Basis of Presentation

The consolidated financial statements include the accounts of the Company and all of its wholly-owned and controlled subsidiaries. All significant intercompany transactions, balances, and profits (losses) have been eliminated in consolidation.

The consolidated financial statements have been prepared in accordance with GAAP. The Company consolidates all entities it controls through a majority voting interest, a controlling interest through other contractual rights, or as being identified as the primary beneficiary of variable interest entities, or VIEs. The primary beneficiary is the party who has both (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance, and (2) an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity. For consolidated entities that are less than wholly owned, the third-party’s holding is recorded as non-controlling interest.

Fair Value of Assets and Liabilities

The Company follows the Financial Accounting Standards Board, or FASB, FASB Accounting Standards Codification, or ASC, Topic 820, Fair Value Measurements and Disclosures, or FASB ASC 820, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. FASB ASC 820 defines fair value as an exit price (i.e. a price that would be received to sell, as opposed to acquire, an asset or transfer a liability), and emphasizes that fair value is a market-based measurement. It establishes a fair value hierarchy that distinguishes between assumptions developed based on market data obtained from independent external sources and the reporting entity’s own assumptions. Further, it specifies that fair value measurement should consider adjustment for risk, such as the risk inherent in the valuation technique or its inputs. See also Notes 13 and 14 to the consolidated financial statements.

Investment Securities

The Company follows FASB ASC Topic 320, Investments – Debt Securities, or ASC 320, which requires that all applicable investments in debt securities be classified as trading securities, available-for-sale securities, or held-to-maturity securities. Investment securities are purchased from time-to-time in the open market at prices that are greater or lesser than the par value of the investment. The resulting premium or discount is deferred and recognized using the interest method. ASC 320 further requires that held-to-maturity securities be reported at amortized cost and available-for-sale securities be reported at fair value, with unrealized gains and losses excluded from earnings at the date of the consolidated financial statements, and reported in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity, net of the effect of income taxes, until they are sold. At the time of sale, any gains or losses, calculated by the specific identification method, will be recognized as a component of operating results and any amounts previously included in stockholders’ equity, which were recorded net of the income tax effect, will be reversed. In accordance with ASC 326, the Company does not maintain an allowance for credit losses for accrued interest receivable.

For available-for-sale debt securities in an unrealized loss position, the Company first determines if it intends to sell the security, or if it is more likely than not that the Company will be required to sell it before recovering its amortized cost basis. If either condition is met, the security’s amortized cost basis is written down to its fair value through earnings. If neither condition is met, the Company assesses whether the decline in fair value is the result of credit losses or other factors. This assessment includes reviewing changes in the rating of the security by a rating agency, increases in defaults on the underlying collateral, and the extent to which the securities are issued by the federal government or its agencies, including the amount of the guarantee issued by those agencies, among other factors. If a credit loss exists, the Company compares the present value of expected cash flows from the security to its amortized cost basis. If the present value is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded through earnings, but limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment not recorded through an allowance for credit losses is recognized in other comprehensive (loss) income, net of taxes.

Changes in the allowance for credit losses are recorded as a provision for, or reversal of, credit loss expense. Losses are charged against the allowance when management confirms the uncollectibility of an available-for-sale debt security or when either of the criteria regarding intent or requirement to sell is met. There were no investment securities allowance for credit losses as of December 31, 2025 and 2024.

Loans Held For Sale

Loans Held for Sale

Loans held for sale consist of consumer loans and strategic partnership loans intended to be sold in the secondary market. Loans held for sale are recorded at the lower of amortized cost or fair value. Changes in fair value are recognized in non-interest income. For loans transferred into the held for sale classification from the held for investment classification, any allowance for credit losses previously recorded is reversed at the transfer date, and the loans are transferred at their amortized cost basis (which is reduced by any previous charge-offs, but excludes any allowance for credit losses). For the years ended December 31, 2025 and 2024, the Company did not recognize any fair value adjustments related to loans held for sale.

Allowance for Credit Losses

The Company follows Accounting Standards Update, or ASU, 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments", or ASC 326, which requires recognition of lifetime expected losses using "reasonable and supportable" expectations about the future, referred to as the current expected credit loss, or CECL, methodology. For consumer loans, the Company uses historical delinquent loan performance, qualitative adjustments, and actual loss rates modified by quantitative adjustments based on macroeconomic factors over a twelve-month reasonable and supportable forecast period followed by a six month reversion period. For commercial loans, the Company assesses the historical impact that macroeconomic indicators have had on the loan portfolio, to determine an approximate allowance for credit loss. Unlike consumer loans, where loans may have similar performing characteristics, each commercial loan is unique. The Company evaluates each commercial loan for specific impairment with additional allowance for credit losses recognized as necessary. For taxi medallion loans, the Company individually evaluates each loan and establishes a reserve based on fair value of collateral less cost to sell.

The allowance is evaluated on a quarterly basis by management based on the collectability of the loans in light of historical experience, the nature and size of the loan portfolio, adverse situations that may affect the borrowers' ability to repay, estimated value of any underlying collateral, prevailing economic conditions, and excess concentration risks. This evaluation is inherently subjective, as it requires estimates, including those based on changes in economic conditions, that are susceptible to significant revision as more information becomes available. Credit losses are deducted from the allowance, and subsequent recoveries are added back to the allowance. The Company has elected to exclude accrued interest from its measurement of the allowance for credit losses.

Goodwill and Intangible Assets

Goodwill assets arose as a result of the excess of fair value over book value for several of our previously unconsolidated portfolio investment companies as of April 2, 2018. This fair value was brought forward under the Company's requirement to consolidate these previously unconsolidated subsidiaries and was subject to a purchase price accounting allocation process conducted by an independent third-party expert to arrive at the current categories and amounts. Goodwill is not amortized, but is subject to quarterly review by management to determine whether additional impairment testing is needed, and such testing is performed at least on an annual basis.

