Medallion Financial Corp 8-K, filed Apr 30, 2021
Medallion Financial Corp (MFIN)
About this 8-K
Medallion Financial Corp filed this 8-K on April 30, 2021.
Items reported
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 7.01 | Regulation FD Disclosure. |
Medallion Bank, a wholly owned subsidiary of Medallion Financial Corp. (the “Company”), issued a press release to the news media announcing, among other things, Medallion Bank’s results for the quarter ended March 31, 2021.
A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The information in the press release is being furnished, not filed, pursuant to Item 7.01. Accordingly, the information in the press release will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits
The following exhibits are being filed with this Current Report on Form 8-K:
| 99.1 | Medallion Bank press release, dated April 30, 2021 | |||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: April 30, 2021
| MEDALLION FINANCIAL CORP. | ||
| By: | /s/ Larry D. Hall | |
| Name: Larry D. Hall | ||
| Title: Chief Financial Officer | ||
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Exhibit 99.1
FOR IMMEDIATE RELEASE:
MEDALLION BANK REPORTS 2021 FIRST QUARTER RESULTS AND DECLARES SERIES F PREFERRED STOCK DIVIDEND
SALT LAKE CITY, UT – April 30, 2021 – Medallion Bank (Nasdaq: MBNKP, “the Bank”), an FDIC-insured bank providing consumer loans for the purchase of recreational vehicles, boats, and home improvements, along with loan origination services to fintech partners, announced today its 2021 first quarter results. The Bank is a wholly owned subsidiary of Medallion Financial Corp. (Nasdaq: MFIN).
2021 First Quarter Highlights
| • | Quarterly net income was $13.8 million compared to a net loss of $0.4 million in the prior year period. |
| • | Quarterly net interest income was $31.0 million, compared to $27.8 million in the 2020 first quarter. |
| • | Quarterly provision for loan losses was $2.7 million, compared to $15.3 million in the 2020 first quarter. |
| • | Net charge-offs were 1.0% of average loans outstanding, compared to 3.4% in the prior year period. |
| • | The gross recreation and home improvement loan portfolios grew 11% and 34%, respectively, from March 31, 2020. |
| • | The total exposure of the medallion lending segment, which includes loan collateral in process of foreclosure and remarketed assets, was $42.6 million, or 3% of total assets, as of March 31, 2021, compared to $107.3 million, or 9%, at March 31, 2020. Of that exposure, the medallion loan portfolio net of the allowance for loan losses was $6.5 million as of March 31, 2021, compared to $74.3 million at March 31, 2020. |
| • | Total assets were $1.3 billion, and the Bank had $228.6 million in capital and a Tier 1 leverage ratio of 18.03% as of March 31, 2021. |
Donald Poulton, President and Chief Executive Officer of Medallion Bank, stated, “Following a strong 2020 fourth quarter, the Bank continued its momentum into 2021 with $13.8 million of first quarter net income. Volume overall remained elevated with record loan volumes in our recreation lending segment in March. Both charge-off and delinquency ratios were low in the quarter. With the high-volume months in our annual cycle still ahead, we expect continued growth throughout the year. New York City taxi medallion values were unchanged from year end but we slightly adjusted downward the values in some of the smaller medallion markets. Such adjustments had an immaterial impact on our earnings this quarter. Finally, we signed our second fintech partner during the first quarter and expect to begin providing loan origination services in the second quarter.”
Recreation Lending Segment
The Bank’s recreation loan portfolio was $828.7 million as of March 31, 2021, compared to $743.5 million at March 31, 2020. Net interest income for the first quarter was $29.6 million, compared to $28.1 million in the prior year period. Recreation loans were at 69% and 67% of loans receivable as of March 31, 2021 and March 31, 2020, respectively. The provision for recreation loan losses was $3.6 million, compared to $10.5 million in the prior year period. Recreation loan delinquencies 90 days or more past due were $3.2 million, or 0.4% of gross recreation loans, as of March 31, 2021, compared to $5.3 million, or 0.7%, at March 31, 2020. Delinquencies were lower due to improved credit performance by our borrowers.
Home Improvement Lending Segment
The Bank’s home improvement loan portfolio was $342.3 million as of March 31, 2021, compared to $256.1 million at March 31, 2020. Net interest income for the first quarter was $7.5 million, compared to $5.5 million in the prior year period. Home improvement loans were 28% and 23% of loans receivable as of March 31, 2021 and March 31, 2020, respectively. The provision for home improvement loan losses was $0.5 million, compared to $1.5 million in the prior year period. Home improvement loan delinquencies 90 days or more past due were $150,000, or 0.04% of gross home improvement loans as of March 31, 2021, compared to $222,000, or 0.09%, at March 31, 2020. Delinquencies were lower due to improved credit performance by our borrowers.
