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Medallion Bank Reports 2024 Third Quarter Results and Declares Series F Preferred Stock Dividend
SALT LAKE CITY, Oct. 29, 2024 (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 ended September 30, 2024. The Bank is a wholly owned subsidiary of Medallion Financial Corp. (Nasdaq: MFIN).
2024 Third Quarter Highlights
Net income of $15.5 million, compared to $17.2 million in the prior year quarter.
Net interest income of $53.2 million, compared to $48.7 million in the prior year quarter.
Net interest margin of 8.44%, compared to 8.70% in the prior year quarter.
Total provision for credit losses was $20.2 million, compared to $14.0 million in the prior year quarter. Total provision for credit losses included $2.2 million of net taxi medallion recoveries, compared to $1.7 million of net taxi medallion recoveries in the prior year quarter.
Annualized net charge-offs were 2.31% of average loans outstanding, compared to 1.97% in the prior year quarter.
Annualized return on assets and return on equity were 2.47% and 16.72%, respectively, compared to 3.06% and 20.46% for the prior year period.
The total loan portfolio grew 13% from September 30, 2023 to $2.4 billion as of September 30, 2024.
Total assets were $2.6 billion and the Tier 1 leverage ratio was 15.66% at September 30, 2024.
Donald Poulton, President and Chief Executive Officer of Medallion Bank, stated, “Earnings grew over the sequential quarter as combined recreation and home improvement loan origination volumes reached their anticipated peak for 2024. Net interest income rose to $53 million on more than $72 million of total interest income. As is typical for the time of year, delinquency rose compared to the second quarter while the net charge-off rate was essentially flat. Aided by the new fintech relationship announced in September, we originated $40 million in loans through our fintech strategic partners during the quarter. The strategic partnership program, which we have approached with caution and patience, is expected to grow steadily in the coming periods as our partners grow. Though overall demand for our products remains strong, we continue to prioritize credit quality and managed growth that maintains our market position.”
Recreation Lending Segment
The Bank’s recreation loan portfolio grew 15% to $1.555 billion as of September 30, 2024, compared to $1.346 billion at September 30, 2023. Loan originations were $139.1 million, compared to $92.6 million in the prior year quarter.
Net interest income was $40.2 million, compared to $36.5 million in the prior year quarter.
Recreation loans were 65% of loans receivable as of September 30, 2024, compared to 64% at September 30, 2023.
Delinquencies 30 days or more past due were $64.6 million, or 4.15%, of recreation loans as of September 30, 2024, compared to $51.4 million, or 3.82%, at September 30, 2023.
Annualized net charge-offs were 3.18% of average recreation loans outstanding, compared to 2.67% in the prior year quarter.
The provision for recreation credit losses was $17.5 million and the allowance for credit losses was 4.53% of the outstanding balance, compared to $11.9 million and 4.24% of the outstanding balance in the prior year quarter.
Home Improvement Lending Segment
The Bank’s home improvement loan portfolio grew 8% to $814.1 million as of September 30, 2024, compared to $750.5 million at September 30, 2023. Loan originations were $96.5 million, compared to $79.3 million in the prior year quarter.
Net interest income was $12.6 million, compared to $11.9 million in the prior year quarter.
Home improvement loans were 34% of loans receivable as of September 30, 2024, compared to 36% at September 30, 2023.
Delinquencies 30 days or more past due were $8.3 million, or 1.02%, of home improvement loans as of September 30, 2024, compared to $6.8 million, or 0.90%, at September 30, 2023.
Annualized net charge-offs were 1.76% of average home improvement loans outstanding, compared to 1.61% in the prior year quarter.
The provision for home improvement credit losses was $4.9 million and the allowance for credit losses was 2.42% of the outstanding balance, compared to $3.9 million and 2.31% of the outstanding balance in the prior year quarter.
Series F Preferred Stock Dividend
On October 24, 2024, 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 January 2, 2025, to holders of record at the close of business on December 16, 2024.
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).
Please note that this press release contains forward-looking statements that involve risks and uncertainties relating to business performance, cash flow, costs, 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,” “expected,” “continue,” “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.
