Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 24, 2023

MEDALLION FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

001-37747

(Commission File Number)

04-3291176

(IRS Employer Identification No.)

437 Madison Avenue

New York, New York 10022

(Address of principal executive offices) (Zip code)

(212) 328-2100

(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)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	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
Common Stock, par value $0.01 per share	MFIN	NASDAQ Global Select Market

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 June 30, 2023.

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		Press release, dated July 24, 2023

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: July 24, 2023


MEDALLION FINANCIAL CORP.

By:		/s/ Anthony N. Cutrone
		Name: Anthony N. Cutrone
		Title: Chief Financial Officer

- 3 -

Exhibit 99.1

LOGO

FOR IMMEDIATE RELEASE:

MEDALLION FINANCIAL CORP. REPORTS 2023 SECOND QUARTER RESULTS

NEW YORK, NY – July 24, 2023 – 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 June 30, 2023.

2023 Second Quarter Highlights

•

Net income was $14.2 million, or $0.62 per share, compared to $13.3 million, or $0.54 per share, in the prior year quarter.

•

$10.6 million of cash collected on taxi medallion-related assets, with recoveries resulting in earnings of $0.22 per share.

•

Net interest income grew 20% to $46.7 million from $38.9 million in the prior year quarter.

•

Net interest margin on net loans was 8.77%, compared to 9.07% in the prior year quarter, and on gross loans it was 8.48%, compared to 8.78% in the prior year quarter.

•

Loan originations were $346 million, compared to $305 million in the prior year quarter.

•

The credit loss provision increased to $8.5 million from $7.8 million in the prior year quarter.

•

Total assets grew to an all-time high of $2.5 billion at June 30, 2023, a 19% increase over June 30, 2022.

•

The Company declared and paid a quarterly cash dividend of $0.08 per share.

Executive Commentary – Andrew Murstein, President of Medallion

“We are very pleased with our second quarter results. Net interest income grew 20% over the prior year quarter and importantly grew 7% from just one quarter ago. As we have been saying since interest rates started to increase, we believe we will be able to manage through the current interest rate environment by growing our loan portfolio and passing along a portion of those increases. Our consumer teams originated over $300 million of loans in the quarter, which is a record second quarter for us, and led to our loan portfolio exceeding $2 billion for the first time in our history. We had another strong quarter of cash collections related to our medallion assets, with over $10 million collected. This helped us deliver one of our strongest quarters ever, with earnings per share of $0.62.”

Business Segment Highlights

Recreation Lending Segment

•

Originations were $190.0 million during the quarter, compared to $170.2 million a year ago.

•

Recreation loans grew 21% to $1.3 billion as of June 30, 2023, compared to $1.1 billion a year ago.

•

Recreation loans were 62% of total loans as of June 30, 2023, compared to 63% a year ago.

•

Net interest income grew 14% to $33.5 million for the quarter, from $29.4 million in the prior year quarter.

•

The average interest rate was 14.62% at quarter-end, compared to 14.23% a year ago.

•

Recreation loans 90 days or more past due were $5.0 million, or 0.39% of gross recreation loans, as of June 30, 2023, compared to $3.8 million, or 0.36%, a year ago.

Home Improvement Lending Segment

•

Originations were $117.0 million during the quarter, compared to $105.2 million a year ago.

•

Home improvement loans grew 38% to $728.5 million as of June 30, 2023, compared to $526.3 million a year ago.

•

Home improvement loans were 34% of total loans as of June 30, 2023, compared to 30% a year ago.

•

Net interest income grew 24% to $11.1 million for the quarter, from $9.0 million in the prior year quarter.

•

The average interest rate was 9.21% at quarter-end, compared to 8.50% a year ago.

•

Home improvement loans 90 days or more past due were $1.1 million, or 0.16% of gross home improvement loans, as of June 30, 2023, compared to $0.4 million, or 0.07%, a year ago.

Commercial Lending Segment

•

Commercial loans were $92.6 million at June 30, 2023, compared to $96.9 million a year ago.

•

The average interest rate on the portfolio was 12.64%, compared to 12.33% a year ago.

Medallion Lending Segment

•

The Company collected $10.6 million of cash on taxi medallion-related assets during the quarter.

•

Total net taxi medallion assets declined to $17.7 million (comprised of $1.6 million of loans net of allowance for credit losses and $16.1 million of loan collateral in process of foreclosure), a 43% reduction from a year ago, and represented less than 1% of the Company’s total assets, as of June 30, 2023.

Capital Allocation

Quarterly Dividend

•

The Board of Directors declared a quarterly cash dividend of $0.08 per share payable on August 31, 2023 to shareholders of record at the close of business on August 15, 2023.

