• Medallion Financial Corp. Reports 2023 First Quarter Results

    ソース: Nasdaq GlobeNewswire / 01 5 2023 16:01:00   America/New_York

    NEW YORK, May 01, 2023 (GLOBE NEWSWIRE) -- Medallion Financial Corp. (NASDAQ: MFIN, “Medallion” or the “Company”), a specialty finance company that originates and services loans in various consumer and commercial industries, along with offering loan origination services to fintech strategic partners, announced today its results for the quarter ended March 31, 2023.

    2023 First Quarter Highlights

    • Net income was $15.4 million, or $0.67 per share, compared to $9.8 million, or $0.39 per share, in the prior year quarter.
    • $13.2 million of cash collected on medallion-related assets. Medallion recoveries resulted in earnings of $0.28 per share.
    • Net interest income grew 21% to $43.6 million from $35.9 million in the prior year quarter.
    • Net interest margin on net loans was 8.71%, compared to 9.20% in the prior year quarter, and on gross loans it was 8.42%, compared to 8.91% in the prior year quarter.
    • Loan originations were $227.3 million, compared to $213.7 million in the prior year quarter.
    • The credit loss provision increased to $4.0 million from $3.2 million in the prior year quarter.
    • Total assets were $2.4 billion at March 31, 2023, a 20% increase over March 31, 2022.
    • The Company declared and paid a quarterly cash dividend of $0.08 per share.

    Executive Commentary – Andrew Murstein, President of Medallion

    “We are very pleased with our first quarter results which reflects one of our best quarters since our IPO in 1996. Despite the current interest rate environment, the growth in our consumer loan portfolio was enough to counteract our rising cost of funds, allowing us to grow our net interest income year-over-year and maintain it sequentially from the fourth quarter. Our earnings per share of $0.67 included $0.28 specific to medallion loan recoveries, tied to the more than $13 million of cash collected during the three months. While recent collection activity has been good the past several quarters and our team has done a great job, we reiterate collections and recoveries are expected to fluctuate for the foreseeable future.  We are happy with the more than $200 million of loan originations during the quarter, which helped our total assets grow 20% year-over-year.”

    Business Segment Highlights

    Recreation Lending Segment

    • Originations were $101.7 million during the quarter, compared to $114.4 million a year ago.
    • Recreation loans grew 21% to $1.2 billion as of March 31, 2023, compared to $1.0 billion a year ago.
    • Recreation loans were 61% of total loans as of March 31, 2023, compared to 64% a year ago.
    • Net interest income grew 16% to $32.0 million for the quarter, from $27.5 million in the prior year quarter.
    • The average interest rate was 14.42% at quarter-end, compared to 14.36% a year ago.
    • Recreation loans 90 days or more past due were $4.2 million, or 0.36% of gross recreation loans, as of March 31, 2023, compared to $3.8 million, or 0.39%, a year ago.

    Home Improvement Lending Segment

    • Originations grew to $95.0 million during the quarter, up from $89.8 million of the prior year quarter.
    • Home improvement loans grew 41% to $669.6 million as of March 31, 2023, compared to $473.4 million a year ago.
    • Home improvement loans were 34% of total loans as of March 31, 2023, compared to 30% a year ago.
    • Net interest income grew 24% to $10.4 million for the quarter, from $8.4 million in the prior year quarter.
    • The average interest rate was 8.83% at quarter-end, compared to 8.47% a year ago.
    • Home improvement loans 90 days or more past due were $0.4 million, or 0.07% of gross home improvement loans, as of March 31, 2023, compared to $0.3 million, or 0.06%, a year ago.

    Commercial Lending Segment

    • Commercial loans were $95.3 million at March 31, 2023, compared to $77.9 million a year ago.
    • The average interest rate on the portfolio was 12.42%, compared to 12.41% a year ago.

    Medallion Lending Segment

    • The Company collected $13.2 million during the quarter.
    • Total net medallion assets declined to $20.9 million (comprised of $1.9 million of loans net of allowance for credit losses and $19.0 million of loan collateral in process of foreclosure), a 44% reduction from a year ago, and represented 1% of the Company’s total assets, as of March 31, 2023.

    Loan Detail

    • During the quarter, net charge-offs were $11.3 million, compared to net $2.7 million in the prior year quarter.
    • Total loans 90 days or more past due were 0.24% of loans at March 31, 2023, compared to 0.27% at March 31, 2022.

    Capital Allocation

    Quarterly Dividend

    • The Board of Directors declared a quarterly cash dividend of $0.08 per share payable on May 31, 2023 to shareholders of record at the close of business on May 15, 2023.

    Stock Repurchase Plan

    • As of March 31, 2023, the Company had $20.0 million remaining under its $40 million share repurchase program.

    Current Expected Credit Loss (CECL) Adoption

    On January 1, 2023, the Company adopted the Current Expected Credit Loss accounting standard (Topic 326), otherwise known as CECL. Our calculation of the CECL transition amount on that date was an $11.6 million increase in our allowance for credit losses for consumer loans and a $2.2 million increase with respect to our commercial loans. As all medallion loans have specific reserves, the medallion loan allowance was not affected. With the adoption of CECL, our provisions for credit losses during the first quarter reflect an earlier recognition of credit losses than under the incurred loss accounting standard.

    Conference Call Information

    The Company will host a conference call to discuss its first quarter financial results tomorrow, Tuesday, May 2, 2023, at 9:00 a.m. Eastern time.