Through December 31, 2024, the Company evaluated goodwill for impairment on an annual basis at December 31 of each year or whenever events or changes in circumstances indicate the carrying value may not be recoverable. On October 1, 2025, the Company changed its annual goodwill impairment testing date from December 31 to October 1 to better align with the timing of its annual long-term planning process. This change was not material to the consolidated financial statements as it did not delay, accelerate, or avoid any potential goodwill impairment charge.

Other intangible assets with finite useful lives are amortized either on an accelerated or straight-line basis over their estimated useful lives. Other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

As of December 31, 2025 and 2024, the Company had goodwill of $150.8 million, all of which related to the recreation and home improvement lending segments. As of December 31, 2025 and 2024, the Company had intangible assets of $17.7 million and $19.1 million. The Company recognized $1.4 million of amortization expense on the intangible assets for the years ended December 31, 2025, 2024 and 2023.

Management engaged an independent third-party expert to perform a quantitative assessment of goodwill for impairment at October 1, 2025. The third-party expert’s assessment determined that it was more likely than not that the fair value of both the recreation lending and home improvement lending segments individually were not less than the carrying value of each of these segments. Based upon inputs and analysis deemed appropriate by the third-party expert, the third-party expert concluded that a fair value premium existed in excess of carrying value with respect to the recreation and home improvement lending segments.

In evaluating both segments, a combination of an income approach (weighted 50%), an earnings based market approach (weighted 25%), and a book value based market approach (weighted 25%) were employed by the third-party expert. For the income approach, a discounted cash flow analysis was used. Key inputs and assumptions used in the discounted cash flow analysis included future projected cash flows, risk-adjusted discount rates, capital requirements, and future economic and market conditions. For both segments a discount rate was estimated using the risk-free interest rate adjusted for specific risk and size premiums, resulting in a discount rate of 16.2% for each of the recreation and home improvement lending segments. For both segments, growth rates consistent with our plan were employed by the third-party expert for a five year period, and a long-term growth rate of 3% was utilized in determining the terminal fair value.

Determining the fair value of a lending segment or an indefinite-lived intangible asset involves the use of significant estimates and assumptions. The Company believes that the fair value estimates determined by the third-party expert were based on reasonable assumptions and appropriate for the purpose of assessing goodwill for impairment. However, as these estimates and assumptions are unpredictable and inherently uncertain, actual future results may differ from these estimates. In addition, the Company also makes certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of the Company’s reporting units. To the extent that the Company was unable to grow either the recreation lending or home improvement lending segment at the levels forecasted, if the Company were unable to issue new consumer loans at rates and terms consistent with current practices, and if the Company's cost of borrowings were to increase significantly from current levels without the ability to pass along those rate increases to new borrowers, the fair value of these segments could deteriorate to a level which would require an impairment of goodwill.

The table below presents the intangible assets as of the dates presented:


	December 31,
(Dollars in thousands)	2025		2024
Brand-related intellectual property	$	13,475	$	14,575
Home improvement contractor relationships		4,226		4,571
Total intangible assets	$	17,701	$	19,146

Fixed Assets

Fixed assets are carried at cost less accumulated depreciation and amortization, and are depreciated on a straight-line basis over their estimated useful lives of 3 to 10 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the estimated economic useful life of the improvement. Depreciation and amortization expense was $2.5 million, $0.7 million, and $0.4 million for the years ended December 31, 2025, 2024, and 2023.

Deferred Costs

Deferred financing costs represent costs associated with obtaining the Company’s borrowing facilities, and are amortized on a straight line basis over the lives of the related financing agreements and life of the respective pool. Amortization expense, included as interest expense in the Consolidated Statements of Operations, was $4.3 million, $4.0 million, and $3.1 million for the years ended December 31, 2025, 2024, and 2023. In addition, the Company capitalizes certain costs for transactions in the process of completion (other than business combinations), including those for potential investments, and the sourcing of other financing alternatives. Upon completion or termination of the transaction, any accumulated amounts will be amortized against income over an appropriate period, or written off. The amount on the Company’s balance sheet related to deposits and borrowing facilities were $8.4 million and $8.2 million as of December 31, 2025 and 2024, and there were no capitalized transaction costs as of December 31, 2025 and 2024.

Income Taxes

Income taxes are accounted for using the asset and liability approach in accordance with FASB ASC Topic 740, Income Taxes, or ASC 740. Deferred tax assets and liabilities reflect the impact of temporary differences between the carrying amount of assets and liabilities and their tax basis and are stated at the enacted tax rates expected to apply in the year when taxes are actually paid or recovered. Deferred tax assets are also recorded for net operating losses, capital losses and any tax credit carryforwards. A valuation allowance is provided against a deferred tax asset when it is more likely than not that some or all of the deferred tax assets will not be realized. All available evidence, both positive and negative, is considered to determine whether a valuation allowance for deferred tax assets is needed. Items considered in determining the Company’s valuation allowance include expectations of future earnings of the appropriate tax character, recent historical financial results, tax planning strategies, the length of statutory carryforward periods and the expected timing of the reversal of temporary differences. The Company recognizes tax benefits of uncertain tax positions only when the position is more likely than not to be sustained assuming examination by tax authorities. The Company records income tax related interest and penalties, if applicable, within current income tax expense.

Earnings Per Share (EPS)

Basic earnings per share are computed by dividing net income resulting from operations available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if option contracts to issue common stock were exercised, or if restricted stock vests, and has been computed after considering the weighted average dilutive effect of the Company’s stock options and restricted stock. The Company uses the treasury stock method to calculate diluted EPS, which is a method of recognizing the use of proceeds that could be obtained upon exercise of options and warrants, including unvested compensation expense related to the shares, in computing diluted EPS. It assumes that any proceeds would be used to purchase common stock at the average market price during the period. The table below presents the calculation of basic and diluted EPS.


