Group 1 - The article does not provide any specific content related to a company or industry [1]

Financial Data and Key Metrics Changes - Net income for Q3 2025 was $7.8 million, or $0.32 per diluted share, which includes a non-recurring charge of $3.5 million related to the redemption of Series F preferred stock, resulting in adjusted earnings of $11.3 million [4][19] - Net interest income increased by 6% to $55.7 million, with a net interest margin of 8.21%, up 10 basis points from the previous year [14][4] - Total loans reached $2.559 billion, reflecting a 3% increase year-over-year [15] Business Line Data and Key Metrics Changes - Consumer lending, the largest segment, generated interest income of $74.1 million, a 5% increase, despite originations decreasing to $201.4 million from $235.6 million a year ago [5][6] - Recreational loans grew 3% to $1.603 billion, representing 63% of total loans, with delinquencies of 90+ days at 0.57% [6] - Home improvement loans decreased to $804 million, with originations of $59.7 million, and delinquencies at 0.16% [6] - Commercial loans reached $135.1 million, with new originations of $17.5 million [9] Market Data and Key Metrics Changes - The strategic partnership program saw record originations of $208.4 million, contributing approximately $1.5 million in fees and interest for the quarter [10][11] - The average interest rate on recreation loans was 15.77%, while home improvement loans averaged 10.9% [14] Company Strategy and Development Direction - The company is focused on disciplined execution and strategic positioning to drive growth across its lending segments [5] - Plans to expand the strategic partnership program by adding new partners in the coming quarters [10][40] - The company aims to maintain a growth strategy that has successfully guided its lending business over the past several years [52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver sustainable growth and attractive shareholder returns, supported by a diversified portfolio and prudent underwriting standards [12][13] - The company anticipates continued margin expansion and loan growth, particularly in the home improvement segment [43][46] Other Important Information - The company paid a quarterly dividend of $0.12 per share and has $14.4 million remaining under a $40 million share repurchase program [12] - The net book value per share increased to $17.07, up from $16.77 in the previous quarter [19] Q&A Session Summary Question: Was the operating EPS $0.46 a share? - Answer: The operating EPS was $0.32, with the $0.14 impact from the Series F preferred stock redemption bringing it to $0.46 [23][24] Question: Were there any loans sold in the quarter? - Answer: Other than within the strategic partnership program, there are plans to sell recreation loans in the next couple of quarters [25] Question: Does the increase in non-controlling income relate to the Series F preferred stock redemption? - Answer: Yes, the decrease on the balance sheet is due to the redemption of Series F [26] Question: What should be the non-controlling income quarterly going forward? - Answer: It is expected to be $2.33 million [28] Question: Do you have exposure to government employees given the government shutdown? - Answer: No, there is no exposure that would affect the company [31] Question: What is the outlook for strategic originations and fees in 2026? - Answer: The strategic partnership program is expected to continue growing, with plans to add new partners [40] Question: Why were recreation originations flat year over year? - Answer: The company raised credit standards and was cautious due to capital levels [41] Question: How should margins be viewed going forward with recent Fed rate cuts? - Answer: The trend of margin expansion is expected to continue, with a potential drop in the cost of funds [43] Question: What is the outlook for overall loan growth? - Answer: The company is optimistic about loan growth, especially with new talent in home improvement lending [46]

Financial Performance - The company's loan portfolio reached $2,559.1 million as of September 30, 2025, a 3% increase compared to September 30, 2024[15] - Net interest income for the quarter ended September 30, 2025, was $55.7 million[23] - The net interest margin on gross loans was 8.21%, and on net loans, it was 8.56%[14] - Net income for the quarter was $7.8 million, which includes a $3.5 million non-recurring charge related to the redemption of Medallion Bank's series F preferred stock[26, 39] - Year-to-date net interest income through the third quarter of 2025 reached $160.5 million[23] Loan Portfolio Composition - Recreation loans constitute 62.6% of the total loan portfolio, amounting to $1,603.2 million[15, 12] - Home improvement loans represent 31.4% of the portfolio, totaling $804.0 million[15, 12] - Commercial loans account for 5.3% of the portfolio, with a balance of $135.1 million[15, 12] - Strategic partnership and other loans make up 0.7% of the portfolio, totaling $16.8 million[15] Loan Originations and Credit Quality - Total loan originations for the quarter were $141.7 million for recreation loans and $59.7 million for home improvement loans[12] - The average FICO score for recreation loans originated in 2025 was 688, while for home improvement loans, it was 779[11] - The net charge-off (NCO) rate for the total loan portfolio in the third quarter of 2025 was 2.26%[31] Shareholder Value - The company declared a dividend of $0.12 per share per quarter[14, 51] - The company repurchased 108,351 shares at an average cost of $9.10 per share in the first nine months of 2025[14]

Core Insights - Medallion Financial (MFIN) reported quarterly earnings of $0.46 per share, exceeding the Zacks Consensus Estimate of $0.29 per share, and up from $0.37 per share a year ago, representing an earnings surprise of +58.62% [1] - The company achieved revenues of $58.73 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 8.55% and increasing from $53.32 million year-over-year [2] Earnings Performance - Medallion Financial has consistently surpassed consensus EPS estimates over the last four quarters [2] - The company delivered a surprise of +53.33% in the previous quarter, where it was expected to post earnings of $0.30 per share [1] Stock Performance - Medallion Financial shares have increased approximately 3.5% since the beginning of the year, while the S&P 500 has gained 17.2% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.28 on revenues of $53.24 million, and for the current fiscal year, it is $1.64 on revenues of $232.94 million [7] - The outlook for the Financial - SBIC & Commercial Industry, to which Medallion Financial belongs, is currently in the bottom 11% of Zacks industries, which may impact stock performance [8]

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].

