The Company currently has five business segments, which include four lending and a non-operating segment, which are reflective of how Company management makes decisions about its business and operations.

The four lending segments reflect the main types of lending performed at the Company, which are recreation, home improvement, commercial, and medallion. The recreation and home improvement lending segments are operated by the Bank and include loans in all fifty states. The highest concentrations of recreation loans are in Texas and Florida at 15% and 9% of loans outstanding and with no other states over 9% as of September 30, 2022. The recreation lending segment is a consumer finance business that works with third-party dealers and financial service providers for the purpose of financing RVs, boats, and other consumer recreational equipment, of which RVs, boats, and trailers make up 58%, 20%, and 13% of the segment portfolio as of September 30, 2022. The home improvement lending segment works with contractors and financial service providers to finance residential home improvements concentrated in roofs, swimming pools, and windows at 37%, 23%, and 12% of total home improvement loans outstanding, and with no other product lines over 10% as of September 30, 2022. The highest concentrations of home improvement loans are in Texas and Florida at 10% and 9% of loans outstanding and with no other states over 9% as of September 30, 2022. The commercial lending segment focuses on enterprise-wide industries, including manufacturing services, and various other industries, and 51% of these loans are made in the Midwest. The medallion lending segment arose in connection with the financing of taxi medallions, taxis, and related assets, substantially all of which are located in the New York City metropolitan area as of September 30, 2022.

Our corporate and other investments segment is a non-operating segment that includes items not allocated to our operating segments such as investment securities, equity investments, intercompany eliminations, and other corporate elements. Additionally, through December 1, 2021, the date of disposition, the Company had another non-operating segment, RPAC, a race car team.

As part of segment reporting, capital ratios for all operating segments have been normalized as a percentage of consolidated total equity divided by total assets, with the net adjustment applied to corporate and other investments. In addition, the commercial segment primarily represents the mezzanine lending business, with certain legacy commercial loans (immaterial to total) allocated to corporate and other investments.

The following tables present segment data as of and for the three and nine months ended September 30, 2022 and 2021.


Three Months Ended September 30, 2022	Consumer Lending
(Dollars in thousands)	Recreation			Home Improvement			Commercial Lending				Medallion Lending			Corporate and Other Investments			Consolidated
Total interest income	$	36,539		$	11,689		$	2,493			$	92		$	881		$	51,694
Total interest expense		5,003			2,093			780				133			1,645			9,654
Net interest income (loss)		31,536			9,596			1,713				(41	)		(764	)		42,040
Provision (recoveries) for loan losses		7,182			2,041			2,100				(1,275	)		(1	)		10,047
Net interest income (loss) after loss provision		24,354			7,555			(387	)			1,234			(763	)		31,993
Other income (expense), net		(7,178	)		(3,163	)		(2,214	)			(2,686	)		(4,399	)		(19,640	)
Net income (loss) before taxes		17,176			4,392			(2,601	)			(1,452	)		(5,162	)		12,353
Income tax (provision) benefit		(4,499	)		(1,152	)		700				394			1,352			(3,205	)
Net income (loss) after taxes		12,677			3,240			(1,901	)			(1,058	)		(3,810	)		9,148
Income attributable to the non-controlling interest	*			*			*				*			*				1,512
Total net income (loss) attributable to Medallion Financial Corp.	$	12,677		$	3,240		$	(1,901	)		$	(1,058	)	$	(3,810	)	$	7,636
Balance Sheet Data
Total loans, net	$	1,131,051		$	565,002		$	92,772			$	4,377		$	773		$	1,793,975
Total assets		1,145,380			569,603			102,367				27,860			354,331			2,199,541
Total funds borrowed		928,194			461,595			82,956				22,577			287,143			1,782,465
Selected Financial Ratios
Return on average assets		4.54	%		2.36	%		(7.32	)%			(13.00	)%		(4.10	)%		1.68	%
Return on average equity		27.07			14.06			(43.65	)			(74.61	)		(24.41	)		10.03
Return on average stockholders' equity	*			*			*				*			*				10.35
Interest yield		13.19			8.57			10.82				8.12		N/A				10.97
Net interest margin		11.38			7.03			7.43				(3.62	)	N/A				8.91
Reserve coverage		3.48			1.77			1.03		(1)		68.68		N/A				3.32
Delinquency status(2)		0.45			0.08			0.08		(1)		2.24		N/A				0.33
Charge-off (recovery) ratio(4)		1.51			0.78			16.74		(3)		(127.68	)	N/A				1.75

(1)

Ratio is based on total commercial lending balances and relates solely to the legacy commercial loan business.

