Medallion Financial Corp. Reports 2024 First Quarter Results
April 30 2024 - 3:07PM
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, 2024.
2024 First Quarter Highlights
- Net income was $10.0 million, or $0.42 per share, compared to
$15.4 million, or $0.67 per share, in the prior year quarter.
- $3.1 million of cash was collected on taxi medallion-related
assets, with recoveries resulting in earnings of $0.04 per share
compared to $13.2 million of cash collected, with recoveries
resulting in earnings of $0.28 per share in the prior year
quarter.
- Net interest income grew 10% to $47.9 million from $43.6
million in the prior year quarter.
- Net interest margin on net loans was 8.39%, compared to 8.71%
in the prior year quarter, and on gross loans it was 8.10%,
compared to 8.42% in the prior year quarter.
- Loan originations were $173.1 million, compared to $227.3
million in the prior year quarter.
- Loans grew 12% to $2.2 billion as of March 31, 2024,
compared to $2.0 billion a year ago.
- The credit loss provision increased to $17.2 million from $4.0
million in the prior year quarter. The total provision included
$0.9 million of net taxi medallion recoveries in the current
quarter compared to $7.1 million of net taxi medallion recoveries
in the prior year quarter.
- Repurchased 264,160 shares of its common stock at an average
cost of $8.05 per share, for a total of $2.1 million.
- The Company declared and paid a quarterly cash dividend of
$0.10 per share
Executive Commentary – Andrew Murstein,
President of Medallion
“Once again, we continue to be pleased with our
quarterly results, earning $10 million for the shareholders, or
$0.42 per diluted share. The credit loss provision reflected the
seasonality of our consumer lending business, starting relatively
high early in the quarter and decreasing late in the quarter as
delinquency declined from the December peak. Additionally, in the
prior years we had significant recoveries related to taxi-medallion
loans, which in the current quarter only totaled $0.9
million. As we look to the remainder of the year, we also
expect consumer originations to increase as we hit our strong
months.
In addition to our quarterly dividend, we
returned an additional $2.1 million to shareholders in the form of
stock repurchases made in the first quarter. We’ll continue to
assess our repurchase plans, being opportunistic at the right
times, with the ultimate goal of providing long term value
accretion to our shareholders.”
Business Segment Highlights
Recreation Lending Segment
- Originations were $105.8 million during the quarter, compared
to $101.7 million a year ago.
- Recreation loans grew 13% to $1.4 billion as of March 31,
2024, compared to $1.2 billion a year ago.
- Recreation loans were 61% of total loans as of March 31,
2024, consistent with a year ago.
- Net interest income grew 7% to $34.3 million for the quarter,
from $32.0 million in the prior year quarter.
- The average interest rate was 14.80% at quarter-end, compared
to 14.42% a year ago.
- Recreation loans 90 days or more past due were $6.4 million, or
0.48% of gross recreation loans, as of March 31, 2024,
compared to $4.2 million, or 0.36%, a year ago.
- Allowance for credit loss rate was 4.40% as of March 31,
2024, compared to 4.12% a year ago.
Home Improvement Lending Segment
- Originations were $51.6 million during the quarter, compared to
$95.0 million a year ago.
- Home improvement loans grew 12% to $752.3 million as of
March 31, 2024, compared to $669.6 million a year ago.
- Home improvement loans were 34% of total loans as of
March 31, 2024, consistent with a year ago.
- Net interest income grew 14% to $11.8 million for the quarter,
from $10.4 million in the prior year quarter.
- The average interest rate was 9.60% at quarter-end, compared to
8.83% a year ago.
- Home improvement loans 90 days or more past due were $1.4
million, or 0.18% of gross home improvement loans, as of
March 31, 2024, compared to $0.4 million, or 0.07%, a year
ago.
- Allowance for credit loss rate was 2.38% as of March 31,
2024, compared to 2.19% a year ago.
Commercial Lending Segment
- Commercial loans were $106.6 million at March 31, 2024,
compared to $95.3 million a year ago.