	Year Ended December 31,
(Dollars in thousands, except share and per share data)	2025		2024		2023
Net income attributable to common stockholders	$	43,044	$	35,878	$	55,079
Weighted average common shares outstanding applicable to basic EPS		22,774,561		22,546,051		22,510,435
Effect of restricted stock grants		474,767		516,694		461,098
Effect of dilutive stock options		264,909		214,882		142,216
Effect of performance stock unit grants		733,551		327,866		134,574
Adjusted weighted average common shares outstanding applicable to diluted EPS	$	24,247,788	$	23,605,493	$	23,248,323
Basic earnings per share	$	1.89	$	1.59	$	2.45
Diluted earnings per share		1.78		1.52		2.37

Potentially dilutive common shares excluded from the above calculations aggregated 25,859 shares, 59,902 shares, and 92,310 shares as of December 31, 2025, 2024, and 2023.

Stock Compensation

The Company follows FASB ASC Topic 718, or ASC 718, Compensation – Stock Compensation, for its equity incentive, stock option, and restricted stock plans, and accordingly, the Company recognizes the expense of these grants as required. Stock-based employee compensation costs pertaining to stock options are reflected in net income resulting from operations for any new grants using the fair values established by usage of the Black-Scholes option pricing model, expensed over the vesting period of the underlying option. Stock-based employee compensation costs pertaining to restricted stock and performance stock units, or PSUs, are reflected in net income resulting from operations for any new grants using the grant date fair value of the shares and units granted, expensed over the vesting period of the underlying stock.

Regulatory Capital

The Bank is subject to various regulatory capital requirements administered by the FDIC and the Utah Department of Financial Institutions. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classifications are also subject to qualitative judgments by the bank regulators about components, risk weightings, and other factors.

FDIC-insured banks, including the Bank, are subject to certain federal laws, which impose various legal limitations on the extent to which banks may finance or otherwise supply funds to certain of their affiliates. In particular, the Bank is subject to certain restrictions on any extensions of credit to, or other covered transactions with, such as certain purchases of assets, the Company or its affiliates.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios as defined in the regulations (presented in the table below). Additionally, as conditions of granting the Bank’s application for federal deposit insurance, the FDIC ordered that the Tier 1 leverage capital to total assets ratio, as defined, be not less than 15%, a level which could affect the Bank's ability to pay dividends to the Company, and that an adequate allowance for credit losses be maintained. As of December 31, 2025 and 2024, the Bank’s Tier 1 leverage ratio was considered well-capitalized. The Bank had excess Tier 1 leverage capital of $71.7 million over the 15% minimum required, which was $383.8 million based on the Bank's total assets as of December 31, 2025. The Bank’s actual capital amounts and ratios and the regulatory minimum ratios are presented in the following table.


	Regulatory						December 31,
(Dollars in thousands)	Adequately Capitalized			Well-Capitalized			2025			2024
Common equity tier 1 capital							$	356,038		$	322,229
Tier 1 capital								455,467			391,016
Total capital								487,292			422,139
Average assets								2,558,754			2,493,857
Risk-weighted assets								2,472,328			2,429,349
Leverage ratio (1)		4.0	%		5.0	%		17.8	%		15.7	%
Common equity tier 1 capital ratio (2)		4.5			6.5			14.4			13.3
Tier 1 capital ratio (3)		6.0			8.0			18.4			16.1
Total capital ratio (3)		8.0			10.0			19.7			17.4

(1)

Calculated by dividing Tier 1 capital by average assets.

(2)

Calculated by subtracting preferred stock or non-controlling interest from Tier 1 capital and dividing by risk-weighted assets.

(3)

Calculated by dividing Tier 1 or total capital by risk-weighted assets.

In the above table, the minimum risk-based ratios as of December 31, 2025 and 2024 reflect the capital conservation buffer of 2.5%. The minimum regulatory requirements, inclusive of the capital conservation buffer, were the binding requirements for the risk-based requirements, and the “well-capitalized” requirements were the binding requirements for Tier 1 leverage capital as of both December 31, 2025 and 2024.

Recently Adopted Accounting Standards

In December 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2023-09, Income Taxes, or Topic 740: Improvements to Income Tax Disclosures. The main objective of this update is to improve financial reporting disclosure of incremental segment information on an annual and interim basis. The amendments in this update became effective for the annual periods beginning after December 15, 2024. The Company adopted the amended tax presentation pursuant to this ASU in the financial statements for the year ended December 31, 2025. This ASU did not have a material change to the presentation of income tax expense in the Statement of Operations.

Recently Issued Accounting Standards

In November 2024, the FASB issued ASU 2024-03, Income Statement, Reporting Comprehensive Income – Expense Disaggregation of Income Statement Expenses. This update requires additional disaggregation of specific types of expenses within the notes to consolidated financial statements on an annual and interim basis. In January 2025, the FASB issued ASU 2025-01 to clarify that all public business entities are required to adopt ASU 2024-03 for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is assessing the impact of the update on the accompanying financial statements.

Reclassifications

Certain reclassifications have been made to prior year balances to conform with the current year presentation. These reclassifications have no effect on the previously reported results of operations.

(3) INVESTMENT SECURITIES

The following tables present details of fixed maturity securities available for sale as of December 31, 2025 and 2024:


December 31, 2025 (Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Mortgage-backed securities	$	45,392	$	160	$	(3,381	)	$	42,171
State and municipalities		19,117		14		(1,251	)		17,880
Agency bonds		139		—		(7	)		132
Total	$	64,648	$	174	$	(4,639	)	$	60,183

December 31, 2024 (Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Mortgage-backed securities	$	41,475	$	28	$	(4,802	)	$	36,701
State and municipalities		17,373		81		(1,516	)		15,938
Agency bonds		2,179		2		(15	)		2,166
Total	$	61,027	$	111	$	(6,333	)	$	54,805

The amortized cost and estimated fair market value of investment securities as of December 31, 2025 by contractual maturity are presented below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage‑backed securities are included in the table based on their contractual maturities and are reflected in the each category below.


