Medallion Financial Q2 2026 Earnings Report

Medallion Financial EPS Results

• Actual EPS: $0.31
• Consensus EPS: $0.29
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: N/A

Medallion Financial Revenue Results

• Actual Revenue: $84.38 million
• Expected Revenue: $58.98 million
• Beat/Miss: Beat by +$25.39 million
• YoY Revenue Growth: N/A

Medallion Financial Announcement Details

• Quarter: Q2 2026
• Date: 7/29/2026
• Time: After Market Closes
• Conference Call Date: Thursday, July 30, 2026
• Conference Call Time: 9:00AM ET

Medallion Financial (NASDAQ:MFIN) Corporation is a specialty finance company that provides asset-based lending solutions to small and mid-sized businesses in the United States. The company’s core business activities include secured loans collateralized by business assets such as insurance premiums, commercial real estate, maritime assets and portfolio receivables. Through its insurance premium finance division, Medallion offers short-term loans that allow policyholders to spread insurance costs over multiple payments, while its portfolio financing arm provides funding against a borrower’s existing asset portfolios.

Founded in 1998 and headquartered in Minneapolis, Minnesota, Medallion Financial originally established itself in the taxi medallion lending market, extending loans secured by New York City cab medallions. Over time, the company diversified its book of business to include a broader range of asset classes and geographic markets across the U.S. This evolution has enabled Medallion to mitigate concentration risk and capitalize on financing niches underserved by traditional banks.

Under the leadership of President and Chief Executive Officer Christopher M. Steckler, Medallion Financial emphasizes disciplined underwriting and risk management. The company maintains a lean operating model, originating most loans directly through its in-house credit team. Medallion’s approach combines customized financing solutions with ongoing portfolio oversight, positioning it as a resource for businesses seeking flexible funding structures backed by tangible collateral.

Medallion Financial Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Record originations drove strong growth: home improvement lending reached $128.6 million and recreation lending $228.5 million, while total loans rose 12% year over year and 7% sequentially to $2.79 billion. Management said the elevated activity continued into July and remains sustainable, though seasonality is expected.
• Positive Sentiment: Net interest income increased 7% year over year to a quarterly record of $57.2 million, with the net interest margin remaining near 8%. The strategic partnership program added a fifth partner and generated $247.1 million of loan originations and more than $1.1 million in fee income.
• Negative Sentiment: Net income fell to $7.4 million, or $0.31 per diluted share, from $11.1 million, or $0.46 per share, a year earlier. Results were pressured by higher credit-loss provisions—including $6.5 million of day-one provisions tied to loan growth—higher operating expenses, and lower gains on equity investments.
• Neutral Sentiment: Credit trends were described as stable, with home improvement charge-offs improving, while recreation charge-offs remained elevated but broadly flat. Management expects recent recreation pricing changes to improve charge-off-adjusted margins over time, although economic conditions remain a key risk.
• Positive Sentiment: The company raised its quarterly dividend to $0.14 per share, repurchased nearly 780,000 shares, and expects to complete the remaining approximately $6 million of its current buyback authorization within six months before potentially establishing a new plan. Investments in talent, analytics, collections, and a new loan-origination system targeted for Q1 2027 are intended to support future growth.

Presentation

[Operator]

Good day. Welcome to the Medallion Financial Corp Q2 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star and zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and one on your touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would like now to turn the conference over to Ken Cooper, investor relations. Please go ahead.

[Ken Cooper, Investor Relations at Medallion Financial]

Thank you. Good morning. Welcome to Medallion Financial Corp's second quarter 2026 earnings call. Joining me today are Andrew Murstein, President and Chief Executive Officer, Anthony Cutrone, Executive Vice President and Chief Financial Officer, and Justin Haley, President and CEO of Medallion Bank. Certain statements made during the call today constitute forward-looking statements. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. Those risks and uncertainties are described in our earnings press release issued yesterday and in our filings with the SEC.

[Ken Cooper, Investor Relations at Medallion Financial]

The forward-looking statements made today are as of the date of this call, and we do not undertake any obligation to update these forward-looking statements. In addition to our earnings press release, you can find our second-quarter supplement presentation on our website by visiting medallion.com and clicking Investor Relations. The presentation is near the top of the page. With that, I'll turn it over to Andrew.

