Medallion Financial (NasdaqGS:MFIN) Q3 2025 Earnings Call October 30, 2025 09:00 AM ET Speaker2Good day and welcome to Medallion Financial Corp. third quarter of 2025 earnings call. All participants will be in a listen-only mode for the duration of the call. Should you need any assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone k ...

COMMERCIAL HOME IMPROVEMENT RECREATION FINTECH This presentation contains certain forward-looking statements, including statements with regard to the future performance of Medallion Financial Corp. ("MFIN" or the "Company"). Words such as "believes," "expects," "projects," "anticipates" and "future" or similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on information available to us at the time of this presentation and are subject to the inher ...

Medallion Financial (MFIN) came out with quarterly earnings of $0.46 per share, beating the Zacks Consensus Estimate of $0.29 per share. This compares to earnings of $0.37 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +58.62%. A quarter ago, it was expected that this business development company would post earnings of $0.3 per share when it actually produced earnings of $0.46, delivering a surprise of +53.33%.Over the last f ...

Financial Performance - Total net income attributable to stockholders for Q3 2025 was $7.8 million, or $0.32 per share, excluding a non-recurring charge of $3.5 million, net income was $11.3 million, compared to $8.6 million in the prior year quarter [6]. - Nine months earnings increased 20% year over year, supported by strong portfolio diversification and disciplined underwriting [5]. - Net income after taxes for the three months ended September 30, 2025, was $13,614 thousand, a 34.7% increase from $10,123 thousand in the same period of 2024 [24]. - Basic net income per share for the three months ended September 30, 2025, was $0.34, a decrease from $0.38 in 2024 [24]. - Other income for the three months ended September 30, 2025, totaled $3,048 thousand, significantly higher than $587 thousand in the same period of 2024 [24]. Loan and Interest Metrics - Net interest income grew 6% to $55.7 million from $52.7 million in the prior year quarter, with a net interest margin on gross loans of 8.21% [6]. - Loan originations increased to $427.4 million, compared to $275.6 million in the prior year quarter, including $208.4 million from strategic partnerships, up from $39.9 million a year ago [6][9]. - The average interest rate on recreation loans was 15.17% at quarter-end, compared to 14.92% a year ago [9]. - Net interest income for the three months ended September 30, 2025, was $55,686 thousand, an increase of 5.4% compared to $52,737 thousand for the same period in 2024 [24]. - Total interest income for the nine months ended September 30, 2025, was $233,637 thousand, up from $214,183 thousand in 2024, representing an increase of 9.1% [24]. Asset and Liability Overview - Total assets amounted to $2.900 billion, up from $2.880 billion at September 30, 2024 [13]. - Total assets increased to $2,900,387 thousand as of September 30, 2025, up from $2,868,606 thousand at December 31, 2024, representing a growth of 1.1% [22]. - Total liabilities decreased to $2,403,510 thousand as of September 30, 2025, from $2,429,648 thousand at December 31, 2024, reflecting a reduction of 1.1% [22]. - Total stockholders' equity increased to $397,448 thousand as of September 30, 2025, compared to $370,170 thousand at December 31, 2024, marking a growth of 7.4% [22]. Cash and Dividend Information - Cash and cash equivalents were $212.1 million as of September 30, 2025, down from $244.7 million a year ago [13]. - The company declared a quarterly cash dividend of $0.12 per share, unchanged from previous quarters and 20% higher than the same quarter last year [11]. Credit Quality - Provision for credit losses decreased to $18,556 thousand for the three months ended September 30, 2025, down from $20,151 thousand in 2024, indicating improved credit quality [24]. - Total strategic partnership loans held as of quarter-end were $15.3 million, compared to $3.2 million a year ago [9]. Portfolio Growth - The loan portfolio reached $2.56 billion, a 3% increase from $2.485 billion a year ago [6]. - The number of shares outstanding increased to 23,279,435 as of September 30, 2025, from 23,135,624 at December 31, 2024, indicating a growth in equity participation [22].

NEW YORK, Oct. 29, 2025 (GLOBE NEWSWIRE) -- Medallion Financial Corp. (NASDAQ: MFIN, “Medallion” or the “Company”), a specialty finance company that originates and services loans in various consumer and commercial industries, along with offering loan origination services to fintech strategic partners, today announced its financial results for the three and nine months ended September 30, 2025. 2025 Third Quarter Highlights Total net income attributable to stockholders for the 2025 third quarter was $7.8 mil ...

SALT LAKE CITY, Oct. 29, 2025 (GLOBE NEWSWIRE) -- Medallion Bank (Nasdaq: MBNKO, 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, 2025. The Bank is a wholly owned subsidiary of Medallion Financial Corp. (Nasdaq: MFIN). 2025 Third Quarter Highlights Net income of $19.8 million, compared to $15.5 m ...

Alvin Murstein to Serve as Executive ChairmanNEW YORK, Oct. 28, 2025 (GLOBE NEWSWIRE) -- Medallion Financial Corp. (NASDAQ: MFIN, the “Company”), a specialty finance company that originates and services loans in various consumer and commercial industries, as well as loan products and services offered through fintech strategic partners, announced today that its Board of Directors has appointed Andrew Murstein as Chief Executive Officer, effective January 31, 2026. Andrew Murstein will continue to serve as Pr ...

Conference Call Scheduled for 9:00 a.m. ET on Thursday, October 30, 2025NEW YORK, Oct. 20, 2025 (GLOBE NEWSWIRE) -- Medallion Financial Corp. (NASDAQ: MFIN, the “Company”), a specialty finance company that originates and services loans in various consumer and commercial industries, as well as loan products and services offered through fintech strategic partners, announced today that it will report its financial results for the quarter ended September 30, 2025, after market close on Wednesday, October 29, 20 ...

