Medallion Financial (MFIN) Summer 2024 Investor Summit Virtual-MicroCap Forum summary

Strategic evolution and business highlights

• Achieved key milestones: public listing, diversification, and bank establishment since 1990.

• Diversified from taxi medallion lending to consumer and commercial lending, with taxi loans now under 0.5% of assets.

• Bank maintains a 15% Tier 1 leverage ratio and has been profitable every year since inception.

• Consumer lending portfolio stands at $1.5 billion, with strong quarterly originations and high FICO scores.

• Commercial lending focuses on mezzanine loans with equity components, yielding 15-17% annually.

Portfolio composition and credit quality

• 95% of loans are consumer loans, mainly recreation and home improvement, driving net interest income.

• Recreation loans average $20,000, with a current FICO of 685, up from 642 six years ago.

• Home improvement loans are super prime, averaging a 764 FICO.

• Net charge-offs have normalized to pre-pandemic levels at 2.47% in the most recent quarter.

• Commercial portfolio is $110 million, focused on PE-backed companies with minority equity stakes.

Financial performance and growth outlook

• Loan portfolio grew 94% since 2020, with a 21% compound annual growth rate.

• Net interest margin is 8.12%, with net income of $7.1 million and $0.30 per diluted share in Q2.

• Cost of funds increased from 2% to 3.8% since 2022, but higher origination rates offset margin compression.

• Origination rates for recreation and home improvement loans now exceed portfolio averages.

• Growth is expected to moderate to high single digits annually going forward.