Financial Data and Key Metrics Changes - In 2025, Medallion Financial Corp reported record performance with increases in net interest income, net income, originations, and portfolio size compared to 2024 [4] - Net interest income grew 8% to $56.4 million for Q4 and 7% to $216.9 million for the full year [17] - Net income attributable to shareholders was $12.2 million for Q4, an increase of $2.1 million from the prior year, and $43 million for the full year, up $7.2 million [23] Business Line Data and Key Metrics Changes - Consumer lending, the largest business line, reported interest income of $74.5 million for Q4 and $289.9 million for the year, growing 5% and 8% respectively [5] - Home improvement loans stood at $810.2 million, with Q4 originations of $61.7 million, down from $82.5 million a year ago [7] - Commercial lending originations were $4.1 million for Q4, compared to $7.3 million the previous year, but total originations for the year increased to $40.6 million from $14.3 million [8] Market Data and Key Metrics Changes - Total loans reached $2.567 billion, with total originations of $421 million for Q4 and $1.5 billion for the full year, reflecting growth from the previous year [4] - The average interest rate on the total loan portfolio increased to 12.26% from 12.01% a year ago [19] - Delinquencies of ninety-plus days were 0.82% for recreational loans and 0.16% for home improvement loans, indicating strong credit quality [6][7] Company Strategy and Development Direction - The company aims to build on its strong foundation while refining strategic priorities, focusing on growth in the recreation and home improvement segments [13] - A disciplined origination strategy and prudent balance sheet management are prioritized to ensure sustainable growth [12] - The strategic partnership program has seen significant growth, with originations reaching a record level of $258.3 million [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate changing environments and deliver consistent returns for shareholders [16] - The focus for 2026 includes targeting sustained growth in core business lines and expanding the home improvement segment [13] - Management acknowledged the potential for market conditions to evolve but emphasized a clear and consistent strategy [16] Other Important Information - The provision for credit loss was $27.7 million for Q4, reflecting an increase from previous quarters due to portfolio growth and adjustments in allowance coverage [20] - The company collected $2.5 million from its legacy Taxi Medallion business during Q4, with net recoveries and gains of $1.4 million [11] - The adjusted tangible book value per share increased to $12.12, up from $10.50 a year ago [24] Q&A Session Summary Question: How would you characterize the provision expense of $27.7 million? - Management explained that the increase was due to moving loans from held for sale to held for investment and adjustments in allowance coverage [26][27] Question: What were the nature of the equity gains recognized? - Management detailed that the $8.8 million in equity gains came from several exits, including gains on warrants and equity investments [32][34] Question: What is the growth outlook for the home improvement segment? - Management indicated a focus on mid-teens growth for home improvement, supported by new talent and improved capital availability [36][38] Question: Should we expect a growth in the reserve ratio in 2026? - Management stated that while the allowance will grow with the loan book, significant changes in the reserve ratio are not expected [46] Question: What were the net charge-offs for Q4? - Management provided details on net charge-offs, indicating $107 for home improvement and $441 for the recreational portfolio [48]

Medallion Financial (NasdaqGS:MFIN) Q4 2025 Earnings call February 19, 2026 09:00 AM ET Company ParticipantsAndrew Murstein - President and CEOAnthony Cutrone - EVP and CFOChristopher Nolan - Senior Vice PresidentVal Ferraro - Investor RelationsConference Call ParticipantsMike Grondahl - Head of Equity Research and Senior Research AnalystOperatorGood day, and welcome to the Medallion Financial Corp Fourth Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need as ...