    As part of its earnings release, the Company has updated its quarterly supplement presentation, which is now available at www.medallion.com.

    How to Participate

    A link to the live audio webcast of the conference call will also be available at the Company’s IR website.

    Replay Information

    The webcast replay will be available at the Company's IR website until the next quarter’s results are announced.

    The conference call replay will be available following the end of the call through Tuesday, May 9.

    • U.S. dial-in number: (844) 512-2921
    • International dial-in number: (412) 317-6671
    • Passcode: 1017 8186

    About Medallion Financial Corp.
    Medallion Financial Corp. (NASDAQ:MFIN) and its subsidiaries originate and service a growing portfolio of consumer loans and mezzanine loans in various industries. Key industries served include recreation (towable RVs and marine) and home improvement (replacement roofs, swimming pools, and windows). Medallion Financial Corp. is headquartered in New York City, NY, and its largest subsidiary, Medallion Bank, is headquartered in Salt Lake City, Utah. For more information, please visit www.medallion.com.

    Forward-Looking Statements
    Please note that 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 our growth strategy. These statements are often, but not always, made using words or phrases such as “will” and “continue” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These statements relate to future public announcements of our earnings, the impact of the pending SEC litigation, expectations regarding our loan portfolio, including collections on our medallion loans, the potential for future asset growth, and market share opportunities. Medallion’s actual results may differ significantly from the results discussed in such forward-looking statements. For example, statements about the effects of the current economy, whether inflation or the risk of recession, operations, financial performance and prospects constitute forward-looking statements and are subject to the risk that the actual impacts may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond Medallion’s control.  In addition to risks relating to the current economy, a description of certain risks to which Medallion is or may be subject, including risks related to the pending SEC litigation, please refer to the factors discussed under the heading “Risk Factors” in Medallion’s 2022 Annual Report on Form 10-K.

    Company Contact:
    Investor Relations
    212-328-2176
    InvestorRelations@medallion.com

    MEDALLION FINANCIAL CORP.
    CONSOLIDATED BALANCE SHEETS
    (UNAUDITED)

    (Dollars in thousands, except share and per share data) March 31,
    2023    		  December 31,
    2022    		  March 31,
    2022    		 
    Assets         
    Cash, cash equivalents, and federal funds sold$132,382  $105,598  $138,794 
    Equity investments and investment securities 59,182   58,785   57,151 
                
    Loans 1,984,180   1,916,953   1,569,441 
    Allowance for credit losses (70,280)  (63,845)  (50,686)
    Net loans receivable 1,913,900   1,853,108   1,518,775 
                
    Loan collateral in process of foreclosure 20,467   21,819   33,834 
    Goodwill and intangible assets 172,478   172,838   173,923 
    Other assets 53,261   47,731   44,168 
    Total assets$2,351,670  $2,259,879  $1,966,625 
    Liabilities         
    Deposits$1,695,300  $1,607,110  $1,332,112 
    Long-term debt 211,864   214,320   220,006 
    Accounts payable and other liabilities 32,480   27,764   22,187 
    Deferred tax liabilities and other tax payables 26,205   26,753   21,731 
    Operating lease liabilities 8,168   8,408   8,548 
    Short-term borrowings 2,500   5,000   — 
    Total liabilities 1,976,517   1,889,355   1,604,584 
                
    Commitments and contingencies         
              
    Total stockholders’ equity 306,365   301,736   293,253 
    Non-controlling interest in consolidated subsidiaries 68,788   68,788   68,788 
    Total equity 375,153   370,524   362,041 
    Total liabilities and equity$2,351,670  $2,259,879  $1,966,625 
                
                
    Number of shares outstanding 23,309,993   23,061,673   25,507,113 
    Book value per share$13.14  $13.08  $11.50 
                

    MEDALLION FINANCIAL CORP.‌
    CONSOLIDATED STATEMENTS OF OPERATIONS‌
    (UNAUDITED)

     Three Months Ended
     March 31,
    (Dollars in thousands, except share and per share data)2023 2022
    Total interest income$55,843   $43,303 
    Total interest expense 12,240    7,375 
    Net interest income 43,603    35,928 
    Provision for credit losses 4,038    3,240 
    Net interest income after provision for loan losses 39,565    32,688 
    Other income (loss)     
    Gain on sale of loans and medallions 1,855   1,876 
    Write-down of loan collateral in process of foreclosure (252 )  (386)
    Loss on equity investments (90 )  (133)
    Other income 570    172 
    Total other income, net 2,083    1,529 
    Other expenses     
    Salaries and employee benefits 8,836    7,568 
    Loan servicing fees 2,222    1,953 
    Professional fees 1,707    3,992 
    Collection costs 1,538   1,343 
    Other expenses 4,090    3,177 
    Total other expenses 18,393   18,033 
    Income before income taxes 23,255   16,184 
    Income tax provision 6,382   4,831 
    Net income after taxes 16,873    11,353 
    Less: income attributable to the non-controlling interest 1,512    1,512 
    Total net income attributable to Medallion Financial Corp.$15,361   $9,841 
          
    Income per common share:     
    Basic$0.69   $0.40 
    Diluted$0.67   $0.39 
          
    Weighted average shares outstanding:     
    Basic 22,342,911    24,770,134 
    Diluted 22,975,457    25,083,566 
          
    Dividends declared per common share$0.08   $0.08 
            

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