Medallion Financial posts $2.4 million profit as loan originations rise 41%
Key Facts
Medallion Financial said net income attributable to shareholders was $2.4 million, or $0.10 per share, for the quarter ended September 30, 2026, compared with $7.8 million, or $0.32 per share, a year earlier. Profit declined as loan originations rose 41% to $603.9 million from $427.4 million in the year-ago quarter. The CEO said day-one provisions associated with the expansion were a key factor in the lower profit. Net interest income increased 5% to $58.4 million from $55.7 million. But the net interest margin fell to 7.34% from 8.21%, reflecting mixed income indicators during the quarter. The company said its results included growth in lending across its segments, alongside higher credit loss provisions.
The total loan portfolio was $2.936 billion at September 30, up 15% from $2.559 billion a year earlier. Assets rose to $3.361 billion from $2.900 billion on the same date in 2025. Home improvement loan originations were $146.3 million during the quarter, up 145% from $59.7 million a year earlier. The segment's portfolio totaled $947.5 million, an 18% year-over-year increase. This distinction puts quarterly originations growth in context, separately from the size of the outstanding portfolio. The company said recreational loan originations rose 40% to $198.2 million from $141.7 million, while the portfolio of these loans totaled $1.853 billion, up 16%.
The provision for credit losses rose to $30.8 million in the third quarter, compared with $18.6 million in the year-ago period. The provision included about $5.6 million related to increased provisions for consumer loan losses as lending grew, versus $1.9 million a year earlier. The CEO linked the effect of expansion on profit to what he described as provisions recorded when loans are originated. He said: "These day-one provisions account for a significant portion of the decline in profit this quarter compared with the prior year." This sets loan originations and portfolio growth against a higher credit cost during the period. It also shows the gap between higher net interest income and a bottom line below last year's level.
On capital, net book value per share was $17.73 at September 30, compared with $17.07 a year earlier. The company repurchased 483,871 shares during the quarter at an average cost of $11.48 per share, for a total of $5.6 million. After exhausting the remainder of its previous program, the board approved a new $40 million share repurchase program on October 27, after the quarter ended. The company also announced a quarterly cash dividend of $0.14 per share. The dividend will be paid on November 19 to shareholders of record as of the close of trading on November 9, 2026. The company also said Medallion Bank raised an additional $55 million in preferred stock, with the capital expected to be deployed in consumer loans over the coming quarters.
Medallion Financial shares closed at $11.52 on October 28, 2026. The company scheduled a call to discuss its third-quarter results for Friday, October 30, at 9:00 a.m. Eastern time. The call follows the announcement of the new repurchase program and quarterly dividend, alongside results for the period ended in September. The company is expected to discuss the figures in its statement during the call. The timing gives investors an opportunity to hear management's explanations of profit, credit provisions and lending growth. The reported operating figures relate to the third quarter, while the new repurchase program was approved in October.