Medallion Financial Corp. Q4 FY2025 earnings call

• 2025 was a record year with solid performance across core metrics. Total loans $2,567,000,000, Q4 originations $421,000,000, full-year $1,500,000,000. • Consumer lending anchors performance with growth in interest income. Direct and home improvement loan books have specific details on size, originations, delinquencies. • Commercial segment had equity gains and specific originations and portfolio details. • Strategic partnership program had record Q4 originations. • CEO transitioned on Jan 31, 2026, with 2026 strategy focused on growing core business lines like recreation, home improvement, and commercial lending, and expanding strategic partnership program.

Consumer lending is the largest and most profitable business line. Interest income for consumer lending was $74,500,000 for the quarter and $289,900,000 for the year, growing 5% and 8% respectively. Direct loan book grew 5% to $1,600,000,000 (63% of total loans) with Q4 originations at $97,200,000 and interest income up 6%. Home improvement loan book was $810,200,000 (32% of total loans) with Q4 originations at $61,700,000. Commercial segment had Q4 new originations of $4,100,000 vs $7,300,000 same quarter prior, full-year originations $40,600,000 vs $14,300,000 in 2024. Portfolio increased to $123,100,000. Legacy taxi medallion business collected $2,500,000 in Q4 with net recoveries/gains of $1,400,000, full-year collected $13,600,000 with net recoveries/gains of $4,600,000.

• Expect mid-teens growth in loan book in 2026 with put-on costs for booking allowances. • Net interest income growth expected to outpace operating cost growth in long term. • 2026 strategy focused on building on strong foundation and refining strategic priorities with growth in core business lines and strategic partnership program.

• Market conditions may evolve which could impact performance. • Credit performance could be affected by economic dynamics and borrower behavior. • Unpredictable timing of exits for equity investments. • Potential changes in regulatory environment affecting business operations.

Q: How to characterize the provision expense increase and normalized provision in 2026?

A: Provision increase due to moving rec loans from held for sale to held for investment, step up in allowance coverage, commercial provisions, and taxi medallion benefits. Normalized provision expected to be less than $27,700,000 with mid-teens loan book growth in 2026.

Q: Nature of equity gains and other income?

A: Equity gains from over a half dozen changes in equity holdings. Other income included significant CRA investment related income.

Q: Growth outlook for home improvement?

A: Added talent to support growth, expecting mid-teens growth, portfolio has strong credit quality.

Q: Reserve increase driver and reserve ratio outlook in 2026?

A: Reserve increase driven by CECL, economic factors, and historical charge-off experience. No significant expected change in reserve ratio but allowance will grow with loan book growth.

Q: Charge-offs and rec origination slowdown?

A: Net charge-offs in home improvement 1.07%, rec portfolio 4.41% (held for investment 4.53%). Originations in rec may slow due to rate adjustments to improve credit performance.

Q: Potential for acquisitions or sale?

A: No top of mind acquisitions, potential for sale exists but no immediate plans, EnerBank sale as an example of potential premium.