Conference Call Information

The Company will host a conference call to discuss its second quarter financial results tomorrow, Tuesday, July 25, 2023, at 9:00 a.m. Eastern time.

As part of its earnings release, the Company has updated its quarterly supplement presentation, which is now available at www.medallion.com.

How to Participate

•

Date: Tuesday, July 25, 2023

•

Time: 9:00 a.m. Eastern time

•

U.S. dial-in number: (877) 407-0789

•

International dial-in number: (201) 689-8562

•

Live webcast: Link to Webcast of 2Q23 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 Tuesday, August 1.

•

U.S. dial-in number: (844) 512-2921

•

International dial-in number: (412) 317-6671

•

Passcode: 1374 0079

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 2022 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)	June 30, 2023			December 31, 2022			June 30, 2022
Assets
Cash, cash equivalents, and federal funds sold	$	124,554		$	105,598		$	126,330
Equity investments and investment securities		65,096			58,785			61,300
Loans		2,156,998			1,916,953			1,734,621
Allowance for credit losses		(74,971	)		(63,845	)		(59,152	)

Net loans receivable		2,082,027			1,853,108			1,675,469

Goodwill and intangible assets		172,118			172,838			173,562
Loan collateral in process of foreclosure		16,803			21,819			26,974
Other assets		58,539			47,731			48,496

Total assets	$	2,519,137		$	2,259,879		$	2,112,131

Liabilities
Deposits	$	1,813,785		$	1,607,110		$	1,469,241
Long-term debt		178,128			214,320			219,377
Short-term borrowings		67,880			5,000			—
Deferred tax liabilities and other tax payables		26,840			26,753			24,048
Operating lease liabilities		7,629			8,408			9,078
Accounts payable and other liabilities		37,111			27,764			27,546

Total liabilities		2,131,373			1,889,355			1,749,290

Commitments and contingencies
Total stockholders’ equity		318,976			301,736			294,053
Non-controlling interest in consolidated subsidiaries		68,788			68,788			68,788

Total equity		387,764			370,524			362,841

Total liabilities and equity	$	2,519,137		$	2,259,879		$	2,112,131

Number of shares outstanding		23,345,017			23,061,673			24,239,320

Book value per share	$	13.66		$	13.08		$	12.13

MEDALLION FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands, except share and per share data)	2023			2022			2023			2022
Total interest income	$	61,726		$	47,111		$	117,568		$	90,414
Total interest expense		15,035			8,230			27,275			15,605

Net interest income		46,691			38,881			90,293			74,809

Provision for loan losses		8,476			7,759			12,514			10,999

Net interest income after provision for loan losses		38,215			31,122			77,779			63,810

Other income (loss)
Gain on sale of loans and medallions		1,306			2,667			3,161			4,543
Gain on equity investments		99			4,241			9			4,108
Write-down of loan collateral in process of foreclosure		(21	)		(128	)		(273	)		(514	)
Other income		558			578			1,128			750

Total other income, net		1,942			7,358			4,025			8,887

Other expenses
Salaries and employee benefits		9,339			7,730			18,175			15,298
Loan servicing fees		2,361			2,119			4,583			4,072
Collection costs		1,608			999			3,146			2,342
Professional fees		1,368			4,392			3,075			8,384
Other expenses		4,327			3,573			8,416			6,749

Total other expenses		19,003			18,813			37,395			36,845

Income before income taxes		21,154			19,667			44,409			35,852

Income tax provision		5,472			4,856			11,854			9,687

Net income after taxes		15,682			14,811			32,555			26,165

Less: income attributable to the non-controlling interest		1,512			1,511			3,024			3,024

Total net income attributable to Medallion Financial Corp.	$	14,170		$	13,300		$	29,531		$	23,141

Net income per common share:
Basic	$	0.63		$	0.55		$	1.32		$	0.95
Diluted	$	0.62		$	0.54		$	1.29		$	0.93
Weighted average shares outstanding:
Basic		22,488,463			24,153,015			22,416,089			24,459,870
Diluted		22,853,927			24,421,867			22,915,094			24,751,012
Dividends declared per common share	$	0.08		$	0.08		$	0.16		$	0.16

Document and Entity Information	Jul. 24, 2023
Cover [Abstract]
Entity Registrant Name	MEDALLION FINANCIAL CORP
Amendment Flag	false
Entity Central Index Key	0001000209
Document Type	8-K
Document Period End Date	Jul. 24, 2023
Entity Incorporation State Country Code	DE
Entity File Number	001-37747
Entity Tax Identification Number	04-3291176
Entity Address, Address Line One	437 Madison Avenue
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10022
City Area Code	(212)
Local Phone Number	328-2100
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Security 12b Title	Common Stock, par value $0.01 per share
Trading Symbol	MFIN
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false