PART I – FINANCIAL INFORMATION This section presents the unaudited consolidated financial statements and management's discussion and analysis - **Medallion Financial Corp.** is a specialty finance company focused on consumer finance and commercial lending, operating through wholly-owned subsidiaries including **Medallion Bank**[13](index=13&type=chunk) Selected Consolidated Financial Data | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | | Total Assets | $2,879,994 | $2,868,606 | | Total Liabilities | $2,347,429 | $2,429,648 | | Total Equity | $532,565 | $438,958 | | Common Shares Outstanding | 23,246,593 | 23,135,624 | | Book Value Per Common Share | $16.77 | $16.00 | [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents **Medallion Financial Corp.**'s unaudited consolidated financial statements for Q2 and YTD 2025 [Basis of Preparation](index=4&type=section&id=BASIS%20OF%20PREPARATION) The financial statements are unaudited, prepared under SEC rules and GAAP, focusing on consumer and commercial lending growth - The financial statements are unaudited and prepared in accordance with SEC rules and GAAP, with certain condensed disclosures[13](index=13&type=chunk) - The Company's strategic focus is on growing its consumer finance and commercial lending businesses[13](index=13&type=chunk) Total Assets | Metric | June 30, 2025 (in billions) | December 31, 2024 (in billions) | | :---------- | :-------------------------- | :------------------------------ | | Total Assets | $2.88 | $2.87 | [Consolidated Balance Sheets](index=5&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) Overview of the company's financial position, including assets, liabilities, and equity Table Data | Asset/Liability Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------- | :----------------------------- | :----------------------------- | | Cash and cash equivalents | $110,361 | $98,238 | | Net loans receivable | $2,305,665 | $2,265,428 | | Total assets | $2,879,994 | $2,868,606 | | Deposits | $2,009,176 | $2,090,071 | | Long-term debt | $199,928 | $232,159 | | Total liabilities | $2,347,429 | $2,429,648 | | Total stockholders' equity | $389,896 | $370,170 | | Non-controlling interest | $142,669 | $68,788 |\ | Total equity | $532,565 | $438,958 | - Total assets increased slightly to **$2.88 billion** as of June 30, 2025, from **$2.87 billion** at December 31, 2024. Net loans receivable saw an increase, while deposits decreased[16](index=16&type=chunk) - Non-controlling interest in consolidated subsidiaries significantly increased from **$68.8 million** to **$142.7 million**, contributing to the overall increase in total equity[16](index=16&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Analysis of the company's revenues, expenses, and net income over specific periods Table Data | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total interest income | $77,442 | $70,704 | $152,867 | $137,774 | | Total interest expense | $24,072 | $20,836 | $48,085 | $39,989 | | Net interest income | $53,370 | $49,868 | $104,782 | $97,785 | | Provision for credit losses | $21,562 | $18,577 | $43,576 | $35,778 | | Net income attributable to Medallion Financial Corp. | $11,069 | $7,101 | $23,083 | $17,125 | | Basic earnings per share | $0.49 | $0.31 | $1.02 | $0.76 | | Diluted earnings per share | $0.46 | $0.30 | $0.96 | $0.73 | - Net income attributable to **Medallion Financial Corp.** increased significantly by **55.9%** for the three months ended June 30, 2025, and by **34.8%** for the six months ended June 30, 2025, compared to the prior year periods[21](index=21&type=chunk) - Total interest income grew, driven by increased interest and fees on loans, while total interest expense also rose due to higher interest on deposits and borrowings[21](index=21&type=chunk) [Consolidated Statements of Other Comprehensive Income](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OTHER%20COMPREHENSIVE%20INCOME) Details of net income and other comprehensive income components Table Data | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income after taxes | $13,667 | $8,613 | $27,193 | $20,149 | | Other comprehensive (loss) income, net of tax | $(89) | $102 | $549 | $(48) | | Total comprehensive income attributable to Medallion Financial Corp. | $10,980 | $7,203 | $23,632 | $17,077 | - Total comprehensive income attributable to **Medallion Financial Corp.** increased by **52.4%** for the three months and **38.4%** for the six months ended June 30, 2025, compared to the same periods in 2024[24](index=24&type=chunk) [Consolidated Statement of Changes in Stockholders' Equity](index=8&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20CHANGES%20IN%20STOCKHOLDERS'%20EQUITY) Summary of changes in equity, including net income and non-controlling interests - Total equity increased from **$438.96 million** at December 31, 2024, to **$532.57 million** at June 30, 2025, primarily driven by net income and a significant increase in non-controlling interest equity raised by **Medallion Bank**[26](index=26&type=chunk) Table Data | Equity Component (in thousands) | Balance at Dec 31, 2024 | Balance at June 30, 2025 | | :------------------------------ | :---------------------- | :----------------------- | | Common Stock | $293 | $295 | | Additional Paid In Capital | $293,412 | $295,834 | | Treasury Stock | $(50,144) | $(51,130) | | Retained Earnings | $130,256 | $147,995 | | Accumulated Other Comprehensive Loss | $(3,647) | $(3,098) | | Total Stockholders' Equity | $370,170 | $389,896 | | Non-controlling Interest | $68,788 | $142,669 | | Total Equity | $438,958 | $532,565 | - **Medallion Bank** raised **$73.13 million** in non-controlling interest equity during the six months ended June 30, 2025[26](index=26&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Analysis of cash generated and used by operating, investing, and financing activities Table Data | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $25,536 | $59,900 | | Net cash used for investing activities | $(30,296) | $(204,517) | | Net cash (used in) provided by financing activities | $(12,818) | $152,733 | | Net (decrease) increase in cash and cash equivalents | $(17,578) | $8,116 | | Cash and cash equivalents, end of period | $151,994 | $157,961 | - Net cash provided by operating activities decreased significantly in the first six months of 2025 compared to 2024, primarily due to changes in other assets and accounts payable/accrued expenses[31](index=31&type=chunk) - Financing activities shifted from providing **$152.7 million** in cash in 2024 to using **$12.8 million** in 2025, despite **$73.1 million** in non-controlling interest equity raised by **Medallion Bank**, due to higher repayments of time deposits and funds borrowed[31](index=31&type=chunk) [Notes to Consolidated Financial Statements](index=11&type=section&id=NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Detailed explanations and disclosures supporting the consolidated financial statements [(1) Organization of Medallion Financial Corp. and Its Subsidiaries](index=11&type=section&id=(1)%20ORGANIZATION%20OF%20MEDALLION%20FINANCIAL%20CORP.