December 31, 2025 (Dollars in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	2,436	$	2,415
Due after one year through five years		10,788		10,281
Due after five years through ten years		7,332		7,170
Due after ten years		44,092		40,317
Total	$	64,648	$	60,183

The following tables present information pertaining to securities with gross unrealized losses as of December 31, 2025 and 2024, aggregated by investment category and length of time that individual securities have been in a continuous loss position.


	Less than Twelve Months					Twelve Months and Over
December 31, 2025 (Dollars in thousands)	Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value
Mortgage-backed securities	$	(13	)	$	3,420	$	(3,368	)	$	26,541
State and municipalities		(3	)		22		(1,248	)		14,840
Agency bonds		—			—		(7	)		132
Total	$	(16	)	$	3,442	$	(4,623	)	$	41,513

	Less than Twelve Months					Twelve Months and Over
December 31, 2024 (Dollars in thousands)	Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value
Mortgage-backed securities	$	(106	)	$	5,423	$	(4,696	)	$	29,619
State and municipalities		(269	)		4,884		(1,247	)		9,939
Agency bonds		—			—		(15	)		166
Total	$	(375	)	$	10,307	$	(5,958	)	$	39,724

As of December 31, 2025 and 2024, the Company had 52 and 58 securities with unrealized losses that have not been recognized in income. The investments are mortgage-backed securities and similar instruments with conservative risk characteristics, all of which are directly or indirectly guaranteed by the U.S. Government. The municipal bond portfolio consists of bonds purchased from the Utah Housing Corporation, which primarily acquires FHA‑insured loans within the state of Utah. The Company regularly reviews investment securities for impairment resulting from credit loss using both qualitative and quantitative criteria, as necessary based on the composition of the portfolio at period end. Based on the Company's assessment, no material impairments for credit losses were recognized during the period. The Company does not intend to sell its investment securities that are in an unrealized loss position and believes that it is unlikely that it will be required to sell these securities before recovery of the amortized cost. As of December 31, 2025 and 2024, the Company did not hold investments in any single issuer with an aggregate book value that exceeded 10% of the Company's equity, other than U.S. Government agency residential mortgage-backed securities issued by the Federal National Mortgage Association.

(4) LOANS AND ALLOWANCE FOR CREDIT LOSSES

The following table presents the major classification of loans, inclusive of capitalized loan origination costs, as of December 31, 2025 and 2024.


	As of December 31,
	2025					2024
(Dollars in thousands)	Amount		As a Percent of Total Loans (1)			Amount		As a Percent of Total Loans
Loans held for investment:
Recreation	$	1,617,221		63	%	$	1,422,403		57	%
Home improvement		810,237		32			827,211		33
Commercial		123,068		5			111,273		4
Taxi medallion		1,179	*				1,909	*
Total loans		2,551,705		99			2,362,796		95
Loans held for sale, at lower of amortized cost or fair value:
Recreation		—		—			120,840		5
Strategic partnership		15,144	*				7,386	*
Total loans held for sale, at lower of amortized cost or fair value		15,144		—			128,226		5
Total loans and loans held for sale	$	2,566,849		100	%	$	2,491,022		100	%

(1) Percentage may not foot due to rounding.

(*) Less than 1%.

The following tables present the activity of the gross loans and loans held for sale for the years ended December 31, 2025 and 2024.


December 31, 2025 (Dollars in thousands)	Recreation			Home Improvement			Commercial			Taxi Medallion			Strategic Partnership			Total
Gross loans – December 31, 2024	$	1,543,243		$	827,211		$	111,273		$	1,909		$	7,386		$	2,491,022
Loan originations		468,467			224,478			40,625			258			771,564			1,505,392
Principal receipts, sales, and maturities		(293,199	)		(225,794	)		(24,870	)		(973	)		(763,806	)		(1,308,642	)
Charge-offs		(75,486	)		(16,577	)		(5,165	)		(15	)		—			(97,243	)
Transfer to loan collateral in process of foreclosure, net		(30,223	)		—			—			—			—			(30,223	)
Amortization of origination fees and costs, net		(14,653	)		4,117			(56	)		—			—			(10,592	)
Origination fees and costs, net		19,072			(3,198	)		100			—			—			15,974
Paid-in-kind interest		—			—			1,161			—			—			1,161
Gross loans – December 31, 2025	$	1,617,221		$	810,237		$	123,068		$	1,179		$	15,144		$	2,566,849


December 31, 2024 (Dollars in thousands)	Recreation (1)			Home Improvement			Commercial			Taxi Medallion			Strategic Partnership			Total
Gross loans – December 31, 2023	$	1,336,226		$	760,617		$	114,827		$	3,663		$	553		$	2,215,886
Loan originations		526,634			298,642			14,300			250			203,627			1,043,453
Principal receipts, sales, and maturities		(232,414	)		(213,600	)		(17,949	)		(886	)		(196,794	)		(661,643	)
Charge-offs		(69,349	)		(18,035	)		(71	)		(124	)		—			(87,579	)
Transfer to loan collateral in process of foreclosure, net		(24,921	)		—			(1,627	)		(994	)		—			(27,542	)
Amortization of origination fees and costs, net		(13,502	)		4,288			41			—			—			(9,173	)
Origination fees and costs, net		20,569			(4,701	)		(78	)		—			—			15,790
Paid-in-kind interest		—			—			1,830			—			—			1,830
Gross loans – December 31, 2024	$	1,543,243		$	827,211		$	111,273		$	1,909		$	7,386		$	2,491,022

(1)

Includes loans held for sale and loans held for investment.

