Michael Grondahl's questions to Medallion Financial Corp (MFIN) leadership • Q1 2025
Question
Michael Grondahl from Northland Securities asked for guidance on calculating normalized earnings by adjusting for one-time items, the timing and potential premium on the sale of loans held for sale, details on the strategic partnership program's loan categories and fees, and the outlook for net interest margin and total loan growth. He also requested clarification on the net charge-off figures for the recreation loan portfolio.
Answer
CFO Anthony Cutrone provided a path to normalized earnings, suggesting the $0.50 EPS would adjust to approximately $0.35 after removing the equity gain and considering non-recurring provisions and costs. He confirmed a loan sale is expected in Q2 at a ~2.5% gain, with another to follow in Q3 or Q4. Executive Andrew Murstein added that a $53 million sale had just closed. Murstein described the strategic partnerships as durable and growing, with fees ranging from 15 to 65 basis points. Cutrone projected that the net interest margin would remain stable and guided for 5-7% total loan growth for the year, contingent on economic conditions. He also clarified the recreation portfolio's net charge-offs were $16.4 million, or 4.67%.