MBNKP Medallion Bank

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 strategic partners, announced today its results for the quarter ended June 30, 2024. The Bank is a wholly owned subsidiary of Medallion Financial Corp. (Nasdaq: MFIN).

2024 Second Quarter Highlights

• Net income of $15.0 million, compared to $19.3 million in the prior year quarter.
• Net interest income of $50.2 million, compared to $47.0 million in the prior year quarter.
• Net interest margin of 8.55%, compared to 8.91% in the prior year quarter.
• Total provision for credit losses was $18.2 million, compared to $8.9 million in the prior year quarter. Total provision for credit losses included $0.9 million of net taxi medallion recoveries, compared to $5.0 million of net taxi medallion recoveries in the prior year quarter.
• Annualized net charge-offs were 2.31% of average loans outstanding, compared to 0.63% in the prior year quarter.
• Annualized return on assets and return on equity were 2.57% and 16.77%, respectively, compared to 3.66% and 24.38% for the prior year period.
• The total loan portfolio grew 10% from June 30, 2023 to $2.3 billion as of June 30, 2024.
• Total assets were $2.4 billion and the Tier 1 leverage ratio was 16.14% at June 30, 2024.

Donald Poulton, President and Chief Executive Officer of Medallion Bank, stated, “Asset growth resumed in the second quarter, reflecting the seasonality of our business and ongoing strong demand for our lending programs. While loan growth will increase interest income, it comes at a short-term cost in the form of elevated credit loss provisions as we build the reserve for expected losses. Credit performance improvement during the quarter was notable. Both loan losses and delinquency fell compared to the first quarter, with recreation loan net charge-offs down 137 basis points and home improvement loan net charge-offs down 63 basis points. Our credit standards remained relatively tight as we prioritized quality growth that maintains our market position. Consistent with the last few quarters, our focus remains on prudent balance sheet and credit risk management.”

Recreation Lending Segment

• The Bank’s recreation loan portfolio grew 12% to $1.497 billion as of June 30, 2024, compared to $1.331 billion at June 30, 2023.
• Net interest income was $37.9 million, compared to $34.4 million in the prior year quarter.
• Recreation loans were 66% of loans receivable as of June 30, 2024, compared to 65% at June 30, 2023.
• Annualized net charge-offs were 2.99% of average recreation loans outstanding, compared to 1.87% in the prior year quarter.
• Delinquencies 30 days or more past due were $54.3 million, or 3.75%, of recreation loans as of June 30, 2024, compared to $42.9 million, or 3.33%, at June 30, 2023.
• The provision for recreation credit losses was $15.8 million, compared to $10.1 million in the prior year quarter.

Home Improvement Lending Segment

• The Bank’s home improvement loan portfolio grew 6% to $773.2 million as of June 30, 2024, compared to $728.5 million at June 30, 2023.
• Net interest income was $12.1 million, compared to $11.6 million in the prior year quarter.
• Home improvement loans were 34% of loans receivable as of June 30, 2024, compared to 35% at June 30, 2023.
• Annualized net charge-offs were 1.49% of average home improvement loans outstanding, compared to 1.12% in the prior year quarter.
• Delinquencies 30 days or more past due were $6.9 million, or 0.89%, of home improvement loans as of June 30, 2024, compared to $5.3 million, or 0.72%, at June 30, 2023.
• The provision for home improvement credit losses was $3.3 million, compared to $3.7 million in the prior year quarter.

Series F Preferred Stock Dividend

On July 25, 2024, 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 October 1, 2024, to holders of record at the close of business on September 16, 2024.

About Medallion Bank

Medallion Bank specializes in providing consumer loans for the purchase of recreational vehicles, boats, and home improvements, along with loan origination services to fintech strategic 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 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, returns and growth. These statements are often, but not always, made through the use of words or phrases such as “remains” “ongoing” or the negative versions of these words or other comparable words or phrases of a future or forward-looking nature. These statements may relate to our future earnings, returns, capital levels, sources of funding, growth prospects, asset quality and pursuit and execution of our strategy. 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, 2023, and in its Quarterly Reports on Form 10-Q, 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’s financial results for any period are not necessarily indicative of Medallion Financial Corp.’s results for the same period.

Company Contact:Investor Relations212-328-2176InvestorRelations@medallion.com

MEDALLION BANK STATEMENTS OF OPERATIONS (UNAUDITED)
	Three Months Ended June 30,								Six Months Ended June 30,
(In thousands)		2024				2023				2024				2023
Total interest income	$	66,759			$	58,287			$	129,727			$	111,221
Total interest expense		16,524				11,337				31,277				19,937
Net interest income		50,235				46,950				98,450				91,284
Provision for credit losses		18,190				8,857				35,192				12,716
Net interest income after provision for credit losses		32,045				38,093				63,258				78,568
Other non-interest income		869				263				1,471				295
Non-interest expense
Salaries and benefits		4,953				4,588				9,937				8,980
Loan servicing		3,049				2,901				5,916				5,716
Collection costs		1,569				1,506				2,974				2,963
Regulatory fees		888				781				1,865				1,463
Professional fees		385				495				817				1,162
Information Technology		273				267				541				498
Occupancy and equipment		226				211				433				413
Other		1,059				996				1,809				1,867
Total non-interest expense		12,402				11,745				24,292				23,062
Income before income taxes		20,512				26,611				40,437				55,801
Provision for income taxes		5,476				7,282				10,922				15,047
Net income	$	15,036			$	19,329			$	29,515			$	40,754
Less: Preferred stock dividends		1,512				1,512				3,024			$	3,024
Net income attributable to common shareholder	$	13,524			$	17,817			$	26,491			$	37,730

MEDALLION BANKBALANCE SHEETS(UNAUDITED)
(In thousands)	June 30, 2024				December 31, 2023				June 30, 2023
Assets
Cash and federal funds sold	$	119,457			$	110,043			$	97,492
Investment securities, available-for-sale		55,830				54,282				53,692
Loans, inclusive of net deferred loan acquisition fees and costs		2,274,740				2,100,338				2,063,963
Allowance for credit losses		(84,213	)			(79,283	)			(71,447	)
Loans, net		2,190,527				2,021,055				1,992,516
Loan collateral in process of foreclosure		3,103				4,165				7,259
Fixed assets and right-of-use lease assets, net		8,850				8,140				7,366
Deferred tax assets		12,866				12,761				10,400
Accrued interest receivable and other assets		52,759				51,610				51,244
Total assets	$	2,443,392			$	2,262,056			$	2,219,969
Liabilities and Shareholders’ Equity
Liabilities
Deposits and other funds borrowed	$	2,031,782			$	1,866,657			$	1,841,549
Accrued interest payable		5,281				4,029				2,037
Income tax payable		21,127				21,219				27,441
Other liabilities		17,983				17,509				22,454
Due to affiliates		983				849				823
Total liabilities		2,077,156				1,910,263				1,894,304
Shareholder’s Equity
Series E Preferred stock		26,303				26,303				26,303
Series F Preferred stock		42,485				42,485				42,485
Common stock		1,000				1,000				1,000
Additional paid in capital		77,500				77,500				77,500
Accumulated other comprehensive loss, net of tax		(4,578	)			(4,529	)			(4,583	)
Retained earnings		223,526				209,034				182,960
Total shareholders’ equity		366,236				351,793				325,665
Total liabilities and shareholders’ equity	$	2,443,392			$	2,262,056			$	2,219,969