- The average interest rate on the portfolio was 13.00%, compared
to 12.42% a year ago.
Taxi Medallion Lending Segment
- The Company collected $3.1 million of cash on taxi
medallion-related assets during the quarter.
- Total net taxi medallion assets declined to $10.8 million
(comprised of $2.1 million of loans net of allowance for credit
losses and $8.7 million of loan collateral in process of
foreclosure), a 48% reduction from a year ago, and represented less
than half a percent of the Company’s total assets, as of
March 31, 2024.
Capital Allocation
Quarterly Dividend
- The Board of Directors declared the quarterly dividend of $0.10
per share, payable on May 31, 2024 to shareholders of record at the
close of business on May 15, 2024.
Stock Repurchase Plan
- During the first quarter, the Company repurchased 264,160
shares of its common stock at an average cost of $8.05 per share,
for a total of $2.1 million.
- As of March 31, 2024 the Company had $17.9 million remaining
under its $40 million share repurchase program
Conference Call Information
The Company will host a conference call to discuss
its first quarter financial results tomorrow, Wednesday, May 1,
2024 at 9:00 a.m. Eastern time.
In connection with its earnings release, the
Company has updated its quarterly supplement presentation, which is
now available at www.medallion.com.
How to Participate
- Date: Wednesday, May 1, 2024
- Time: 9:00 a.m. Eastern time
- U.S. dial-in number: (833) 816-1412
- International dial-in number: (412)
317-0504
- Live webcast: Link to Webcast of 1Q24 Earnings
Call
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 Wednesday, May 8.
- U.S. dial-in number: (844) 512-2921
- International dial-in number: (412)
317-6671
- Access ID: 1018 8235
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 2023 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, 2024 |
|
|
December 31, 2023 |
|
|
March 31, 2023 |
|
Assets |
|
|
|
|
|
|
|
|
|
Cash, cash equivalents, and federal funds sold |
|
$ |
169,125 |
|
|
$ |
149,845 |
|
|
$ |
132,382 |
|
Investment and equity securities |
|
|
69,412 |
|
|
|
65,712 |
|
|
|
59,182 |
|
Loans |
|
|
2,228,426 |
|
|
|
2,215,886 |
|
|
|
1,984,180 |
|
Allowance for credit losses |
|
|
(83,827 |
) |
|
|
(84,235 |
) |
|
|
(70,280 |
) |
Net loans receivable |
|
|
2,144,599 |
|
|
|
2,131,651 |
|
|
|
1,913,900 |
|
Goodwill and intangible assets, net |
|
|
171,033 |
|
|
|
171,394 |
|
|
|
172,478 |
|
Property, equipment, and right-of-use lease asset, net |
|
|
14,024 |
|
|
|
14,076 |
|
|
|
13,401 |
|
Accrued interest receivable |
|
|
12,673 |
|
|
|
13,538 |
|
|
|
12,235 |
|
Loan collateral in process of foreclosure |
|
|
10,198 |
|
|
|
11,772 |
|
|
|
20,467 |
|
Other assets |
|
|
27,698 |
|
|
|
29,839 |
|
|
|
27,625 |
|
Total assets |
|
$ |
2,618,762 |
|
|
$ |
2,587,827 |
|
|
$ |
2,351,670 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
Deposits |
|
$ |
1,879,061 |
|
|
$ |
1,866,657 |
|
|
$ |
1,695,300 |
|
Long-term debt |
|
|
225,558 |
|
|
|
