Medallion Financial (US:MFIN)2024-11-06 21:01Financial Performance - Total assets were $2.9 billion, an increase from $2.6 billion as of December 31, 2023[96]. - Total interest income for the nine months ended September 30, 2024, was $142.9 million, up from $123.3 million in the prior year[131]. - Net income after taxes for the nine months ended September 30, 2024, was $19.6 million, down from $33.0 million in the prior year[131]. - Total revenue for the three months ended September 30, 2023, was $1,854,000, compared to $6,370,000 in the same period in 2022, representing a decrease of 70.0%[121]. - Net income after taxes for the three months ended September 30, 2024, was $455,000, a significant improvement from a net loss of $2,525,000 in the same period of 2023[143]. Loan Portfolio - Consumer loans represented 95% of the gross loan portfolio, while commercial loans accounted for 4%[96]. - Total loans reached $2,445,886 thousand, an increase of 11.87% compared to $2,185,808 thousand in the previous year[103]. - Total loans reached $2,319,136, with a yield of 12.02% for the nine months ended September 30, 2024, compared to $2,065,650 and 11.62% for the same period in 2023[107]. - The company originated $454.4 million in recreation loans during the nine months ended September 30, 2024, compared to $384.3 million in the prior year period[127]. - The commercial lending segment originated $7,000,000 in new commercial loans during the nine months ended September 30, 2024, a decrease of 58% compared to $16,700,000 in the same period of 2023[136]. Credit Losses and Allowances - The allowance for credit losses on loans increased to $77.6 million post-ASC 326 adoption[99]. - The provision for credit losses for the three months ended September 30, 2024, was $20.2 million, up from $14.5 million in the same period of 2023, reflecting an increase of approximately 39.3%[114]. - The allowance for credit losses as of September 30, 2024, was $96.5 million, representing 3.88% of total loans, compared to $84.2 million or 3.80% of total loans as of December 31, 2023[114]. - Total charge-offs for the three months ended September 30, 2024, were $20,500 thousand, compared to $15,574 thousand for the same period in 2023, representing a 31.1% increase[116]. - The total charge-offs for the nine months ended September 30, 2024, reached $62,189 thousand, compared to $46,533 thousand in 2023, reflecting a year-over-year increase of 33.6%[116]. Interest Income and Expenses - Net interest income for the three months ended September 30, 2024, was $52,737 thousand, compared to $48,784 thousand for the same period in 2023[103]. - Interest income increased due to growth in consumer loan portfolios and higher yields on interest-earning assets[111]. - Interest expense rose primarily from increased borrowing costs linked to higher deposits and total borrowings[111]. - The average yield on interest-earning assets was 12.17%, compared to 11.66% in the previous year[103]. - The average cost of interest-bearing liabilities increased to 4.05%, up from 3.28% year-over-year[103]. Strategic Initiatives - The Bank launched a strategic partnership program with fintech companies in 2019, continuing to evaluate additional partnerships[96]. - The company is considering various alternatives for the Bank, including a potential initial public offering or sale[96]. - The company continues to seek SBA funding through Medallion Capital for attractive rates[111]. - The company is exploring various financing options, including the sale or spinoff of certain assets, to enhance liquidity and support growth[153]. Economic Factors - The company continues to monitor economic factors such as global supply chain disruptions and inflation that may affect loan demand[96]. - The Federal Reserve's decision to decrease interest rates by 50 basis points in September 2024 may impact both loan origination rates and the cost of new borrowings[108]. - The company expects the cost of funds to continue increasing as new certificates of deposit are issued to replace maturing ones, influenced by prevailing market interest rates[108]. Asset Management - Total stockholders' equity increased to $356,561 thousand, compared to $322,945 thousand, reflecting a growth of 10.43%[103]. - Total liabilities rose to $2,261,667, compared to $2,022,455 in the prior year, reflecting growth in the lending business[107]. - The company has a total cash balance of $187,929,000 as of September 30, 2024, compared to $149,845,000 on December 31, 2023[155]. - The total outstanding debt was $2.4 billion, with deposits making up 88% of this amount at an average rate of 3.68%[151]. Market Presence - The company reported a total of 315 taxi medallions in the New York City market as of September 30, 2024, indicating ongoing market presence[124]. - The company has identified a need for adjustments in collateral valuation due to the short-term nature of the liquidation process for recreational loans[124].