Medallion Bank Reports 2021 First Quarter Results and Declares Series F Preferred Stock Dividend

SALT LAKE CITY--()--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.

MEDALLION BANK
STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three Months Ended March 31,
(In thousands)

2021

2020

Total interest income

$

35,756

 

$

33,750

 

Total interest expense

 

4,711

 

 

5,941

 

Net interest income

 

31,045

 

 

27,809

 

 
Provision for loan losses

 

2,739

 

 

15,271

 

Net interest income after provision for loan losses

 

28,306

 

 

12,538

 

 
Other income (loss)
Write-downs of loan collateral in process of foreclosure and other assets

 

(1,129

)

 

(4,576

)

Other non-interest income

 

94

 

 

17

 

Total other income (loss)

 

(1,035

)

 

(4,559

)

 
Non-interest expense
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

 

Total non-interest expense

 

8,520

 

 

8,565

 

 
Income before income taxes

 

18,751

 

 

(586

)

Provision for income taxes

 

4,979

 

 

(150

)

 
Net income

$

13,772

 

$

(436

)

MEDALLION BANK
BALANCE SHEETS
(UNAUDITED)
(In thousands) March 31, 2021 December 31, 2020 March 31, 2020
Assets
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

)

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

 

Total assets

$

1,330,183

 

$

1,291,367

 

$

1,199,293

 

 
Liabilities and shareholders' equity
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

 

Total liabilities

 

1,101,553

 

 

1,072,893

 

 

975,601

 

 
Total shareholders' equity

 

228,630

 

 

218,474

 

 

223,692

 

Total liabilities and shareholders' equity

$

1,330,183

 

$

1,291,367

 

$

1,199,293

 

 

Contacts

Company Contact:
Investor Relations
212-328-2168
InvestorRelations@medallion.com

Contacts

Company Contact:
Investor Relations
212-328-2168
InvestorRelations@medallion.com