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 2020 first quarter results. The Bank is a wholly owned subsidiary of Medallion Financial Corp. (Nasdaq: MFIN).
2020 First Quarter Highlights
- Net loss was $0.4 million, compared to net income of $2.4 million in the 2019 first quarter
- Net interest income was $27.8 million, compared to $23.9 million in the prior year period
- Provision for loan losses was $15.3 million, compared to $11.2 million in the prior year period, while annualized net charge-offs were 3.42% of average loans outstanding, compared to 5.33% in the prior year period
- The gross recreation and home improvement loan portfolios both grew 3% from December 31, 2019
- The gross medallion loan portfolio decreased 3% to $105.1 million compared to $108.4 million at December 31, 2019
- Total assets were $1.2 billion as of March 31, 2020
- The Bank had $224 million in capital and a Tier 1 leverage ratio of 18.78% as of March 31, 2020
- During March, the Bank launched its first fintech strategic partnership, which will leverage the Bank’s compliance, lending operations, and management expertise
Donald Poulton, President and Chief Executive Officer of Medallion Bank, stated, “The Bank had a strong start to the year but the escalating COVID-19 pandemic led us to increase our loan loss reserves in March. In addition, transaction activity during the quarter indicated the need to lower medallion collateral values substantially in New York City, which reduced the Bank’s net income by approximately $7 million. While it is too early to predict how our consumer portfolio will be affected by the current economic disruption, we structured the Bank with resilience in mind and remain optimistic the Bank is well positioned to respond to opportunities to grow market share. The annualized consumer loan delinquency rate is only modestly higher than it was this time last year, our capital position remains strong, and our focus is on credit quality while moving forward cautiously. I am proud of how our employees have adapted and continued serving our customers and borrowers while working remotely. They demonstrate every day why we are a leader in our chosen niches.”
Recreation Lending Segment
The Bank’s gross recreation loan portfolio was $720.2 million as of March 31, 2020, compared to $699.5 million at the end of 2019. Net interest income for the first quarter was $22.8 million, compared to $19.6 million in the prior year period. Recreation loans were 66.2% of the Bank’s loans receivable as of March 31, 2020, compared to 65.9% at the end of 2019.
Home Improvement Lending Segment
The Bank’s gross home improvement loan portfolio was $260.6 million as of March 31, 2020, compared to $252.1 at the end of 2019. Net interest income for the first quarter was $4.6 million, compared to $3.5 million in the prior year period. Home improvement loans were 24.0% of the Bank’s loans receivable as of March 31, 2020, compared to 23.7% at the end of 2019.
Medallion Lending Segment
The Banks’s gross medallion loan portfolio was $105.1 million as of March 31, 2020, compared to $108.4 million at the end of 2019. Medallion loan delinquencies 90 days or more past due were $1.2 million as of March 31, 2020, compared to $0.4 million at the end of 2019. Medallion loan delinquencies 30 days or more past due were $22.4 million as of March 31, 2020, compared to $10.3 million at the end of 2019 Medallion loans were 9.7% of the Bank’s loans receivable as of March 31, 2020, compared to 10.2% at the end of 2019.
On April 29, 2020, 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, 2020 to holders of record at the close of business on June 15, 2020.
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. Since its founding in 2003, Medallion Bank has been in the top 2% of banks in the U.S. when measured by Tier 1 leverage ratio and annual return on assets. The Bank is a Utah-chartered, FDIC-insured industrial bank headquartered in Salt Lake City with an office in Bothell, Washington.
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 “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, expectations regarding medallion loan portfolio liquidation, 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 example, statements about the effects of the COVID-19 pandemic on Medallion Bank’s business, 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 Bank’s control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on Medallion Bank, its customers and third parties. In addition, Medallion Bank’s financial results for any period are not necessarily indicative of Medallion Financial Corp.’s results for the same period. In addition to risks related to the ongoing COVID-19 pandemic, 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 filed with the FDIC. Medallion Bank’s Form 10-K 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 | ||||||||
| (Dollars in thousands) | 2020 | 2019 | ||||||
| Total interest income | $ | 33,750 | $ | 28,832 | ||||
| Total interest expense | 5,941 | 4,922 | ||||||
| Net interest income | 27,809 | 23,910 | ||||||
| Provision for loan losses | 15,271 | 11,206 | ||||||
| Net interest income after provision for loan losses | 12,538 | 12,704 | ||||||
| Other (loss) income | ||||||||
| Write-downs of loan collateral in process of foreclosure | (4,576 | ) | (1,712 | ) | ||||
| Other non-interest income | 17 | 11 | ||||||
| Total non-interest (loss) income, net | (4,559 | ) | (1,701 | ) | ||||
| Non-interest expense | ||||||||
| Loan servicing | 2,755 | 2,534 | ||||||
| Salaries and benefits | 2,524 | 2,101 | ||||||
| Collection costs | 963 | 1,158 | ||||||
| Professional fees | 769 | 1,297 | ||||||
| Regulatory fees | 365 | 464 | ||||||
| Occupancy and equipment | 215 | 130 | ||||||
| Other | 975 | 900 | ||||||
| Total non-interest expense | 8,565 | 8,583 | ||||||
| (Loss) income before income taxes | (586 | ) | 2,420 | |||||
| (Benefit) provision for income taxes | (150 | ) | 27 | |||||
| Net (loss) income | $ | (436 | ) | $ | 2,393 | |||
| MEDALLION BANK BALANCE SHEETS (UNAUDITED) | |||||||||
| (Dollars in thousands) | March 31, 2020 | December 31, 2019 | |||||||
| Assets | |||||||||
| Cash and federal funds sold | $ | 39,808 | $ | 50,237 | |||||
| Investment securities, available-for-sale | 46,127 | 48,998 | |||||||
| Loans, inclusive of net deferred loan acquisition costs | 1,105,918 | 1,079,553 | |||||||
| Allowance for loan losses | (66,036 | ) | (59,885 | ) | |||||
| Loans, net | 1,039,882 | 1,019,668 | |||||||
| Loan collateral in process of foreclosure | 25,579 | 30,639 | |||||||
| Fixed assets and right-of-use assets, net | 3,764 | 3,852 | |||||||
| Deferred tax assets | 12,912 | 11,419 | |||||||
| Accrued interest receivable and other assets | 31,221 | 28,417 | |||||||
| Total assets | $ | 1,199,293 | $ | 1,193,230 | |||||
| Liabilities and Shareholders' Equity | |||||||||
| Deposits and other funds borrowed | $ | 960,376 | $ | 951,651 | |||||
| Accrued interest payable | 2,103 | 2,096 | |||||||
| Income taxes payable | 2,341 | 2,144 | |||||||
| Other liabilities | 9,857 | 9,157 | |||||||
| Due to affiliates | 924 | 1,041 | |||||||
| Total liabilities | 975,601 | 966,089 | |||||||
| Total shareholders' equity | 223,692 | 227,141 | |||||||
| Total liabilities and shareholders' equity | $ | 1,199,293 | $ | 1,193,230 | |||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20200430005633/en/
Contacts:
Alex E. Arzeno
Investor Relations
212-328-2168
InvestorRelations@medallion.com
