Medallion Financial Corp. Reports 2023 Fourth Quarter and Full-Year Results
20 Février 2024 - 10:01PM
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 and full-year
ended December 31, 2023.
2023 Fourth Quarter
Highlights
- Net income was $14.3 million, or
$0.60 per share, compared to $13.1 million, or $0.57 per share, in
the prior year quarter.
- Net interest income grew 12% to
$49.0 million from $43.6 million in the prior year quarter.
- Net interest margin on net loans
was 8.50%, compared to 8.86% in the prior year quarter, and on
gross loans it was 8.20%, compared to 8.59% in the prior year
quarter.
- Loan originations were $169.1
million, compared to $191.9 million in the prior year quarter.
- The credit loss provision increased
to $10.8 million from $9.0 million in the prior year quarter and
included a net benefit of $12.1 million related to taxi medallion
recoveries.
- Beginning with the fourth quarter,
the Board of Directors increased the quarterly dividend 25% to
$0.10 per share.
2023 Full-Year Highlights
- Net income was $55.1 million, or
$2.37 per share, compared to $43.8 million, or $1.83 per share, in
the prior year.
- Net interest income grew 17% to
$188.1 million from $160.4 million in the prior year.
- Net interest margin on net loans
was 8.68%, compared to 9.05% in the prior year quarter, and on
gross loans it was 8.38%, compared to 8.73% in the prior year.
- Loan originations were $960.0
million, compared to $983.9 million in the prior year.
- Loans grew 16% to $2.2 billion as
of December 31, 2023, compared to $1.9 billion a year ago.
- The credit loss provision increased
to $37.8 million from $30.1 million in the prior year and included
a net benefit of $26.3 million related to taxi medallion
recoveries.
- Total assets grew to $2.6 billion
at December 31, 2023, a 15% increase over December 31, 2022.
Executive Commentary – Andrew Murstein,
President of Medallion
"Once again, we continue to be quite pleased
with our bottom-line results. This was our highest annual total
earnings and highest annual earnings per share in our history, with
each of our businesses contributing to the success. In the past
three years we have generated $153 million of earnings for our
shareholders, reinstated our quarterly dividend and then raised it,
returned $36 million to shareholders in the form of dividends and
stock repurchases, and increased loans by 80%. Our continual
reinvestment in our businesses has positioned the Company for long
term success.”
Business Segment Highlights
Recreation Lending Segment
- Originations were $62.7 million
during the quarter, compared to $79.3 million a year ago.
- Recreation loans grew 13% to $1.3
billion, or 60% of total loans, as of December 31, 2023, compared
to $1.2 billion, or 62% of total loans, a year ago.
- Net interest income grew 8% to
$35.2 million for the quarter, from $32.7 million in the prior year
quarter.
- The average interest rate was
14.79% at year-end, compared to 14.28% a year ago.
- Recreation loans 90 days or more
past due were $9.1 million, or 0.70% of gross recreation loans, as
of December 31, 2023, compared to $7.4 million, or 0.64%, a year
ago.
- Allowance for credit loss rate was
4.31% at year-end, compared to 3.55% a year ago and 4.39% with the
implementation of CECL on January 1, 2023.
Home Improvement Lending Segment
- Originations were $66.0 million
during the quarter, compared to $97.1 million a year ago.
- Home improvement loans grew 21% to
$760.6 million, or 34% of total loans, as of December 31, 2023,
compared to $626.4 million, or 33% of total loans, a year ago.
- Net interest income grew 16% to
$11.7 million for the quarter, from $10.1 million in the prior year
quarter.
- The average interest rate was 9.51%
at year-end, compared to 8.65% a year ago.
- Home improvement loans 90 days or
more past due were $1.5 million, or 0.20% of gross home improvement
loans, as of December 31, 2023, compared to $0.6 million, or 0.09%,
a year ago.
- Allowance for credit loss rate was
2.76% at year-end, compared to 1.81% a year ago and 2.05% with the
implementation of CECL on January 1, 2023.
Commercial Lending Segment
- Commercial loans were $114.8
million at 2023, compared to $92.9 million a year ago.
- The average interest rate on the
portfolio was 12.87%, compared to 12.23% a year ago.