The following table presents the activity in the allowance for credit losses for the years ended December 31, 2025 and 2024.


(Dollars in thousands)	Recreation			Home Improvement			Commercial			Taxi Medallion (1)			Total
Balance at December 31, 2023	$	57,532		$	21,019		$	4,148		$	1,536		$	84,235
Charge-offs		(69,349	)		(18,035	)		(71	)		(124	)		(87,579	)
Recoveries		14,924			4,094			29			5,163			24,210
Provision (benefit) for credit losses		67,995			13,458			1,084			(6,035	)		76,502
Balance at December 31, 2024		71,102			20,536			5,190			540			97,368
Charge-offs		(75,486	)		(16,577	)		(5,165	)		(15	)		(97,243	)
Recoveries		16,432			5,423			—			2,987			24,842
Provision (benefit) for credit losses		73,908			10,181			9,027			(3,294	)		89,822
Balance at December 31, 2025	$	85,956		$	19,563		$	9,052		$	218		$	114,789

(1)

As of December 31, 2025, cumulative net charge-offs of loans and loan collateral in process of foreclosure in the taxi medallion portfolio were $171.1 million, including $106.3 million related to loans secured by New York taxi medallions, some of which may represent collection opportunities for the Company.

The following tables present the gross charge-offs for the years ended December 31, 2025 and 2024, by the year of origination:


December 31, 2025 (Dollars in thousands)	2025		2024		2023		2022		2021		Prior		Total
Recreation	$	3,280	$	15,870	$	16,369	$	17,582	$	8,310	$	14,075	$	75,486
Home improvement		108		3,668		5,141		4,365		1,824		1,471		16,577
Commercial		—		—		—		152		—		5,013		5,165
Taxi medallion		—		—		—		—		—		15		15
Total	$	3,388	$	19,538	$	21,510	$	22,099	$	10,134	$	20,574	$	97,243


December 31, 2024 (Dollars in thousands)	2024		2023		2022		2021		2020		Prior		Total
Recreation	$	3,203	$	18,540	$	22,883	$	10,789	$	4,222	$	9,712	$	69,349
Home improvement		841		5,766		6,412		3,131		815		1,070		18,035
Commercial		—		71		—		—		—		—		71
Taxi medallion		—		—		—		—		—		124		124
Total	$	4,044	$	24,377	$	29,295	$	13,920	$	5,037	$	10,906	$	87,579

The following tables present the allowance for credit losses by type as of December 31, 2025 and 2024.


December 31, 2025 (Dollars in thousands)	Amount		Percentage of Allowance (1)			Allowance as a Percent of Loan Category (2)
Recreation	$	85,956		75	%		5.32	%
Home improvement		19,563		17			2.41
Commercial		9,052		8			7.36
Taxi medallion		218	*				18.49
Total (2)	$	114,789		100	%

(1)

Does not include loans held for sale which are carried at the lower of amortized cost or fair value for which an allowance for credit loss is not established.

(2)

As of December 31, 2025, total allowance for credit losses as a percentage of nonaccrual loans was 281%.

(*) Less than 0.1%.


December 31, 2024 (Dollars in thousands)	Amount		Percentage of Allowance (1)			Allowance as a Percent of Loan Category (2)
Recreation	$	71,102		73	%		5.00	%
Home improvement		20,536		21			2.48
Commercial		5,190		5			4.66
Taxi medallion		540		1			28.29
Total (2)	$	97,368		100	%

(1)

Does not include loans held for sale which are carried at the lower of amortized cost or fair value for which an allowance for credit loss is not established.

(2)

As of December 31, 2024, total allowance for credit losses as a percentage of nonaccrual loans was 292%.

The following tables present the performance status of loans as of December 31, 2025 and 2024.


December 31, 2025 (Dollars in thousands)	Performing		Nonperforming		Total		Percentage of Nonperforming to Total
Recreation	$	1,603,542	$	13,679	$	1,617,221		0.85	%
Home improvement		808,943		1,294		810,237		0.16
Commercial		98,380		24,688		123,068		20.06
Taxi medallion		—		1,179		1,179		100.00
Strategic partnership		15,144		—		15,144		—
Total	$	2,526,009	$	40,840	$	2,566,849		1.59	%

December 31, 2024 (Dollars in thousands)	Performing		Nonperforming		Total		Percentage of Nonperforming to Total
Recreation	$	1,532,448	$	10,795	$	1,543,243		0.70	%
Home improvement		825,825		1,386		827,211		0.17
Commercial		92,010		19,263		111,273		17.31
Taxi medallion		—		1,909		1,909		100.00
Strategic partnership		7,386		—		7,386		—
Total	$	2,457,669	$	33,353	$	2,491,022		1.34	%

For those loans aged under 90 days past due, there is a possibility that their delinquency status will continue to deteriorate and they will subsequently be placed on nonaccrual status and be reserved for, and as a result, deemed nonperforming.

The following tables present the aging of all loans as of December 31, 2025 and 2024.


December 31, 2025	Days Past Due												Recorded Investment 90 Days and
(Dollars in thousands)	30-59		60-89		90 +		Total		Current		Total (1)		Accruing
Recreation	$	56,911	$	22,890	$	12,856	$	92,657	$	1,469,444	$	1,562,101	$	—
Home improvement		4,891		2,367		1,300		8,558		804,627		813,185		—
Commercial		—		—		10,274		10,274		112,942		123,216		—
Taxi medallion		—		—		41		41		1,138		1,179		—
Strategic partnership		—		—		—		—		15,144		15,144		—
Total	$	61,802	$	25,257	$	24,471	$	111,530	$	2,403,295	$	2,514,825	$	—

(1)

Excludes $52.0 million of capitalized loan origination costs.