Core Insights - Medallion Financial Corp. reported strong financial results for Q3 2025, achieving record highs in net interest income, loan volume, and total assets, with a 31% increase in net income year-over-year when excluding non-recurring charges [3][7][18] Financial Performance - Total net income attributable to stockholders for Q3 2025 was $7.8 million, or $0.32 per share, which includes a non-recurring charge of $3.5 million; excluding this charge, net income was $11.3 million compared to $8.6 million in the prior year [7] - Net interest income grew by 6% to $55.7 million from $52.7 million in the prior year quarter, with a net interest margin (NIM) on gross loans of 8.21% and on net loans of 8.56% [7][12] - Loan originations increased to $427.4 million, up from $275.6 million in the prior year quarter, with strategic partnership loan originations reaching $208.4 million compared to $39.9 million a year ago [7][12] Loan Portfolio and Segments - The loan portfolio reached $2.56 billion, a 3% increase from $2.49 billion a year ago, with recreation loans comprising 63% of total loans [7][8] - The recreation lending segment saw a 3% growth to $1.60 billion, while home improvement loans accounted for 31% of total loans, totaling $804 million [8][12] - The commercial lending segment grew to $135.1 million, with an average loan size of $3.8 million [12] Strategic Partnerships and Growth - The strategic partnership loan program originated $208 million this quarter, significantly up from $169 million in the prior quarter and $40 million a year ago, indicating strong growth potential [4][12] - The company collected over $6 million from taxi medallion-related assets, resulting in net recoveries and gains of $3.4 million for the period [4][12] Balance Sheet and Capital Allocation - Total assets as of September 30, 2025, amounted to $2.90 billion, up from $2.88 billion a year ago, while total liabilities decreased to $2.40 billion from $2.45 billion [18][26] - The company declared a quarterly cash dividend of $0.12 per share, which is 20% higher than the same quarter last year [15][16] Operational Efficiency - The company is enhancing its analytical and data-driven approach to lending, supported by digital tools that improve various stages of the lending process, contributing to strong credit performance [5][12]

Core Insights - Medallion Bank reported a net income of $19.8 million for Q3 2025, an increase from $15.5 million in the same quarter last year, driven by growth in recreation loans and stable performance in home improvement loans [3][6] - The bank's total loan portfolio was $2.3 billion as of September 30, 2025, down from $2.4 billion a year earlier, with recreation loans making up 66% of the total [6][7] - Strategic partnership loan originations reached a record $208 million in the quarter, indicating strong demand for consumer loans [3] Financial Performance - Net interest income increased to $55.9 million from $53.2 million year-over-year, with a net interest margin of 8.64%, up from 8.44% [6] - Total non-interest income rose to $2.3 million compared to $0.6 million in the prior year quarter [6] - The provision for credit losses decreased to $17.2 million from $20.2 million in the prior year quarter, reflecting improved asset quality [6] Loan Segments - The recreation loan portfolio was $1.546 billion as of September 30, 2025, with loan originations of $141.7 million, slightly up from $139.1 million in the prior year quarter [7] - Home improvement loan portfolio size was $804.0 million, down from $814.1 million a year earlier, with loan originations of $59.7 million [5][14] - Delinquencies for recreation loans increased to 4.97% from 4.15% year-over-year, while home improvement loans saw a decrease in delinquencies to 0.92% from 1.02% [7][14] Capital and Dividends - The bank's Tier 1 leverage ratio was 17.5% as of September 30, 2025, indicating strong capital position [6] - A quarterly cash dividend of $0.5625 per share on Series G preferred stock was declared, payable on January 2, 2026 [9]

Core Points - Medallion Financial Corp. has appointed Andrew Murstein as Chief Executive Officer effective January 31, 2026, while Alvin Murstein transitions to Executive Chairman until May 2027 [1][3] - The leadership transition is part of a planned succession process aimed at ensuring continuity and strategic growth for the company [3] - Andrew Murstein will oversee the company's strategic direction, focusing on capital allocation, risk management, and operational efficiency to enhance shareholder value [2] Company Overview - Medallion Financial Corp. is a specialty finance company that originates and services loans across various consumer and commercial industries, including partnerships with fintech companies [1][5] - The company serves key industries such as recreation (towable RVs and marine) and home improvement (replacement roofs, swimming pools, and windows) [5] - Medallion Financial Corp. is headquartered in New York City, with its largest subsidiary, Medallion Bank, located in Salt Lake City, Utah [5] Leadership Insights - Andrew Murstein expressed commitment to guiding Medallion through its next growth phase, building on the foundation established under Alvin Murstein's leadership [4] - Alvin Murstein highlighted Andrew's successful pivot away from traditional taxi medallion lending, leading to record earnings and asset growth, with the legacy business now constituting well under 1% of total assets [4]

Core Points - Medallion Financial Corp. will report its financial results for the quarter ended September 30, 2025, after market close on October 29, 2025 [1] - A conference call to discuss these results is scheduled for October 30, 2025, at 9:00 a.m. ET [2][6] - The company specializes in originating and servicing loans across various consumer and commercial industries, including recreation and home improvement [5] Financial Reporting - Financial results will be disclosed after market close on October 29, 2025 [1] - A live audio webcast of the conference call will be available on the company's investor relations website [2] Conference Call Details - The conference call will take place on October 30, 2025, at 9:00 a.m. ET [6] - Dial-in numbers for the call are provided, along with a passcode for access [6] Company Overview - Medallion Financial Corp. operates in the specialty finance sector, focusing on consumer loans and mezzanine loans [5] - Key industries served include recreation (towable RVs and marine) and home improvement (replacement roofs, swimming pools, and windows) [5] - The company is headquartered in New York City, with its largest subsidiary, Medallion Bank, located in Salt Lake City, Utah [5]

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)