[Andrew Murstein, President and CEO at Medallion Financial]

Thank you, Ken. Good morning, everyone. Our second quarter results further demonstrated the strength, stability, and growth potential of our lending platform. The highlights included our home improvement originations were up over twofold where they were last second quarter. As a matter of fact, the $128.6 million of originations was the highest origination quarter in our history for home improvement lending. We are doing this with stable credit quality, and this level of origination has continued through July. Equally as impressive was our origination activity in recreation, where originations were up 60% from a year ago to $228.5 million. Like home improvement, this was a record high for originations in a quarter for this segment. Here again, we are achieving this with stable credit quality, and we are seeing this level of activity continue through July.

[Andrew Murstein, President and CEO at Medallion Financial]

This acceleration of origination activity led to outstanding total loan growth for the quarter. We are now at $2.79 billion in loans, a 12% increase year-over-year, an impressive 7% sequential growth from a quarter ago. Our company surpassed an important milestone during this quarter as we exceeded $3 billion in assets. Achieving this milestone is a testament to our entire organization, and we are very pleased with where we are today and where we intend on going in the future. In many ways, the second quarter marked the continuation of our performance across our operating segments and many of our key performance indicators. For the second quarter, the $57.2 million of net interest income is a new quarterly record, which was particularly satisfying as we maintained our net interest margin at the approximate 8% level. Our strategic partnership program continues to gain traction.

[Andrew Murstein, President and CEO at Medallion Financial]

We added a fifth partner in the quarter, which contributed to originating $247.1 million of loans and over $1.1 million of fee income in the quarter. We continue to work on our growing pipeline of new partner prospects and expect to add new partners over time. As I have mentioned in the past, long-term, we believe our program will scale to a more significant size. We are taking a very methodical approach to growth to ensure we satisfy the needs of all stakeholders, including our borrowers, team, partners, and regulators. That said, we are very pleased with the progress, particularly over the last year or so. From a capital allocation perspective, we remain committed to our shareholders.

[Andrew Murstein, President and CEO at Medallion Financial]

During the quarter, our board of directors approved the second quarter dividend of $0.14 per share, representing a 16.7% increase from last quarter and a 75% increase since we reinstated the dividend in the second quarter of 2022. We also bought back nearly 780,000 shares of stock during the quarter, which we were able to do at a discount to both book value and tangible book value. Our commercial lending business grew 5% during the quarter, with two new loans originated for a total of $7.1 million. This portfolio now sits at $126 million, with the weighted average coupon being 14.37%. Our company is well-positioned for future growth. We have a clear track record of growing assets, net interest income, and our book value. We have proven to be able to do this profitably and believe we will continue to do so.

[Andrew Murstein, President and CEO at Medallion Financial]

As we have stated since our founding, our net income and earnings per share may be choppy quarter-to-quarter due to timing related to several unique drivers of our business, but all add shareholder value long-term. Lastly, we recently completed our relocation to our new New York office, a move that is expected to reduce our annual occupancy costs and further enhance shareholder value through ongoing expense savings. With that, I'll now turn it over to Anthony, who will provide some additional insight into our quarter.

[Anthony Cutrone, EVP and CFO at Medallion Financial]

Thank you, Andrew. Good morning, everyone. For the quarter, net interest income grew 7% to $57.2 million from $53.4 million in the prior year quarter. The increase was driven by growth in our loan portfolio, generating higher interest income, outpacing interest expense, which was higher due to an increase in both borrowings and average borrowing cost. Our net interest margin was 7.94% during the quarter, down 15 basis points from a year ago and down six basis points from the first quarter. Our interest yield on loans of 12.28% increased one basis point from a year ago, and our average cost of borrowings in the quarter was 4.32%, compared to 4.20% a year ago. During the quarter, our average cost of deposits at Medallion Bank was 3.96%, compared to 3.84% in the prior year quarter.

