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Medallion Bank Reports 2024 Fourth Quarter and Full-Year Results and Declares Series F Preferred Stock Dividend

1. Medallion Bank reported Q4 2024 net income of $15.6 million. 2. Provisions for credit losses increased to $20.5 million in Q4 2024. 3. Loan portfolio grew to $2.4 billion with a 13% increase. 4. Charge-offs rose to 3.28% of average loans outstanding. 5. A $121 million loan sale was announced to boost capital efficiency.

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Rising provisions and charge-offs indicate increasing risk, reflecting negatively on MFIN.

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The article contains significant financial information that can directly influence MFIN's stock price.

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Quarterly results indicate immediate pressures; longer-term growth could stabilize.

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MBNKP
January 30, 2025 16:01 ET  | Source: Medallion Financial Corp. SALT LAKE CITY, Jan. 30, 2025 (GLOBE NEWSWIRE) -- Medallion Bank (Nasdaq: MBNKP, the “Bank”), an FDIC-insured bank specializing in consumer loans for the purchase of recreational vehicles, boats, and home improvements, as well as loan products and services offered through fintech strategic partners, today announced its results for the quarter and year ended December 31, 2024. The Bank is a wholly owned subsidiary of Medallion Financial Corp. (Nasdaq: MFIN). 2024 Fourth Quarter Highlights Net income of $15.6 million, compared to $21.9 million in the prior year quarter.Net interest income of $53.1 million, compared to $48.9 million in the prior year quarter.Net interest margin of 8.28%, compared to 8.62% in the prior year quarter.Total provision for credit losses was $20.5 million, compared to $9.7 million in the prior year quarter. Total provision for credit losses included $0.9 million of net taxi medallion recoveries, compared to $12.0 million of net taxi medallion recoveries in the prior year quarter.Annualized net charge-offs were 3.28% of average loans outstanding, compared to 1.04% in the prior year quarter.In December 2024, the Bank signed a letter of intent to sell up to $121 million of recreation loans at a premium to par value. 2024 Full-Year Highlights Net income of $60.6 million, compared to net income of $79.9 million in 2023.Net interest income of $204.7 million, compared to $188.9 million in 2023.Net interest margin of 8.48%, compared to 8.84% in 2023.Total provision for credit losses was $75.8 million, compared to $36.5 million in 2023. Total provision for credit losses included $4.9 million of net taxi medallion recoveries, compared to $18.1 million of net taxi medallion recoveries in 2023.Total net charge-offs were 2.82% of average loans outstanding, compared to 1.52% in 2023.Return on assets and return on equity were 2.52% and 16.62%, respectively, compared to 3.74% and 24.57% in 2023.Total loan portfolio grew 13% to $2.4 billion.Total assets were $2.5 billion, total capital was $382.4 million, and the Tier 1 leverage ratio was 15.68% as of December 31, 2024. Donald Poulton, President and Chief Executive Officer of Medallion Bank, stated, “We finished 2024 on a solid note, with quarterly earnings of $15.6 million and net interest income above $53 million. Volumes in our strategic partnership business tripled to $124 million from $40 million in the third quarter. As anticipated, recreation and home improvement loan volumes slowed with the winter season, and loan delinquency and net charge-offs rose in the quarter as is expected. With record recreation loan originations of more than $526 million in 2024, we initiated another loan sale — our fifth since 2016 — in preparation for the projected demand from our customers in 2025. We view loan sales as an efficient method to recycle capital that can also generate earnings when demand exceeds our capacity. Reclassifying these recreation loans as held for sale resulted in a release of $3.9 million in related allowance for credit losses. As we look ahead, our priorities remain constant: loan originations of predictable credit quality and managed growth that continues to deliver increasing net interest income while maintaining or growing our market position.” Recreation Lending Segment The Bank’s recreation loan portfolio grew 15% to $1.543 billion as of December 31, 2024, compared to $1.336 billion at December 31, 2023. Loan originations were $72.2 million in the fourth quarter 2024, compared to $62.7 million in the prior year quarter. For the year, loan originations were $526.6 million, compared to $447.0 million in 2023.Net interest income was $39.4 million for the fourth quarter 2024, compared to $36.2 million in the prior year quarter. For the year, net interest income was $153.1 million, compared to $140.3 million in 2023.Recreation loans were 65% of loans receivable as of December 31, 2024, compared to 64% at December 31, 2023.Annualized net charge-offs were 4.35% of average recreation loans outstanding in the fourth quarter 2024, compared to 4.23% in the prior year quarter. For the year, total net charge-offs were 3.72% of average recreation loans outstanding, compared to 3.04% in 2023.The provision for recreation credit losses was $17.7 million in the fourth quarter 2024, compared to $14.8 million in the prior year quarter. For the year, the provision for recreation credit losses was $68.0 million, compared to $44.6 million in 2023. The provisions for the three and twelve months ended December 31, 2024 included $3.9 million of allowance for credit losses released as $121 million of recreation loans were reclassified as held for sale.The recreation allowance for credit losses was 5.00% of the outstanding balance as of December 31, 2024, compared to 4.31% of the outstanding balance as of December 31, 2023. The Bank does not record an allowance for loans held for sale, so the allowance as of December 31, 2024 relates only to the remaining recreation loans held for investment. Home Improvement Lending Segment The Bank’s home improvement loan portfolio grew 9% to $827.2 million as of December 31, 2024, compared to $760.6 million at December 31, 2023. Loan originations were $82.5 million in the fourth quarter 2024, compared to $66.0 million in the prior year quarter. For