Medallion Bank Reports 2025 Second Quarter Results and Declares Series G Preferred Stock Dividend

Rhea-AI Summary

Medallion Bank (NASDAQ: MFIN) reported strong Q2 2025 financial results, with net income rising to $17.3 million from $15.0 million in the prior year quarter. The bank achieved net interest income of $53.9 million and maintained a robust net interest margin of 8.54%.

Key developments include a successful public offering of 3.1 million shares of Series G Preferred Stock, raising $77.5 million, and the redemption of $46 million Series F preferred securities. The bank's total loan portfolio grew 1% YoY to $2.3 billion, with recreation lending at $1.486 billion and home improvement lending at $803.5 million. Strategic partnership volumes increased 24% QoQ to $169 million.

The bank maintained strong capital positions with a Tier 1 leverage ratio of 19.3% and declared a quarterly dividend of $0.80625 per share on its Series G Preferred Stock.

Positive

• Net income increased 15.3% YoY to $17.3 million
• Net interest income grew 7.4% YoY to $53.9 million
• Strategic partnership volumes increased 24% QoQ to $169 million
• Successfully raised $77.5 million through Series G Preferred Stock offering
• Home improvement loan delinquency rate at lowest level since Q2 2023
• Strong capital position with 19.3% Tier 1 leverage ratio

Negative

• Recreation loan portfolio decreased 0.8% YoY to $1.486 billion
• Recreation loan originations declined 31.9% YoY to $142.8 million
• Increased net charge-offs at 2.66% vs 2.31% in prior year quarter
• Recreation loan delinquencies increased to 4.42% from 3.63% YoY
• Home improvement loan originations decreased 20.1% YoY to $54.3 million

Insights

Banking Industry Analyst

Medallion Bank's Q2 results show solid 15% earnings growth with strategic capital raising that strengthens their position despite mixed loan demand.

Medallion Bank delivered $17.3 million in net income for Q2 2025, representing a healthy 15.3% increase from the $15.0 million reported in the same quarter last year. This growth was primarily driven by a 7.4% increase in net interest income to $53.9 million and a substantial rise in non-interest income, which tripled to $2.7 million.

The bank's strategic decisions during the quarter deserve particular attention. Management completed three significant transactions: a $52.8 million sale of recreation loans, a $77.5 million Series G preferred stock offering, and the redemption of $46 million in Series F preferred securities. This capital management approach strengthens the bank's already robust Tier 1 leverage ratio of 19.3%, which significantly exceeds regulatory requirements and positions the bank well for potential economic challenges.

Loan portfolio performance shows some concerning trends despite overall growth. The recreation lending segment experienced a slight contraction of 0.8% year-over-year, with originations down 31.9% from $209.6 million to $142.8 million. More worryingly, delinquencies in this segment increased to 4.42% from 3.63% in the prior year, and annualized net charge-offs rose to 3.25% from 2.99%.

The home improvement segment shows better resilience with 4% portfolio growth, though originations declined by 20.1%. Notably, delinquency rates remained stable at 0.86%, reaching their lowest level since Q2 2023, though charge-offs increased to 1.87% from 1.49%.

The bright spot in their business model appears to be the strategic partnership channel, which grew loan volumes by 24% quarter-over-quarter to $169 million, suggesting this fintech-focused origination strategy is gaining traction while traditional direct lending channels face headwinds.

Overall, Medallion Bank is navigating a challenging consumer lending environment with reasonable success, maintaining strong profitability metrics with 2.75% return on assets and 16.11% return on equity, while proactively strengthening its capital position to weather potential credit deterioration.

SALT LAKE CITY, July 30, 2025 (GLOBE NEWSWIRE) -- Medallion Bank (Nasdaq: MBNKO, 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, 2025. The Bank is a wholly owned subsidiary of Medallion Financial Corp. (Nasdaq: MFIN).

2025 Second Quarter Highlights

• Net income of $17.3 million, compared to $15.0 million in the prior year quarter.
• Net interest income of $53.9 million, compared to $50.2 million in the prior year quarter. Total non-interest income of $2.7 million, compared to $0.9 million in the prior year quarter.
• Net interest margin of 8.54%, compared to 8.55% in the prior year quarter.
• Total provision for credit losses was $18.7 million, compared to $18.2 million in the prior year quarter.
• Annualized net charge-offs were 2.66% of average loans outstanding, compared to 2.31% in the prior year quarter.
• Annualized return on assets and return on equity were 2.75% and 16.11%, respectively, compared to 2.57% and 16.77%, respectively, for the prior year period.
• The total loan portfolio grew 1% from June 30, 2024 to $2.3 billion as of June 30, 2025.
• Closed a public offering of 3,100,000 shares of Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series G, par value $1.00 per share, with a liquidation amount of $25 per share and an aggregate liquidation amount of $77.5 million.
• Total assets were $2.6 billion and the Tier 1 leverage ratio was 19.3% at June 30, 2025. The Series F preferred stock, which was redeemed on July 1, 2025, contributed 171 basis points to the Tier 1 leverage ratio as of June 30, 2025.
  