%20AND%20ITS%20SUBSIDIARIES) Overview of **Medallion Financial Corp.**'s structure and primary business segments - **Medallion Financial Corp.** is a specialty finance company operating through wholly-owned subsidiaries, primarily **Medallion Bank**, which originates consumer loans for recreational vehicles, boats, collector cars, and home improvements[34](index=34&type=chunk) - Other subsidiaries include **Medallion Capital** (SBIC for mezzanine financing) and **Medallion Funding LLC** (historically taxi medallion lending)[35](index=35&type=chunk) - The **Bank** funds loans primarily with nationally originated time certificates of deposit and has not originated new taxi medallion loans since 2014[34](index=34&type=chunk) [(2) Summary of Significant Accounting Policies](index=11&type=section&id=(2)%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Key accounting principles and estimates used in preparing the financial statements - The consolidated financial statements are prepared in accordance with GAAP, requiring management estimates for items like goodwill, intangible assets, and allowance for credit losses[37](index=37&type=chunk) - Loans held for investment are reported at amortized cost, while loans held for sale are reported at the lower of amortized cost or fair value[47](index=47&type=chunk)[52](index=52&type=chunk) - The Company follows ASC 326 (CECL methodology) for allowance for credit losses, recognizing lifetime expected losses based on historical performance, qualitative adjustments, and macroeconomic factors[54](index=54&type=chunk) **Bank Capital Ratios (June 30, 2025 vs. December 31, 2024):** | Capital Ratio | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Tier 1 leverage ratio | 19.3% | 15.7% | | Common equity tier 1 capital ratio | 13.8% | 13.3% | | Tier 1 capital ratio | 19.5% | 16.1% | | Total capital ratio | 20.8% | 17.4% | - The **Bank**'s Tier 1 leverage ratio was **19.3%** at June 30, 2025, exceeding the **15%** minimum required by **$106.9 million**, indicating a 'well-capitalized' status[69](index=69&type=chunk) [(3) Investment Securities](index=20&type=section&id=(3)%20INVESTMENT%20SECURITIES) Details of the company's investment securities portfolio and unrealized gains/losses **Investment Securities Available for Sale (in thousands):** | Category | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :------------------------------------------- | :----------------------- | :--------------------------- | | Mortgage-backed securities | $42,930 | $36,701 | | State and municipalities | $18,433 | $15,938 | | Agency bonds | $166 | $2,166 | | **Total** | **$61,529** | **$54,805** | - Total investment securities increased to **$61.5 million** at June 30, 2025, from **$54.8 million** at December 31, 2024[76](index=76&type=chunk) - The Company had **$5.5 million** in gross unrealized losses on investment securities at June 30, 2025, primarily in mortgage-backed securities and state/municipal bonds, but does not intend to sell these securities and expects to recover amortized cost[76](index=76&type=chunk)[78](index=78&type=chunk) [(4) Loans and Allowance for Credit Losses](index=21&type=section&id=(4)%20LOANS%20AND%20ALLOWANCE%20FOR%20CREDIT%20LOSSES) Analysis of the loan portfolio, credit quality, and allowance for credit losses **Loan Portfolio Classification (in thousands):** | Loan Type | June 30, 2025 Amount | June 30, 2025 % of Total | December 31, 2024 Amount | December 31, 2024 % of Total | | :------------------ | :------------------- | :----------------------- | :----------------------- | :--------------------------- | | Recreation | $1,486,047 | 60% | $1,422,403 | 57% | | Home improvement | $803,535 | 32% | $827,211 | 33% | | Commercial | $121,415 | 5% | $111,273 | 4% | | Taxi medallion | $1,564 | * | $1,909 | * | | Loans held for sale | $72,490 | 2% | $128,226 | 5% | | **Total Loans** | **$2,485,051** | **100%** | **$2,491,022** | **100%** | **Allowance for Credit Losses (in thousands):** | Loan Type | June 30, 2025 Amount | June 30, 2025 % of Allowance | June 30, 2025 % of Loan Category | | :--------------- | :------------------- | :--------------------------- | :------------------------------- | | Recreation | $75,040 | 70% | 5.05% | | Home improvement | $20,422 | 19% | 2.54% | | Commercial | $11,096 | 10% | 9.14% | | Taxi medallion | $338 | 1% | 21.62% | | **Total** | **$106,896** | **100%** | | - Total loans decreased slightly from **$2.49 billion** at December 31, 2024, to **$2.48 billion** at June 30, 2025. Recreation loans increased, while home improvement and loans held for sale decreased[81](index=81&type=chunk) - The total allowance for credit losses increased to **$106.9 million** at June 30, 2025, from **$97.4 million** at December 31, 2024, with recreation loans accounting for the largest portion[87](index=87&type=chunk)[90](index=90&type=chunk) **Loans 90 Days or More Past Due (in thousands):** | Loan Type | June 30, 2025 Amount | June 30, 2025 % of Total Loans | December 31, 2024 Amount | December 31, 2024 % of Total Loans | | :--------------- | :------------------- | :----------------------------- | :----------------------- | :--------------------------------- | | Recreation | $7,265 | 0.3% | $10,018 | 0.4% | | Home improvement | $1,292 | 0.1% | $1,386 | 0.1% | | Commercial | $20,402 | 0.8% | $16,337 | 0.7% | | **Total** | **$28,959** | **1.2%** | **$27,741** | **1.1%** | [(5) Funds Borrowed](index=25&type=section&id=(5)%20FUNDS%20BORROWED) Details of the company's funding sources, including deposits and various borrowings **Outstanding Funds Borrowed (in thousands):** | Source | June 30, 2025 Amount | December 31, 2024 Amount | Weighted Average Contractual Rate (June 30, 2025) | | :---------------------------- | :------------------- | :----------------------- | :------------------------------------------------ | | Deposits | $2,009,767 | $2,091,663 | 3.81% | | Privately placed notes | $146,500 | $146,500 | 8.12% | | SBA debentures and borrowings | $70,500 | $70,250 | 3.81% | | Trust preferred securities | $33,000 | $33,000 | 6.70% | | Federal reserve and other borrowings | $40,000 | $35,000 | 4.50% | | **Total** | **$2,299,767** | **$2,376,413** | **4.14%** | - Total outstanding funds borrowed decreased from **$2.38 billion** at December 31, 2024, to **$2.30 billion** at June 30, 2025, primarily due to a reduction in deposits[100](index=100&type=chunk) - The weighted average contractual interest rate on total borrowings increased slightly to **4.14%** at June 30, 2025, from **4.09%** at December 31, 2024[100](index=100&type=chunk) - The **Bank** had **$40.0 million** utilized from its **$88.7 million** secured borrowing capacity with the Federal Reserve, collateralized by home improvement loans[104](index=104&type=chunk) [(6) Leases](index=27&type=section&id=(6)%20LEASES) Information on operating lease assets, liabilities, and associated costs **Operating Lease Information (in thousands):** | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Operating lease right-of-use assets | $5,946 | $6,922 | | Total operating lease liabilities | $6,331 | $7,422 | | Weighted average remaining lease term | 3.5 years | 4.1 years | | Weighted average discount rate | 5.55% | 5.56% | - Operating lease costs for the three and six months ended June 30, 2025, were **$0.56 million** and **$1.18 million**, respectively, showing a slight decrease from the prior year[114](index=114&type=chunk) [(7) Income Taxes](index=27&type=section&id=(7)%20INCOME%20TAXES) Analysis of deferred tax assets, liabilities, and the income tax provision **Deferred Tax Assets and Liabilities (in thousands):** | Category | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | Total deferred tax assets | $23,329 | $21,777 | | Total deferred tax liabilities | $42,590 | $42,772 | | Deferred tax liability, net | $19,261 | $20,995 | **Income Tax Provision (in thousands):** | Component | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Current Federal | $5,757 | $4,792 | $10,418 | $6,521 | | Current State | $2,569 | $1,476 | $4,091 | $2,119 | | Deferred Federal | $(1,709) | $(1,916) | $(1,448) | $1,200 | | Deferred State | $(812) | $(570) | $(543) | $300 | | **Net provision for income taxes** | **$5,805** | **$3,782** | **$12,518** | **$10,140** | - The net deferred tax liability decreased to **$19.26 million** at June 30, 2025, from **$20.99 million** at December 31, 2024[118](index=118&type=chunk) - The total income tax provision increased for both the three and six months ended June 30, 2025, compared to the prior year periods, reflecting higher income before taxes[120](index=120&type=chunk) [(8) Stock Options and Restricted Stock](index=28&type=section&id=(8)%20STOCK%20OPTIONS%20AND%20RESTRICTED%20STOCK) Details of equity incentive plans and stock-based compensation - The Company's 2018 Equity Incentive Plan was amended to increase authorized shares, with **2,287,437** shares remaining issuable as of June 30, 2025[123](index=123&type=chunk) **Stock-Based Compensation Data (June 30, 2025):** | Metric | Amount/Shares | | :-------------------------------------- | :------------ | | Outstanding stock options | 838,813 | | Unvested restricted stock | 727,415 | | Unvested performance stock units (PSUs) | 823,854 | | Unvested restricted stock units (RSUs) | 86,410 | | Vested, unissued RSUs | 323,977 | | Total unrecognized compensation cost | $8.1 million | **Stock-Based Compensation Expense (in thousands):** | Period | 2025 (3 months) | 2024 (3 months) | 2025 (6 months) | 2024 (6 months) | | :------------------------------------ | :-------------- | :-------------- | :-------------- | :-------------- | | Total stock-based compensation expense | $1,700 | $1,600 | $3,400 | $3,100 | [(9) Segment Reporting](index=32&type=section&id=(9)%20SEGMENT%20REPORTING) Financial performance and characteristics of the company's operating segments - The Company operates through four lending segments: recreation, home improvement, commercial, and taxi medallion lending, plus a non-operating segment for corporate and other investments[143](index=143&type=chunk) - The recreation lending segment is the largest, with **54%** of its portfolio in RVs, **21%** in boats, and **12%** in collector cars, concentrated in Texas (**16%**) and Florida (**10%**)[144](index=144&type=chunk) - The home improvement lending segment focuses on roofs (**30%**), swimming pools (**30%**), and windows (**11%**), with concentrations in Florida (**13%**) and Texas (**12%**)[144](index=144&type=chunk) **Net Income After Taxes by Segment (in thousands):** | Segment | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------- | :------ | :------ | :------- | :------- | | Recreation Lending | $9,949 | $6,711 | $17,963 | $12,652 | | Home Improvement Lending | $2,935 | $2,010 | $6,263 | $6,396 | | Commercial Lending | $3,298 | $481 | $8,207 | $4,058 | | Taxi Medallion Lending | $394 | $87 | $891 | $700 | | Corporate and Other Investments | $(2,909) | $(676) | $(6,131) | $(3,657) | | **Consolidated** | **$13,667** | **$8,613** | **$27,193** | **$20,149** | [(10) Commitments and Contingencies](index=36&type=section&id=(10)%20COMMITMENTS%20AND%20CONTINGENCIES) Information on contractual commitments and potential legal liabilities - The Company has employment agreements with key officers, with future minimum payments of approximately **$8.6 million** expiring through 2028[163](index=163&type=chunk) - The SEC litigation regarding anti-fraud, books and records, internal controls, and anti-touting provisions from 2015-2017 was resolved with a Final Judgment on May 30, 2025. The Company paid a civil penalty of **$3.0 million** and agreed to compliance undertakings[165](index=165&type=chunk) - As of June 30, 2025, there were no other material commitments or legal proceedings expected to have a material adverse impact on the Company's financial condition or results of operations[164](index=164&type=chunk)[166](index=166&type=chunk) [(11) Related Party Transactions](index=37&type=section&id=(11)%20RELATED%20PARTY%20TRANSACTIONS) Disclosure of transactions with related parties, including officers and directors - Jeffrey Rudnick, son of a Company director, serves as Executive Vice President with an annual salary of **$269,000** and received cash and equity bonuses[168](index=168&type=chunk) [(12) Fair Value of Financial Instruments](index=38&type=section&id=(12)%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) Estimates of fair value for various financial instruments - Fair value estimates for financial instruments are derived using various methods, including discounted cash flow for loans and market spreads for fixed-rate borrowings[171](index=171&type=chunk)[173](index=173&type=chunk) **Fair Value of Financial