[Anthony Cutrone, EVP and CFO at Medallion Financial]

As of June 30th, the weighted average coupon of recreation loans was 15.06% and was 9.69% for home improvement loans. During the quarter, we originated loans at rates averaging around 14.75% for recreation loans and 9.25% for home improvement loans. During July, we have continued to originate both recreation and home improvement loans at similar rates. The provision for credit loss was $22.3 million for the quarter, a slight decrease from $22.5 million for the first quarter, and a slight increase from $21.6 million in the prior year quarter. Current quarter provision included approximately $6.5 million of day one provisioning. The allowance for credit loss we book when a loan is originated, in comparison to approximately $2.5 million in the prior quarter and an approximate $400,000 benefit in the prior year quarter.

[Anthony Cutrone, EVP and CFO at Medallion Financial]

As we continue to grow our consumer loan portfolios, particularly recreation loans, there is a steep penalty that presents itself on the income statement on the date of growth in terms of increased provisions. This $6.5 million of additional provisions translates into roughly $0.18 per share of reduced earnings in the quarter. If we chose to keep our loan book size static, excluding the impact of portfolio mix, we would not have those additional costs. However, we don't believe that to be in the best interest of our company or our shareholders. Net charge-offs in the recreation portfolio during the quarter were $13.3 million, or 3.14%, compared to 3.11% in the 2025 quarter, and were $2.9 million or 1.37% of the average home improvement portfolio, compared to 1.87% in the 2025 quarter.

[Anthony Cutrone, EVP and CFO at Medallion Financial]

Turning to expenses, operating costs totaled $25 million in the second quarter, which were up from $21.5 million in the prior year quarter, with the increase tied to both higher employee costs as well as higher servicing expenses, both of which are associated with our growing loan portfolio. Additionally, our professional fee costs were elevated in the quarter related to this year's proxy. As we continue to expand our platform and focus on growth, we anticipate higher operating costs. As we've stated previously, long-term, we expect the growth in our net interest income to outpace any growth in operating costs.

[Anthony Cutrone, EVP and CFO at Medallion Financial]

For the quarter, net income attributable to our shareholders was $7.4 million, or $0.31 per diluted share, compared to $11.1 million or $0.46 per share in the prior year quarter, with the prior year quarter including $5.9 million of higher gains on equity investments compared to the current quarter, and the current quarter including a significant amount of additional credit loss provisions tied to the growth we experienced when compared to a year ago, as we just previously discussed. Our net book value per share as of June 30th was $17.62 from $17.66 a year ago, and our tangible book value per share, which excludes the value of goodwill, intangible assets, and the correlated deferred tax liability associated with both, was $12.17 at the end of the quarter, up from $11.32 a year ago.

[Anthony Cutrone, EVP and CFO at Medallion Financial]

Reconciliation of our book value per share, the tangible book value per share, is available on medallion.com. That covers our second quarter results. We are now happy to answer any questions you may have.

[Operator]

We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you're using a speakerphone, please pick up your handset pressing the key. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question is from Ken Kohut, Raymond James. Please go ahead.

[Ken Kohut, Analyst at Raymond James]

Hey, good morning, guys. Thanks for taking my questions.

[Andrew Murstein, President and CEO at Medallion Financial]

Hi, Ken.

[Ken Kohut, Analyst at Raymond James]

Yeah, hi. Good morning. Starting out with loans. I know you guys have been pretty optimistic with loan growth and balance sheet growth going forward, this level this quarter was really impressive. I'm just trying to get a sense to how sustainable this level is going forward.

[Andrew Murstein, President and CEO at Medallion Financial]

Yeah, no, we were quite happy with the loan origination volumes this quarter, and we do think that they're sustainable. We would expect there to be continued seasonality like we've seen it. Q2 and Q3 are going to be our stronger origination months. Particularly with home improvement, there's just a huge ecosystem of loans to be done, and we're a growing but still a small player in that space. We feel really good about that.

[Ken Kohut, Analyst at Raymond James]

Awesome. Maybe sticking with home improvement, as you know, is really strong growth. I'm just wondering if the recent EnerBank and Regions hires that you guys made kind of contributed to that outsized growth and if they're gaining traction.

