Medallion Bank Reports 2022 Second Quarter Results and Declares Series F Preferred Stock Dividend

Rhea-AI Summary

Medallion Bank (MFIN) reported its second quarter results for 2022, showcasing a net income of $17.9 million, up from $17.5 million year-over-year. Net interest income rose to $40 million with a margin of 9.5%. The total loan portfolio expanded by 28.5% to $1.6 billion, with assets totaling $1.8 billion. However, the provision for loan losses increased to $6 million from a benefit last year, with annualized charge-offs at 0.2%. The Board declared a quarterly cash dividend of $0.50 for Series F preferred stock, payable October 3, 2022.

Positive

• Net income increased to $17.9 million from $17.5 million year-over-year.
• Total loan portfolio grew by 28.5% to $1.6 billion.
• Net interest income rose to $40 million with a net interest margin of 9.5%.
• Home improvement loan portfolio expanded by 42.9%.

Negative

• Provision for loan losses increased to $6 million compared to a benefit in the prior year.
• Annualized net charge-offs for recreation loans increased to 1.0% from recoveries of 0.2% year-over-year.

SALT LAKE CITY, July 27, 2022 (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 offering loan origination services to fintech strategic partners, announced today its results for the period ended June 30, 2022. The Bank is a wholly owned subsidiary of Medallion Financial Corp. (Nasdaq: MFIN).

2022 Second Quarter Highlights

• Net income of $17.9 million, compared to net income of $17.5 million in the prior year period.
• Net interest income of $40.0 million with a net interest margin of 9.5%, compared to $33.1 million and 10.0% in the prior year period.
• Annualized ROA and ROE were 4.2% and 25.9%, respectively, as of June 30, 2022, compared to 5.2% and 30.0% in the prior year period.
• Provision for loan losses was $6.0 million, compared to a benefit of $0.4 million in the prior year period.
• Annualized net charge-offs were 0.2% of average loans outstanding, compared to 3.9% in the prior year period.
• The total loan portfolio grew 28.5% to $1.6 billion during the 12-month period ending June 30, 2022.
• Total assets were $1.8 billion, total capital was $282.9 million, and the Tier 1 leverage ratio was 17.0% at June 30, 2022.
  

Donald Poulton, President and Chief Executive Officer of Medallion Bank, stated, “We recorded another quarter of substantial earnings, driven by record loan originations on sustained demand for our products that serve the recreation vehicle, marine, and home improvement industries. Despite rising interest rates and inflationary pressure, our borrowers continued to perform well and loan losses remained lower than historical norms. While the provision for loan losses grew year-over-year commensurate with loan growth, net recoveries of $2.3 million in our medallion loan portfolio were a helpful offset. We continue to focus on serving our customers with an optimal balance of high tech and high touch in order to deliver superior financial performance.”

Recreation Lending Segment

• The Bank’s recreation loan portfolio grew 23.2% to $1.1 billion as of June 30, 2022, compared to $891.6 million at June 30, 2021.
• Net interest income was $30.3 million, compared to $26.0 million in the prior year period.
• Recreation loans were 67.1% of loans receivable as of June 30, 2022, compared to 69.9% at June 30, 2021.
• The provision for recreation loan losses was $6.7 million, compared to $1.0 million in the prior year period.
• Annualized net charge-offs were 1.0% of average recreation loans outstanding, compared to annualized net recoveries of 0.2% in the prior year period.
  

Home Improvement Lending Segment

• The Bank’s home improvement loan portfolio grew 42.9% to $526.3 million as of June 30, 2022, compared to $368.4 million at June 30, 2021.
• Net interest income was $9.4 million, compared to $7.3 million in the prior year period.
• Home improvement loans were 32.1% of loans receivable as of June 30, 2022, compared to 28.9% at June 30, 2021.
• The provision for home improvement loan losses was $1.7 million, compared to $0.7 million in the prior year period.
• Annualized net charge-offs were 0.5% of average home improvement loans outstanding, compared to 0.3% in the prior year period.
  

