Medallion Financial (US:MFIN)2025-11-04 21:07Financial Performance - Net interest income for the three months ended September 30, 2025, was $55.686 million, compared to $52.737 million for the same period in 2024[221]. - The net interest margin, net of allowance, improved to 8.56% for the three months ended September 30, 2025, from 8.42% in 2024[221]. - For the nine months ended September 30, 2025, total loans yielded 12.23%, an increase from 12.02% in the same period of 2024, reflecting a higher yield on loan portfolios[225]. - Net interest income for the nine months ended September 30, 2025, was $160,467 thousand, compared to $150,522 thousand for the same period in 2024[224]. - Total interest income for the three months ended September 30, 2025, was $53,565,000, an increase from $51,443,000 in 2024, representing a growth of 4.1%[265]. - Net income after taxes for the nine months ended September 30, 2025, was $27,299,000, compared to $19,572,000 in 2024, reflecting a year-over-year increase of 39.4%[265]. Loan Portfolio - Consumer loans accounted for 94% of the gross loan portfolio, while commercial loans represented 5%[206]. - The recreation loan portfolio amounted to $1.6 billion, with an average interest rate of 15.17%, reflecting a 25 basis point increase from the previous year[260]. - The gross loans for the Home Recreation segment increased to $1,603,169 thousand as of September 30, 2025, from $1,554,629 thousand a year earlier, reflecting a growth of 3.12%[238]. - Total loans, gross, increased to $1,603,169,000 as of September 30, 2025, up from $1,554,629,000 in 2024, marking a growth of 3.1%[265]. - The average loan size in the recreation loan portfolio was approximately $21,000 as of September 30, 2025[258]. Credit Quality - The allowance for credit losses was $108.719 million as of September 30, 2025, compared to $94.293 million in 2024[221]. - The weighted average FICO score for outstanding recreation loans was 685 as of September 30, 2025, consistent with the score from September 30, 2024, indicating stable credit quality[225]. - The provision for credit losses for the three months ended September 30, 2025, was $18.6 million, a decrease from $20.2 million in the same quarter of 2024, attributed to fewer originations[241]. - The percentage of loans 90 days or more past due increased to 1.2% as of September 30, 2025, up from 1.1% at December 31, 2024[253]. - The allowance for credit losses in the recreation segment increased by 12% from September 30, 2024, due to rising loss rates[260]. Interest Rates and Borrowing Costs - The average interest cost for the nine months ended September 30, 2025, was 4.22%, up 36 basis points from 3.86% in the same period of 2024, primarily due to the higher cost associated with deposits[227]. - The average cost of borrowed funds was 4.28% for the three months ended September 30, 2025, up from 4.05% in 2024, reflecting higher borrowing costs in the current interest rate environment[301]. - The average interest rate for trust preferred securities is 6.52%, with a maturity date of September 2037[336]. - The average interest rate for brokered certificates of deposit is 3.82%, with maturities from October 2025 to September 2030[336]. Strategic Initiatives - The strategic partnership program with fintech companies continues to expand, with the first loans issued in 2020[211]. - The company is considering various alternatives for the Bank, including a potential initial public offering or sale[212]. - The company is exploring various financing options, including asset sales and securitization programs, to support external expansion and internal growth[334]. Asset Management - As of September 30, 2025, total assets were $2.90 billion, an increase from $2.87 billion as of December 31, 2024[206]. - Total interest-earning assets, net of allowance, were $2.573 billion for Q3 2025, up from $2.498 billion in Q3 2024[221]. - Total outstanding debt as of September 30, 2025, was $2.36 billion, with deposits accounting for 87% of this total at a weighted average rate of 3.82%[327]. Operational Efficiency - Operating expenses for Q3 2025 were $1,490,000, compared to $1,235,000 in Q3 2024, reflecting an increase of 20.6%[280]. - The company reported net recoveries and gains of $3,400,000 related to taxi medallion assets during Q3 2025[284]. - The company actively monitors interest rate exposure to mitigate adverse effects on future earnings, utilizing net interest income sensitivity analysis as a primary metric[314].