[Andrew Murstein, President and CEO at Medallion Financial]

Yes, they have. We really brought over a great person from EnerBank. As you know, EnerBank sold to Regions, and I think they sold for two and a half or three times book value. That often happens with mergers and acquisitions, that the smaller bank usually allow their people leave after the deal's done. The atmosphere is different. The culture is different. They want more of a growing, smaller, more energetic company, perhaps. That's what we've found. These people have done a great job for us. We're actually bringing over some more of them in the coming weeks.

[Ken Kohut, Analyst at Raymond James]

Awesome. That's good to know. Maybe if I could sneak one more in. Looks like you guys recognized some gains on the sale of recreation loans. Just wondering if you can provide maybe a little bit of color there. What was the balance of the loans sold? What drove the decision to sell? Maybe pricing and demand from the buyers? That'd be great. Thanks.

[Andrew Murstein, President and CEO at Medallion Financial]

Justin, who's Medallion Bank CEO, is on the call. Justin, you want to jump in on that?

[Justin Haley, President and CEO at Medallion Bank]

Sure. Hi, Ken. About $50 million sold, we're seeing plenty of demand for that. Good economics on it. We would anticipate, as we're growing at the pace we're growing in order to manage our capital effectively, that we'll have periodic sales. We'd like it to be consistent.

[Anthony Cutrone, EVP and CFO at Medallion Financial]

I would just add that.

[Ken Kohut, Analyst at Raymond James]

Awesome. Thanks.

[Anthony Cutrone, EVP and CFO at Medallion Financial]

Despite that portfolio sale, we still grew in the quarter 5% recreation loans. This didn't hinder our ability to grow. We see this as a good outlet, not just to generate more recurring earnings, but also an outlet for these originations that we seem to be lucky to have.

[Ken Kohut, Analyst at Raymond James]

Great. Thanks for taking my questions.

[Andrew Murstein, President and CEO at Medallion Financial]

Thank you, Ken.

[Operator]

The next question from Mike Grondahl, Northland Securities. Please go ahead.

[Analyst at Northland Securities]

Hey. Morning, guys. This is Logan on for Mike. Thanks for taking our question.

[Anthony Cutrone, EVP and CFO at Medallion Financial]

Hey, Logan.

[Analyst at Northland Securities]

First one from us. Hey, guys. Can you just dig in a little bit about how you are feeling about current credit trends and your outlook for credit in the second half of 2026?

[Anthony Cutrone, EVP and CFO at Medallion Financial]

Sure. I think we're feeling positive about credit, particularly home improvement. I mean, charge-offs have come in sizably and performed much better than they have maybe a year ago. We're optimistic about that. Rec is still elevated, but it's not ticking up. It did come in as expected from Q1. I think we look good. The economy's going to dictate to a larger extent where we end up. I think the changes we made in terms of pricing that we spoke about last quarter on recreation loans should, over time and in the coming quarters, produce a better charge-off ratio, which for us is going to produce a better charge-off adjusted NIM.

[Analyst at Northland Securities]

Got it. Originations were pretty robust across rec and home improvement. Granted, 2Q is seasonally a strong quarter, can you guys just go a little deeper talking about the underlying drivers of this growth for each segment?

[Andrew Murstein, President and CEO at Medallion Financial]

Justin, you want to jump in again?

[Justin Haley, President and CEO at Medallion Bank]

Yeah. Hi, Logan. It's two different stories in the recreation business. If you think of our recreation business, it's got a couple components to it. The one we talk about most is our non-prime business, which is near prime and sub-prime originations for RV and marine buyers. In that business, as Anthony mentioned, we took a look at where we fell in the waterfall. As a second-look lender, we're not going to be at the top of the waterfall, where we fall in the waterfall comes down to how competitive we are. We chose to be a little more competitive, and you're seeing the result of that in volume in the year. We also have what we call prime niche businesses. They're small market businesses that allow us to originate some volume.

