Medallion Bank Reports 2023 Second Quarter Results and Declares Series F Preferred Stock Dividend

Rhea-AI Summary

Medallion Bank announces Q2 2023 results with quarterly net income of $19.3 million. Total loan portfolio grows 26.0% to $2.064 billion. Recreation loan portfolio grows 21.2% to $1.331 billion. Home improvement loan portfolio grows 38.4% to $728.5 million. Quarterly cash dividend of $0.50 declared for Series F Preferred Stock.

Positive

• Quarterly net income of $19.3 million, up from $17.9 million in the prior year quarter.
• Total loan portfolio grows 26.0% to $2.064 billion.
• Recreation loan portfolio grows 21.2% to $1.331 billion.
• Home improvement loan portfolio grows 38.4% to $728.5 million.
• Quarterly cash dividend of $0.50 declared for Series F Preferred Stock.

Negative

• None.

SALT LAKE CITY, July 27, 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 ended June 30, 2023. The Bank is a wholly owned subsidiary of Medallion Financial Corp. (Nasdaq: MFIN).

2023 Second Quarter Highlights

• Quarterly net income of $19.3 million, compared to $17.9 million in the prior year quarter.
• Net interest income of $47.0 million with a net interest margin of 8.9%, compared to $40.0 million and 9.5% in the prior year quarter.
• Total provision for credit losses was $8.9 million, compared to $6.0 million in the prior year quarter.
• Annualized net charge-offs were 0.6% of average loans outstanding, compared to 0.2% in the prior year quarter.
• Annualized ROA and ROE were 3.66% and 24.38%, respectively, compared to 4.20% and 25.86% for the prior year period.
• The total loan portfolio grew 26.0% from June 30, 2022 to $2.064 billion as of June 30, 2023.
• Total assets were $2.220 billion and the Tier 1 leverage ratio was 16.03% at June 30, 2023.
  

Donald Poulton, President and Chief Executive Officer of Medallion Bank, stated, “Quarterly earnings surpassed our own expectations, largely due to strong collection activity on our legacy medallion portfolio and our borrowers’ ongoing resilience. Loan demand surged in the second quarter despite increasingly restrictive underwriting, reaching expected peak quarterly originations for the year. The banking environment also settled during the second quarter, and our access to deposits and contingent liquidity remained unhindered throughout. We believe we are positioned well given an uncertain economic outlook.”

Recreation Lending Segment

• The Bank’s recreation loan portfolio grew 21.2% to $1.331 billion as of June 30, 2023, compared to $1.099 billion at June 30, 2022.
• Net interest income was $34.4 million, compared to $30.3 million in the prior year quarter.
• Recreation loans were 64.5% of loans receivable as of June 30, 2023, compared to 67.1% at June 30, 2022.
• Annualized net charge-offs were 1.87% of average recreation loans outstanding, compared to 0.96% in the prior year quarter.
• The provision for recreation credit losses was $10.1 million, compared to a $6.7 million provision for loan losses in the prior year quarter.
  

Home Improvement Lending Segment

• The Bank’s home improvement loan portfolio grew 38.4% to $728.5 million as of June 30, 2023, compared to $526.4 million at June 30, 2022.
• Net interest income was $11.6 million, compared to $9.4 million in the prior year quarter.
• Home improvement loans were 35.3% of loans receivable as of June 30, 2023, compared to 32.1% at June 30, 2022.
• Annualized net charge-offs were 1.12% of average home improvement loans outstanding, compared to 0.52% in the prior year quarter.
• The provision for home improvement credit losses was $3.7 million, compared to a $1.7 million provision for loan losses in the prior year quarter.
  

Series F Preferred Stock Dividend

On July 27, 2023, 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 2, 2023, to holders of record at the close of business on September 15, 2023.

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 “believe,” or the negative version of this word or other comparable words or phrases of a future or forward-looking nature, such as “continuing.” These statements may relate to our future earnings, returns, capital levels, sources of funding, 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, 2022, 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)		2023				2022				2023				2022
Total interest income	$	58,287			$	44,905			$	111,221			$	86,249
Total interest expense		11,337				4,912				19,937				9,066
Net interest income		46,950				39,993				91,284				77,183
Provision for credit losses		8,857				5,986				12,716				8,130
Net interest income after provision for loan losses		38,093				34,007				78,568				69,053
Other income (loss)
Write-downs of loan collateral in process of foreclosure and other assets		(21	)			(54	)			(273	)			(440	)
Other non-interest income		284				392				568				548
Total other income (loss)		263				338				295				108
Non-interest expense
Salaries and benefits		4,588				3,466				8,980				6,971
Loan servicing		2,901				2,787				5,716				5,456
Collection costs		1,506				1,319				2,963				2,478
Regulatory fees		781				560				1,463				1,011
Professional fees		495				394				1,162				805
Occupancy and equipment		211				127				413				370
Other		1,263				1,251				2,365				2,143
Total non-interest expense		11,745				9,904				23,062				19,234
Income before income taxes		26,611				24,441				55,801				49,927
Provision for income taxes		7,282				6,581				15,047				13,283
Net income	$	19,329			$	17,860			$	40,754			$	36,644

MEDALLION BANK
BALANCE SHEETS
(UNAUDITED)

(In thousands)	June 30, 2023				December 31, 2022				June 30, 2022
Assets
Cash and federal funds sold	$	97,492			$	74,078			$	93,946
Investment securities, available-for-sale		53,692				48,492				50,358
Loans, inclusive of net deferred loan acquisition costs		2,063,963				1,822,737				1,638,426
Allowance for losses		(71,447	)			(61,630	)			(58,079	)
Loans, net		1,992,516				1,761,107				1,580,347
Loan collateral in process of foreclosure		7,259				10,381				14,053
Fixed assets and right-of-use lease assets, net		7,366				6,600				5,766
Deferred tax assets		10,400				9,241				8,829
Accrued interest receivable and other assets		51,244				40,928				42,038
Total assets	$	2,219,969			$	1,950,827			$	1,795,337
Liabilities and Shareholders’ Equity
Liabilities
Deposits and other funds borrowed	$	1,841,549			$	1,607,110			$	1,469,241
Accrued interest payable		2,272				2,422				1,303
Income tax payable		27,441				23,165				26,924
Other liabilities		22,219				10,613				14,460
Due to affiliates		823				862				478
Total liabilities		1,894,304				1,644,172				1,512,406
Total shareholders’ equity		325,665				306,655				282,931
Total liabilities and shareholders’ equity	$	2,219,969			$	1,950,827			$	1,795,337

FAQ

What is Medallion Bank's quarterly net income for Q2 2023?

Medallion Bank reported a quarterly net income of $19.3 million for Q2 2023.

How much did the total loan portfolio grow by?

The total loan portfolio grew by 26.0% to $2.064 billion.

What is the growth rate of the recreation loan portfolio?

The recreation loan portfolio grew by 21.2% to $1.331 billion.

What is the growth rate of the home improvement loan portfolio?

The home improvement loan portfolio grew by 38.4% to $728.5 million.

What is the dividend declared for Series F Preferred Stock?

A quarterly cash dividend of $0.50 per share was declared for Medallion Bank's Series F Preferred Stock.