• Net Income: $12 million.
• Earnings Per Share (EPS): $0.50.
• Consumer Lending Origination: $136 million for the quarter.
• Total Loan Book: $2.4 billion.
• Net Interest Income: $51.4 million, up 7% from a year ago.
• Net Interest Margin: 7.94% for the quarter.
• Interest Yield: 11.65%, up 31 basis points from a year ago.
• Total Loans Outstanding: $2.5 billion, a 12% increase from a year ago.
• Provision for Credit Loss: $22 million for the quarter.
• Operating Expenses: $20.8 million, up from $18.2 million in the prior year quarter.
• Net Book Value Per Share: $16.36 as of March 31.
• Adjusted Book Value Per Share: $10.90 at the end of the quarter.
• Dividend: $0.11 per share, with a subsequent 9% increase to $0.12 per share.

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Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Medallion Financial Corp (NASDAQ:MFIN) reported a strong start to the year with $12 million in net income and $0.50 earnings per share.
• The consumer lending business showed solid origination activity with $136 million for the quarter and maintained a healthy $2.4 billion loan book.
• The company successfully exited a commercial loan and related equity investment, resulting in a significant gain of over $10 million.
• The strategic partnership program achieved over $125 million in originations for the second consecutive quarter, indicating strong progress.
• Medallion Financial Corp (NASDAQ:MFIN) increased its quarterly dividend by 9% to $0.12 per share, marking the third increase since reinstating the dividend three years ago.

Negative Points

• The provision for credit loss increased to $22 million for the quarter, up from $20.6 million in the previous quarter and $17.2 million a year ago.
• Operating expenses rose to $20.8 million, up from $18.2 million in the prior year quarter, due to technological initiatives and increased employee costs.
• The net interest margin on gross loans decreased by 16 basis points from a year ago, primarily due to an increase in the cost of funds.
• Consumer loans more than 90 days past due were $8.7 million, representing 0.37% of total consumer loans, indicating some level of delinquency.
• The company faced elevated legal costs, increasing by $700,000 over the prior year quarter, related to corporate and proxy matters.

Q & A Highlights

Q: Were there any nonrecurring expense items aside from the ones highlighted? A: Our professional fees were slightly elevated compared to prior quarters, with about $300,000 of technology costs related to our servicing platform and $600,000 related to our annual meeting and proxy season. There were no costs related to the SEC matter. (Anthony Cutrone, CFO)

Q: Any update on the SEC matter? A: We believe the matter has been resolved, pending Board approval, SEC, and judge sign-off. We expect an update soon. The penalty was booked in the fourth quarter with an offsetting insurance reimbursement. (Andrew Murstein, President and COO)

Q: What latitude do you have in building reserves? Is it strictly formula-based on CECL? A: We have flexibility to use judgment in determining allowances. In Q1, we used qualitative factors to increase consumer provisions by $1.4 million. (Anthony Cutrone, CFO)

Q: Should we anticipate further capital gains from Medallion Capital this year? A: We expect to see one or two more large gains this year, though the timing is unpredictable. We have 30 investments, and gains are expected to continue. (Anthony Cutrone, CFO)

Q: Can you provide a rough outlook on margins and total loan growth for the rest of the year? A: We expect margins to remain stable, with a slight fluctuation. Loan growth is projected at 5% to 7% for the year, but we will not chase growth at the expense of loan quality. (Anthony Cutrone, CFO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.