Donald Poulton, President and Chief Executive Officer of Medallion Bank, stated, “Earnings grew to $17.3 million in the second quarter, but the highlight for the quarter was secondary and capital market activity. As previously reported, we completed an initial sale of recreation loans, then completed a $77.5 million Series G preferred stock offering and announced the redemption of $46 million of our Series F preferred securities.

While demand for both recreation and home improvement loans recovered slightly from the first quarter, overall volumes remained moderate. Strategic partnership volumes continued to grow, reaching $169 million in the second quarter, 24% higher than the first quarter’s $136 million. Charge-offs were up from the prior year quarter and delinquency fell consistent with our seasonal pattern. Notably, the delinquency rate in our home improvement loan portfolio is now at its lowest level since the second quarter of 2023. We are pleased with our second quarter results and believe the added capital establishes a solid foundation for the rest of 2025 and beyond.”

Recreation Lending Segment

• Excluding loans held for sale, the Bank’s recreation loan portfolio size fell 0.8% to $1.486 billion as of June 30, 2025, compared to $1.497 billion at June 30, 2024. Loan originations were $142.8 million, compared to $209.6 million in the prior year quarter.
• On April 30, 2025, the Bank closed a sale of $52.8 million in recreation loans held for sale. The total proceeds received, which included the principal amount outstanding, a purchase premium and accrued but unpaid interest, were $55.9 million.
• Recreation loans were 65% of loans receivable as of June 30, 2025, compared to 66% at June 30, 2024.
• Net interest income was $39.8 million, compared to $37.6 million in the prior year quarter.
• Delinquencies 30 days or more past due were $65.7 million, or 4.42%, of recreation loans as of June 30, 2025, compared to $54.3 million, or 3.63%, at June 30, 2024.
• Annualized net charge-offs were 3.25% of average recreation loans outstanding, compared to 2.99% in the prior year quarter.
• The provision for recreation credit losses was $15.3 million and the allowance for credit losses was 5.05% of the outstanding balance, compared to $15.8 million and 4.35% of the outstanding balance in the prior year quarter.
  

Home Improvement Lending Segment

• The Bank’s home improvement loan portfolio grew 4% to $803.5 million as of June 30, 2025, compared to $773.2 million at June 30, 2024. Loan originations were $54.3 million, compared to $68.0 million in the prior year quarter.
• Home improvement loans were 35% of loans receivable as of June 30, 2025, compared to 34% at June 30, 2024.
• Net interest income was $13.6 million, compared to $12.1 million in the prior year quarter.
• Delinquencies 30 days or more past due were $6.9 million, or 0.86%, of home improvement loans as of June 30, 2025, essentially unchanged from $6.9 million, or 0.90%, at June 30, 2024.
• Annualized net charge-offs were 1.87% of average home improvement loans outstanding, compared to 1.49% in the prior year quarter.
• The provision for home improvement credit losses was $3.9 million and the allowance for credit losses was 2.54% of the outstanding balance, compared to $3.3 million and 2.38% of the outstanding balance in the prior year quarter.

Series F Preferred Stock Dividend

The Series F Preferred Stock was fully redeemed on July 1, 2025, and no further dividends will be paid.

Series G Preferred Stock Dividend

On July 24, 2025, the Bank’s Board of Directors declared a quarterly cash dividend of $0.80625 per share (calculated from date of issuance on May 22, 2025 through September 30, 2025) on the Bank’s Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series G, which trades on the Nasdaq Capital Market under the ticker symbol “MBNKO.” The dividend is payable on October 1, 2025, to holders of record at the close of business on September 15, 2025.