December 31, 2024	Days Past Due												Recorded Investment 90 Days and
(Dollars in thousands)	30-59		60-89		90 +		Total		Current		Total (1)		Accruing
Recreation	$	54,169	$	20,376	$	10,018	$	84,563	$	1,407,977	$	1,492,540	$	—
Home improvement		5,407		2,432		1,386		9,225		821,852		831,077		—
Commercial		—		—		16,337		16,337		95,127		111,464		—
Taxi medallion		49		69		—		118		1,791		1,909		—
Strategic partnership		—		—		—		—		7,386		7,386		—
Total	$	59,625	$	22,877	$	27,741	$	110,243	$	2,334,133	$	2,444,376	$	—

(1)

Excludes $46.6 million of capitalized loan origination costs.

The following table presents loan delinquency for recreation and home improvement loans for the year ended December 31, 2025 by the year of origination:


(Dollars in thousands)	2025		2024		2023		2022		2021		Prior		Total (1)
Recreation
Current	$	423,427	$	335,079	$	237,917	$	209,204	$	132,704	$	131,113	$	1,469,444
30-59 Days		8,210		12,763		11,042		10,623		6,061		8,212		56,911
60-89 Days		2,374		5,414		4,918		4,872		2,581		2,731		22,890
90 + Days		1,487		3,136		2,803		2,329		1,347		1,754		12,856
Total Recreation	$	435,498	$	356,392	$	256,680	$	227,028	$	142,693	$	143,810	$	1,562,101
Home improvement
Current	$	193,964	$	172,735	$	151,637	$	151,365	$	71,812	$	63,114	$	804,627
30-59 Days		535		980		1,609		876		513		378		4,891
60-89 Days		353		761		441		455		199		158		2,367
90 + Days		—		410		417		331		42		100		1,300
Total Home improvement	$	194,852	$	174,886	$	154,104	$	153,027	$	72,566	$	63,750	$	813,185

(1)

Excludes $55.1 million of capitalized recreation loan origination costs and $2.9 million of capitalized home improvement loan origination costs.

The following table presents loan delinquency for recreation and home improvement loans for the year ended December 31, 2024 by the year of origination:


(Dollars in thousands)	2024		2023		2022		2021		2020		Prior		Total (1)
Recreation
Current	$	475,880	$	306,719	$	272,495	$	169,808	$	72,760	$	110,315	$	1,407,977
30-59 Days		8,009		12,511		13,748		8,563		3,129		8,209		54,169
60-89 Days		3,139		5,272		5,136		3,010		998		2,821		20,376
90 + Days		1,300		2,966		2,799		1,414		450		1,089		10,018
Total Recreation	$	488,328	$	327,468	$	294,178	$	182,795	$	77,337	$	122,434	$	1,492,540
Home improvement
Current	$	259,794	$	197,832	$	187,789	$	92,249	$	44,253	$	39,935	$	821,852
30-59 Days		1,064		1,665		1,616		445		422		195		5,407
60-89 Days		289		884		654		344		154		107		2,432
90 + Days		196		392		504		203		37		54		1,386
Total Home improvement	$	261,343	$	200,773	$	190,563	$	93,241	$	44,866	$	40,291	$	831,077

(1)

Excludes $50.7 million of capitalized recreation loan origination costs and $3.9 million of capitalized home improvement loan origination costs.

(5) FUNDS BORROWED

The following table presents outstanding balances of funds borrowed.


	Payments Due for the Year Ending December 31,
(Dollars in thousands)	2026		2027		2028		2029		2030		Thereafter		December 31, 2025 (1)		December 31, 2024 (1)		Interest Rate (2)
Deposits (3)	$	682,132	$	576,313	$	424,188	$	169,783	$	230,919	$	—	$	2,083,335	$	2,091,663		3.87	%
Privately placed notes		31,250		53,750		39,000		—		—		22,500		146,500		146,500		8.12
SBA debentures and borrowings		14,000		2,000		1,250		1,250		3,000		63,500		85,000		70,250		3.98
Trust preferred securities		—		—		—		—		—		33,000		33,000		33,000		6.12
Federal reserve and other borrowings		50,000		—		—		—		—		—		50,000		35,000		3.75
Strategic partner collateral deposits		6,081		—		—		—		—		—		6,081		3,000		3.87
Total	$	783,463	$	632,063	$	464,438	$	171,033	$	233,919	$	119,000	$	2,403,916	$	2,379,413		4.16	%

(1)

Excludes deferred financing costs of $8.4 million and $8.2 million as of December 31, 2025 and 2024.

(2)

Weighted average contractual rate as of December 31, 2025.

(3)

Balance includes $3.7 million and $6.0 million in retail savings deposit balances as of December 31, 2025 and 2024.

(A) DEPOSITS

Most deposits are raised through the use of investment brokerage firms that package time deposits in denominations of less than $250,000 qualifying for FDIC insurance into larger pools that are sold to the Bank. While brokered time deposits are sourced in amounts in excess of $250,000, all underlying deposits are in denominations of $250,000 or less. The rates paid on the deposits are highly competitive with market rates paid by other financial institutions. Additionally, a brokerage fee is paid, depending on the maturity of the deposits, the annual expense of which averages less than 0.15%. Interest on the deposits is accrued daily and paid monthly, quarterly, semiannually, or at maturity. Additionally, the Bank raises deposits through listing services, and, as of December 31, 2025 and 2024, the Bank had $17.2 million and $10.4 million in listing service deposit balances from other financial institutions. As of December 31, 2025 and 2024, the Bank had $3.7 million and $6.0 million in retail savings deposit balances. The following table presents the maturity of the deposit pools, which includes strategic partner reserve deposits, as of December 31, 2025.


