MEDALLION BANK F(MBNKP) - 2024 Q3 - Quarterly Results

Financial Highlights and Executive Commentary Medallion Financial reported Q3 2024 net income of $8.6 million, achieving record highs in total assets, interest income, and net interest income, driven by consumer lending growth Q3 2024 Key Financial Metrics vs. Q3 2023 | Metric | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | Net Income | $8.6 million | $11.2 million | -23.2% | | Diluted EPS | $0.37 | $0.48 | -22.9% | | Net Interest Income | $52.7 million | $48.8 million | +8.0% | | Loan Originations | $275.6 million | $217.4 million | +26.8% | | Total Loans | $2.5 billion | $2.2 billion | +13.0% | | Provision for Credit Losses | $20.2 million | $14.5 million | +39.3% | - The company achieved record highs for total interest income ($76.4 million), net interest income ($52.7 million), and total assets ($2.9 billion)[5] - Earnings included an additional $0.07 per share in allowance for credit losses tied to the growth in consumer lending segments[3] - The fintech strategic partnership program at Medallion Bank had its highest volume quarter ever with $40 million of new loans, a significant increase from $24 million in Q2 2024[5] Business Segment Performance Consumer lending segments, particularly recreation and home improvement, drove performance, while the taxi medallion segment continued its strategic wind-down Recreation Lending Segment The largest segment, Recreation Lending, showed strong growth in its loan portfolio and net interest income, despite a slight rise in delinquencies Recreation Lending Segment Performance (as of Sep 30, 2024) | Metric | Q3 2024 | YoY Change | | :--- | :--- | :--- | | Originations | $139.1 million | +50.2% | | Loan Portfolio | $1.6 billion | +15% | | Net Interest Income (Quarter) | $38.9 million | +9% | | Average Interest Rate | 14.92% | +19 bps | | 90+ Days Past Due | 0.50% | +5 bps | Home Improvement Lending Segment The Home Improvement segment demonstrated solid growth in its loan portfolio and net interest income, maintaining low delinquency rates Home Improvement Lending Segment Performance (as of Sep 30, 2024) | Metric | Q3 2024 | YoY Change | | :--- | :--- | :--- | | Originations | $96.5 million | +21.7% | | Loan Portfolio | $814.1 million | +8% | | Net Interest Income (Quarter) | $12.0 million | +5% | | Average Interest Rate | 9.76% | +38 bps | | 90+ Days Past Due | 0.19% | +6 bps | Commercial Lending Segment The commercial loan portfolio expanded year-over-year, with its average interest rate remaining stable - Commercial loans grew to $110.1 million, up from $100.3 million a year ago[9] - The average interest rate on the portfolio was 12.90%, nearly unchanged from 12.91% a year ago[9] Taxi Medallion Lending Segment The company significantly reduced its exposure to taxi medallion assets, which now represent a minimal portion of total assets - Total net taxi medallion assets declined to $8.8 million, a 46% reduction from the prior year[9] - The company collected $4.1 million of cash on taxi medallion-related assets during the third quarter[9] Capital Allocation Medallion Financial demonstrated commitment to shareholder returns through increased dividends and active share repurchases Quarterly Dividend The Board of Directors authorized a 10% increase in the quarterly cash dividend to $0.11 per share, payable in November 2024 - The Board of Directors increased the quarterly cash dividend by 10% to $0.11 per share[6] - The dividend is payable on November 27, 2024, to shareholders of record at the close of business on November 15, 2024[7] Stock Repurchase Plan The company repurchased 122,344 shares for $1.0 million during the quarter, with $15.4 million remaining under its $40 million repurchase program - Repurchased 122,344 shares of common stock at an average cost of $7.89 per share, totaling $1.0 million[6][9] - As of September 30, 2024, $15.4 million remained under the company's $40 million share repurchase program[9] Financial Statements Consolidated financial statements show a growing balance sheet driven by loan growth, alongside mixed profitability due to higher credit loss provisions Consolidated Balance Sheets The balance sheet strengthened as of September 30, 2024, with total assets and net loans receivable increasing, leading to higher total equity and book value per share Key Balance Sheet Items (in thousands) | Account | Sep 30, 2024 | Sep 30, 2023 | | :--- | :--- | :--- | | Total Assets | $2,880,052 | $2,558,627 | | Net Loans Receivable | $2,388,761 | $2,123,905 | | Total Liabilities | $2,448,876 | $2,161,365 | | Total Equity | $431,176 | $397,262 | | Book Value Per Share | $15.70 | $14.06 | Consolidated Statements of Operations Q3 2024 saw an increase in net interest income, but a higher provision for credit losses and equity investment losses led to a decline in net income Key Income Statement Items - Three Months Ended Sep 30 (in thousands) | Account | 2024 | 2023 | | :--- | :--- | :--- | | Net Interest Income | $52,737 | $48,784 | | Provision for Credit Losses | $20,151 | $14,532 | | Total Other Income, Net | $587 | $4,306 | | Net Income Attributable to MFIN | $8,611 | $11,230 | | Diluted Net Income Per Share | $0.37 | $0.48 | Conference Call and Other Information A conference call is scheduled for October 30, 2024, to discuss financial results, with webcast availability and standard forward-looking statement disclaimers - A conference call to discuss Q3 results is scheduled for Wednesday, October 30, 2024, at 9:00 a.m. Eastern time[10][15] - The press release contains forward-looking statements and directs investors to the 'Risk Factors' in the company's 2023 Form 10-K for a discussion of potential risks[14]