Instruments (in thousands):** | Financial Instrument | June 30, 2025 Carrying Amount | June 30, 2025 Fair Value | December 31, 2024 Carrying Amount | December 31, 2024 Fair Value | | :------------------------------- | :------------------------------ | :----------------------- | :-------------------------------- | :--------------------------- | | Cash, cash equivalents, and federal funds sold | $151,994 | $151,994 | $169,572 | $169,572 | | Investment securities | $61,529 | $61,529 | $54,805 | $54,805 | | Loans held for investment, net of allowance | $2,305,665 | $2,255,160 | $2,265,428 | $2,238,645 | | Loans held for sale | $72,490 | $75,573 | $128,226 | $133,244 | | Funds borrowed | $2,304,317 | $2,318,531 | $2,379,413 | $2,371,434 | [(13) Fair Value of Assets and Liabilities](index=39&type=section&id=(13)%20FAIR%20VALUE%20OF%20ASSETS%20AND%20LIABILITIES) Categorization of assets and liabilities measured at fair value using a hierarchy - The Company categorizes assets and liabilities measured at fair value into a three-level hierarchy based on the observability of valuation inputs[181](index=181&type=chunk) **Fair Value Hierarchy for Assets (in thousands):** | Category | June 30, 2025 Level 1 | June 30, 2025 Level 2 | June 30, 2025 Level 3 | June 30, 2025 Total | | :------------------ | :-------------------- | :-------------------- | :-------------------- | :------------------ | | Investment securities | $0 | $61,529 | $0 | $61,529 | | Equity securities | $1,763 | $0 | $0 | $1,763 | | **Total** | **$1,763** | **$61,529** | **$0** | **$63,292** | - Equity investments without readily determinable fair value are measured at cost less impairment plus or minus observable price changes, with cumulative impairment of **$6.3 million** as of June 30, 2025[42](index=42&type=chunk) [(14) Medallion Bank Preferred Stock (Non-controlling interest)](index=41&type=section&id=(14)%20MEDALLION%20BANK%20PREFERRED%20STOCK%20(Non-controlling%20interest)) Details of **Medallion Bank**'s preferred stock issuances and redemptions - On May 29, 2025, **Medallion Bank** closed an initial public offering of Series G Preferred Stock, raising **$73.1 million** in net proceeds for general corporate purposes, including increasing capital levels and growing loan portfolios[196](index=196&type=chunk) - The **Bank** announced the redemption of all outstanding Series F Preferred Stock on July 1, 2025, for **$46.0 million**, which will result in a **$3.5 million** charge to earnings attributable to common shareholders[197](index=197&type=chunk) - The **Bank** also has Series E Preferred Stock outstanding, purchased by the U.S. Treasury under the SBLF program, with a **9%** dividend rate[199](index=199&type=chunk) [(15) Subsequent Events](index=42&type=section&id=(15)%20SUBSEQUENT%20EVENTS) Significant events occurring after the balance sheet date - On July 1, 2025, **Medallion Bank** redeemed its Series F Preferred Stock for **$46.0 million**, resulting in a **$3.5 million** charge to earnings attributable to common shareholders[200](index=200&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=39&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management's discussion and analysis of financial condition and results of operations - The Company's focus and growth are in consumer finance and commercial lending, primarily through **Medallion Bank** and **Medallion Capital**[203](index=203&type=chunk) - Net interest income is the primary driver of earnings, influenced by loan portfolio yield and the cost of borrowed funds, which include bank certificates of deposit, SBA debentures, and privately placed notes[204](index=204&type=chunk) - Total assets were **$2.88 billion** as of June 30, 2025, with consumer loans representing **95%** of the gross loan portfolio[203](index=203&type=chunk) [Company Background](index=39&type=section&id=COMPANY%20BACKGROUND) Overview of **Medallion Financial Corp.**'s business model and strategic focus - **Medallion Financial Corp.** is a specialty finance company with a strategic focus on consumer finance and commercial lending, primarily through **Medallion Bank** and **Medallion Capital**[203](index=203&type=chunk) - The **Bank** originates consumer loans for RVs, boats, collector cars, and home improvements, and provides services to fintech partners, while **Medallion Capital** focuses on mezzanine financing[203](index=203&type=chunk) - The **Bank** launched a strategic partnership program in 2019 to provide lending services to fintech companies[208](index=208&type=chunk) [Critical Accounting Policies and Estimates](index=44&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) Key accounting policies requiring significant management judgment - Critical accounting policies include the allowance for credit losses and goodwill and intangible assets, which involve significant management judgments and uncertainties[210](index=210&type=chunk) - No material changes in critical accounting policies and estimates have occurred since the Annual Report on Form 10-K for December 31, 2024[210](index=210&type=chunk) [Recently Issued and Adopted Accounting Standards](index=44&type=section&id=RECENTLY%20ISSUED%20AND%20ADOPTED%20ACCOUNTING%20STANDARDS) Impact of new accounting pronouncements on the financial statements - ASU 2023-09 (Income Taxes) is effective for annual periods after December 15, 2024, and is not expected to have a material impact[211](index=211&type=chunk) - ASU 2024-03 (Expense Disaggregation of Income Statement Expenses) requires additional disaggregation of expenses and is effective for public business entities after December 15, 2026, with the Company currently assessing its impact[212](index=212&type=chunk) [Control Statutes and Regulations](index=44&type=section&id=CONTROL%20STATUTES%20AND%20REGULATIONS) Regulatory environment and compliance requirements for the company and its bank subsidiary - The **Bank** is an FDIC-insured industrial bank subject to federal and Utah laws and regulations, including capital requirements and restrictions on transactions with affiliates[213](index=213&type=chunk) - Acquiring control (e.g., **25%** or more of voting stock, or **10%** with certain control factors) of the **Bank** or **Medallion Financial Corp.