Medallion's Credit Provision Jumps as Originations Cool

The Tip Desk · October 29, 2026 · 4 min read

Net income attributable to stockholders fell to $2.4 million, or $0.10 a share, as the credit loss provision rose to $30.8 million.

Medallion Financial Corp. (MFIN), a specialty finance company that originates and services consumer and commercial loans, reported net income attributable to stockholders of $2.4 million, or $0.10 a share, for the quarter ended September 30, 2026, down from $7.8 million, or $0.32 a share, a year earlier.

The credit loss provision rose to $30.8 million from $18.6 million a year earlier. The company said the current-quarter provision included about $5.6 million of allowance tied to consumer loan growth, compared with $1.9 million a year earlier. President and Chief Executive Officer Andrew Murstein said growth at those levels requires large upfront day-one provisions, which he said reduced earnings significantly and were a large part of the decrease from the prior year.

Net interest income rose 5% to $58.4 million from $55.7 million a year earlier. Net interest margin was 7.34%, compared with 8.21% a year earlier. That 5% year-over-year increase followed 7% growth to $57.2 million in the second quarter and 5% growth to $54.1 million in the first quarter.

Loan originations grew 41% to $603.9 million from $427.4 million a year earlier, after 63% growth to $611.6 million in the second quarter and 34% growth to $376.9 million in the first quarter. The total loan portfolio was $2.936 billion as of September 30, 2026, up 15% from $2.559 billion a year ago. Total assets were $3.361 billion, up from $2.900 billion a year earlier.

Home improvement was the fastest-growing book. Originations were $146.3 million, up 145% from $59.7 million a year earlier. Home improvement loans grew 18% to $947.5 million, or 32% of total loans, from $804.0 million, or 31%, a year ago. Interest income on home improvement loans grew 5% to $21.4 million. The weighted average interest rate was 9.52% at quarter-end, compared with 9.87% a year ago. Loans 90 days or more past due were $1.7 million, or 0.18% of gross home improvement loans. The allowance for credit losses on home improvement loans was 2.59%.

Recreation originations were $198.2 million, up 40% from $141.7 million a year earlier. Recreation loans, including loans held for investment and held for sale, grew 16% to $1.853 billion, or 63% of total loans, from $1.603 billion, or 63%, a year ago. Interest income grew 14% to $61.0 million. The weighted average interest rate was 15.01% at quarter-end, compared with 15.17% a year ago. Recreation loans 90 days or more past due were $11.9 million, or 0.66% of gross recreation loans, compared with $8.9 million, or 0.57%, a year ago. The allowance for credit losses on recreation loans was 5.30%.

Commercial loans declined to $118.7 million from $135.1 million a year earlier. Commercial interest income fell to $3.2 million from $4.2 million a year earlier.

Strategic partnership originations were $259.4 million, up 25% from $208.4 million a year earlier. Partnership fees fell to $0.8 million from $1.0 million a year earlier. In September 2026, rFinance Credit Company, the finance affiliate of Renewal by Andersen, was added as the sixth partner.

The company collected $1.7 million of cash on taxi medallion-related assets, resulting in net recoveries and gains of $1.1 million. Total net taxi medallion-related assets declined to $3.0 million, a 42% reduction from a year ago, and represented less than 0.1% of total assets.

Cash and cash equivalents, including investment securities, were $306.9 million as of September 30, 2026, compared with $212.1 million a year earlier. Net book value per share was $17.73, compared with $17.07 a year ago.

The company repurchased 483,871 shares at an average cost of $11.48 for $5.6 million in the quarter. It subsequently used the remaining $1.2 million of a $40 million program and, on October 27, 2026, the board approved a new $40 million stock repurchase program. The quarterly cash dividend remained $0.14 a share.

Murstein said the company raised an additional $55 million of preferred stock at Medallion Bank through a reopening of Series G preferred stock and that it repurchased $15 million of trust preferred securities in October at a discount, which he said will result in a gain on extinguishment in the fourth quarter.