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

Rhea-AI Summary

Medallion Bank (Nasdaq: MFIN) reported a net income of $18.3 million for Q3 2022, down from $19.7 million in the previous year. The bank's net interest income rose to $43.0 million with a net interest margin of 9.3%, compared to 10.1% last year. Total loan portfolio expanded 30.4% to $1.8 billion. However, provisions for loan losses increased to $8.2 million from a gain of $0.2 million the prior year, while annualized net charge-offs rose to 1.3%.

The recreation lending segment and home improvement lending portfolios saw notable growth of 24.9% and 44.2%, respectively.

Positive

• Net interest income increased by 22% to $43.0 million.
• Total loan portfolio grew by 30.4% to $1.8 billion.
• Home improvement loan portfolio expanded by 44.2%.

Negative

• Net income decreased to $18.3 million from $19.7 million year-over-year.
• Provision for loan losses rose to $8.2 million from a benefit of $0.2 million.
• Annualized net charge-offs increased to 1.3% of average loans.

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

2022 Third Quarter Highlights

• Net income of $18.3 million, compared to net income of $19.7 million in the prior year period.
• Net interest income of $43.0 million with a net interest margin of 9.3%, compared to $35.3 million and 10.1% in the prior year period.
• Annualized ROA and ROE were 3.9% and 25.3%, respectively, as of September 30, 2022, compared to 5.5% and 31.3% in the prior year period.
• Provision for loan losses was $8.2 million compared to a benefit of $0.2 million in the prior year period.
• Annualized net charge-offs were 1.3% of average loans outstanding, compared to annualized net recoveries of 0.1% in the prior year period.
• The total loan portfolio grew 30.4% to $1.8 billion during the 12-month period ending September 30, 2022.
• Total assets were $1.9 billion, total capital was $293.2 million, and the Tier 1 leverage ratio was 16.2% at September 30, 2022.
  

Donald Poulton, President and Chief Executive Officer of Medallion Bank, stated, “The third quarter was highlighted by moderating loan growth that produced net income of $18 million on net interest income that was 22% higher than the prior year. Loan losses, which were historically low in last year’s third quarter, continued to normalize, rising consistent with our historical seasonality but also likely reflecting the pressures of the inflationary environment. Given rapidly increasing deposit costs, we increased interest rates on new loans and expect additional adjustments consistent with actions by the Federal Reserve. Our focus remains on serving our customers with the optimal balance of high tech and high touch so we can deliver superior financial performance.”

Recreation Lending Segment

• The Bank’s recreation loan portfolio grew 24.9% to $1.2 billion as of September 30, 2022, compared to $938.7 million at September 30, 2021.
• Net interest income was $32.5 million compared to $27.8 million in the prior year period.
• Recreation loans were 66.6% of loans receivable as of September 30, 2022, compared to 69.5% at September 30, 2021.
• The provision for recreation loan losses was $7.2 million compared to $1.0 million in the prior year period.
• Annualized net charge-offs were 1.8% of average recreation loans outstanding compared to 0.1% in the prior year period.
  

Home Improvement Lending Segment

• The Bank’s home improvement loan portfolio grew 44.2% to $575.3 million as of September 30, 2022, compared to $399.0 million at September 30, 2021.
• Net interest income was $10.1 million compared to $7.7 million in the prior year period.
• Home improvement loans were 32.7% of loans receivable as of September 30, 2022, compared to 29.5% at September 30, 2021.
• The provision for home improvement loan losses was $2.0 million compared to $0.4 million in the prior year period.
• Annualized net charge-offs were 0.9% of average home improvement loans outstanding compared to annualized net recoveries of 0.2% in the prior year period.
  

Series F Preferred Stock Dividend

On October 27, 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 January 3, 2023, to holders of record at the close of business on December 15, 2022.

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 “expect” or “will,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature, such as “continues” or “remains.” 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 September 30,								For the Nine Months Ended September 30,
(In thousands)	2022				2021				2022				2021
Total interest income	$	49,249			$	39,524			$	135,499			$	112,874
Total interest expense		6,240				4,189				15,307				13,366
Net interest income		43,009				35,335				120,192				99,508
Provision (benefit) for loan losses		8,171				(196	)			16,301				2,168
Net interest income after provision for loan losses		34,838				35,531				103,891				97,340
Other income (loss)
Write-downs of loan collateral in process of foreclosure		(94	)			(298	)			(533	)			(2,850	)
Other non-interest income		409				222				957				758
Total other income (loss), net		315				(76	)			424				(2,092	)
Non-interest expense
Salaries and benefits		3,686				2,797				10,656				8,399
Loan servicing		2,816				2,584				8,272				7,936
Collection costs		1,462				1,335				3,940				3,470
Regulatory fees		610				488				1,621				1,383
Professional fees		503				431				1,308				1,329
Occupancy and equipment		214				199				584				571
Other		946				809				3,092				2,681
Total non-interest expense		10,237				8,643				29,473				25,769
Income before income taxes		24,916				26,812				74,842				69,479
Provision for income taxes		6,644				7,116				19,927				18,492
Net income	$	18,272			$	19,696			$	54,915			$	50,987

MEDALLION BANK
BALANCE SHEETS
(UNAUDITED)

(In thousands)	September 30, 2022				December 31, 2021				September 30, 2021
Assets
Cash and federal funds sold	$	75,107			$	61,402			$	56,088
Investment securities, available-for-sale		48,354				44,772				47,511
Loans, inclusive of net deferred loan acquisition costs		1,761,563				1,415,415				1,351,240
Allowance for loan losses		(60,792	)			(53,384	)			(52,954	)
Loans, net		1,700,771				1,362,031				1,298,286
Loan collateral in process of foreclosure		12,200				21,438				28,069
Fixed assets and right-of-use lease assets, net		6,188				4,230				3,964
Deferred tax assets		9,402				7,576				7,632
Accrued interest receivable and other assets		42,806				37,786				35,291
Total assets	$	1,894,828			$	1,539,235			$	1,476,841
Liabilities and Shareholders’ Equity
Liabilities
Deposits and other funds borrowed	$	1,555,832			$	1,250,880			$	1,196,508
Accrued interest payable		1,882				1,228				1,562
Income tax payable		30,357				16,104				9,789
Other liabilities		12,731				7,670				10,689
Due to affiliates		795				906				586
Total liabilities		1,601,597				1,276,788				1,219,134
Total shareholders’ equity		293,231				262,447				257,707
Total liabilities and shareholders’ equity	$	1,894,828			$	1,539,235			$	1,476,841

FAQ

What were Medallion Bank's Q3 2022 net income figures?

Medallion Bank reported a net income of $18.3 million for Q3 2022.

How did Medallion Bank's net interest income change in Q3 2022?

Net interest income increased to $43.0 million, a 22% rise compared to the previous year.

What is the provision for loan losses reported by Medallion Bank for Q3 2022?

The provision for loan losses was $8.2 million for Q3 2022.

What growth did Medallion Bank experience in its home improvement lending segment?

The home improvement loan portfolio grew by 44.2% to $575.3 million as of September 30, 2022.

When is the next dividend payment for Medallion Bank's Series F Preferred Stock?

The next dividend payment of $0.50 per share will be on January 3, 2023.