Key Highlights

  • Net income attributable to stockholders was $2.4 million, or $0.10 per share, against $7.8 million, or $0.32, a year earlier.
  • Loan originations grew 41% to $603.9 million from $427.4 million.
  • Net interest income rose 5% to $58.4 million, while net interest Margin narrowed to 7.34% from 8.21%.
  • The Credit loss provision was $30.8 million, compared with $18.6 million in the prior year quarter.
  • The board approved a new $40 million stock repurchase program after quarter end.

Earnings fall even as the Loan book expands

Medallion Financial (NASDAQ:MFIN) is a specialty finance company that originates and services consumer and commercial loans and offers loan origination services to Fintech partners. On October 29, 2026, it reported results for the quarter ended September 30, 2026.

Net income attributable to stockholders was $2.4 million, or $0.10 per diluted share, down from $7.8 million, or $0.32, in the third quarter of 2025. Income before taxes was $7.1 million, compared with $19.5 million a year earlier.

For the nine months, Net Income attributable to the company was $14.8 million, or $0.61 per diluted share, versus $30.8 million, or $1.28.

Day-one provisions weigh on profit

The provision for credit losses was $30.8 million, up from $18.6 million. About $5.6 million of the current quarter charge related to allowance build tied to consumer loan growth, compared with $1.9 million in the prior year period. On a calculated basis, the provision absorbed roughly 53% of net interest income, versus about 33% a year ago.

CEO Andrew Murstein said growth at these levels requires large upfront day-one provisions, which reduced Earnings significantly. Recreation loans 90 days or more past due were 0.66% of gross recreation loans, versus 0.57% a year ago.

Recreation and home improvement lead the originations surge

Total originations reached $603.9 million, including $259.4 million from strategic partnerships. Recreation originations were $198.2 million, up 40%, and home improvement originations were $146.3 million, up 145% from $59.7 million.

Recreation loans grew 16% to $1.853 billion, or 63% of the portfolio, with a weighted average FICO score of 683. Home improvement loans grew 18% to $947.5 million with a FICO score of 768.

The total loan portfolio was $2.936 billion, up 15%, while commercial loans declined to $118.7 million from $135.1 million.

Margin compression and higher costs

Net interest income rose 5% to $58.4 million, but net interest margin was 7.34%, compared with 8.21%. Average Yield on loans fell to 11.87% from 12.39%, while the cost of interest-bearing liabilities rose to 4.45% from 4.28%.

Total other expenses were $24.0 million versus $20.7 million, an increase of about 16% on a calculated basis. Loan Servicing fees rose to $4.0 million from $2.9 million.

Balance sheet, preferred raise and buybacks

Total Assets reached $3.36 billion, against $2.96 billion at December 31, 2025. Net Book Value per share was $17.73 versus $17.07 a year ago. Non-controlling interest rose to $151.3 million from $99.4 million after Medallion Bank reopened its Series G Preferred Stock to raise $55 million.

The company repurchased 483,871 shares at an average cost of $11.48 for $5.6 million and paid a quarterly Dividend of $0.14 per share. In October, it also repurchased $15 million of trust preferred securities at a discount, which should produce a fourth quarter gain.

What to watch after a provision heavy quarter

The central question is whether the loans added this quarter convert into earnings once the upfront provisions are absorbed. Investors tracking the name will likely watch whether net interest margin stabilizes near 7.34%, how delinquencies in recreation lending trend, and how quickly home improvement Volume keeps scaling.

Taxi medallion exposure is now minor, with net assets of $3.0 million, under 0.1% of total assets.