Medallion Bank Reports 2022 Fourth Quarter and Full-Year Results and Declares Series F Preferred Stock Dividend
Medallion Bank (Nasdaq: MFIN) reported strong financial results for Q4 and the year ending December 31, 2022, showing net income of $19.7 million for Q4 and a record annual net income of $74.6 million. The bank’s total loan portfolio increased by 28.8% to $1.8 billion, with significant growth in the home improvement and recreation lending segments. However, provisions for loan losses rose to $8.4 million in Q4, up from $1.6 million a year prior. The bank will pay a dividend of $0.50 on its Series F Preferred Stock on April 3, 2023. The adoption of the CECL accounting standard on January 1, 2023, may lead to larger loan loss provisions going forward.
- Record annual net income of $74.6 million, up from $70.0 million in 2021.
- Total loan portfolio grew by 28.8% to $1.8 billion.
- Net interest income for the year increased to $164.6 million.
- Provisions for loan losses increased to $24.7 million in 2022 from $3.7 million in 2021.
- Annualized net charge-offs rose to 1.0% of average loans outstanding, up from 1.2% in 2021.
- The adoption of CECL may lead to larger loan loss provisions in the near term.
SALT LAKE CITY, Jan. 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 and year ended December 31, 2022. The Bank is a wholly owned subsidiary of Medallion Financial Corp. (Nasdaq: MFIN).
2022 Fourth Quarter Highlights
- Net income of
$19.7 million , compared to net income of$19.0 million in the prior year quarter. - Net interest income of
$44.4 million with a net interest margin of9.2% , compared to$37.3 million and9.9% in the prior year quarter. - Provision for loan losses was
$8.4 million , compared to$1.6 million in the prior year quarter. - Annualized net charge-offs were
1.7% of average loans outstanding, compared to0.3% in the prior year quarter.
2022 Full-Year Highlights
- Record net income of
$74.6 million , compared to net income of$70.0 million in 2021. - Net interest income of
$164.6 million with a net interest margin of9.4% , compared to$136.8 million and10.0% in 2021. - ROA and ROE were
4.2% and26.5% , respectively, for the year ended December 31, 2022, compared to5.0% and29.1% for the prior year. - Provision for loan losses was
$24.7 million , compared to$3.7 million in 2021. - Net charge-offs were
1.0% of average loans outstanding, compared to1.2% in 2021. - The total loan portfolio grew
28.8% to$1.8 billion during the year. - Total assets were
$2.0 billion , total capital was$306.7 million , and the Tier 1 leverage ratio was16.2% at December 31, 2022.
Donald Poulton, President and Chief Executive Officer of Medallion Bank, stated, “We had another tremendous year. We closed out 2022 with record annual net income driven by growth in our recreation and home improvement lending segments. In the fourth quarter, net income was a record high even with recreation loan demand and loan loss provisions continuing to move toward historical levels. We believe our culture, our team, and our superior customer service model have positioned us well for the coming year.”
Recreation Lending Segment
- The Bank’s recreation loan portfolio grew
22.6% to$1.2 billion as of December 31, 2022, compared to$965.3 million at December 31, 2021. - Net interest income was
$33.4 million , compared to$28.7 million in the prior year quarter. - Recreation loans were
64.9% of loans receivable as of December 31, 2022, compared to68.2% at December 31, 2021. - The quarterly provision for recreation loan losses was
$7.3 million , compared to$2.1 million in the prior year quarter. - Annualized net charge-offs were
2.4% of average recreation loans outstanding, compared to1.0% in the prior year quarter.
Home Improvement Lending Segment
- The Bank’s home improvement loan portfolio grew
43.4% to$626.4 million as of December 31, 2022, compared to$436.9 million at December 31, 2021. - Net interest income was
$10.5 million , compared to$8.5 million in the prior year quarter. - Home improvement loans were
34.4% of loans receivable as of December 31, 2022, compared to30.9% at December 31, 2021. - The provision for home improvement loan losses was
$2.7 million , compared to$1.2 million in the prior year quarter. - Annualized net charge-offs were
1.1% of average home improvement loans outstanding, compared to annualized net charge-offs of0.4% in the prior year quarter.
