Medallion Financial Corp 8-K, filed Oct 29, 2024
Medallion Financial Corp (MFIN)
About this 8-K
Medallion Financial Corp filed this 8-K on October 29, 2024.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
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(State or other jurisdiction of incorporation)
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(IRS Employer Identification No.)
(Address of Principal Executive Offices) (Zip Code)
(
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02 Results of Operations and Financial Condition.
Medallion Financial Corp. (the “Company”), issued a press release to the news media announcing, among other things, the Company’s results for the quarter ended September 30, 2024.
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 2.02. 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 |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
2
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: October 29, 2024
MEDALLION FINANCIAL CORP. |
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By: |
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/s/ Anthony N. Cutrone |
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Name: Anthony N. Cutrone |
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Title: Chief Financial Officer |
3
Exhibit 99.1
FOR IMMEDIATE RELEASE:
MEDALLION FINANCIAL CORP. REPORTS 2024 THIRD QUARTER RESULTS
NEW YORK, NY – October 29, 2024 – Medallion Financial Corp. (NASDAQ: MFIN, “Medallion” or the “Company”), a specialty finance company that originates and services loans in various consumer and commercial industries, as well as offers loan products and services through fintech strategic partners, announced today its results for the quarter ended September 30, 2024.
2024 Third Quarter Highlights
Executive Commentary – Andrew Murstein, President of Medallion
"We continue to be pleased with our quarterly performance. The earnings were strong despite lower taxi medallion related recoveries and the absence of equity gains, both of which we experienced in the prior year quarter. At $0.37 per share, our earnings included approximately $0.07 per share of additional allowance tied to the growth of our consumer lending segments, which saw recreation and home improvement loans grow 4% and 5% from the previous quarter to a combined $2.4 billion, with over $235 million in originations this quarter. We continue to be comfortable with the overall credit performance of these two consumer segments, which carry weighted average coupons of 14.92% for recreation loans and 9.76% for home improvement loans. During the quarter we originated recreation loans at an average rate of 16.33% and home improvement loans at an average rate of 10.75%.
Our net interest income reached $52.7 million during the quarter, up 6% from just a quarter ago. We remain cautiously optimistic that the solid performance of our loan portfolio will continue. Our net interest margin during the quarter was 8.11%, decreasing only 1 basis point from the prior quarter, as we continue to increase our yield to offset the rise in our average cost of borrowings.
Our total interest income of $76.4 million, net interest income of $52.7 million, and total assets of $2.9 billion were all record highs. Our fintech strategic partnership program at Medallion Bank had its highest volume quarter ever with $40 million of new loans, up from $24 million in the second quarter of this year. As a result, we are optimistic about the quarters ahead and are hopeful to continue delivering meaningful growth in origination volumes in our newest business line.
Lastly, we are pleased to announce that our board of directors has authorized an increase of our quarterly dividend to $0.11 per share beginning with the upcoming payment next month, reflecting our strong financial performance and ongoing commitment to delivering value to our shareholders. This increase underscores our confidence in the Company’s future growth and stability, as well as our focus on returning capital to investors."
Business Segment Highlights
Recreation Lending Segment
Home Improvement Lending Segment
Commercial Lending Segment
Taxi Medallion Lending Segment
Capital Allocation
Quarterly Dividend
Stock Repurchase Plan
2
Conference Call Information
The Company will host a conference call to discuss its third quarter financial results tomorrow, Wednesday, October 30, 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
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, November 6.
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
3
MEDALLION FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars in thousands, except share and per share data) |
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September 30, 2024 |
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December 31, 2023 |
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September 30, 2023 |
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Assets |
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Cash, cash equivalents, and federal funds sold |
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$ |
187,929 |
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$ |
149,845 |
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$ |
127,642 |
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Investment and equity securities |
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66,651 |
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65,712 |
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63,717 |
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Loans |
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2,485,279 |
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2,215,886 |
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|
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2,203,038 |
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Allowance for credit losses |
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(96,518 |
) |
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(84,235 |
) |
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(79,133 |
) |
Net loans receivable |
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2,388,761 |
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2,131,651 |
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2,123,905 |
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Goodwill and intangible assets, net |
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170,311 |
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171,394 |
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171,755 |
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Property, equipment, and right-of-use lease asset, net |
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14,172 |
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|
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14,076 |
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13,278 |
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Accrued interest receivable |
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14,108 |
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|
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13,538 |
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13,593 |
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Loan collateral in process of foreclosure |
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8,818 |
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11,772 |
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15,923 |
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Other assets |
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29,302 |
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29,839 |
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28,814 |
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Total assets |
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$ |
2,880,052 |
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$ |
2,587,827 |
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$ |
2,558,627 |
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Liabilities |
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Deposits |
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$ |
2,108,132 |
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$ |
1,866,657 |
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$ |
1,855,096 |
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Long-term debt |
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232,037 |
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235,544 |
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218,137 |
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Short-term borrowings |
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49,000 |
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8,000 |
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18,489 |
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Deferred tax liabilities, net |
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20,598 |
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21,207 |
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23,131 |
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Operating lease liabilities |
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5,534 |
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|
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7,019 |
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|
|
7,075 |
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Accrued interest payable |
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6,888 |
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6,822 |
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|
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4,624 |
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Accounts payable and accrued expenses |
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26,687 |
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30,804 |
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34,813 |
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Total liabilities |
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2,448,876 |
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2,176,053 |
