Medallion Financial Corp 8-K, filed Jan 28, 2022
Medallion Financial Corp (MFIN)
About this 8-K
Medallion Financial Corp filed this 8-K on January 28, 2022.
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 and year ended December 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 January 28, 2022 | |
| 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: January 28, 2022
| MEDALLION FINANCIAL CORP. | ||
| By: | /s/ Anthony N. Cutrone | |
| Name: | Anthony N. Cutrone | |
| Title: | Chief Financial Officer | |
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Exhibit 99.1
FOR IMMEDIATE RELEASE:
MEDALLION BANK REPORTS 2021 FOURTH QUARTER AND FULL-YEAR RESULTS AND DECLARES SERIES F PREFERRED STOCK DIVIDEND
SALT LAKE CITY, UT – January 28, 2022 – 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 fourth quarter and full-year results.
2021 Fourth Quarter Highlights
| • | Net income of $19.0 million, compared to net income of $14.3 million in the prior year period. |
| • | Net interest income of $37.3 million, compared to $31.3 million in the prior year period. |
| • | Provision for loan losses was $1.6 million, compared to a quarterly benefit of $4.0 million in the prior year period. |
| • | Annualized net charge-offs were 0.3% of average loans outstanding, compared to 9.7% in the prior year period. |
| • | The recreation and home improvement loan portfolios grew 20.8% and 30.7%, respectively, from December 31, 2020. |
| • | Total assets were $1.5 billion, total capital was $262.4 million, and the Tier 1 leverage ratio was 17.5% at December 31, 2021. |
2021 Full-Year Highlights
| • | Record net income of $70.0 million, compared to net income of $2.5 million in 2020. |
| • | Net interest income of $136.8 million, compared to $118.3 million in 2020. |
| • | Return on assets was 5.0%, compared to 0.2% in 2020. |
| • | Provision for loan losses was $3.7 million, compared to a provision for loan losses of $63.0 million in 2020. |
| • | Net charge-offs were 1.2% of average loans outstanding, compared to 5.0% in 2020. |
Donald Poulton, President and Chief Executive Officer of Medallion Bank, stated, “We finished our best year since we began operating in 2003 with strong quarterly net income driven by the continued growth of our consumer lending businesses. Both our recreation lending and home improvement lending segments had exceptional years. The industries served by these segments experienced elevated demand throughout 2021, which led to sustained portfolio growth, plus we continued to benefit from historically low loan loss provisions. We ended the year with a return on assets of 5.0% and a return on equity of 29.1%, both consistent with supportive economic conditions and growth in the recreation and home improvement industries. We are focused on building on this momentum in 2022.”
Recreation Lending Segment
| • | The Bank’s recreation loan portfolio grew 20.8% to $965.3 million as of December 31, 2021, compared to $799.0 million at December 31, 2020. |
| • | Quarterly net interest income was $28.7 million, compared to $24.9 million in the prior year period. |
| • | Recreation loans were 68.2% of loans receivable as of December 31, 2021, compared to 68.4% at December 31, 2020. |
| • | The quarterly provision for recreation loan losses was $2.1 million, compared to $3.0 million in the prior year period. |
| • | Recreation loans 90 days or more past due were $3.9 million, or 0.5% of gross recreation loans, as of December 31, 2021, compared to $5.4 million, or 0.7%, at December 31, 2020. |
Home Improvement Lending Segment
| • | The Bank’s home improvement loan portfolio grew 30.7% to $436.9 million as of December 31, 2021, compared to $334.2 million at December 31, 2020. |
| • | Quarterly net interest income was $8.5 million, compared to $6.8 million in the prior year period. |
| • | Home improvement loans were 30.9% of loans receivable as of December 31, 2021, compared to 28.6% at December 31, 2020. |
| • | The quarterly provision for home improvement loan losses was $1.2 million, compared to $0.7 million in the prior year period. |
| • | Home improvement loans 90 days or more past due were $133,000, or less than 0.1% of gross home improvement loans, as of December 31, 2021, compared to $171,000, or less than 0.1%, at December 31, 2020. |
Series F Preferred Stock Dividend
On January 27, 2022, 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, 2022, to holders of record at the close of business on March 15, 2022.
* * *
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 and is a wholly owned subsidiary of Medallion Financial Corp. (Nasdaq: MFIN).
