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

Rhea-AI Summary

Medallion Bank (MBNKP) announced its results for the quarter ended September 30, 2023. Quarterly net income was $17.2 million, compared to $18.3 million in the prior year quarter. Net interest income was $48.7 million with a net interest margin of 8.7%. Total provision for credit losses was $14.0 million. Annualized net charge-offs were 2.0% of average loans outstanding. Annualized ROA and ROE were 3.06% and 20.46%, respectively. The total loan portfolio grew 19.3% to $2.102 billion. Total assets were $2.258 billion and the Tier 1 leverage ratio was 16.08%.

Positive

• Quarterly net income of $17.2 million
• Net interest income of $48.7 million with a net interest margin of 8.7%
• Total provision for credit losses of $14.0 million
• Annualized net charge-offs of 2.0% of average loans outstanding
• Annualized ROA and ROE of 3.06% and 20.46%
• Total loan portfolio grew 19.3% to $2.102 billion
• Total assets of $2.258 billion and Tier 1 leverage ratio of 16.08%

Negative

• None.

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

2023 Third Quarter Highlights

• Quarterly net income of $17.2 million, compared to $18.3 million in the prior year quarter.
• Net interest income of $48.7 million with a net interest margin of 8.7%, compared to $43.0 million and 9.3% in the prior year quarter.
• Total provision for credit losses was $14.0 million, compared to $8.2 million in the prior year quarter.
• Annualized net charge-offs were 2.0% of average loans outstanding, compared to 1.3% in the prior year quarter.
• Annualized ROA and ROE were 3.06% and 20.46%, respectively, compared to 3.92% and 25.31% for the prior year period.
• The total loan portfolio grew 19.3% from September 30, 2022 to $2.102 billion as of September 30, 2023.
• Total assets were $2.258 billion and the Tier 1 leverage ratio was 16.08% at September 30, 2023.
  

Donald Poulton, President and Chief Executive Officer of Medallion Bank, stated, “Measured loan portfolio growth contributed to strong quarterly earnings of $17 million. The restrictive underwriting requirements we introduced over the last two quarters had the effect of moderating third quarter loan volumes in both recreation and home improvement lending. Compared to the prior year quarter, the provision for credit losses increased as consumer loan losses continued trending to more normal levels. Our ability to access brokered deposits, which has always been our primary source of deposits, remains unhindered. We believe we are positioned prudently for both the immediate and long-term future.”

Recreation Lending Segment

• The Bank’s recreation loan portfolio grew 14.8% to $1.346 billion as of September 30, 2023, compared to $1.173 billion at September 30, 2022.
• Net interest income was $36.5 million, compared to $32.5 million in the prior year quarter.
• Recreation loans were 64.1% of loans receivable as of September 30, 2023, compared to 66.6% at September 30, 2022.
• Annualized net charge-offs were 2.7% of average recreation loans outstanding, compared to 1.8% in the prior year quarter.
• The provision for recreation credit losses was $11.9 million, compared to a $7.2 million provision for loan losses in the prior year quarter.
  

Home Improvement Lending Segment

• The Bank’s home improvement loan portfolio grew 30.5% to $750.5 million as of September 30, 2023, compared to $575.3 million at September 30, 2022.
• Net interest income was $11.9 million, compared to $10.1 million in the prior year quarter.
• Home improvement loans were 35.7% of loans receivable as of September 30, 2023, compared to 32.7% at September 30, 2022.
• Annualized net charge-offs were 1.6% of average home improvement loans outstanding, compared to 0.9% in the prior year quarter.
• The provision for home improvement credit losses was $3.9 million, compared to a $2.0 million provision for loan losses in the prior year quarter.
  

Series F Preferred Stock Dividend

On October 26, 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 January 2, 2024, to holders of record at the close of business on December 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 September 30,								For the Nine Months Ended September 30,
(In thousands)		2023				2022				2023				2022
Total interest income	$	62,193			$	49,249			$	173,414			$	135,499
Total interest expense		13,446				6,240				33,384				15,307
Net interest income		48,747				43,009				140,030				120,192
Provision for credit losses		14,024				8,171				26,740				16,301
Net interest income after provision for loan losses		34,723				34,838				113,290				103,891
Other income (loss)
Write-downs of loan collateral in process of foreclosure and other assets		(30	)			(94	)			(303	)			(533	)
Other non-interest income		998				409				1,566				957
Total other income (loss)		968				315				1,263				424
Non-interest expense
Salaries and benefits		5,024				3,686				14,004				10,656
Loan servicing		3,007				2,816				8,723				8,272
Collection costs		1,509				1,462				4,473				3,940
Regulatory fees		1,021				610				2,484				1,621
Professional fees		450				503				1,612				1,308
Occupancy and equipment		211				214				625				584
Other		1,091				946				3,455				3,092
Total non-interest expense		12,313				10,237				35,376				29,473
Income before income taxes		23,378				24,916				79,177				74,842
Provision for income taxes		6,222				6,644				21,268				19,927
Net income	$	17,156				18,272			$	57,909				54,915

MEDALLION BANK BALANCE SHEETS (UNAUDITED)
(In thousands)	September 30, 2023				December 31, 2022				September 30, 2022
Assets
Cash and federal funds sold	$	100,192			$	74,078			$	75,107
Investment securities, available-for-sale		53,175				48,492				48,354
Loans, inclusive of net deferred loan acquisition costs		2,101,786				1,822,737				1,761,563
Allowance for losses		(75,094	)			(61,630	)			(60,792	)
Loans, net		2,026,692				1,761,107				1,700,771
Loan collateral in process of foreclosure		7,658				10,381				12,200
Fixed assets and right-of-use lease assets, net		7,705				6,600				6,188
Deferred tax assets		11,634				9,241				9,402
Accrued interest receivable and other assets		51,000				40,928				42,806
Total assets	$	2,258,056			$	1,950,827			$	1,894,828
Liabilities and Shareholders’ Equity
Liabilities
Deposits and other funds borrowed	$	1,865,088			$	1,607,110			$	1,555,832
Accrued interest payable		3,052				2,422				1,882
Income tax payable		30,472				23,165				30,357
Other liabilities		18,405				10,614				12,731
Due to affiliates		942				861				795
Total liabilities		1,917,959				1,644,172				1,601,597
Total shareholders’ equity		340,097				306,655				293,231
Total liabilities and shareholders’ equity	$	2,258,056			$	1,950,827			$	1,894,828

FAQ

What is the ticker symbol for Medallion Bank?

The ticker symbol for Medallion Bank is MBNKP.

What was the quarterly net income for Medallion Bank?

The quarterly net income for Medallion Bank was $17.2 million.

What was the net interest income for Medallion Bank?

The net interest income for Medallion Bank was $48.7 million with a net interest margin of 8.7%.

What was the total provision for credit losses for Medallion Bank?

The total provision for credit losses for Medallion Bank was $14.0 million.

What were the annualized net charge-offs for Medallion Bank?

The annualized net charge-offs for Medallion Bank were 2.0% of average loans outstanding.

What were the annualized ROA and ROE for Medallion Bank?

The annualized ROA and ROE for Medallion Bank were 3.06% and 20.46%, respectively.

What was the total loan portfolio for Medallion Bank?

The total loan portfolio for Medallion Bank was $2.102 billion.

What were the total assets and Tier 1 leverage ratio for Medallion Bank?

The total assets were $2.258 billion and the Tier 1 leverage ratio was 16.08%.