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2,161,365 |
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Total stockholders’ equity |
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362,388 |
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342,986 |
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328,474 |
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Non-controlling interest in consolidated subsidiaries |
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68,788 |
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68,788 |
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68,788 |
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Total equity |
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431,176 |
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411,774 |
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397,262 |
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Total liabilities and equity |
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$ |
2,880,052 |
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$ |
2,587,827 |
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$ |
2,558,627 |
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Number of shares outstanding |
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23,084,277 |
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23,449,646 |
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23,363,731 |
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Book value per share |
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$ |
15.70 |
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$ |
14.63 |
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$ |
14.06 |
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4
MEDALLION FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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(Dollars in thousands, except share and per share data) |
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2024 |
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2023 |
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2024 |
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2023 |
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Total interest income |
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$ |
76,409 |
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$ |
65,886 |
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$ |
214,183 |
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$ |
183,455 |
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Total interest expense |
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23,672 |
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17,102 |
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63,661 |
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44,379 |
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Net interest income |
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52,737 |
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48,784 |
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150,522 |
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|
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139,076 |
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Provision for credit losses |
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20,151 |
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14,532 |
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55,929 |
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27,045 |
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Net interest income after provision for credit losses |
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32,586 |
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34,252 |
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|
94,593 |
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112,031 |
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Other income (loss) |
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(Loss) gain on equity investments |
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(519 |
) |
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2,180 |
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3,136 |
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2,189 |
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Gain on sale of loans and taxi medallions |
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340 |
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1,417 |
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1,170 |
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4,578 |
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Write-down of loan collateral in process of foreclosure |
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(19 |
) |
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(30 |
) |
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(19 |
) |
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(303 |
) |
Other income |
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785 |
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|
739 |
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2,802 |
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|
|
1,868 |
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Total other income, net |
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587 |
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4,306 |
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7,089 |
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8,332 |
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Other expenses |
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Salaries and employee benefits |
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9,456 |
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9,630 |
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28,347 |
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|
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27,805 |
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Loan servicing fees |
|
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2,790 |
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|
|
2,501 |
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|
|
7,951 |
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|
|
7,084 |
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Collection costs |
|
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1,673 |
|
|
|
1,583 |
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|
|
4,799 |
|
|
|
4,729 |
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Regulatory fees |
|
|
961 |
|
|
|
1,021 |
|
|
|
2,826 |
|
|
|
2,484 |
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Professional fees |
|
|
818 |
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|
|
1,148 |
|
|
|
3,434 |
|
|
|
4,223 |
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Rent expense |
|
|
664 |
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|
|
629 |
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|
|
2,019 |
|
|
|
1,855 |
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Amortization of intangible assets |
|
|
361 |
|
|
|
361 |
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|
|
1,084 |
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|
|
1,084 |
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Other expenses |
|
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2,272 |
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|
|
2,216 |
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|
|
6,755 |
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|
|
7,220 |
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Total other expenses |
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18,995 |
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19,089 |
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|
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57,215 |
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|
|
56,484 |
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Income before income taxes |
|
|
14,178 |
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|
|
19,469 |
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|
|
44,467 |
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|
|
63,879 |
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Income tax provision |
|
|
4,055 |
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|
|
6,727 |
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|
|
14,196 |
|
|
|
18,582 |
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Net income after taxes |
|
|
10,123 |
|
|
|
12,742 |
|
|
|
30,271 |
|
|
|
45,297 |
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Less: income attributable to the non-controlling interest |
|
|
1,512 |
|
|
|
1,512 |
|
|
|
4,535 |
|
|
|
4,536 |
|
Total net income attributable to Medallion Financial Corp. |
|
$ |
8,611 |
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$ |
11,230 |
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|
$ |
25,736 |
|
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$ |
40,761 |
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Basic net income per share |
|
$ |
0.38 |
|
|
$ |
0.50 |
|
|
$ |
1.14 |
|
|
$ |
1.81 |
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Diluted net income per share |
|
$ |
0.37 |
|
|
$ |
0.48 |
|
|
$ |
1.09 |
|
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$ |
1.77 |
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Weighted average common shares outstanding |
|
|
|
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|
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||||
Basic |
|
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22,490,792 |
|
|
|
22,596,982 |
|
|
|
22,576,446 |
|
|
|
22,469,968 |
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Diluted |
|
|
23,447,929 |
|
|
|
23,392,901 |
|
|
|
23,555,065 |
|
|
|
23,067,944 |
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Dividends declared per common share |
|
$ |
0.10 |
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$ |
0.08 |
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$ |
0.30 |
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$ |
0.24 |
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5