(2)

Loans 90 days or more past due.

(3)

Ratio is based on total commercial lending balances and relates to the total loan business.

(4)

Negative balances indicate net recoveries for the period.

(*) Line item is not applicable to segments.


Nine Months Ended September 30, 2022	Consumer Lending
(Dollars in thousands)	Recreation			Home Improvement			Commercial Lending				Medallion Lending			Corporate and Other Investments			Consolidated
Total interest income	$	101,189		$	31,977		$	6,701			$	469		$	1,772		$	142,108
Total interest expense		12,700			5,060			2,287				426			4,785			25,258
Net interest income (loss)		88,489			26,917			4,414				43			(3,013	)		116,850
Provision (recoveries) for loan losses		15,536			4,943			5,234				(4,819	)		152			21,046
Net interest income (loss) after loss provision		72,953			21,974			(820	)			4,862			(3,165	)		95,804
Other income (expense), net		(21,549	)		(9,269	)		(282	)			(4,252	)		(12,248	)		(47,600	)
Net income (loss) before taxes		51,404			12,705			(1,102	)			610			(15,413	)		48,204
Income tax (provision) benefit		(13,747	)		(3,398	)		295				(163	)		4,121			(12,892	)
Net income (loss) after taxes		37,657			9,307			(807	)			447			(11,292	)		35,312
Income attributable to the non-controlling interest	*			*			*				*			*				4,535
Total net income (loss) attributable to Medallion Financial Corp.	$	37,657		$	9,307		$	(807	)		$	447		$	(11,292	)	$	30,777
Balance Sheet Data
Total loans, net	$	1,131,051		$	565,002		$	92,772			$	4,377		$	773		$	1,793,975
Total assets		1,145,380			569,603			102,367				27,860			354,331			2,199,541
Total funds borrowed		928,194			461,595			82,956				22,577			287,143			1,782,465
Selected Financial Ratios
Return on average assets		4.86	%		2.48	%		(1.05	)%			1.30	%		(4.24	)%		2.33	%
Return on average equity		27.16			13.91			(6.08	)			6.99			(25.15	)		13.05
Return on average stockholders' equity	*			*			*				*			*				14.06
Interest yield		13.26			8.67			10.55				13.61		N/A				11.03
Net interest margin		11.60			7.30			6.95				1.25		N/A				9.09
Reserve coverage		3.48			1.77			1.03		(1)		68.68		N/A				3.32
Delinquency status(2)		0.45			0.08			0.08		(1)		2.24		N/A				0.33
Charge-off (recovery) ratio(4)		0.94			0.57			8.49		(3)		(145.36	)	N/A				0.81

(1)

Ratio is based on total commercial lending balances and relates solely to the legacy commercial loan business.

(2)

Loans 90 days or more past due.

(3)

Ratio is based on total commercial lending balances and relates to the total loan business.

(4)

Negative balances indicate net recoveries for the period.

(*) Line item is not applicable to segments.


Three Months Ended September 30, 2021	Consumer Lending
(Dollars in thousands)	Recreation			Home Improvement			Commercial Lending				Medallion Lending			RPAC			Corporate and Other Investments			Consolidated
Total interest income	$	30,529		$	8,586		$	2,055			$	1		$	—		$	326		$	41,497
Total interest expense		2,305			958			662				2,009			38			1,454			7,426
Net interest income (loss)		28,224			7,628			1,393				(2,008	)		(38	)		(1,128	)		34,071
Provision (recoveries) for loan losses		916			369			—				(1,944	)		—			322			(337	)
Net interest income (loss) after loss provision		27,308			7,259			1,393				(64	)		(38	)		(1,450	)		34,408
Sponsorship and race winnings		—			—			—				—			3,335			—			3,335
Race team related expenses		—			—			—				—			(2,424	)		—			(2,424	)
Other income (expense), net		(8,856	)		(3,437	)		636				2,073			(2,066	)		(778	)		(12,428	)
Net income (loss) before taxes		18,452			3,822			2,029				2,009			(1,193	)		(2,228	)		22,891
Income tax (provision) benefit		(4,752	)		(951	)		(510	)			(504	)		299			251			(6,167	)
Net income (loss) after taxes		13,700			2,871			1,519				1,505			(894	)		(1,977	)		16,724
Income attributable to the non-controlling interest	*			*			*				*			*			*				784
Total net income (loss) attributable to Medallion Financial Corp.	$	13,700		$	2,871		$	1,519			$	1,505		$	(894	)	$	(1,977	)	$	15,940
Balance Sheet Data
Total loans net	$	902,234		$	392,278		$	70,232			$	5,538		$	—		$	1,951		$	1,372,233
Total assets		916,109			405,439			92,257				93,683			30,969			266,777			1,805,234
Total funds borrowed		712,474			296,509			73,806				74,941			8,054			258,358			1,424,142
Selected Financial Ratios
Return on average assets		6.09	%		2.89	%		6.60	%			6.12	%		(11.28	)%		(2.65	)%		3.73	%
Return on average equity		30.46			14.43			32.99				30.62			(11.08	)		(19.79	)		20.02
Return on average stockholders' equity	*			*			*				*			*			*				24.38
Interest yield		13.78			9.04			12.04				0.09		N/A			N/A				11.55
Net interest margin		12.74			8.03			8.16				(139.64	)	N/A			N/A				9.48
Reserve coverage		3.38			1.63			(0.00	)	(1)		49.98		N/A			N/A				3.34
Delinquency status(2)		0.34			0.04			0.10		(1)		5.42		N/A			N/A				0.29
Charge-off (recovery) ratio(4)		(0.15	)		(0.25	)		—		(3)		(43.01	)	N/A			N/A				(0.38	)

