Financial 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, reflecting a growth of approximately 5.5%[221] - 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 of 4.3% from $51,443,000 in 2024[265] - Net income after taxes for the three months ended September 30, 2025, was $9,336,000, up 35% from $6,920,000 in 2024[265] - Net income after taxes for the nine months ended September 30, 2025, was $8,488,000, up 80.0% from $4,696,000 in the same period of 2024[280] Loan Portfolio - Total loans amounted to $2.53 billion as of September 30, 2025, with a total interest-earning asset yield of 12.43%[221] - Total loans for the three months ended September 30, 2025, reached $4,396 million, an increase of 4,396% compared to the previous year[236] - The recreation loan portfolio amounted to $1.6 billion, with an average interest rate of 15.17%, up 25 basis points from the previous year[260] - The home improvement loan portfolio totaled $804,000,000 as of September 30, 2025, with an allowance for credit losses increasing by 4% year-over-year[270] - The company’s total loan portfolio includes $2,507,597 thousand in fixed-rate loans as of September 30, 2025[240] Credit Quality - The allowance for credit losses was $108.719 million as of September 30, 2025, up from $94.293 million as of the same date in 2024[221] - The allowance for credit losses as of September 30, 2025, was $111.1 million, representing 4.47% of total loans held for investment, an increase from $97.4 million or 4.12% as of December 31, 2024[241] - The percentage of non-prime receivables in the recreation loan portfolio was 36% as of September 30, 2025[261] - The total loans 90 days or more past due increased to $29,074, representing 1.2% of the total loan portfolio as of September 30, 2025[253] - The weighted average FICO score for outstanding recreation loans was 685 as of September 30, 2025, consistent with the previous year, indicating stable credit quality[225] Interest Rates and Margins - The net interest margin, net of allowance, increased to 8.56% for the three months ended September 30, 2025, compared to 8.42% for the same period in 2024[221] - 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 interest rate environment[227] - The average yield on interest-earning cash equivalents decreased to 3.82% in 2025 from 4.44% in 2024[224] - The net interest margin, net of allowance, was 8.39% for the nine months ended September 30, 2025, slightly down from 8.41% in 2024[224] - The net interest margin, net of allowance, was 9.84% in Q3 2025, down from 10.19% in Q3 2024[280] 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, with no set deadline for these considerations[212] - The company completed an initial public offering in May 2025, raising net proceeds of $73.1 million from the sale of 3,100,000 shares of Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series G, with a fixed dividend rate of 9.00% per annum[317] - The company is exploring various financing options, including the sale or spinoff of certain assets, to support external expansion and internal growth[334] - The company maintained relationships with approximately 3,300 dealers and financial service providers, with the top ten relationships accounting for 39% of new loan originations for the nine months ended September 30, 2025[257] Borrowing and Debt - The company’s total outstanding debt as of September 30, 2025, was $2.36 billion, with deposits making up 87% of this total at a weighted average rate of 3.82%[327] - Approximately $1.3 billion of the company's borrowings are set to mature within the next two years, primarily consisting of brokered certificates of deposit[330] - The company has borrowing arrangements with correspondent banks allowing up to $75.0 million, with $35.0 million outstanding as of September 30, 2025[323] - The average interest rate for privately placed notes is 8.12%, with maturities ranging from February 2026 to August 2039[336] - The company has $189.6 million in home improvement loans pledged as collateral to the Federal Reserve, with a secured borrowing capacity of approximately $85.7 million[322] Operational Metrics - Operating expenses increased to $20.7 million in Q3 2025 from $19.0 million in Q3 2024, primarily due to higher salaries and benefits[305] - The company reported net recoveries and gains of $3,400,000 related to taxi medallion assets during Q3 2025[284] - The charge-off ratio for the commercial lending segment was 1.03% for the three months ended September 30, 2025[275] - The provision for credit losses was $18.6 million for Q3 2025, slightly down from $20.2 million in Q3 2024, with recreation loans accounting for $16.7 million of this provision[300] - The company generated liquidity through deposits, privately placed notes, and SBA debentures, but may face challenges in securing additional liquidity under current market conditions[339]
MEDALLION BANK F(MBNKP) - 2025 Q3 - Quarterly Report