MEDALLION BANK F(MBNKP) - 2025 Q2 - Quarterly Results

Executive Summary & Q2 2025 Highlights Medallion Financial Corp. reported a 56% increase in Q2 2025 net income to $11.1 million, driven by strong core lending and strategic partnerships, alongside a 10% rise in net book value per share Introduction Medallion Financial Corp. announced its Q2 2025 financial results, highlighting a significant increase in net income and strong performance across its lending businesses - Medallion Financial Corp. (MFIN) is a specialty finance company originating and servicing loans in various consumer and commercial industries, along with offering loan origination services to fintech strategic partners[2] Executive Commentary Andrew Murstein, President and COO, expressed satisfaction with the strong Q2 2025 results, attributing the 56% net income increase to core lending business strength and disciplined execution. He highlighted contributions from recreation, home improvement, and commercial lending, along with significant growth in strategic partners loan program - Net income increased by 56% year-over-year in Q2 2025, reflecting strong core lending businesses and disciplined execution[4] - Meaningful contributions from recreation, home improvement, and commercial lending segments, supported by solid originations and higher interest income[5] - Commercial division consistently generated net gains from equity investments, totaling $27.6 million over the past eight quarters[5] - Strategic partners loan program in Medallion Bank grew significantly, with $169 million in originations in the quarter compared to $24 million a year ago[5] Key Financial Highlights The company reported a 56% increase in net income to $11.1 million, a 7% rise in net interest income, and 10% growth in net book value per share. Loan originations also saw substantial growth, particularly from strategic partnerships Key Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change (%) | | :----- | :------ | :------ | :--------- | | Net Income | $11.1 million | $7.1 million | 56% | | EPS | $0.46 | $0.30 | 53.3% | | Net Interest Income | $53.4 million | $49.9 million | 7% | | Loan Originations | $375.0 million | $309.1 million | 21.3% | | Strategic Partnership Loan Originations | $168.6 million | $24.3 million | 594% | | Loan Portfolio (as of June 30) | $2.485 billion | $2.386 billion | 4% | | Net Book Value per Share (as of June 30) | $16.77 | $15.25 | 10% | - Net interest margin (NIM) on net loans was 8.42%, consistent with the prior year quarter[6] - Credit loss provision increased to $21.6 million from $18.6 million in the prior year quarter[6] - The Company declared and paid a quarterly cash dividend of $0.12 per share and repurchased 48,166 shares of common stock for $0.5 million[6] Business Segment Performance Medallion Financial Corp. saw varied performance across lending segments, with recreation and home improvement portfolios growing, commercial lending generating significant equity gains, and strategic partnerships experiencing dramatic origination growth Recreation Lending Segment Originations in the recreation lending segment decreased, but the loan portfolio grew 3% year-over-year, representing 62% of total loans. Interest income increased by 8%, while 90+ days past due loans and allowance for credit loss also rose Recreation Lending Segment Performance | Metric | Q2 2025 | Q2 2024 | Change (%) | | :----- | :------ | :------ | :--------- | | Originations | $142.8 million | $209.6 million | -31.9% | | Loans (June 30) | $1.546 billion | $1.497 billion | 3% | | Interest Income | $51.1 million | $47.5 million | 8% | | Average Interest Rate | 15.12% | 14.80% | +0.32 pp | | 90+ Days Past Due | $7.3 million (0.49%) | $5.9 million (0.41%) | +23.7% | | Allowance for Credit Loss | 5.05% | 4.35% | +0.70 pp | - Average loan size was $21,000 with a weighted average FICO score of 684 at origination[9] Home Improvement Lending Segment Home improvement loan originations declined, but the portfolio grew 4% to $803.5 million, comprising 32% of total loans. Interest income increased by 14%, and the average interest rate rose. 90+ days past due loans remained stable in absolute terms but slightly decreased as a percentage Home Improvement Lending Segment Performance | Metric | Q2 2025 | Q2 2024 | Change (%) | | :----- | :------ | :------ | :--------- | | Originations | $54.3 million | $68.0 million | -20.2% | | Loans (June 30) | $803.5 million | $773.2 million | 4% | | Interest Income | $20.1 million | $17.7 million | 14% | | Average Interest Rate | 9.87% | 9.71% | +0.16 pp | | 90+ Days Past Due | $1.3 million (0.16%) | $1.3 million (0.17%) | -0.01 pp | | Allowance for Credit Loss | 2.54% | 2.38% | +0.16 pp | - Average loan size was $22,000 with a weighted average FICO score of 769 at origination[9] Commercial Lending Segment Commercial loan originations were $9.4 million, and the portfolio grew to $121.4 million. The segment recognized significant net