Taxi Medallion Lending Segment
- The Company collected $16.2 million
of cash on taxi medallion related assets during the quarter and
$45.2 million of cash on taxi medallion-related assets during the
year, with net recoveries contributing earnings of $0.33 per share
for the quarter and $0.93 per share for the year.
- Total net taxi medallion assets
declined to $12.1 million (comprised of $2.1 million of loans net
of allowance for credit losses and $10.0 million of loan collateral
in process of foreclosure), a 51% reduction from a year ago, and
represented less than 0.5% of the Company’s total assets, as of
December 31, 2023.
Capital Allocation
Quarterly Dividend
- The Board of Directors declared a
quarterly dividend of $0.10 per share, payable on March 28, 2024,
to shareholders of record at the close of business on March 15,
2024.
Conference Call Information
The Company will host a conference call to
discuss its fourth quarter and full-year financial results
tomorrow, Wednesday, February 21, 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
- Date: Wednesday,
February 21, 2024
- 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 4Q23 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 until February 29, 2024
- U.S. dial-in
number: (844) 512-2921
- International dial-in
number: (412) 317-6671
- Passcode: 1018
5725
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
StatementsPlease 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
Relations212-328-2176InvestorRelations@medallion.com
|
MEDALLION FINANCIAL CORP.CONSOLIDATED
BALANCE SHEETS(UNAUDITED) |
|
|
|
|
|
|
December 31, |
|
(Dollars in thousands, except share and per share data) |
|
2023 |
|
|
2022 |
|
Assets |
|
|
|
|
|
|
Cash, cash equivalents, and federal funds sold |
|
$ |
149,845 |
|
|
$ |
105,598 |
|
Investment and equity securities |
|
|
65,712 |
|
|
|
58,785 |
|
Loans |
|
|
2,215,886 |
|
|
|
1,916,953 |
|
Allowance for credit losses |
|
|
(84,235 |
) |
|
|
(63,845 |
) |
Net loans receivable |
|
|
2,131,651 |
|
|
|
1,853,108 |
|
Goodwill and intangible assets, net |
|
|
171,394 |
|
|
|
172,838 |
|
Property, equipment, and right-of-use lease asset, net |
|
|
14,076 |
|
|
|
13,168 |
|
Accrued interest receivable |
|
|
13,538 |
|
|
|
12,613 |
|
Loan collateral in process of foreclosure |
|
|
11,772 |
|
|
|
21,819 |
|
Other assets |
|
|
29,839 |
|
|
|
21,950 |
|
Total
assets |
|
$ |
2,587,827 |
|
|
$ |
2,259,879 |
|
Liabilities |
|
|
|
|
|
|
Deposits |
|
$ |
1,866,657 |
|
|
$ |
1,607,110 |
|
Long-term debt |
|
|
235,544 |
|
|
|
214,320 |
|
Deferred tax liabilities, net |
|
|
21,207 |
|
|
|
26,753 |
|
Short-term borrowings |
|
|
8,000 |
|
|
|
5,000 |
|
Operating lease liabilities |
|
|
7,019 |
|
|
|
8,408 |
|
Accrued interest payable |
|
|
6,822 |
|
|
|
4,790 |
|
Accounts payable and accrued expenses |
|
|
30,804 |
|
|
|
22,974 |
|
Total
liabilities |
|
|
2,176,053 |
|
|
|
1,889,355 |
|
Total stockholders’
equity |
|
|
342,986 |
|
|
|
301,736 |
|
Non-controlling interest in
consolidated subsidiaries |
|
|
68,788 |
|
|
|
68,788 |
|
Total
equity |
|
|
411,774 |
|
|
|
370,524 |
|
Total liabilities and
equity |
|
$ |
2,587,827 |
|
|
$ |
2,259,879 |
|
Number of shares outstanding |
|
|