** requires prior regulatory approval[213](index=213&type=chunk)[214](index=214&type=chunk) - The Company's operations are subject to various federal, state, and local laws regulating credit granting, interest rates, disclosures, collection practices, and anti-discrimination[215](index=215&type=chunk) [Average Balances and Rates](index=46&type=section&id=AVERAGE%20BALANCES%20AND%20RATES) Analysis of average interest-earning assets, interest-bearing liabilities, and their rates **Average Yield on Interest-Earning Assets:** | Asset Category | Q2 2025 Yield | Q2 2024 Yield | YTD 2025 Yield | YTD 2024 Yield | | :------------- | :------------ | :------------ | :------------- | :------------- | | Total Loans | 12.27% | 11.98% | 12.16% | 11.89% | | Total Interest-Earning Assets (net of allowance) | 12.23% | 11.94% | 12.16% | 11.84% | **Average Cost of Interest-Bearing Liabilities:** | Liability Category | Q2 2025 Cost | Q2 2024 Cost | YTD 2025 Cost | YTD 2024 Cost | | :----------------- | :----------- | :----------- | :------------ | :------------ | | Deposits | 3.84% | 3.41% | 3.83% | 3.31% | | Total Interest-Bearing Liabilities | 4.20% | 3.82% | 4.19% | 3.75% | - The yield on total loans increased by **29 basis points** for Q2 2025 and **27 basis points** for YTD 2025, reflecting higher rates on new consumer originations[222](index=222&type=chunk) - The average interest cost for Q2 2025 and YTD 2025 increased by **38** and **44 basis points**, respectively, primarily due to higher costs associated with deposits in the current interest rate environment[224](index=224&type=chunk) [Rate/Volume Analysis](index=48&type=section&id=RATE/VOLUME%20ANALYSIS) Impact of changes in interest rates and volumes on net interest income - The increase in interest income for Q2 and YTD 2025 was mainly driven by the growth in consumer loan portfolios and higher yields on interest-earning assets[227](index=227&type=chunk) - The increase in interest expense was primarily due to higher borrowing costs, especially for deposits, as older deposits mature and are replaced at current market rates, and an overall increase in borrowings[227](index=227&type=chunk) - The Company expects borrowing costs to continue increasing as new deposits and funds are secured at prevailing higher rates[230](index=230&type=chunk) [Loans](index=49&type=section&id=LOANS) Detailed analysis of loan originations and portfolio trends by segment - The recreation segment continued to grow, while the home improvement lending segment experienced a decline in the three and six months ended June 30, 2025, compared to the prior year[233](index=233&type=chunk) **Gross Loan Originations (in thousands):** | Segment | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------ | :------ | :------ | :------- | :------- | | Recreation | $142,789 | $209,563 | $229,622 | $315,328 | | Home improvement | $54,253 | $67,990 | $103,049 | $119,566 | | Commercial | $9,368 | $7,000 | $19,075 | $7,000 | | Strategic partnership | $168,637 | $24,288 | $304,877 | $40,034 | | **Total** | **$375,047** | **$309,091** | **$656,695** | **$482,178** | - Strategic partnership loan originations significantly increased in 2025, contributing to the overall growth in total originations[234](index=234&type=chunk) [Provision and Allowance for Credit Losses](index=51&type=section&id=PROVISION%20AND%20ALLOWANCE%20FOR%20CREDIT%20LOSSES) Assessment of credit quality and the allowance for expected loan losses **Allowance for Credit Losses (in thousands):** | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------------- | :------------ | :---------------- | | Total allowance for credit losses | $106,896 | $97,368 | | % of total loans held for investment | 4.43% | 4.12% | **Provision for Credit Losses (in thousands):** | Period | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------------- | :------ | :------ | :------- | :------- | | Total provision for credit losses | $21,562 | $18,577 | $43,576 | $35,778 | | Recreation loans provision | $15,336 | $15,795 | $32,206 | $32,825 | | Home improvement loans provision | $3,934 | $3,279 | $6,779 | $4,177 | | Commercial loans provision | $2,912 | $478 | $6,026 | $694 | - The allowance for credit losses increased by **31 basis points** as a percentage of total loans from December 31, 2024, to June 30, 2025[246](index=246&type=chunk) - Provisions for credit losses increased for both the three and six months ended June 30, 2025, driven by rising loss rates and expected losses in recreation loans, partially offset by decreases in home improvement loans[238](index=238&type=chunk) [Segment Results](index=53&type=section&id=SEGMENT%20RESULTS) Financial performance and key metrics for each operating segment [Recreation Lending](index=53&type=section&id=Recreation%20Lending) Performance and portfolio characteristics of the recreation lending segment - Recreation lending is a significant income source, accounting for **66%** of total interest income for Q2 and YTD 2025[251](index=251&type=chunk) - The recreation loan portfolio totaled **$1.5 billion** as of June 30, 2025, with an average interest rate of **15.12%**, up **32 basis points** from a year ago[255](index=255&type=chunk) **Recreation Loan Originations (in thousands):** | Period | 2025 | 2024 | 2023 | | :------------ | :-------- | :-------- | :-------- | | First Quarter | $86,833 | $105,765 | $101,681 | | Second Quarter | $142,789 | $209,563 | $190,007 | | **Year Ended** | **$229,622** | **$526,634** | **$447,039** | - Origination volumes decreased in 2025, reflecting a focus on originating loans expected to perform better during economic downturns[256](index=256&type=chunk) - Non-prime originations constituted **36%** of total originations for the six months ended June 30, 2025[259](index=259&type=chunk) [Home Improvement Lending](index=55&type=section&id=Home%20Improvement%20Lending) Performance and portfolio characteristics of the home improvement lending segment - The home improvement loan portfolio totaled **$803.5 million** as of June 30, 2025, with an average interest rate of **9.87%**, up **16 basis points** from a year ago[265](index=265&type=chunk) **Home Improvement Loan Originations (in thousands):** | Period | 2025 | 2024 | 2023 | | :------------ | :-------- | :-------- | :-------- | | First Quarter | $48,796 | $51,576 | $94,981 | | Second Quarter | $54,253 | $67,990 | $117,035 | | **Year Ended** | **$103,049** | **$298,642** | **$357,394** | - Origination volumes were lower in 2025, reflecting a focus on higher-performing loans during economic downturns[266](index=266&type=chunk) - The allowance for credit losses increased by **11%** from a year ago, reflecting higher delinquency and potential losses[265](index=265&type=chunk) [Commercial Lending](index=57&type=section&id=Commercial%20Lending) Performance and portfolio characteristics of the commercial lending segment - The commercial lending segment originates senior and subordinated mezzanine loans nationwide, with a concentration in California (**29%** of