For more information, visit www.medallionbank.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, 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 “expect,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature, such as “building”, “maintaining” or “momentum.” These statements relate to our future earnings, returns, capital levels, 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, 2020, 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. In addition, 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 Relations
212-328-2176
InvestorRelations@medallion.com
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MEDALLION BANK
STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended December 31, |
For the Twelve Months Ended December 31, |
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| (In thousands) |
2021 | 2020 | 2021 | 2020 | ||||||||||||
| Total interest income |
$ | 41,436 | $ | 36,349 | $ | 154,310 | $ | 140,654 | ||||||||
| Total interest expense |
4,178 | 5,015 | 17,544 | 22,330 | ||||||||||||
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| Net interest income |
37,258 | 31,334 | 136,766 | 118,324 | ||||||||||||
| Provision (benefit) for loan losses |
1,578 | (3,959 | ) | 3,746 | 63,048 | |||||||||||
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| Net interest income after provision for loan losses |
35,680 | 35,293 | 133,020 | 55,276 | ||||||||||||
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| Other income (loss) |
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| Write-downs of loan collateral in process of foreclosure and other assets |
(140 | ) | (7,393 | ) | (2,990 | ) | (18,199 | ) | ||||||||
| Other non-interest income |
386 | 86 | 1,144 | 261 | ||||||||||||
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| Total other (loss) |
246 | (7,307 | ) | (1,846 | ) | (17,938 | ) | |||||||||
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| Non-interest expense |
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| Salaries and benefits |
3,838 | 2,665 | 12,237 | 10,275 | ||||||||||||
| Loan servicing |
2,756 | 2,739 | 10,692 | 11,158 | ||||||||||||
| Collection costs |
1,305 | 1,021 | 4,775 | 4,294 | ||||||||||||
| Regulatory fees |
489 | 874 | 1,872 | 1,822 | ||||||||||||
| Professional fees |
366 | 446 | 1,695 | 2,017 | ||||||||||||
| Occupancy and equipment |
217 | 106 | 789 | 783 | ||||||||||||
| Other |
872 | 633 | 3,552 | 3,546 | ||||||||||||
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| Total non-interest expense |
9,843 | 8,484 | 35,612 | 33,895 | ||||||||||||
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| Income before income taxes |
26,083 | 19,502 | 95,562 | 3,443 | ||||||||||||
| Provision for income taxes |
7,071 | 5,177 | 25,563 | 928 | ||||||||||||
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| Net income |
$ | 19,012 | $ | 14,325 | $ | 69,999 | $ | 2,515 | ||||||||
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3
MEDALLION BANK
BALANCE SHEETS
(UNAUDITED)
| (In thousands) |
December 31, 2021 | December 31, 2020 | ||||||
| Assets |
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| Cash and federal funds sold |
$ | 61,402 | $ | 58,977 | ||||
| Investment securities, available-for-sale |
44,772 | 46,792 | ||||||
| Loans, inclusive of net deferred loan acquisition costs |
1,415,415 | 1,167,748 | ||||||
| Allowance for loan losses |
(53,384 | ) | (65,557 | ) | ||||
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| Loans, net |
1,362,031 | 1,102,191 | ||||||
| Loan collateral in process of foreclosure |
21,438 | 35,557 | ||||||
| Fixed assets and right-of-use assets, net |
4,230 | 3,418 | ||||||
| Deferred tax assets |
7,576 | 11,839 | ||||||
| Due from affiliates |
— | 3,298 | ||||||
| Income tax receivable |
— | 549 | ||||||
| Accrued interest receivable and other assets |
37,788 | 28,746 | ||||||
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| Total assets |
$ | 1,539,237 | $ | 1,291,367 | ||||
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| Liabilities and shareholders’ equity |
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| Deposits and other funds borrowed |
$ | 1,250,880 | $ | 1,065,398 | ||||
| Accrued interest payable |
1,228 | 1,515 | ||||||
| Income taxes payable |
16,104 | — | ||||||
| Other liabilities |
7,672 | 5,980 | ||||||
| Due to affiliates |
906 | — | ||||||
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| Total liabilities |
1,276,790 | 1,072,893 | ||||||
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| Total shareholders’ equity |
262,447 | 218,474 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 1,539,237 | $ | 1,291,367 | ||||
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