gains from equity investments of $6.1 million during the quarter Commercial Lending Segment Performance | Metric | Q2 2025 | Q2 2024 | Change | | :----- | :------ | :------ | :----- | | Originations | $9.4 million | N/A | N/A | | Loans (June 30) | $121.4 million | $110.2 million | +10.2% | | Net Gains from Equity Investments | $6.1 million | N/A | N/A | | Average Interest Rate | 13.43% | 13.05% | +0.38 pp | - Average loan size was $3.6 million, invested in 34 portfolio companies[9] Strategic Partnerships Strategic partnership loan originations surged dramatically to $168.6 million from $24.3 million a year ago. Fees generated from these partnerships also increased, with an average loan holding period of 5 days Strategic Partnerships Performance | Metric | Q2 2025 | Q2 2024 | Change (%) | | :----- | :------ | :------ | :--------- | | Originations | $168.6 million | $24.3 million | 594% | | Fees Generated | $0.8 million | $0.5 million | 60% | - Total strategic partnership loans held as of quarter-end were $12.3 million[9] - Average loan holding period for strategic partnership loans was 5 days[9] Taxi Medallion Lending Segment The company collected $2.3 million in cash on taxi medallion-related assets, resulting in $1.4 million in net recoveries and gains. Total net taxi medallion assets significantly declined by 41% year-over-year, now representing less than 0.3% of total assets Taxi Medallion Lending Segment Performance | Metric | Q2 2025 | Q2 2024 | Change (%) | | :----- | :------ | :------ | :--------- | | Cash Collected | $2.3 million | N/A | N/A | | Net Recoveries & Gains | $1.4 million | N/A | N/A | | Total Net Assets (June 30) | $5.9 million | N/A | -41% YoY | - Taxi medallion assets represent less than 0.3% of the Company's total assets as of June 30, 2025[9] Loan Portfolio Overview The total loan portfolio stood at $2.485 billion as of June 30, 2025, with recreation and home improvement loans comprising the majority, reflecting a slight decrease from year-end 2024 but an increase year-over-year Loan Portfolio Composition As of June 30, 2025, the total loan portfolio was $2.485 billion, slightly down from December 31, 2024, but up from a year ago. Recreation loans continue to be the largest component, followed by home improvement loans Loan Portfolio Composition (Dollars in thousands) | Loan Type | June 30, 2025 (Amount) | June 30, 2025 (% of Total) | December 31, 2024 (Amount) | December 31, 2024 (% of Total) | | :-------------------------- | :----------------------- | :------------------------- | :------------------------- | :--------------------------- | | 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 | * | | Total loans held for investment | $2,412,561 | 97% | $2,362,796 | 95% | | Loans held for sale: | | | | | | Recreation | $60,205 | 2% | $120,840 | 5% | | Strategic partnership | $12,285 | * | $7,386 | * | | Total loans held for sale | $72,490 | 3% | $128,226 | 5% | | Total loans and loans held for sale | $2,485,051 | 100% | $2,491,022 | 100% | Capital Allocation & Shareholder Returns The company maintained its quarterly dividend at $0.12 per share, repurchased $0.5 million in stock, and saw total assets increase to $2.880 billion, primarily due to a prepaid expense for preferred stock redemption Quarterly Dividend The Board declared a Q3 2025 dividend of $0.12 per share, consistent with Q2 2025 but 20% higher than the same quarter last year Quarterly Dividend History | Dividend Period | Per Share | Record Date | Payment Date | | :-------------- | :-------- | :---------- | :----------- | | Q3 2025 | $0.12 | 8/15/2025 | 8/29/2025 | | Q2 2025 | $0.12 | 5/15/2025 | 5/30/2025 | | Q1 2025 | $0.11 | 3/17/2025 | 3/31/2025 | | Total: Year 2025 (YTD) | $0.35 | | | | Total: Year 2024 | $0.41 | | | | Total: Year 2023 | $0.34 | | | | Total: Year 2022 | $0.32 | | | - The Q3 2025 dividend of $0.12 per share remains unchanged from Q2 2025 and is 20% higher than the same quarter last year[11] Stock Repurchase Plan The company repurchased 48,166 shares for $0.5 million during Q2 2025, with $14.4 million remaining under its $40 million stock repurchase program Stock Repurchase Activity (Q2 2025) | Metric | Q2 2025 | | :----- | :------ | | Shares Repurchased | 48,166 | | Average Cost per Share | $9.44 | | Total Cost | $0.5 million | - As of June 30, 2025, the Company had $14.4 million remaining under its $40 million stock repurchase program[14] Balance Sheet Overview As of June 30, 2025, total assets increased to $2.880 billion, primarily due to an increase in prepaid expenses related to the redemption of Medallion Bank's Series F preferred stock. Total liabilities also saw a slight increase Balance Sheet Highlights | Metric | June 30, 2025 | June 30, 2024 | Change (%) | | :----- | :------------ | :------------ | :--------- | | Cash & 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 is largely due to an increase in prepaid expense resulting from the redemption of Medallion Bank's Series F