(Dollars in thousands)	December 31, 2025
Three months or less	$	143,956
Over three months through six months		238,847
Over six months through one year		299,329
Over one year		1,401,203
Deposits		2,083,335
Strategic partner collateral deposits		6,081
Total deposits	$	2,089,416

(B) FEDERAL RESERVE DISCOUNT WINDOW AND OTHER BORROWINGS

As of December 31, 2025, the Bank had $591.9 million in home improvement loans pledged as collateral for a discount window line of credit established at the Federal Reserve. The current advance rate on the pledged securities is approximately 49% of book value, for a total of approximately $292.9 million in secured borrowing capacity, of which $50.0 million was utilized as of December 31, 2025. The discount window facility is not committed, and any borrowings by the Bank from the discount window facility are at the discretion of the Federal Reserve. The weighted average interest rate on funds borrowed from the discount window was 3.75% as of December 31, 2025.

The Bank has borrowing arrangements with several commercial banks. These agreements are accommodations that can be terminated at any time, for any reason and allow the Bank to borrow up to $75.0 million. As of December 31, 2025, no outstanding amounts with respect to these arrangements.

(C) PRIVATELY PLACED NOTES

The Company has entered into various private placements with certain institutional investors over time. The following table presents the private placement notes outstanding for the years ended December 31, 2025 and 2024.


(Dollars in thousands)						December 31,
Date of Notes	Maturity	Interest Rate			Interest Payable	2025		2024
December 2020	December 2027		7.500	%	Semi-annually	$	53,750	$	53,750
February 2021 (1)	February 2026		7.250	%	Semi-annually		31,250		31,250
September 2023	September 2028		9.250	%	Semi-annually		39,000		39,000
June 2024	June 2039		8.875	%	Semi-annually		17,500		17,500
August 2024	August 2039		8.625	%	Semi-annually		5,000		5,000
						$	146,500	$	146,500

(1)

Privately placed notes due in 2026 were repaid, in full, at maturity, on February 26, 2026.

(D) SBA DEBENTURES AND BORROWINGS

Over the years, the SBA has approved commitments for Medallion Capital, typically for a four and a half year term and a 1% fee. On February 28, 2024, Medallion Capital accepted a commitment from the SBA for $18.5 million in debenture financing, all of which had been utilized as of December 31, 2025. The Company does not currently have any commitments available from the SBA.

The following table presents the SBA debentures and borrowings for the years ended December 31, 2025 and 2024.


(Dollars in thousands)						December 31,
Date of Notes	Maturity	Interest Rate			Interest Payable	2025		2024
March 2015	March 2025		2.87	%	Semi-annually	$	—	$	10,000
September 2015	September 2025		3.57	%	Semi-annually		—		4,000
March 2016	March 2026		3.25	%	Semi-annually		1,500		1,500
March 2016	March 2026		3.18	%	Semi-annually		10,000		10,000
May 2016	September 2026		2.72	%	Semi-annually		2,500		2,500
March 2017	March 2027		3.52	%	Semi-annually		2,000		2,000
September 2018	September 2028		4.22	%	Semi-annually		1,250		1,250
March 2019	March 2029		3.79	%	Semi-annually		1,250		1,250
September 2020	September 2030		1.71	%	Semi-annually		3,000		3,000
June 2021	September 2031		1.58	%	Semi-annually		8,500		8,500
October 2021	March 2032		3.21	%	Semi-annually		7,000		7,000
October 2022	March 2033		5.44	%	Semi-annually		4,750		4,750
April 2023	September 2033		5.96	%	Semi-annually		4,750		4,750
September 2023	March 2034		5.08	%	Semi-annually		4,750		4,750
November 2023	March 2034		5.08	%	Semi-annually		5,000		5,000
March 2025	September 2035		4.58	%	Semi-annually		10,250		—
August 2025	September 2035		4.66	%	Semi-annually		18,500		—
						$	85,000	$	70,250

(E) TRUST PREFERRED SECURITIES

In June 2007, the Company issued and sold $36.1 million aggregate principal amount of unsecured junior subordinated notes to Fin Trust which, in turn, sold $35.0 million of trust preferred securities to Merrill Lynch International and issued 1,083 shares of common stock to the Company. Interest is calculated using the Secured Overnight Financing Rate (SOFR) adjusted by a relevant spread adjustment of approximately 26 basis points, plus 2.13%. The notes mature in September 2037 and are prepayable at par. Interest is payable quarterly in arrears. The terms of the trust preferred securities and the notes are substantially identical. In December 2007, $2.0 million of the trust preferred securities were repurchased from a third-party investor. As of December 31, 2025, $33.0 million was outstanding on the trust preferred securities.

(F) COVENANT COMPLIANCE

Certain of the Company's debt agreements contain financial covenants that require the Company to maintain certain financial ratios and minimum tangible net worth. As of December 31, 2025, the Company was in compliance with all such covenants.

(6) LEASES

The Company has leased premises that expire at various dates through November 30, 2033 subject to various operating leases.

The following table presents the operating lease costs and additional information for the years ended December 31, 2025, 2024, and 2023.


	December 31,
(Dollars in thousands)	2025			2024			2023
Operating lease costs	$	2,350		$	2,422		$	2,390
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases		2,789			2,682			2,472
Right-of-use asset obtained in exchange for lease liability		(226	)		(237	)		(226	)

The following table presents the breakout of the operating leases as of December 31, 2025 and 2024.


	December 31,
(Dollars in thousands)	2025			2024
Operating lease right-of-use assets	$	6,896		$	6,922
Other current liabilities		2,205			2,294
Operating lease liabilities		5,041			5,128
Total operating lease liabilities		7,246			7,422
Weighted average remaining lease term	5.8 years			4.1 years
Weighted average discount rate		5.90	%	5.56%

At December 31, 2025, maturities of the lease liabilities were as follows:


(Dollars in thousands)
2026	$	2,546
2027		1,340
2028		756
2029		777
2030		797
Thereafter		2,070
Total lease payments		8,286
Less imputed interest		1,040
Total operating lease liabilities	$	7,246

(7) INCOME TAXES

The Company is subject to federal and applicable state corporate income taxes on its taxable ordinary income and capital gains. As a corporation taxed under Subchapter C of the Internal Revenue Code, the Company is able, and intends, to file a consolidated federal income tax return with corporate subsidiaries in which it holds 80% or more of the outstanding equity interest measured by both vote and fair value.