Financial Data and Key Metrics Changes - In Q4 2025, net interest income grew 8% to $56.4 million from $52 million in the same quarter a year ago, and for the full year, it increased 7% to $216.9 million from $202.5 million in 2024 [16][22] - Net income attributable to shareholders was $12.2 million, or $0.50 per diluted share, an increase of $2.1 million or $0.07 per share over the prior year quarter, and for the full year, net income was $43 million, or $1.78 per share, an increase of $7.2 million or $0.26 per share from 2024 [22] - Total loans reached $2.567 billion, with total originations of $421 million for Q4 and $1.5 billion for the full year, reflecting increases from both the same quarter last year and year-over-year [4][18] Business Line Data and Key Metrics Changes - Consumer lending, the largest business line, reported interest income of $74.5 million for Q4 and $289.9 million for the year, growing 5% compared to the same period last year and 8% year-over-year [5] - The recreational loan book grew 5% to $1.6 billion, representing 63% of total loans, with Q4 originations of $97.2 million compared to $72.2 million a year ago [5][18] - The home improvement loan book stood at $810.2 million, representing 32% of total loans, with Q4 originations of $61.7 million versus $82.5 million last year [6] - The commercial segment had new originations of $4.1 million during Q4, compared to $7.3 million the same quarter a year ago, but total originations for the year were $40.6 million, up from $14.3 million in 2024 [7] Market Data and Key Metrics Changes - The average interest rate on the total loan portfolio increased to 12.26% from 12.01% a year ago, with the average interest rate on commercial loans at 14.22% compared to 12.97% a year ago [18] - Delinquencies of ninety-plus days were 0.82% of gross recreational loans and 0.16% of gross home improvement loans, with allowances for credit losses at 5.32% and 2.41% respectively [6][19] Company Strategy and Development Direction - The company aims to build upon its strong foundation while refining strategic priorities, focusing on sustained growth in the recreation and home improvement segments [12] - The strategic partnership program has seen record levels of originations, reaching $258.3 million in Q4, indicating diversification of income sources [9] - The company is committed to disciplined growth, operational excellence, and prudent capital allocation, with a focus on optimizing returns and improving margins [14][57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate changing environments and deliver consistent, attractive returns for shareholders [14] - The company recognizes the potential for market conditions to evolve but remains focused on sustainable value creation [14] - Management highlighted the importance of maintaining a strong balance sheet to support future investments and growth opportunities [14] Other Important Information - The provision for credit loss was $27.7 million for Q4, reflecting an increase from $18.6 million in Q3 and $20.6 million in the prior year quarter [19] - The company collected $2.5 million in cash from its legacy Taxi Medallion business during Q4, resulting in net recoveries and gains of $1.4 million [10] Q&A Session Summary Question: How would you characterize the provision expense of $27.7 million? - Management explained that the increase was due to moving loans from held for sale to held for investment, which accounted for a $2.2 million provision hit, and an increase in allowance coverage from 5% to 5.32% [26][27] Question: What were the nature of the equity gains of $8.7 million? - Management indicated that the gains were related to several exits, with about $8.5 million coming from three specific portfolio companies [31][32] Question: Should we expect a growth in the reserve ratio in 2026? - Management stated that while the allowance will grow with the loan book, they do not expect significant changes in the reserve ratio [45] Question: What is the growth outlook for the home improvement segment? - Management highlighted that they added experienced talent to support growth in the home improvement line and expect mid-teens growth, significantly above previous levels [36][38]

Financial Data and Key Metrics Changes - Net income for Q3 2025 was $7.8 million, or $0.32 per diluted share, which includes a non-recurring charge of $3.5 million related to the redemption of Series F preferred stock, resulting in adjusted earnings of $11.3 million [4][19] - Net interest income increased by 6% to $55.7 million, with a net interest margin of 8.21%, up 10 basis points from the previous year [14][4] - Total loans reached $2.559 billion, reflecting a 3% increase year-over-year [15] Business Line Data and Key Metrics Changes - Consumer lending, the largest segment, generated interest income of $74.1 million, a 5% increase, despite originations decreasing to $201.4 million from $235.6 million a year ago [5][6] - Recreational loans grew 3% to $1.603 billion, representing 63% of total loans, with delinquencies of 90+ days at 0.57% [6] - Home improvement loans decreased to $804 million, with originations of $59.7 million, and delinquencies at 0.16% [6] - Commercial loans reached $135.1 million, with new originations of $17.5 million [9] Market Data and Key Metrics Changes - The strategic partnership program saw record originations of $208.4 million, contributing approximately $1.5 million in fees and interest for the quarter [10][11] - The average interest rate on recreation loans was 15.77%, while home improvement loans averaged 10.9% [14] Company Strategy and Development Direction - The company is focused on disciplined execution and strategic positioning to drive growth across its lending segments [5] - Plans to expand the strategic partnership program by adding new partners in the coming quarters [10][40] - The company aims to maintain a growth strategy that has successfully guided its lending business over the past several years [52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver sustainable growth and attractive shareholder returns, supported by a diversified portfolio and prudent underwriting standards [12][13] - The company anticipates continued margin expansion and loan growth, particularly in the home improvement segment [43][46] Other Important Information - The company paid a quarterly dividend of $0.12 per share and has $14.4 million remaining under a $40 million share repurchase program [12] - The net book value per share increased to $17.07, up from $16.77 in the previous quarter [19] Q&A Session Summary Question: Was the operating EPS $0.46 a share? - Answer: The operating EPS was $0.32, with the $0.14 impact from the Series F preferred stock redemption bringing it to $0.46 [23][24] Question: Were there any loans sold in the quarter? - Answer: Other than within the strategic partnership program, there are plans to sell recreation loans in the next couple of quarters [25] Question: Does the increase in non-controlling income relate to the Series F preferred stock redemption? - Answer: Yes, the decrease on the balance sheet is due to the redemption of Series F [26] Question: What should be the non-controlling income quarterly going forward? - Answer: It is expected to be $2.33 million [28] Question: Do you have exposure to government employees given the government shutdown? - Answer: No, there is no exposure that would affect the company [31] Question: What is the outlook for strategic originations and fees in 2026? - Answer: The strategic partnership program is expected to continue growing, with plans to add new partners [40] Question: Why were recreation originations flat year over year? - Answer: The company raised credit standards and was cautious due to capital levels [41] Question: How should margins be viewed going forward with recent Fed rate cuts? - Answer: The trend of margin expansion is expected to continue, with a potential drop in the cost of funds [43] Question: What is the outlook for overall loan growth? - Answer: The company is optimistic about loan growth, especially with new talent in home improvement lending [46]