Series F Preferred Stock Dividend

On July 26, 2022, the Bank’s Board of Directors declared a quarterly cash dividend of $0.50 per share on the Bank’s Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series F, which trades on the Nasdaq Capital Market under the ticker symbol “MBNKP.” The dividend is payable on October 3, 2022, to holders of record at the close of business on September 15, 2022.

About Medallion Bank

Medallion Bank specializes in providing consumer loans for the purchase of recreational vehicles, boats, and home improvements, along with offering 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 “continue,” “believe,” or “will,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature, such as “sustain.” These statements relate to our future earnings, returns, 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.

Company Contact:
Investor Relations
212-328-2176
InvestorRelations@medallion.com

MEDALLION BANK STATEMENTS OF OPERATIONS (UNAUDITED)
	For the Three Months Ended June 30,								For the Six Months Ended June 30,
(In thousands)		2022				2021				2022				2021
Total interest income	$	44,905			$	37,594			$	86,249			$	73,350
Total interest expense		4,912				4,465				9,066				9,176
Net interest income		39,993				33,129				77,183				64,174
Provision (benefit) for loan losses		5,986				(374	)			8,130				2,364
Net interest income after provision for loan losses		34,007				33,503				69,053				61,810
Other (loss) income
Write-downs of loan collateral in process of foreclosure		(54	)			(1,424	)			(440	)			(2,552	)
Other non-interest income		392				442				548				536
Total non-interest loss, net		338				(982	)			108				(2,016	)
Non-interest expense
Salaries and benefits		3,466				2,798				6,971				5,602
Loan servicing		2,787				2,704				5,456				5,352
Collection costs		1,319				1,120				2,478				2,135
Regulatory fees		560				456				1,011				895
Professional fees		394				474				805				898
Occupancy and equipment		127				187				370				373
Other		1,251				866				2,143				1,872
Total non-interest expense		9,904				8,605				19,234				17,127
Income before income taxes		24,441				23,916				49,927				42,667
Provision for income taxes		6,581				6,397				13,283				11,376
Net income	$	17,860			$	17,519			$	36,644			$	31,291

MEDALLION BANK BALANCE SHEETS (UNAUDITED)
(In thousands)	June 30, 2022				December 31, 2021				June 30, 2021
Assets
Cash and federal funds sold	$	93,946			$	61,402			$	61,563
Investment securities, available-for-sale		50,358				44,772				48,307
Loans, inclusive of net deferred loan acquisition costs		1,638,426				1,415,415				1,274,846
Allowance for loan losses		(58,079	)			(53,384	)			(52,799	)
Loans, net		1,580,347				1,362,031				1,222,047
Loan collateral in process of foreclosure		14,053				21,438				32,768
Fixed assets and right-of-use lease assets, net		5,766				4,230				3,308
Deferred tax assets		8,829				7,576				7,936
Due from affiliates		—				—				487
Accrued interest receivable and other assets		42,038				37,788				33,911
Total assets	$	1,795,337			$	1,539,237			$	1,410,327
Liabilities and Shareholders’ Equity
Liabilities
Deposits and other funds borrowed	$	1,469,241			$	1,250,880			$	1,152,068
Accrued interest payable		1,303				1,228				1,196
Income tax payable		26,924				16,104				4,643
Other liabilities		14,460				7,672				10,256
Due to affiliates		478				906				—
Total liabilities		1,512,406				1,276,790				1,167,676
Total shareholders’ equity		282,931				262,447				242,164
Total liabilities and shareholders’ equity	$	1,795,337			$	1,539,237			$	1,410,327

FAQ

What were Medallion Bank's earnings results for Q2 2022?

Medallion Bank reported a net income of $17.9 million for Q2 2022.

What is the total loan portfolio of Medallion Bank as of June 30, 2022?

As of June 30, 2022, Medallion Bank's total loan portfolio was $1.6 billion.

What dividend did Medallion Bank declare for its Series F preferred stock?

Medallion Bank declared a quarterly cash dividend of $0.50 per share on its Series F preferred stock.

How much did net interest income increase for Medallion Bank in Q2 2022?

Net interest income increased to $40 million in Q2 2022.

What was the provision for loan losses for the Bank in Q2 2022?

The provision for loan losses was $6 million in Q2 2022.