Medallion Lending Segment
The Bank’s gross medallion loan portfolio before the allowance for loan losses was $31.8 million as of March 31, 2021, compared to $105.1 million at March 31, 2020. Medallion loans were 2.6% of the Bank’s loans receivable as of March 31, 2021, compared to 9.5% at March 31, 2020. The total gross exposure of the medallion lending segment, which includes loan collateral in process of foreclosure and remarketed assets, was $42.6 million, or 3% of total assets, as of March 31, 2021, compared to $107.3 million, or 9%, at March 31, 2020. Of that exposure, the medallion loan portfolio net of the allowance for loan losses was $6.5 million as of March 31, 2021, compared to $74.3 million at March 31, 2020.
Unless otherwise specified, loan portfolios are presented net of deferred loan acquisition costs.
* * *
On April 29, 2021, 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 July 1, 2021 to holders of record at the close of business on June 15, 2021.
* * *
About Medallion Bank
Medallion Bank specializes in providing consumer loans for the purchase of recreational vehicles, boats and home improvements, and offering loan origination services to fintech 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 with an office in Bothell, Washington, 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, net investment income, earnings, and growth. These statements are often, but not always, made through the use of words or phrases such as “expects” 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 maintenance of our current capital levels, the potential for future asset growth and market share growth opportunities. 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, 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.
Company Contact:
Investor Relations
212-328-2168
InvestorRelations@medallion.com
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MEDALLION BANK
STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended March 31, |
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| (In thousands) |
2021 | 2020 | ||||||
| Total interest income |
$ | 35,756 | $ | 33,750 | ||||
| Total interest expense |
4,711 | 5,941 | ||||||
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| Net interest income |
31,045 | 27,809 | ||||||
| Provision for loan losses |
2,739 | 15,271 | ||||||
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| Net interest income after provision for loan losses |
28,306 | 12,538 | ||||||
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| Other income (loss) |
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| Write-downs of loan collateral in process of foreclosure and other assets |
(1,129 | ) | (4,576 | ) | ||||
| Other non-interest income |
94 | 17 | ||||||
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| Total other income (loss) |
(1,035 | ) | (4,559 | ) | ||||
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| Non-interest expense |
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| Salaries and benefits |
2,804 | 2,524 | ||||||
| Loan servicing |
2,648 | 2,755 | ||||||
| Collection costs |
1,014 | 963 | ||||||
| Regulatory fees |
438 | 365 | ||||||
| Professional fees |
424 | 769 | ||||||
| Occupancy and equipment |
185 | 215 | ||||||
| Other |
1,007 | 974 | ||||||
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| Total non-interest expense |
8,520 | 8,565 | ||||||
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| Income before income taxes |
18,751 | (586 | ) | |||||
| Provision for income taxes |
4,979 | (150 | ) | |||||
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| Net income |
$ | 13,772 | $ | (436 | ) | |||
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MEDALLION BANK
BALANCE SHEETS
(UNAUDITED)
| (In thousands) |
March 31, 2021 |
December 31, 2020 |
March 31, 2020 |
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| Assets |
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| Cash and federal funds sold |
$ | 72,452 | $ | 58,977 | $ | 39,808 | ||||||
| Investment securities, available-for-sale |
38,081 | 46,792 | 46,127 | |||||||||
| Loans, inclusive of net deferred loan acquisition costs |
1,203,994 | 1,167,748 | 1,105,918 | |||||||||
| Allowance for loan losses |
(65,285 | ) | (65,557 | ) | (66,036 | ) | ||||||
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| Loans, net |
1,138,709 | 1,102,191 | 1,039,882 | |||||||||
| Loan collateral in process of foreclosure |
33,178 | 35,557 | 25,579 | |||||||||
| Fixed assets and right-of-use assets, net |
3,316 | 3,418 | 3,764 | |||||||||
| Deferred tax assets |
11,768 | 11,839 | 12,912 | |||||||||
| Due from affiliates |
— | 3,298 | — | |||||||||
| Income tax receivable |
— | 549 | — | |||||||||
| Accrued interest receivable and other assets |
32,679 | 28,746 | 31,221 | |||||||||
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| Total assets |
$ | 1,330,183 | $ | 1,291,367 | $ | 1,199,293 | ||||||
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| Liabilities and shareholders' equity |
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| Deposits and other funds borrowed |
$ | 1,084,074 | $ | 1,065,398 | $ | 960,376 | ||||||
| Accrued interest payable |
1,819 | 1,515 | 2,103 | |||||||||
| Income taxes payable |
4,870 | — | 2,341 | |||||||||
| Other liabilities |
10,189 | 5,980 | 9,857 | |||||||||
| Due to affiliates |
601 | — | 924 | |||||||||
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| Total liabilities |
1,101,553 | 1,072,893 | 975,601 | |||||||||
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| Total shareholders' equity |
228,630 | 218,474 | 223,692 | |||||||||
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| Total liabilities and shareholders' equity |
$ | 1,330,183 | $ | 1,291,367 | $ | 1,199,293 | ||||||
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