2,587,827  $2,519,137 
    Liabilities         
    Deposits $2,006,782  $1,866,657  $1,813,785 
    Long-term debt  230,803   235,544   178,128 
    Short-term borrowings  37,500   8,000   67,880 
    Deferred tax liabilities, net  22,394   21,207   26,840 
    Operating lease liabilities  6,071   7,019   7,629 
    Accrued interest payable  7,945   6,822   4,449 
    Accounts payable and accrued expenses  26,592   30,804   32,662 
    Total liabilities  2,338,087   2,176,053   2,131,373 
    Total stockholders’ equity  354,001   342,986   318,976 
    Non-controlling interest in consolidated subsidiaries  68,788   68,788   68,788 
    Total equity  422,789   411,774   387,764 
    Total liabilities and equity $2,760,876  $2,587,827  $2,519,137 
    Number of shares outstanding  23,211,990   23,449,646   23,345,017 
    Book value per share $15.25  $14.63  $13.66 


    MEDALLION FINANCIAL CORP.‌
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (UNAUDITED)‌
     
      Three Months Ended June 30,  Six Months Ended June 30, 
    (Dollars in thousands, except share and per share data) 2024  2023  2024  2023 
    Total interest income $70,704  $61,726  $137,774  $117,568 
    Total interest expense  20,836   15,035   39,989   27,275 
    Net interest income  49,868   46,691   97,785   90,293 
    Provision for credit losses  18,577   8,476   35,778   12,514 
    Net interest income after provision for credit losses  31,291   38,215   62,007   77,779 
    Other income (loss)            
    Gain (loss) on equity investments  (512)  99   3,655   9 
    Gain on sale of loans and taxi medallions  242   1,306   830   3,161 
    Write-down of loan collateral in process of foreclosure  —   (21)  —   (273)
    Other income  1,369   558   2,017   1,128 
    Total other income, net  1,099   1,942   6,502   4,025 
    Other expenses            
    Salaries and employee benefits  9,435   9,339   18,892   18,175 
    Loan servicing fees  2,692   2,361   5,162   4,583 
    Collection costs  1,659   1,608   3,126   3,146 
    Regulatory fees  888   781   1,865   1,463 
    Professional fees  1,845   1,368   2,616   3,075 
    Rent expense  698   603   1,355   1,226 
    Amortization of intangible assets  362   363   723   723 
    Other expenses  2,416   2,580   4,481   5,004 
    Total other expenses  19,995   19,003   38,220   37,395 
    Income before income taxes  12,395   21,154   30,289   44,409 
    Income tax provision  3,782   5,472   10,140   11,854 
    Net income after taxes  8,613   15,682   20,149   32,555 
    Less: income attributable to the non-controlling interest  1,512   1,512   3,024   3,024 
    Total net income attributable to Medallion Financial Corp. $7,101  $14,170  $17,125  $29,531 
    Basic net income per share $0.31  $0.63  $0.76  $1.32 
    Diluted net income per share $0.30  $0.62  $0.73  $1.29 
    Weighted average common shares outstanding            
    Basic  22,598,102   22,488,463   22,619,743   22,416,089 
    Diluted  23,453,162   22,853,927   23,609,104   22,915,094 
    Dividends declared per common share $0.10  $0.08  $0.20  $0.16 

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