preferred stock on July 1, 2025[13] Financial Statements The financial statements detail a Q2 2025 net income of $11.1 million, with total assets at $2.880 billion and book value per share at $16.77, reflecting strong operational performance and balance sheet health Consolidated Balance Sheets The consolidated balance sheet shows total assets of $2.880 billion as of June 30, 2025, with net loans receivable at $2.306 billion. Total liabilities were $2.347 billion, and total equity was $532.6 million. Book value per share increased to $16.77 Consolidated Balance Sheets (Dollars in thousands, except share and per share data) | (Dollars in thousands, except share 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 asset, 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 liabilities, 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 | | Equity | | | | | Total stockholders' equity | $389,896 | $370,170 | $354,001 | | Non-controlling interest in consolidated subsidiaries | $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 | | Number of 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 For Q2 2025, Medallion Financial Corp. reported net interest income of $53.4 million and total net income attributable to Medallion Financial Corp. of $11.1 million, or $0.46 diluted EPS. Other income significantly increased due to gains on equity investments and strategic partnership fees Consolidated Statements of Operations (Dollars in thousands, except share and per share data) | (Dollars in thousands, except share and per share data) | 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 interest income after provision for credit losses | $31,808 | $31,291 | $61,206 | $62,007 | | Other income: | | | | | | Gain (loss) on equity investments, net | $6,096 | $(512) | $15,526 | $3,655 | | Gain on sale of recreation loans | $1,304 | — | $1,304 | — | | Gain on taxi medallion assets, net | $749 | $242 | $1,592 | $830 | | Strategic partnership 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 | | Total other expenses | $21,545 | $19,995 | $42,303 | $38,220 | | Income before income taxes | $19,472 | $12,395 | $39,711 | $30,289 | | Income tax provision | $5,805 | $3,782 | $12,518 | $10,140 | | Net income after taxes | $13,667 | $8,613 | $27,193 | $20,149 | | Less: income attributable to the non-controlling interest | $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 | Company Information & Disclosures This section provides details on the upcoming Q2 earnings conference call, an overview of Medallion Financial Corp.'s business, a cautionary note on forward-looking statements, and investor relations contact information Conference Call Details Medallion Financial Corp. will host a conference call on July 31, 2025, at 9:00 a.m. Eastern time to discuss its Q2 financial results. Replay information is also provided - A conference call to discuss Q2 financial results will be held on Thursday, July 31, 2025, at 9:00 a.m. Eastern time[15] - A link to the live audio webcast and replay information will be available on the Company's IR website[16][17] About Medallion Financial Corp. Medallion Financial Corp. is a specialty finance company headquartered in New York City, originating and servicing consumer and mezzanine loans in industries like recreation and home improvement. Its largest subsidiary, Medallion Bank, is in Salt Lake City - Medallion Financial Corp. (NASDAQ: MFIN) originates and services a growing portfolio of consumer loans and mezzanine loans in recreation (towable RVs and marine) and home improvement (replacement roofs, swimming pools, and windows) industries[18] - The company is headquartered in New York City, NY, and its largest subsidiary, Medallion Bank, is headquartered in Salt Lake City, Utah[18] Forward-Looking Statements This section cautions that the press release contains forward-looking statements subject to risks and uncertainties, and actual results may differ significantly due to various factors, including economic conditions and other risks detailed in the company's 2024 Annual Report on Form 10-K - This press release contains forward-looking statements that involve risks and uncertainties relating to business performance, cash flow, net interest income and expenses, other expenses, earnings, growth, and growth strategy[19] - Medallion's actual results may differ significantly from forward-looking statements due to factors such as the current economy, inflation, recession risk, tariffs, and other risks discussed in the 2024 Annual Report on Form 10-K[19] Investor Relations Contact Contact information for Medallion Financial Corp.'s internal Investor Relations and external Investor Relations firm, The Equity Group Inc., is provided for inquiries - Contact information for Investor Relations is provided via email (InvestorRelations@medallion.com) and phone (212-328-2176)[20] - External Investor Relations support is provided by The Equity Group Inc., with contacts Lena Cati and Val Ferraro[20]