Current Expected Credit Loss Adoption on January 1
On January 1, 2023, we formally adopted the Current Expected Credit Loss accounting standard (Topic 326), otherwise known as CECL. Our preliminary calculation of the CECL transition amount on that date was a
Series F Preferred Stock Dividend
On January 26, 2023, the Bank’s Board of Directors declared a quarterly cash dividend of
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 “will” or “expect,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature, such as “continuing.” These statements relate to our future earnings, returns, capital levels, 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, 2021, 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.
Statements about Medallion Bank's preliminary calculations relating to the impact of adopting CECL consist of preliminary estimates. These estimates are forward-looking statements and are subject to change, possibly materially, as Medallion Bank completes its financial statements for the first quarter of 2023.
Company Contact:
Investor Relations
212-328-2176
InvestorRelations@medallion.com
MEDALLION BANK STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||||||
For the Three Months Ended December 31, | For the Years Ended December 31, | ||||||||||||||
(In thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||
Total interest income | $ | 51,774 | $ | 41,436 | $ | 187,272 | $ | 154,310 | |||||||
Total interest expense | 7,361 | 4,178 | 22,667 | 17,544 | |||||||||||
Net interest income | 44,413 | 37,258 | 164,605 | 136,766 | |||||||||||
Provision for loan losses | 8,409 | 1,578 | 24,709 | 3,746 | |||||||||||
Net interest income after provision for loan losses | 36,004 | 35,680 | 139,896 | 133,020 | |||||||||||
Other income (loss) | |||||||||||||||
Write-downs of loan collateral in process of foreclosure and other assets | (49 | ) | (140 | ) | (582 | ) | (2,990 | ) | |||||||
Other non-interest income | 280 | 386 | 1,237 | 1,144 | |||||||||||
Total other income (loss) | 231 | 246 | 655 | (1,846 | ) | ||||||||||
Non-interest expense | |||||||||||||||
Salaries and benefits | 4,430 | 3,838 | 15,086 | 12,237 | |||||||||||
Loan servicing | 2,571 | 2,756 | 10,843 | 10,692 | |||||||||||
Collection costs | 1,445 | 1,305 | 5,385 | 4,775 | |||||||||||
Regulatory fees | 797 | 489 | 2,418 | 1,872 | |||||||||||
Professional fees | 446 | 366 | 1,754 | 1,695 | |||||||||||
Occupancy and equipment | 209 | 217 | 793 | 789 | |||||||||||
Other | 1,154 | 872 | 4,248 | 3,552 | |||||||||||
Total non-interest expense | 11,052 | 9,843 | 40,527 | 35,612 | |||||||||||
Income before income taxes | 25,183 | 26,083 | 100,024 | 95,562 | |||||||||||
Provision for income taxes | 5,460 | 7,071 | 25,386 | 25,563 | |||||||||||
Net income | $ | 19,723 | $ | 19,012 | $ | 74,638 | $ | 69,999 |
MEDALLION BANK
BALANCE SHEETS
(UNAUDITED)
(In thousands) | December 31, 2022 | December 31, 2021 | |||||
Assets | |||||||
Cash and federal funds sold | $ | 74,078 | $ | 61,402 | |||
Investment securities, available-for-sale | 48,492 | 44,772 | |||||
Loans, inclusive of net deferred loan acquisition costs | 1,822,737 | 1,415,415 | |||||
Allowance for loan losses | (61,630 | ) | (53,384 | ) | |||
Loans, net | 1,761,107 | 1,362,031 | |||||
Loan collateral in process of foreclosure | 10,381 | 21,438 | |||||
Fixed assets and right-of-use lease assets, net | 6,600 | 4,230 | |||||
Deferred tax assets | 9,241 | 7,576 | |||||
Accrued interest receivable and other assets | 40,928 | 37,786 | |||||
Total assets | $ | 1,950,827 | $ | 1,539,235 | |||
Liabilities and Shareholders’ Equity | |||||||
Liabilities | |||||||
Deposits and other funds borrowed | $ | 1,607,110 | $ | 1,250,880 | |||
Accrued interest payable | 2,422 | 1,228 | |||||
Income tax payable | 23,165 | 16,104 | |||||
Other liabilities | 10,613 | 7,670 | |||||
Due to affiliates | 862 | 906 | |||||
Total liabilities | 1,644,172 | 1,276,788 | |||||
Total shareholders’ equity | 306,655 | 262,447 | |||||
Total liabilities and shareholders’ equity | $ | 1,950,827 | $ | 1,539,235 |
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