[Justin Haley, President and CEO at Medallion Bank]

We met with and engaged with some of our larger relationships there and modified the programs, not by modifying credit, but by modifying delivery and how we price in order to ensure that we met their needs and we could win more often. That's rec. In home improvement, as mentioned before, we have new talent in the team. You'll see this quarter we went from 700 contractors to 800 active contractors. Our marketing engine has stood up. We do expect to have better contractor acquisition going forward and to continue that growth. For the volume today, it's like rec. We're leaning into our existing relationships and asking them how we can win. They're telling us, and then we're making the modifications to win. We do think this is all sustainable.

[Analyst at Northland Securities]

Thank you. That was very helpful and impressive numbers in 2Q. One last one from us. We have been calling out 2026 as the year of investing in the business. Can you guys provide an update on how those investments are going so far and what still needs to be done?

[Justin Haley, President and CEO at Medallion Bank]

I'll jump into this one as well.

[Andrew Murstein, President and CEO at Medallion Financial]

You're doing a good job, Justin. Keep going.

[Justin Haley, President and CEO at Medallion Bank]

Thank you. The investments thus far We made some technology investments in 2025. In 2026, right now we're focused a lot on bringing talent into the bank, because we have the platform in place, we just need more talent to be able to leverage it effectively. We mentioned marketing already. We've brought in some technology talent. We're adding analytics talent, both data analytics and credit analytics. We're also bringing folks into our collection and recovery area, not because we're intending to replace our long-term servicer, SST, but because we want to supplement them where we can do better. Looking forward, the next big shift will be a replacement of our loan origination system, which is anticipated to be done in Q1 2027, before our busy season.

[Justin Haley, President and CEO at Medallion Bank]

Once that happens, that unlocks the ability for us to roll out new credit scoring models, including the addition of some alternative data into our credit underwriting. The whole purpose of that is to ensure that we're underwriting with a level of sophistication that befits a three, four, five billion dollar bank.

[Analyst at Northland Securities]

Got it. Thank you guys, and congrats on the quarter.

[Andrew Murstein, President and CEO at Medallion Financial]

Thank you.

[Operator]

The next question from Manuel Navas, Piper Sandler. Please go ahead.

[Manuel Navas, Analyst at Piper Sandler]

I appreciate a lot of the commentary on expenses. Wondering, could you quantify the benefit from the headquarter move? You just talked about these investments. How does that all fit in with the forward trajectory of expense growth?

[Andrew Murstein, President and CEO at Medallion Financial]

I'd say for the headquarters, we moved to about half the space that we had. A lot of our old space was pricey and was for the Medallion business, and that's down to virtually zero today. We're probably saving about, I don't know, $500,000 or so a year. We reduced our cost by about 30%. Over the life of the new deal, you're probably talking about $5 million of savings. We're definitely happy with that. Anthony could touch base on the other point.

[Anthony Cutrone, EVP and CFO at Medallion Financial]

Yeah. In terms of operating costs, as we continue to grow, obviously our costs are going to grow with that. As Justin mentioned, we're committed to developing and bringing in the right talent. That's going to come at a cost. That's going to allow us to grow, but grow prudently, grow with loans that we want to hold, that are going to perform better in different cycles.

[Manuel Navas, Analyst at Piper Sandler]

I appreciate that. I hear you on this quarter being a really strong origination quarter. You've talked about mid-teens loan growth. Is there any shift for the full year given how strong this quarter was?

[Anthony Cutrone, EVP and CFO at Medallion Financial]

I think that's still what we're targeting. Obviously, when we get to the latter part of Q3, things will start to slow to some extent, particularly in rec. I think what we were expecting is still what we're expecting.

[Manuel Navas, Analyst at Piper Sandler]

Okay. I know that gains on equity investments is pretty lumpy. Is there any sight line to anything in the back half of the year, or is it too soon to tell?

[Anthony Cutrone, EVP and CFO at Medallion Financial]

It's too soon to tell. We're not aware of anything. There's one or two portfolio companies where there's talk of them exiting. We don't count those chips until it's paid out. There's just too much volatility in that space surrounding these exits. We continue to hold these at cost, and then less impairment if there is some. When there's an exit and we get real cash, then we recognize the gain.

[Manuel Navas, Analyst at Piper Sandler]

Just my last one here. Buyback pace was quite impressive. What's the appetite to continue? What's the capacity to continue? Where does it fit in with your capital deployment priorities?