the portfolio)[273](index=273&type=chunk)[277](index=277&type=chunk) - Net gains on equity investments were **$6.1 million** for Q2 2025 and **$15.5 million** for YTD 2025, significantly higher than the prior year[275](index=275&type=chunk) - Provision for credit losses in commercial lending increased substantially to **$2.9 million** for Q2 2025 and **$6.0 million** for YTD 2025, reflecting specific commercial loan assessments[275](index=275&type=chunk) [Taxi Medallion Lending](index=58&type=section&id=Taxi%20Medallion%20Lending) Performance and portfolio characteristics of the taxi medallion lending segment - The taxi medallion lending segment operates primarily in the New York City metropolitan area, with a consistent valuation of **$79,500** for New York City and Newark medallions[278](index=278&type=chunk) - All taxi medallion loans are on nonaccrual status, with underperforming loans transferred to loan collateral in process of foreclosure[278](index=278&type=chunk) - Net recoveries and gains from taxi medallion and related assets were **$1.4 million** for Q2 2025 and **$3.0 million** for YTD 2025, reflecting collection efforts[279](index=279&type=chunk) [Corporate and Other Investments](index=59&type=section&id=Corporate%20and%20Other%20Investments) Financial results for corporate activities and other investment holdings - This segment includes equity and investment securities, legacy commercial business, and unallocated corporate items, with all goodwill related to the **Bank**'s recreation and home improvement segments[284](index=284&type=chunk) - Strategic partnership loans, issued by the **Bank** and sold to third parties without recourse, significantly increased to **$12.3 million** at June 30, 2025, from **$1.3 million** at June 30, 2024[285](index=285&type=chunk) **Strategic Partnership Loan Originations (in thousands):** | Period | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :----- | :------ | :------ | :------- | :------- | | Amount | $168,637 | $24,288 | $304,900 | $40,000 | [Summary Consolidated Financial Data](index=59&type=section&id=SUMMARY%20CONSOLIDATED%20FINANCIAL%20DATA) Key consolidated financial ratios and performance indicators **Selected Consolidated Financial Ratios:** | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------------- | :------ | :------ | :------- | :------- | | Return on average assets | 1.93% | 1.30% | 1.93% | 1.55% | | Return on average equity | 11.13% | 8.25% | 11.63% | 9.70% | | Net interest margin, gross | 8.09% | 8.12% | 8.01% | 8.11% | | Equity to assets | 18.49% | 15.31% | 18.49% | 15.31% | | Debt to equity | 4.3x | 5.4x | 4.3x | 5.4x | | Net charge-offs as a % of average loans receivable | 2.44% | 2.20% | 2.77% | 2.68% | | Reserve coverage ratio | 4.43% | 3.76% | 4.43% | 3.76% | - Return on average assets and equity improved for both the three and six months ended June 30, 2025, compared to the prior year periods[289](index=289&type=chunk) - Equity to assets ratio increased to **18.49%** at June 30, 2025, from **15.31%** at June 30, 2024, while the debt to equity ratio improved from **5.4x** to **4.3x**[289](index=289&type=chunk) [Consolidated Results of Operations](index=60&type=section&id=CONSOLIDATED%20RESULTS%20OF%20OPERATIONS) Overall financial performance, including net income and key revenue/expense items **Key Financial Performance (in thousands, except EPS):** | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------------- | :------ | :------ | :------- | :------- | | Net income attributable to shareholders | $11,100 | $7,100 | $23,100 | $17,100 | | Diluted EPS | $0.46 | $0.30 | $0.96 | $0.73 | | Total interest income | $77,400 | $70,700 | $152,900 | $137,800 | | Total interest expense | $24,100 | $20,800 | $48,100 | $40,000 | | Net interest income | $53,400 | $49,900 | $104,800 | $97,800 | | Provision for credit losses | $21,600 | $18,600 | $43,600 | $35,800 | | Net other income | $9,200 | $1,100 | $20,800 | $6,500 | | Operating expenses | $21,500 | $20,000 | $42,300 | $38,200 | - Net income attributable to shareholders and diluted EPS significantly increased for both the three and six months ended June 30, 2025, compared to the prior year[292](index=292&type=chunk) - Net interest margin before allowance for credit losses slightly tightened to **8.09%** for Q2 2025 and **8.01%** for YTD 2025, reflecting rising borrowing costs partially offset by higher loan yields[299](index=299&type=chunk) - Net other income saw a substantial increase, driven by higher gains on equity investments and strategic partnership fees[300](index=300&type=chunk) [Asset/Liability Management](index=61&type=section&id=ASSET/LIABILITY%20MANAGEMENT) Management of interest rate risk and balance sheet structure - The Company is exposed to interest rate risk due to mismatches in repricing of interest-earning assets and interest-bearing liabilities[303](index=303&type=chunk) - The one-year cumulative interest rate gap was a negative **$563.4 million**, or **21%** of interest rate sensitive assets, at June 30, 2025, indicating more repricing liabilities than assets within one year[309](index=309&type=chunk) - A hypothetical immediate **1%** increase in interest rates would result in an annualized increase to net income of **$1.7 million** as of June 30, 2025[328](index=328&type=chunk) [Liquidity and Capital Resources](index=63&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Sources of liquidity, capital adequacy, and capital management strategies - Sources of liquidity include brokered certificates of deposit, SBA debenture commitments, loan amortization, private/public debt issuances, and subsidiary preferred securities[311](index=311&type=chunk) - **Medallion Bank** raised **$73.1 million** in net proceeds from its Series G Preferred Stock IPO in May 2025 to increase capital and grow loan portfolios[312](index=312&type=chunk) - The Company repurchased **48,166** shares of common stock for **$0.5 million** during Q2 2025, with **$14.4 million** remaining authorized under its stock repurchase program[336](index=336&type=chunk) **Contractual Obligations (in thousands) as of June 30, 2025:** | Obligation Type | Less than 1 year | 1-2 years | 2-3 years | 3-4 years | 4-5 years | More than 5 years | Total | | :-------------------------- | :--------------- | :-------- | :-------- | :-------- | :-------- | :---------------- | :---- | | Borrowings | $750,778 | $547,954 | $439,412 | $241,129 | $216,994 | $103,500 | $2,299,767 | | Operating lease obligations | $2,556 | $2,275 | $638 | $582 | $598 | $247 | $6,896 | | **Total** | **$753,334** | **$550,229** | **$440,050** | **$241,711** | **$217,592** | **$103,747** | **$2,306,663** | [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=61&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Disclosure of market risk exposures and management strategies - No material changes in market risk disclosures since the last Annual Report on Form 10-K[338](index=338&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=61&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Evaluation of disclosure controls and internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=66&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Assessment of the effectiveness of disclosure controls and procedures - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[339](index=339&type=chunk) [Changes in Internal Control over Financial Reporting](index=66&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Report on any material changes in internal control over financial reporting - Management, including the CEO and CFO, concluded that there were no material changes in internal control over financial reporting during the quarter ended June 30, 2025[340](index=340&type=chunk) PART II—OTHER INFORMATION This section provides additional information not covered in Part I [ITEM 1. LEGAL PROCEEDINGS](index=62&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Details of legal proceedings and related commitments are provided - Details of legal proceedings are provided in Note 10 to the consolidated financial statements[342](index=342&type=chunk) [ITEM 1A. RISK FACTORS](index=62&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces various risks in its operations and financial performance - No material changes in risk factors since the Annual Report on Form 10-K for December 31, 2024[343](index=343&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=62&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) Details of unregistered equity sales and stock repurchase activities - The Company repurchased **48,166** shares of common stock at an aggregate cost of **$0.5 million** during the quarter ended June 30, 2025[344](index=344&type=chunk)[345](index=345&type=chunk) - As of June 30, 2025, **$14,406,534** remained authorized for repurchase under the stock repurchase program[344](index=344&type=chunk)[345](index=345&type=chunk) [ITEM 5. OTHER INFORMATION](index=62&type=section&id=ITEM%205.%20OTHER%20INFORMATION) Disclosure of trading arrangements by directors and officers - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers during the quarter[346](index=346&type=chunk) [ITEM 6. EXHIBITS](index=63&type=section&id=ITEM%206.%20EXHIBITS) List of documents filed as exhibits to the report - Exhibits include Amendment No. 3 to **Medallion Financial Corp.** 2018 Equity Incentive Plan, certifications from CEO and CFO, and XBRL instance documents[347](index=347&type=chunk) SIGNATURES Official signatures confirming the submission of the report - The report was signed by Alvin Murstein (Chairman and CEO) and Anthony N. Cutrone (EVP and CFO) on August 5, 2025[350](index=350&type=chunk)[351](index=351&type=chunk)

Financial Data and Key Metrics Changes - Net income increased by 56% to $11.1 million, with earnings per share rising to $0.46 [8][20] - Net interest income grew by 7% to $53.4 million, while the net interest margin remained steady at 8.09% [8][15] - Total loans increased to $2.49 billion, up 4% from the previous year [16][20] Business Line Data and Key Metrics Changes - Consumer lending, the largest business line, saw total originations decrease to $197 million from $277.6 million a year ago, but interest income rose by 9% to $71.2 million [9][10] - The recreational loan book grew to $1.55 billion, representing 62% of total loans, while the home improvement loan book reached $803.5 million, accounting for 32% of total loans [9][10] - The commercial segment generated $3.3 million in income this quarter, with equity gains totaling $27.6 million over the past eight quarters [11] Market Data and Key Metrics Changes - Delinquencies for recreational loans were at 0.49%, while home improvement loans had a delinquency rate of 0.16% [9][10] - The average interest rate on deposits was 3.81% as of June [15] Company Strategy and Development Direction - The company is focused on disciplined execution and strategic positioning to drive growth across its lending segments [8] - Medallion Financial is committed to returning capital to shareholders, having repurchased over 48,000 shares and increased dividends by 20% year-over-year [13][20] - The company is expanding its strategic partnership program, which has seen record originations of $168.6 million this quarter [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's pipeline and the potential for continued success, despite challenges in the economic environment [13][14] - The company anticipates growth in originations as it manages capital and maintains underwriting standards [42] Other Important Information - The company raised over $75 million through a public offering of non-cumulative perpetual preferred stock [6] - Operating costs increased to $21.5 million, driven by technological initiatives aimed at improving servicing capabilities [19] Q&A Session Summary Question: What were the strategic partners that you sold the loans to identified? - The loans sold were typical recreational loans, not from strategic partnerships, with a sale of about $53 million closed in April [24][25] Question: Is that going to be an ongoing thing? - The company expects to continue selling loans, although not on a quarterly basis [27] Question: Were there any non-recurring items in the quarter aside from the gains? - The only non-recurring item was a $1.3 million gain on the loan sale [29] Question: Your reserve ratio is going up. What's the thinking in terms of managing both the reserves and the capital levels going forward? - The capital increased significantly due to a recent offering, providing ample capital for growth [34][35] Question: Is there anything to call out on the delinquency trend for recreational loans? - The increase in delinquency is attributed to older vintages, but newer loans are performing better [40] Question: Can you walk us through unit economics of these strategic partnership loans? - The company charges fees ranging from 20 to 50 basis points for loans funded through FinTech partners, with higher yields compared to typical consumer loans [43][44] Question: Any outlook for loan growth, margin, and credit quality going forward? - The company expects to maintain current credit standards and margins, with potential expansion as interest rates fall [46][48]