Medallion Bank posted record profits in 2022 as the bank grew its recreational loan portfolio.
The bank reported record full-year net income of $74.6 million, up 6.6% from 2021. Net income in the fourth quarter was $19.7 million, up 3.7% from the fourth quarter of 2021.
“We had another tremendous year. We closed out 2022 with record annual net income driven by growth in our recreation and home improvement lending segments,” Medallion Bank President and CEO Donald Poulton said. “In the fourth quarter, net income was a record high even with recreation loan demand and loan loss provisions continuing to move toward historical levels.”
The record profits came as Medallion Bank increased its provisions for loan losses, in the fourth quarter and for the full year. The bank set aside $8.4 million in the fourth quarter for loan losses, more than five times the $1.6 million set aside in the fourth quarter of 2021. A total of $7.3 million of the fourth-quarter provision came in the recreation loan segment.
Although the bank increased provisions for potential loan losses, default rates remained low throughout 2022. Total net charge-offs for Medallion Bank’s portfolio were 1% in 2022, down from a 1.2% rate in 2021. Charge-offs did rise in the fourth quarter, however.
The annualized net charge-offs rate in the fourth quarter was 1.7% compared with 0.3% in the fourth quarter of 2021. In the recreation lending segment, the fourth-quarter net charge-offs rate climbed to 2.4%, up from 1% in the fourth quarter of 2021.
The recreation lending segment’s portfolio grew 22.6% in 2022 to $1.2 billion, compared with 2021. Recreation loans comprised 64.9% of the bank’s loans receivable, down slightly from 68.2% of the 2021 loans receivable.
The bank had $2 billion in total assets under management at the end of 2022.
“We believe our culture, our team and our superior customer service model have positioned us well for the coming year,” Poulton said.