23,449,646 |
|
|
|
23,061,673 |
|
Book value per
share |
|
$ |
14.63 |
|
|
$ |
13.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MEDALLION FINANCIAL CORP.CONSOLIDATED
STATEMENTS OF OPERATIONS(UNAUDITED) |
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
Years Ended December 31, |
|
(Dollars in thousands, except share and per share data) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Total interest income |
|
$ |
67,585 |
|
|
$ |
54,513 |
|
|
$ |
251,040 |
|
|
$ |
196,621 |
|
Total interest
expense |
|
|
18,567 |
|
|
|
10,926 |
|
|
|
62,946 |
|
|
|
36,185 |
|
Net interest
income |
|
|
49,018 |
|
|
|
43,587 |
|
|
|
188,094 |
|
|
|
160,436 |
|
Provision for credit losses |
|
|
10,764 |
|
|
|
9,013 |
|
|
|
37,810 |
|
|
|
30,059 |
|
Net interest income after
provision for credit losses |
|
|
38,254 |
|
|
|
34,574 |
|
|
|
150,284 |
|
|
|
130,377 |
|
Other income
(loss) |
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on equity investments |
|
|
2,989 |
|
|
|
(206 |
) |
|
|
5,178 |
|
|
|
2,779 |
|
Gain on sale of loans and medallion |
|
|
413 |
|
|
|
387 |
|
|
|
4,992 |
|
|
|
5,448 |
|
Write-down of loan collateral in process of foreclosure |
|
|
(1,393 |
) |
|
|
(49 |
) |
|
|
(1,696 |
) |
|
|
(657 |
) |
Other income, net |
|
|
979 |
|
|
|
738 |
|
|
|
2,846 |
|
|
|
1,956 |
|
Total other income,
net |
|
|
2,988 |
|
|
|
870 |
|
|
|
11,320 |
|
|
|
9,526 |
|
Other
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
9,757 |
|
|
|
7,421 |
|
|
|
37,562 |
|
|
|
31,130 |
|
Loan servicing fees |
|
|
2,459 |
|
|
|
2,140 |
|
|
|
9,543 |
|
|
|
8,371 |
|
Collection costs |
|
|
1,271 |
|
|
|
1,379 |
|
|
|
6,000 |
|
|
|
5,314 |
|
Professional fees |
|
|
1,663 |
|
|
|
948 |
|
|
|
5,886 |
|
|
|
13,054 |
|
Regulatory fees |
|
|
710 |
|
|
|
797 |
|
|
|
3,194 |
|
|
|
2,418 |
|
Rent expense |
|
|
617 |
|
|
|
614 |
|
|
|
2,472 |
|
|
|
2,378 |
|
Amortization of intangible assets |
|
|
361 |
|
|
|
361 |
|
|
|
1,445 |
|
|
|
1,445 |
|
Other expenses |
|
|
2,246 |
|
|
|
2,141 |
|
|
|
9,466 |
|
|
|
7,943 |
|
Total other
expenses |
|
|
19,084 |
|
|
|
15,801 |
|
|
|
75,568 |
|
|
|
72,053 |
|
Income before income
taxes |
|
|
22,158 |
|
|
|
19,643 |
|
|
|
86,036 |
|
|
|
67,850 |
|
Income tax provision |
|
|
6,328 |
|
|
|
5,071 |
|
|
|
24,910 |
|
|
|
17,963 |
|
Net income after
taxes |
|
|
15,830 |
|
|
|
14,572 |
|
|
|
61,126 |
|
|
|
49,887 |
|
Less: income attributable to the non-controlling interest |
|
|
1,512 |
|
|
|
1,512 |
|
|
|
6,047 |
|
|
|
6,047 |
|
Total net income
attributable to Medallion Financial Corp. |
|
$ |
14,318 |
|
|
$ |
13,060 |
|
|
$ |
55,079 |
|
|
$ |
43,840 |
|
Basic net income per share |
|
$ |
0.63 |
|
|
$ |
0.59 |
|
|
$ |
2.45 |
|
|
$ |
1.86 |
|
Diluted net income per share |
|
$ |
0.60 |
|
|
$ |
0.57 |
|
|
$ |
2.37 |
|
|
$ |
1.83 |
|
Weighted average common
shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
22,608,243 |
|
|
|
22,286,272 |
|
|
|
22,510,435 |
|
|
|
23,583,049 |
|
Diluted |
|
|
23,765,866 |
|
|
|
22,725,292 |
|
|
|
23,248,323 |
|
|
|
23,927,342 |
|
Dividends declared per common share |
|
$ |
0.10 |
|
|
$ |
0.08 |
|
|
$ |
0.34 |
|
|
$ |
0.32 |
|
Medallion Financial (NASDAQ:MFIN)
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