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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): February 20, 2024

 

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, 38th Floor

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 year and quarter ended December 31, 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 February 20, 2024

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: February 20, 2024

MEDALLION FINANCIAL CORP.

 

 

By:

/s/ Anthony N. Cutrone

 

Name: Anthony N. Cutrone

 

Title: Chief Financial Officer

 

3


 

 

img225047079_0.jpg

 

FOR IMMEDIATE RELEASE:

MEDALLION FINANCIAL CORP. REPORTS 2023 FOURTH QUARTER

AND FULL-YEAR RESULTS

NEW YORK, NY – February 20, 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, 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.

 

 

2

 


 

 

 

 

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 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

 

3

 


 

 

 

 

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

 

 

 

4

 


 

 

 

 

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

 

 

5

 


v3.24.0.1
Document and Entity Information
Feb. 20, 2024
Cover [Abstract]  
Entity Registrant Name MEDALLION FINANCIAL CORP.
Amendment Flag false
Entity Central Index Key 0001000209
Document Type 8-K
Document Period End Date Feb. 20, 2024
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, Address Line Two 38th Floor
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

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