Segment Reporting

3 Months Ended

Mar. 31, 2025

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 to finance RVs, boats, collector cars, and other consumer recreational equipment, of which RVs, boats, and collector cars make up 55%, 19%, and 11% of the segment portfolio, with no other product lines at or above 10%, as of March 31, 2025. 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, 2025. 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 35%, 29%, and 13% of total home improvement loans outstanding, and with no other product lines at or above 10% as of March 31, 2025. The highest concentrations of home improvement loans are in Florida and Texas at 13% and 11% of loans outstanding, with no other states at or above 10% as of March 31, 2025. The commercial lending segment focuses on serving a wide variety of industries, with concentrations in manufacturing, construction, and wholesale trade making up 58%, 13%, and 12% of the loans outstanding as of March 31, 2025, with no other product lines exceeding 10% as of March 31, 2025. The commercial lending segment invests across the United States with concentrations in California and Illinois having 31% and 10% of the segment portfolio, with no other states having a concentration at or above 10% as of March 31, 2025. 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, 2025.

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, goodwill, and other corporate elements. The Company allocates portions of centrally incurred costs inclusive of overhead and interest expense formulaically based upon overall capital allocated to the lending segments.

As part of segment reporting, capital ratios for all operating segments have been normalized as a percent 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 Company's chief operating decision maker (CODM) is a group comprised of the Chief Executive Officer, Chief Financial Officer, President, Chief Operating Officer, and other senior members of management. The CODM primarily uses segment information to identify areas to improve efficiency of resources allocation, determine where to reinvest profits, and minimize unnecessary expenses. The CODM assesses segment performance mainly through selected financial ratios such as returns on average assets and net interest margin, which identifies areas requiring action.

The following table presents segment data as of and for the three months ended March 31, 2025.

Three Months Ended March 31, 2025	Consumer Lending
(Dollars in thousands)	Recreation			Home Improvement			Commercial Lending			Taxi Medallion Lending			Corporate and Other Investments			Consolidated
Total interest income	$	50,466		$	19,771		$	3,343		$	80		$	1,765		$	75,425
Total interest expense		12,041			6,964			1,053			12			3,943			24,013
Net interest income (loss)		38,425			12,807			2,290			68			(2,178	)		51,412
Provision (benefit) for credit losses		16,870			2,845			3,114			(815	)		—			22,014
Net interest income (loss) after credit loss provision		21,555			9,962			(824	)		883			(2,178	)		29,398
Other income, net		400			2			9,642			844			711			11,599
Operating expenses		(9,964	)		(4,984	)		(1,473	)		(983	)		(3,354	)		(20,758	)
Net income (loss) before taxes		11,991			4,980			7,345			744			(4,821	)		20,239
Income tax (provision) benefit		(3,977	)		(1,652	)		(2,436	)		(247	)		1,599			(6,713	)
Net income (loss) after taxes	$	8,014		$	3,328		$	4,909		$	497		$	(3,222	)	$	13,526
Income attributable to the non-controlling interest																	1,512
Total net income attributable to Medallion Financial Corp.																$	12,014
Balance Sheet Data
Total loans, gross (1)	$	1,545,844		$	812,381		$	116,059		$	1,650		$	10,499		$	2,486,433
Total assets		1,495,150			795,868			109,565			6,855			440,300			2,847,738
Total funds borrowed		1,229,818			654,632			90,121			5,638			362,164			2,342,373
Selected Financial Ratios
Return on average assets		2.17	%		1.68	%		18.45	%		30.14	%		(2.94	)%		1.93	%
Return on average stockholders' equity	*			*			*			*			*				12.96
Return on average equity		13.37			10.33			113.46			185.45			(18.04	)		12.32
Interest yield		13.27			9.78			12.05			19.12		NM				11.65
Net interest margin, gross		10.10			6.33			8.25			16.25		NM				7.94
Net interest margin, net of allowance		10.59			6.50			8.71			21.87		NM				8.25
Reserve coverage (2)		5.00			2.49			7.04			23.32		NM				4.25
Delinquency status (3)		0.48			0.19			17.63			—		NM				1.20
Charge-off (recovery) ratio (4)		4.67			1.55			0.47			(157.97	)	NM				3.10

(1) Inclusive of recreation and strategic partnership loans held for sale, at lower of amortized cost or fair value.

(2) Allowance for credit loss as a percent of gross loans held for investment and excludes loans held for sale.

(3) Loans 90 days or more past due as a percent of total loans.

(4) Charge-off ratio in the recreation lending segment was 4.32% when including loans held for sale.

(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, 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 credit loss provision		17,252			10,915			2,331			1,056			(838	)		30,716
Other income, net		250			2			4,202			639			310			5,403
Operating 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, gross	$	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 (1)		4.40			2.38			4.11			42.19		NM				3.76
Delinquency status (2)		0.48			0.18			7.80			—		NM				0.74
Charge-off (recovery) ratio (3)		4.36			2.12			(0.07	)		(101.47	)	NM				3.20

(1) Allowance for credit loss as a percent of gross loans held for investment and excludes loans held for sale.

(2) Loans 90 days or more past due as a percent of total loans.

(3) Net charge-offs as a percent of annual average total gross loans.

(NM) Not meaningful.

(*) Line item is not applicable to segments.