(1)

Ratio is based on total commercial lending balances and relates solely to the legacy commercial loan business.

(2)

Loans 90 days or more past due.

(3)

Ratio is based on total commercial lending balances and relates to the total loan business.

(4)

Negative balances indicate net recoveries for the period.

(*) Line item is not applicable to segments.


Nine Months Ended September 30, 2021	Consumer Lending
(Dollars in thousands)	Recreation			Home Improvement			Commercial Lending				Medallion Lending			RPAC			Corporate and Other Investments			Consolidated
Total interest income (loss)	$	86,857		$	24,732		$	4,920			$	(1,543	)	$	—		$	987		$	115,953
Total interest expense		7,962			3,309			1,950				5,903			113			4,481			23,718
Net interest income (loss)		78,895			21,423			2,970				(7,446	)		(113	)		(3,494	)		92,235
Provision (recoveries) for loan losses		5,546			1,575			—				(5,931	)		—			810			2,000
Net interest income (loss) after loss provision		73,349			19,848			2,970				(1,515	)		(113	)		(4,304	)		90,235
Sponsorship and race winnings		—			—			—				—			10,153			—			10,153
Race team related expenses		—			—			—				—			(7,219	)		—			(7,219	)
Other income (expense), net		(21,774	)		(7,989	)		107				(1,228	)		(5,689	)		(2,637	)		(39,210	)
Net income (loss) before taxes		51,575			11,859			3,077				(2,743	)		(2,868	)		(6,941	)		53,959
Income tax (provision) benefit		(13,281	)		(3,054	)		(773	)			689			720			(874	)		(16,573	)
Net income (loss) after taxes		38,294			8,805			2,304				(2,054	)		(2,148	)		(7,815	)		37,386
Income attributable to the non-controlling interest	*			*			*				*			*			*				2,748
Total net income (loss) attributable to Medallion Financial Corp.	$	38,294		$	8,805		$	2,304			$	(2,054	)	$	(2,148	)	$	(7,815	)	$	34,638
Balance Sheet Data
Total loans net	$	902,234		$	392,278		$	70,232			$	5,538		$	—		$	1,951		$	1,372,233
Total assets		916,109			405,439			92,257				93,683			30,969			266,777			1,805,234
Total funds borrowed		712,474			296,509			73,806				74,941			8,054			258,358			1,424,142
Selected Financial Ratios
Return on average assets		6.08	%		3.20	%		3.68	%			(2.52	)%		(8.89	)%		(3.68	)%		2.73	%
Return on average equity		30.39			16.02			18.38				(12.60	)		(386.73	)		(27.18	)		15.61
Return on average stockholders' equity	*			*			*				*			*			*				18.71
Interest yield		14.05			9.37			10.56				(23.55	)	N/A			N/A				11.56
Net interest margin		12.76			8.11			6.37				(113.66	)	N/A			N/A				9.19
Reserve coverage		3.38			1.63			(0.00	)	(1)		49.98		N/A			N/A				3.34
Delinquency status(2)		0.34			0.04			0.10		(1)		5.42		N/A			N/A				0.29
Charge-off (recovery) ratio		0.22			0.09			—		(3)		143.94		N/A			N/A				1.17

(1)

Ratio is based on total commercial lending balances and relates solely to the legacy commercial loan business.

(2)

Loans 90 days or more past due.

(3)

Ratio is based on total commercial lending balances and relates to the total loan business.

(*) Line item is not applicable to segments.