235,544 |
|
|
|
175,864 |
|
Short-term borrowings |
|
|
32,500 |
|
|
|
8,000 |
|
|
|
38,500 |
|
Deferred tax liabilities, net |
|
|
24,846 |
|
|
|
21,207 |
|
|
|
26,205 |
|
Operating lease liabilities |
|
|
6,710 |
|
|
|
7,019 |
|
|
|
8,168 |
|
Accrued interest payable |
|
|
6,077 |
|
|
|
6,822 |
|
|
|
5,152 |
|
Accounts payable and accrued expenses |
|
|
26,186 |
|
|
|
30,804 |
|
|
|
27,328 |
|
Total liabilities |
|
|
2,200,938 |
|
|
|
2,176,053 |
|
|
|
1,976,517 |
|
Total stockholders’ equity |
|
|
349,036 |
|
|
|
342,986 |
|
|
|
306,365 |
|
Non-controlling interest in consolidated subsidiaries |
|
|
68,788 |
|
|
|
68,788 |
|
|
|
68,788 |
|
Total equity |
|
|
417,824 |
|
|
|
411,774 |
|
|
|
375,153 |
|
Total liabilities and equity |
|
$ |
2,618,762 |
|
|
$ |
2,587,827 |
|
|
$ |
2,351,670 |
|
Number of
shares outstanding |
|
|
23,377,564 |
|
|
|
23,449,646 |
|
|
|
23,309,993 |
|
Book
value per share |
|
$ |
14.93 |
|
|
$ |
14.63 |
|
|
$ |
13.14 |
|
MEDALLION FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
|
Three Months Ended March 31, |
|
(Dollars in thousands, except share and per share data) |
|
2024 |
|
|
2023 |
|
Total interest income |
|
$ |
67,070 |
|
|
$ |
55,843 |
|
Total interest expense |
|
|
19,153 |
|
|
|
12,240 |
|
Net
interest income |
|
|
47,917 |
|
|
|
43,603 |
|
Provision for credit losses |
|
|
17,201 |
|
|
|
4,038 |
|
Net
interest income after provision for credit losses |
|
|
30,716 |
|
|
|
39,565 |
|
Other income (loss) |
|
|
|
|
|
|
Gain (loss) on equity investments |
|
|
4,167 |
|
|
|
(90 |
) |
Gain on sale of loans and taxi medallions |
|
|
588 |
|
|
|
1,855 |
|
Write-down of loan collateral in process of foreclosure |
|
|
— |
|
|
|
(252 |
) |
Other income |
|
|
648 |
|
|
|
570 |
|
Total other income, net |
|
|
5,403 |
|
|
|
2,083 |
|
Other expenses |
|
|
|
|
|
|
Salaries and employee benefits |
|
|
9,457 |
|
|
|
8,836 |
|
Loan servicing fees |
|
|
2,470 |
|
|
|
2,222 |
|
Collection costs |
|
|
1,467 |
|
|
|
1,538 |
|
Regulatory fees |
|
|
977 |
|
|
|
682 |
|
Professional fees |
|
|
771 |
|
|
|
1,707 |
|
Rent expense |
|
|
657 |
|
|
|
623 |
|
Amortization of intangible assets |
|
|
361 |
|
|
|
360 |
|
Other expenses |
|
|
2,065 |
|
|
|
2,425 |
|
Total other expenses |
|
|
18,225 |
|
|
|
18,393 |
|
Income before income taxes |
|
|
17,894 |
|
|
|
23,255 |
|
Income tax provision |
|
|
6,358 |
|
|
|
6,382 |
|
Net
income after taxes |
|
|
11,536 |
|
|
|
16,873 |
|
Less: income attributable to the non-controlling interest |
|
|
1,512 |
|
|
|
1,512 |
|
Total net income attributable to Medallion Financial
Corp. |
|
$ |
10,024 |
|
|
$ |
15,361 |
|
Basic net income per share |
|
$ |
0.44 |
|
|
$ |
0.69 |
|
Diluted net income per share |
|
$ |
0.42 |
|
|
$ |
0.67 |
|
Weighted average common shares outstanding |
|
|
|
|
|
|
Basic |
|
|
22,641,385 |
|
|
|
22,342,911 |
|
Diluted |
|
|
23,765,045 |
|
|
|
22,975,457 |
|
Dividends declared per common share |
|
$ |
0.10 |
|
|
$ |
0.08 |
|
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