Medallion Financial (MFIN) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Release Overview Medallion Financial Corp. achieved strong Q2 2025 results with significant net income growth and strategic loan program expansion Company Introduction Medallion Financial Corp. is a specialty finance company focused on consumer and commercial lending, including fintech partnerships - Medallion Financial Corp. (MFIN) is a specialty finance company focused on originating and servicing consumer and commercial loans, and providing loan origination services for fintech strategic partners[2] Executive Summary & Key Highlights Medallion Financial Corp. reported a 56% increase in Q2 2025 net income to $11.1 million, driven by core lending and strategic partnerships - The company is pleased with its strong Q2 2025 performance, with net income increasing by 56% year-over-year, reflecting the strength of its core lending businesses and disciplined execution across business lines[4] - The commercial segment has consistently generated net gains from equity investments over the past eight quarters, totaling $27.6 million over two years[5] - Medallion Bank's strategic partner loan program continues to grow, with $169 million in loan originations this quarter, compared to $24 million in the prior year period[5] Q2 2025 Key Financial and Operational Metrics | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------------- | :--------- | :--------- | :---------- | | Net Income | $11.1 Million | $7.1 Million | +56% | | Diluted Net Income per Share | $0.46 | $0.30 | +53.3% | | Net Interest Income | $53.4 Million | $49.9 Million | +7% | | Total Loan Originations | $375.0 Million | $309.1 Million | +21.3% | | Strategic Partner Loan Originations | $168.6 Million | $24.3 Million | +594% | | Total Loan Portfolio (as of June 30) | $2.485 Billion | $2.386 Billion | +4% | | Allowance for Credit Losses | $21.6 Million | $18.6 Million | +16.1% | | Net Book Value per Share (as of June 30) | $16.77 | $15.25 | +10% | | Quarterly Cash Dividend | $0.12/share | $0.10/share | +20% | | Stock Repurchases | 48,166 shares ($0.5 Million) | - | - | Business Segment Performance The company's lending segments showed varied performance, with growth in loan portfolios and interest income despite some origination declines Recreation Lending Segment Recreation lending saw a decrease in originations but growth in portfolio size and interest income, with higher average rates and increased delinquencies Recreation Lending Key Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------------- | :--------- | :--------- | :---------- | | Originations | $142.8 Million | $209.6 Million | -31.9% | | Total Loans (as of June 30) | $1.546 Billion | $1.497 Billion | +3% | | Interest Income | $51.1 Million | $47.5 Million | +8% | | Average Interest Rate (quarter-end) | 15.12% | 14.80% | +0.32 pp | | Loans 90+ Days Delinquent | $7.3 Million (0.49%) | $5.9 Million (0.41%) | +23.7% (+0.08 pp) | | Allowance for Credit Losses (loans held for investment) | 5.05% | 4.35% | +0.70 pp | - Average loan size was $21,000, with a weighted average FICO score of 684[9] Home Improvement Lending Segment Home improvement lending experienced lower originations but increased portfolio size and interest income, with stable delinquencies and slightly higher credit loss allowance Home Improvement Lending Key Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------------- | :--------- | :--------- | :---------- | | Originations | $54.3 Million | $68.0 Million | -20.2% | | Total Loans (as of June 30) | $803.5 Million | $773.2 Million | +4% | | Interest Income | $20.1 Million | $17.7 Million | +14% | | Average Interest Rate (quarter-end) | 9.87% | 9.71% | +0.16 pp | | Loans 90+ Days Delinquent | $1.3 Million (0.16%) | $1.3 Million (0.17%) | -0.01 pp | | Allowance for Credit Losses | 2.54% | 2.38% | +0.16 pp | - Average loan size was $22,000, with a weighted average FICO score of 769[9] Commercial Lending Segment Commercial lending originated $9.4 million in loans, grew its portfolio, and generated $6.1 million in net gains from equity investments, with an improved average interest rate Commercial Lending Key Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------------- | :--------- | :--------- | :---------- | | Originations | $9.4 Million | - | - | | Total Loans (as of June 30) | $121.4 Million | $110.2 Million | +10.2% | | Net Gains from Equity Investments | $6.1 Million | - | - | | Average Portfolio Interest Rate | 13.43% | 13.05% | +0.38 pp | - Average loan size was $3.6 million, invested across 34 portfolio companies[9] Strategic Partnerships Strategic partner loan originations significantly increased, leading to a substantial rise in fee income, indicating strong expansion in this business line Strategic Partnerships Key Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------------- | :--------- | :--------- | :---------- | | Originations | $168.6 Million | $24.3 Million | +594% | | Fee Income | $0.8 Million | $0.5 Million | +60% | | Total Loans Held (quarter-end) | $12.3 Million | - | - | | Average Loan Holding Period | 5 Days | - | - | Taxi Medallion Lending Segment Taxi medallion-related assets continued to decrease, with the company recovering $2.3 million in cash and realizing $1.4 million in net recoveries and gains Taxi Medallion Lending Key Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------------- | :--------- | :--------- | :---------- | | Cash Recoveries | $2.3 Million | - | - | | Net Recoveries and Gains | $1.4 Million | - | - | | Total Net Assets (as of June 30) | $5.9 Million | - | -41% (YoY) | | Percentage of Total Company Assets (as of June 30) | <0.3% | - | - | Loan Portfolio & Capital Management The company's loan portfolio totaled $2.485 billion, primarily composed of recreation and home improvement loans, with stable capital allocation and dividend payments Loan Portfolio Composition As of June 30, 2025, the total loan portfolio was $2.485 billion, with recreation and home improvement loans constituting 60% and 32% respectively Loan Portfolio Composition (as of June 30, 2025 vs December 31, 2024) | (Thousand USD) | June 30, 2025 | % of Total Loans | December 31, 2024 | % of Total Loans | | :--------------------------------- | :------------- | :------------- | :------------- | :------------- | | Loans Held for Investment: | | | | | | 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: | | | | | | Recreation | 60,205 | 2% | 120,840 | 5% | | Strategic Partner | 12,285 | * | 7,386 | * | | Total Loans and Loans Held for Sale | $2,485,051 | 100% | $2,491,022 | 100% | Balance Sheet Overview As of June 30, 2025, total assets increased to $2.880 billion, primarily due to higher prepaid expenses, while cash and cash equivalents remained stable Balance Sheet Key Metrics (as of June 30, 2025 vs June 30, 2024) | Metric | June 30, 2025 | June 30, 2024 | Change (YoY) | | :-------------------------------- | :------------- | :------------- | :---------- | | Cash and Cash Equivalents (incl. investment securities) | $213.5 Million | $213.8 Million | -0.1% | | Total Assets | $2.880 Billion | $2.761 Billion | +4.3% | | Total Liabilities | $2.347 Billion | $2.338 Billion | +0.4% | - The increase in total assets was primarily attributable to an increase in prepaid expenses, resulting from Medallion Bank's redemption of Series F preferred stock on July 1, 2025[13] Capital Allocation & Dividends The board declared a Q3 2025 dividend of $0.12 per share, consistent with Q2 and a 20% increase year-over-year - The Board of Directors declared a Q3 2025 dividend of $0.12 per share, payable on August 29, 2025, to shareholders of record at the close of business on August 15, 2025[11] - This dividend amount is consistent with the $0.12 per share paid in Q2 2025 and represents a 20% increase from the prior year period[11] Declared Dividends (per share) | Quarter | Amount per Share | Record Date | Payment Date | | :-------------------- | :------- | :--------- | :--------- | | 2025 Q3 | $0.12 | 8/15/2025 | 8/29/2025 | | 2025 Q2 | $0.12 | 5/15/2025 | 5/30/2025 | | 2025 Q1 | $0.11 | 3/17/2025 | 3/31/2025 | | 2025 Total (YTD) | $0.35 | | | | 2024 Total | $0.41 | | | | 2023 Total | $0.34 | | | | 2022 Total | $0.32 | | | Stock Repurchase Plan The company repurchased 48,166 common shares for $0.5 million in Q2 2025, with $14.4 million remaining under its $40 million repurchase program - For the three months ended June 30, 2025, the company repurchased 48,166 shares of common stock at an average price of $9.44 per share, totaling $0.5 million[14] - As of June 30, 2025, $14.4 million remained available under the company's $40 million stock repurchase program[14] Consolidated Financial Statements The consolidated financial statements provide a detailed overview of the company's assets, liabilities, equity, and operational performance for the period Consolidated Balance Sheets As of June 30, 2025, Medallion Financial Corp.'s consolidated balance sheet reported total assets of $2.880 billion, total liabilities of $2.347 billion, and total equity of $390 million Consolidated Balance Sheets (Unaudited) | (Thousand USD, except for shares and per share data) | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :--------------------------------- | :------------- | :------------- | :------------- | | Assets | | | | | Cash, cash equivalents and federal funds sold | $151,994 | $169,572 | $157,961 | | Investment securities | 61,529 | 54,805 | 55,830 | | Equity investments | 8,097 | 9,198 | 10,795 | | Loans held for sale | 72,490 | 128,226 | — | | Loans | 2,412,561 | 2,362,796 | 2,385,590 | | Allowance for credit losses | (106,896) | (97,368) | (89,788) | | Net loans receivable | 2,305,665 | 2,265,428 | 2,295,802 | | Goodwill and intangible assets, net | 169,227 | 169,949 | 170,672 | | Property, equipment and right-of-use lease assets, net | 11,890 | 13,756 | 14,094 | | Accrued interest receivable | 15,294 | 15,314 | 13,299 | | Loan collateral in process of foreclosure | 9,007 | 9,932 | 9,359 | | Other assets | 74,801 | 32,426 | 33,064 | | Total Assets | $2,879,994 | $2,868,606 | $2,760,876 | | Liabilities | | | | | Deposits | $2,009,176 | $2,090,071 | $2,006,782 | | Long-term debt | 199,928 | 232,159 | 230,803 | | Short-term borrowings | 86,750 | 49,000 | 37,500 | | Deferred tax liability, net | 19,261 | 20,995 | 22,394 | | Operating lease liabilities | 4,041 | 5,128 | 6,071 | | Accrued interest payable | 5,746 | 8,231 | 7,945 | | Accounts payable and accrued expenses | 22,527 | 24,064 | 26,592 | | Total Liabilities | $2,347,429 | $2,429,648 | $2,338,087 | | Total Stockholders’ Equity | $389,896 | $370,170 | $354,001 | | Non-controlling interests | 142,669 | 68,788 | 68,788 | | Total Equity | $532,565 | $438,958 | $422,789 | | Total Liabilities and Equity | $2,879,994 | $2,868,606 | $2,760,876 | | Shares outstanding | 23,246,593 | 23,135,624 | 23,211,990 | | Book value per share | $16.77 | $16.00 | $15.25 | Consolidated Statements of Operations In Q2 2025, the company reported total interest income of $77.4 million, net interest income of $53.4 million, net income of $11.1 million, and diluted EPS of $0.46 Consolidated Statements of Operations (Unaudited) | (Thousand USD, except for shares and per share data) | Q2 2025 | Q2 2024 | H1 2025 | H1 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 interest income after provision for credit losses | 31,808 | 31,291 | 61,206 | 62,007 | | Other Income | | | | | | Net gains (losses) on equity investments | 6,096 | (512) | 15,526 | 3,655 | | Gains on sale of recreation loans | 1,304 | — | 1,304 | — | | Net gains on taxi medallion assets | 749 | 242 | 1,592 | 830 | | Strategic partner fees | 787 | 480 | 1,472 | 806 | | Other income | 273 | 889 | 914 | 1,211 | | Total Other Income, Net | 9,209 | 1,099 | 20,808 | 6,502 | | Other Expenses | | | | | | Salaries and employee benefits | 10,148 | 9,435 | 20,141 | 18,892 | | Loan servicing fees | 2,899 | 2,692 | 5,716 | 5,162 | | Collection costs | 1,749 | 1,659 | 3,286 | 3,126 | | Regulatory fees | 1,109 | 888 | 1,930 | 1,865 | | Professional services, net | 1,187 | 1,845 | 2,937 | 2,616 | | Rent expense | 683 | 698 | 1,358 | 1,355 | | Amortization of intangible assets | 362 | 362 | 723 | 723 | | Other expenses | 3,408 | 2,416 | 6,212 | 4,481 | | Total Other Expenses | 21,545 | 19,995 | 42,303 | 38,220 | | Income before income tax provision | 19,472 | 12,395 | 39,711 | 30,289 | | Provision for income taxes | 5,805 | 3,782 | 12,518 | 10,140 | | Net income after income tax provision | 13,667 | 8,613 | 27,193 | 20,149 | | Less: Income attributable to non-controlling interests | 2,598 | 1,512 | 4,110 | 3,024 | | Total Net Income Attributable to Medallion Financial Corp. | $11,069 | $7,101 | $23,083 | $17,125 | | Basic net income per share | $0.49 | $0.31 | $1.02 | $0.76 | | Diluted net income per share | $0.46 | $0.30 | $0.96 | $0.73 | | Dividends declared per common share | $0.12 | $0.10 | $0.24 | $0.20 | Corporate Information This section provides details on the upcoming conference call, company background, and important forward-looking statements and investor contacts Conference Call Details The company will host a conference call on July 31, 2025, at 9:00 AM ET to discuss Q2 financial results, with webcast and replay options available - The company will host a conference call on Thursday, July 31, 2025, at 9:00 AM ET to discuss its second-quarter financial results[15] - A live audio webcast of the call will be available on the company's investor relations website, with a replay accessible until August 7, 2025[16][17] - The dial-in number is (412) 317-0504, with a passcode of 1020 1134[20] About Medallion Financial Corp. Medallion Financial Corp. and its subsidiaries originate and service consumer and mezzanine loans, primarily in recreation and home improvement sectors - Medallion Financial Corp. (NASDAQ: MFIN) and its subsidiaries originate and service a growing portfolio of consumer and mezzanine loans[18] - Key industries served include recreation (RVs and boats) and home improvement (roofing, pools, and windows)[18] - The company is headquartered in New York City, with its largest subsidiary, Medallion Bank, based in Salt Lake City, Utah[18] Forward-Looking Statements & Investor Contacts This press release contains forward-looking statements regarding business performance, cash flow, and growth strategies, with investor contact information provided for inquiries - This press release contains forward-looking statements involving risks and uncertainties regarding business performance, cash flow, net interest income and expenses, other expenses, earnings, growth, and growth strategies[19] - Medallion's actual results could differ materially from those discussed in the forward-looking statements due to factors such as economic conditions, tariff impacts, operations, financial performance, and prospects[19] - Investors can contact the company's Investor Relations department via email at InvestorRelations@medallion.com or by phone at 212-328-2176[20]