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 (including loan 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,” “anticipated,” “continue,” “expect,” “may,” “maintain,” “potential” 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, 2024, 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 Relations
212-328-2176
InvestorRelations@medallion.com

MEDALLION BANK STATEMENTS OF OPERATIONS (UNAUDITED)
	Three Months Ended June 30,								Six Months Ended June 30,
(In thousands)		2025				2024				2025				2024
Interest income
Loan interest including fees	$	71,688			$	65,213			$	142,305			$	126,637
Investments		1,824				1,546				3,041				3,090
Total interest income		73,512				66,759				145,346				129,727
Interest expense		19,608				16,524				39,225				31,277
Net interest income		53,904				50,235				106,121				98,450
Provision for credit losses		18,697				18,190				37,735				35,192
Net interest income after provision for credit losses		35,207				32,045				68,386				63,258
Strategic partnership fees		787				480				1,472				806
Gain on sale of loans		1,304				—				1,304				—
Other non-interest income		603				389				1,599				665
Total non-interest income		2,694				869				4,375				1,471
Non-interest expense
Salaries and benefits		5,297				4,953				10,645				9,937
Loan servicing		3,293				3,049				6,447				5,916
Collection costs		1,697				1,569				3,189				2,974
Regulatory fees		1,109				888				1,930				1,865
Professional fees		592				385				1,202				817
Information technology		324				273				646				541
Occupancy and equipment		724				226				1,451				433
Other		1,093				1,059				2,003				1,809
Total non-interest expense		14,129				12,402				27,513				24,292
Income before income taxes		23,772				20,512				45,248				40,437
Provision for income taxes		6,468				5,476				12,305				10,922
Net income	$	17,304			$	15,036			$	32,943			$	29,515
Less: Preferred stock dividends		2,598				1,512				4,110				3,024
Net income attributable to common shareholder	$	14,706			$	13,524			$	28,833			$	26,491

MEDALLION BANK BALANCE SHEETS
	(UNAUDITED)								(UNAUDITED)
(In thousands)	June 30, 2025				December 31, 2024				June 30, 2024
Assets
Cash and federal funds sold	$	117,345			$	126,196			$	119,457
Investment securities, available-for-sale		61,529				54,805				55,830
Loans held for sale, at the lower of amortized cost or fair value		72,490				128,226				—
Loan receivables, inclusive of net deferred loan acquisition cost and fees		2,289,583				2,249,614				2,274,740
Allowance for credit losses		(95,462	)			(91,638	)			(84,213	)
Loans, net		2,194,121				2,157,976				2,190,527
Loan collateral in process of foreclosure		3,414				3,326				3,103
Fixed assets and right-of-use lease assets, net		7,972				9,126				8,850
Deferred tax assets		14,647				14,036				12,866
Accrued interest receivable		15,124				15,083				13,203
Other assets		85,417				40,325				39,556
Total assets	$	2,572,059			$	2,549,099			$	2,443,392
Liabilities and Shareholders’ Equity
Liabilities
Deposits	$	2,009,176			$	2,090,071			$	2,006,782
Short-term borrowings		40,000				35,000				25,000
Accrued interest payable		3,065				5,586				5,281
Income tax payable (1)		26,734				17,951				21,127
Other liabilities		18,406				17,204				17,983
Due to affiliates		1,037				910				983
Total liabilities		2,098,418				2,166,722				2,077,156
Shareholders’ Equity
Series E preferred stock		26,303				26,303				26,303
Series F preferred stock		42,485				42,485				42,485
Series G preferred stock		73,126				—				—
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		(3,931	)			(4,480	)			(4,578	)
Retained earnings		257,158				239,569				223,526
Total shareholders’ equity		473,641				382,377				366,236
Total liabilities and shareholders’ equity	$	2,572,059			$	2,549,099			$	2,443,392
(1)      The majority of income tax payable is payable to Medallion Financial Corp.

FAQ

What were Medallion Bank's (MFIN) key financial results for Q2 2025?

Medallion Bank reported net income of $17.3 million, net interest income of $53.9 million, and maintained a net interest margin of 8.54%. The total loan portfolio grew 1% YoY to $2.3 billion.

How much capital did Medallion Bank raise in its Series G Preferred Stock offering?

Medallion Bank raised $77.5 million through a public offering of 3,100,000 shares of Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series G.

What is the dividend amount for Medallion Bank's Series G Preferred Stock?

The bank declared a quarterly cash dividend of $0.80625 per share on its Series G Preferred Stock, payable on October 1, 2025, to holders of record as of September 15, 2025.

How did Medallion Bank's loan segments perform in Q2 2025?

The recreation loan portfolio decreased 0.8% YoY to $1.486 billion with 4.42% delinquency rate, while the home improvement portfolio grew 4% YoY to $803.5 million with 0.86% delinquency rate.

What was Medallion Bank's capital position in Q2 2025?

Medallion Bank maintained a strong capital position with a Tier 1 leverage ratio of 19.3%, with the Series F preferred stock contributing 171 basis points before its redemption on July 1, 2025.