the year, loan originations were $298.7 million, compared to $357.4 million in 2023.Net interest income was $13.1 million for the fourth quarter 2024, compared to $12.2 million in the prior year quarter. For the year, net interest income was $50.2 million, compared to $46.6 million in 2023.Home improvement loans were 35% of loans receivable as of December 31, 2024, compared to 36% at December 31, 2023.Annualized net charge-offs were 1.75% of average home improvement loans outstanding in the fourth quarter 2024, compared to 1.67% in the prior year quarter. For the year, total net charge-offs were 1.78% of average home improvement loans outstanding, compared to 1.33% in 2023.The provision for home improvement credit losses was $4.4 million in the fourth quarter 2024, compared to $6.9 million in the prior year quarter. For the year, the provision for home improvement credit losses was $13.5 million, compared to $17.6 million in 2023.The home improvement allowance for credit losses was 2.48% of the outstanding balance at December 31, 2024, compared to 2.76% of the outstanding balance at December 31, 2023. Series F Preferred Stock Dividend On January 23, 2025, the Bank’s Board of Directors declared a quarterly cash dividend of $0.50 per share on the Bank’s Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series F, which trades on the Nasdaq Capital Market under the ticker symbol “MBNKP.” The dividend is payable on April 1, 2025, to holders of record at the close of business on March 17, 2025. About Medallion Bank Medallion Bank specializes in providing consumer loans for the purchase of recreational vehicles, boats, and home improvements, along with loan origination services to fintech strategic partners. The Bank works directly with thousands of dealers, contractors and financial service providers serving their customers throughout the United States. Medallion Bank is a Utah-chartered, FDIC-insured industrial bank headquartered in Salt Lake City and is a wholly owned subsidiary of Medallion Financial Corp. (Nasdaq: MFIN). For more information, visit www.medallionbank.com Please note that this press release contains forward-looking statements that involve risks and uncertainties relating to business performance, cash flow, costs, sales (including loan sales), net investment income, earnings, returns and growth. These statements are often, but not always, made through the use of words or phrases such as “remains,” “anticipated,” “continue,” “may,” “maintain” or the negative versions of these words or other comparable words or phrases of a future or forward-looking nature. These statements may relate to our future earnings, returns, capital levels, sources of funding, growth prospects, asset quality and pursuit and execution of our strategy. Medallion Bank’s actual results may differ significantly from the results discussed in such forward-looking statements. For a description of certain risks to which Medallion Bank is or may be subject, please refer to the factors discussed under the captions “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” included in Medallion Bank’s Form 10-K for the year ended December 31, 2023, and in its Quarterly Reports on Form 10-Q, filed with the FDIC. Medallion Bank’s Form 10-K, Form 10-Qs and other FDIC filings are available in the Investor Relations section of Medallion Bank’s website. Medallion Bank’s financial results for any period are not necessarily indicative of Medallion Financial Corp.’s results for the same period.   Company Contact:Investor Relations212-328-2176InvestorRelations@medallion.com MEDALLION BANKSTATEMENTS OF OPERATIONS(UNAUDITED)  Three Months Ended December 31, For the Years Ended December 31,(In thousands)2024 2023 2024 2023Interest income       Loan interest including fees$71,577 $61,668 $268,914 $231,496Investments 1,564  1,585  6,306  5,171Total interest income 73,141  63,253  275,220  236,667Interest expense 20,039  14,401  70,509  47,785Net interest income 53,102  48,852  204,711  188,882Provision for credit losses 20,500  9,717  75,845  36,457Net interest income after provision for credit losses 32,602  39,135  128,866  152,425Other non-interest income 16  839  2,134  2,102Non-interest expense       Salaries and benefits 5,014  4,997  19,985  19,001Loan servicing 3,173  2,903  12,248  11,626Collection costs 1,517  1,492  6,095  5,965Regulatory fees 969  692  3,795  3,176Professional fees 508  631  1,694  2,243Information technology 329  281  1,186  1,031Occupancy and equipment 541  206  1,167  830Other 938  818  3,624  3,524Total non-interest expense 12,989  12,020  49,794  47,396Income before income taxes 19,629  27,954  81,206  107,131Provision for income taxes 4,040  6,011  20,624  27,279Net income$15,589 $21,943 $60,582 $79,852Less: Preferred stock dividends 1,512  1,512  6,047  6,047Net income attributable to common shareholder$14,077 $20,431 $54,535 $73,805             MEDALLION BANKBALANCE SHEETS(UNAUDITED) (In thousands)December 31, 2024 December 31, 2023Assets   Cash and federal funds sold$126,196  $110,043 Investment securities, available-for-sale 54,805   54,282 Loans held for sale, at the lower of amortized cost or fair value 128,226   —     Loan receivables, inclusive of net deferred loan acquisition cost and fees 2,249,613   2,100,338 Allowance for credit losses (91,638)  (79,283)Loans, net 2,157,975   2,021,055 Loan collateral in process of foreclosure 3,326   4,165 Fixed assets and right-of-use lease assets, net 9,126   8,140 Deferred tax assets 14,036   12,761 Accrued interest receivable 15,083   13,439 Other assets 40,326   38,171 Total assets$2,549,099  $2,262,056 Liabilities and Shareholders’ Equity   Liabilities   Deposits and other funds borrowed$2,125,071  $1,866,657 Accrued interest payable 5,586   4,029 Income tax payable 17,951   21,219 Other liabilities 17,204   17,509 Due to affiliates 910   849 Total liabilities 2,166,722   1,910,263 Shareholder’s Equity   Series E Preferred stock 26,303   26,303 Series F Preferred stock 42,485   42,485 Common stock 1,000   1,000 Additional paid in capital 77,500   77,500 Accumulated other comprehensive loss, net of tax (4,480)  (4,529)Retained earnings 239,569   209,034 Total shareholders’ equity 382,377   351,793 Total liabilities and shareholders’ equity$2,549,099  $2,262,056 

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