[Andrew Murstein, President and CEO at Medallion Financial]

We're a fan of buybacks, especially when you can buy a company back at below book value and a very low price to earnings as well. They're obviously very accretive when we do that. We announced a $40 million buyback several years ago. I think we're down to about $6 million left. The hope, well, it depends what happens to the share price. I expect us to probably finish that within the next six months.

[Manuel Navas, Analyst at Piper Sandler]

Reload?

[Andrew Murstein, President and CEO at Medallion Financial]

Yes. I think we'd reload and put a new plan in place. We look at growth dividends and buybacks, we're actually in a very good position these days. We're able to do all three very effectively. I don't think one has to come at the expense of the other. I think we could do all three.

[Anthony Cutrone, EVP and CFO at Medallion Financial]

Yeah. I think just those three that Andy mentioned, growth, dividends, buybacks. We look at all of them as shareholder return. Growth, just our type of business, the way we view our business, we think that's just as important, if not more important, than dividends and buybacks. Allocating to that and then opportunistically being in the market when we're not getting the valuation we know exists, is also important.

[Manuel Navas, Analyst at Piper Sandler]

Thank you for the commentary.

[Andrew Murstein, President and CEO at Medallion Financial]

Thank you.

[Anthony Cutrone, EVP and CFO at Medallion Financial]

I think we had a couple of questions came in from Christopher Nolan of Ladenburg Thalmann, that he's on the call, but he's having some issues with his microphone. We just wanted to go through those. He asked if there were any non-recurring items affecting the second quarter earnings. Professional fees were slightly elevated because of this year's proxy. That was probably $0.01 or $0.02 when it hit the bottom line. Other than that, we don't view anything in this quarter as significant non-recurring. A year ago, we had a pretty sizable equity gains. We had a small amount of equity gains, that's all part and parcel to our business, but we don't see that as being outliers. The gain on the recreation loans was about $1,000,003. Again, we expect to have more of those on a recurring basis.

[Anthony Cutrone, EVP and CFO at Medallion Financial]

Maybe not every quarter, but on a more frequent basis, just given our origination platforms and where that's going. From our perspective, this was a fairly clean quarter. The one thing that we talk about internally and we think is important and spoke about it just a few minutes ago, is that with growth comes a significant amount of penalty in terms of that day one provision on the rec portfolio. That was $6.5 million of additional provision because of the growth. It's in our best interest to grow. It's in the shareholders' best interest for us to grow. We'll continue to have those penalties to the extent we grow. That translates into real earnings down the line. One other question from Chris Nolan was asking about the buybacks and what the impact was to EPS.

[Anthony Cutrone, EVP and CFO at Medallion Financial]

The buybacks occurred throughout the quarter, and the way dilution works is, it's a weighted average outstanding shares throughout the quarter. We had about a $0.01 benefit. That benefit will be higher in Q3 when we get the full benefit of the weighted average reduced share count. We are happy about that.

[Operator]

As a reminder, if you wish to register for questions, please press star and one on your telephone. There are no more questions registered. This concludes our Q&A session. I would like to turn the conference back over to Andrew Murstein for any closing remarks. Thank you.

[Andrew Murstein, President and CEO at Medallion Financial]

Thank you. In closing, I just want to highlight what a strong growth quarter this was. We delivered one of our highest loan volume quarters on record, reflecting exceptional demand for our products and the success of our team's origination efforts. We're excited about the underlying business momentum and confident the strong volume positions us well for solid returns ahead. We are very pleased with our performance and where things stand halfway through the year. We have a very bright future in front of us. We're always accessible, please don't hesitate to reach out with any questions or thoughts. Thank you all for your continued support. We look forward to updating you on our progress next quarter. I hope you have a great rest of your day.

[Operator]

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Ken Cooper, Investor Relations
• Andrew Murstein, President and CEO
• Anthony Cutrone, EVP and CFO

Analysts

• Ken Kohut, Analyst at Raymond James
• Justin Haley, President and CEO at Medallion Bank
• Analyst at Northland Securities
• Manuel Navas, Analyst at Piper Sandler