Segment Reporting

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Segment Reporting

(9) SEGMENT REPORTING

The Company has five business segments, which include four lending segments and one 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 taxi medallion lending. The recreation and home improvement lending segments are operated by the Bank and loans are made to borrowers residing nationwide. 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, collector automobiles, and other consumer recreational equipment, of which RVs, boats, and collector automobiles make up 54%, 19%, and 10% of the segment portfolio, with no other product lines equal to or exceeding 10%, as of March 31, 2024. The highest concentrations of recreation loans are in Texas and Florida at 16% and 10% of loans outstanding and with no other states at or above 10% as of March 31, 2024. The home improvement lending segment works with contractors and financial service providers to finance residential home improvement with the largest product lines being roofs, swimming pools, and windows at 40%, 20%, and 13% of total home improvement loans outstanding, and with no other product lines exceeding 10% as of March 31, 2024. The highest concentrations of home improvement loans are in Texas and Florida both at 10% of loans outstanding and with no other states at or above 10% as of March 31, 2024. The commercial lending segment focuses on serving a wide variety of industries, with concentrations in manufacturing, construction, and wholesale trade making up 53%, 14%, and 12% of the loans outstanding as of March 31, 2024, with no other product lines exceeding 10% as of March 31, 2024. The commercial lending segment invests across the United States with concentrations in California, Wisconsin, and Texas each having 30%, 11%, and 10% of the segment portfolio, and no other states having a concentration at or greater than 10% as of March 31, 2024. The taxi medallion lending segment arose in connection with the financing of taxi medallions, taxis, and related assets, primarily all of which are located in the New York City metropolitan area as of March 31, 2024.

The Company's corporate and other investments segment is a non-operating segment that includes items not allocated to the Company's operating segments such as investment securities, equity investments, intercompany eliminations, and other corporate elements.

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 table presents segment data as of and for the three months ended March 31, 2024.

Three Months Ended March 31, 2024	Consumer Lending
(Dollars in thousands)	Recreation			Home Improvement			Commercial Lending			Taxi Medallion Lending			Corporate and Other Investments			Consolidated
Total interest income	$	43,927		$	17,447		$	3,645		$	140		$	1,911		$	67,070
Total interest expense		9,645			5,634			1,098			28			2,748			19,153
Net interest income (loss)		34,282			11,813			2,547			112			(837	)		47,917
Provision (benefit) for credit losses		17,030			898			216			(944	)		1			17,201
Net interest income (loss) after loss provision		17,252			10,915			2,331			1,056			(838	)		30,716
Other income		250			2			4,202			639			310			5,403
Other expenses		(8,287	)		(4,114	)		(985	)		(743	)		(4,096	)		(18,225	)
Net income (loss) before taxes		9,215			6,803			5,548			952			(4,624	)		17,894
Income tax (provision) benefit		(3,274	)		(2,417	)		(1,971	)		(338	)		1,642			(6,358	)
Net income (loss) after taxes	$	5,941		$	4,386		$	3,577		$	614		$	(2,982	)	$	11,536
Income attributable to the non-controlling interest																	1,512
Total net income attributable to Medallion Financial Corp.																$	10,024
Balance Sheet Data
Total loans	$	1,365,165		$	752,262		$	106,570		$	3,560		$	869		$	2,228,426
Total assets		1,322,761			738,551			102,331			8,611			446,508			2,618,762
Total funds borrowed		1,083,760			605,107			83,842			7,055			365,832			2,145,596
Selected Financial Ratios
Return on average assets		1.82	%		2.38	%		13.50	%		23.68	%		(2.78	)%		1.80	%
Return on average stockholders' equity	*			*			*			*			*				11.65
Return on average equity		11.44			14.93			84.71			148.65			(17.47	)		11.18
Interest yield		13.17			9.28			12.99			15.59		NM				11.34
Net interest margin, gross		10.28			6.28			9.08			12.47		NM				8.10
Net interest margin, net of allowance		10.75			6.45			9.43			21.57		NM				8.39
Reserve coverage		4.40			2.38			4.11			42.19		NM				3.76
Delinquency status (1)		0.48			0.18			7.80			—		NM				0.74
Charge-off (recovery) ratio (2)		4.36			2.12			(0.07	)		(101.47	)	NM				3.20

(1)Loans 90 days or more past due.

(2)Negative balances indicate net recoveries for the period.

(NM) Not meaningful.

(*) Line item is not applicable to segments.

The following table presents segment data as of and for the three months ended March 31, 2023.

Three Months March 31, 2023	Consumer Lending
(Dollars in thousands)	Recreation			Home Improvement			Commercial Lending			Taxi Medallion Lending			Corporate and Other Investments			Consolidated
Total interest income	$	37,899		$	13,649		$	2,701		$	310		$	1,284		$	55,843
Total interest expense		5,904			3,279			809			67			2,181			12,240
Net interest income (loss)		31,995			10,370			1,892			243			(897	)		43,603
Provision (benefit) for credit losses		7,751			3,081			327			(7,084	)		(37	)		4,038
Net interest income (loss) after loss provision		24,244			7,289			1,565			7,327			(860	)		39,565
Other income		—			1			271			1,620			191			2,083
Other expenses		(7,803	)		(3,994	)		(420	)		(2,027	)		(4,149	)		(18,393	)
Net income (loss) before taxes		16,441			3,296			1,416			6,920			(4,818	)		23,255
Income tax (provision) benefit		(4,513	)		(905	)		(389	)		(1,899	)		1,324			(6,382	)
Net income (loss) after taxes	$	11,928		$	2,391		$	1,027		$	5,021		$	(3,494	)	$	16,873
Income attributable to the non-controlling interest																	1,512
Total net income attributable to Medallion Financial Corp.																$	15,361
Balance Sheet Data
Total loans, gross	$	1,213,380		$	669,642		$	95,329		$	4,059		$	1,770		$	1,984,180
Total assets		1,179,965			660,846			101,392			20,335			389,132			2,351,670
Total funds borrowed		961,561			538,527			82,625			16,571			317,106			1,916,390
Selected Financial Ratios
Return on average assets		4.14	%		1.52	%		4.11	%		90.53	%		(3.79	)%		2.99	%
Return on average stockholders' equity	*			*			*			*			*				20.72
Return on average equity		25.63			9.37			25.39			558.90			(23.42	)		18.50
Interest yield		12.87			8.54			11.53			11.78		NM				10.78
Net interest margin, gross		10.86			6.49			8.08			9.23		NM				8.42
Net interest margin, net of allowance		11.33			6.62			8.32			28.89		NM				8.71
Reserve coverage		4.12			2.19			3.71			53.07		NM				3.54
Delinquency status (1)		0.36			0.07			0.08			—		NM				0.24
Charge-off ratio (2)		3.48			0.82			(0.16	)		29.84		NM				2.35

(1)Loans 90 days or more past due.

(2)Negative balances indicate net recoveries for the period.

(NM) Not meaningful.

(*) Line item is not applicable to segments.