The following table presents the significant components of the Company's deferred tax assets and liabilities as of December 31, 2025 and 2024.


	December 31,
(Dollars in thousands)	2025			2024
Deferred tax assets:
Provision for credit losses	$	17,700		$	14,530
Accrued expenses, compensation, and other assets		5,868			5,612
Net operating loss carryforwards (1)		2,648			3,168
Other investments and investment securities		2,553			2,885
Valuation allowance		(5,957	)		(4,418	)
Total deferred tax assets		22,812			21,777
Deferred tax liabilities:
Goodwill and other intangibles		42,408			42,772
Total deferred tax liabilities		42,408			42,772
Deferred tax liability, net	$	19,596		$	20,995

(1)

As of December 31, 2025, the Company had an estimated $11.1 million of net operating loss carryforwards, $1.7 million of which expires at various dates between December 31, 2026 and December 31, 2035, which had no net carrying value as of December 31, 2025.

The following table presents the components of the Company's tax provision for the years ended December 31, 2025, 2024, and 2023.


	Year Ended December 31,
(Dollars in thousands)	2025			2024			2023
Current
Federal	$	19,532		$	15,634		$	18,634
State		7,928			4,789			6,014
Deferred
Federal		(2,010	)		1,455			(52	)
State		(906	)		(867	)		314
Net provision for income taxes	$	24,544		$	21,011		$	24,910

The following table presents a reconciliation of statutory federal income tax provision to consolidated actual income tax provision reported for the years ended December 31, 2025, 2024, and 2023.


	Year Ended December 31,
(Dollars in thousands)	2025					2024					2023
	Amount		Percent (1)			Amount		Percent (1)			Amount			Percent (1)
Statutory Federal income tax provision	$	16,776		21	%	$	13,217		21	%	$	18,068			21	%
State and local income taxes, net of federal income tax benefit		4,525		6			2,623		4			3,534			4
Valuation allowance against deferred tax assets		1,539		2			558		1			1,565			2
Change in effective state income tax rates and accrual		424		1			109	*				(222	)	*
Non-deductible expenses		457		1			3,899		6			2,024			2
Other		823		1			605		1			(59	)	*
Total income tax provision	$	24,544		31	%	$	21,011		33	%	$	24,910			29	%

(1) Percentage may not foot due to rounding.

(*) Less than 1%.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible pursuant to ASC 740. The Company considers the reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The Company’s evaluation of the realizability of deferred tax assets must consider both positive and negative evidence. The weight given to the potential effects of positive and negative evidence is based on the extent to which it can be objectively verified. The Company has determined that a valuation allowance is necessary for net operating losses which the Company does not believe will be utilized as well as for deferred compensation in excess of statutory limits. Based upon these considerations, the Company determined the necessary valuation allowance as of December 31, 2025.

The Company has filed tax returns in many states. Federal, Utah, California, New York, Florida, and Texas tax filings of the Company for the tax years 2022 through the present are the more significant filings that are open for examination. For the year ended December 31, 2025, Utah, California, Florida, New York, and Texas made up 34%, 7%, 6%, 5%, and 3% of the state and local income taxes, net of federal income tax benefit.

(8) STOCK OPTIONS AND RESTRICTED STOCK

The Company’s Board of Directors approved the 2018 Equity Incentive Plan, or the 2018 Plan, which was approved by the Company’s stockholders on June 15, 2018. The terms of the 2018 Plan provide for grants of a variety of different type of stock awards to the Company’s employees and non-employee directors, including options, restricted stock, restricted stock units, PSUs, and stock appreciation rights, etc. On April 22, 2020, the Company’s Board of Directors approved an amendment to the 2018 Plan to increase the number of shares of the Company’s common stock authorized for issuance thereunder, which was approved by the Company’s stockholders on June 19, 2020. On April 26, 2022, the Company’s Board of Directors approved an additional amendment to the 2018 Plan to further increase the number of shares of the Company’s common stock authorized for issuance thereunder, which was approved by the Company’s stockholders on June 14, 2022. On April 25, 2025, the Company’s Board of Directors approved an additional amendment to the 2018 Plan to further increase the number of shares of the Company’s common stock authorized for issuance thereunder, which was approved by the Company’s stockholders on June 12, 2025. A total of 7,710,968 shares of the Company’s common stock are issuable under the 2018 Plan, and 2,262,518 shares remained issuable as of December 31, 2025. Awards under the 2018 Plan are subject to certain limitations as set forth in the 2018 Plan, which will terminate when all shares of common stock authorized for delivery have been delivered and the forfeiture restrictions on all awards have lapsed, or by action of the Board of Directors pursuant to the 2018 Plan, whichever occurs first.

The Company’s Board of Directors approved the 2015 Non-Employee Director Stock Option Plan, or the 2015 Director Plan, on March 12, 2015, which was approved by the Company’s shareholders on June 5, 2015, and on which exemptive relief to implement the 2015 Director Plan was received from the SEC on February 29, 2016. A total of 300,000 shares of the Company’s common stock were issuable under the 2015 Director Plan, and 258,334 remained issuable as of June 15, 2018. Effective June 15, 2018, the 2018 Plan was approved, and these remaining shares were rolled into the 2018 Plan. Under the 2015 Director Plan, unless otherwise determined by a committee of the Board of Directors comprised of directors who are not eligible for grants under the 2015 Director Plan, the Company granted options to purchase 12,000 shares of the Company’s common stock to a non-employee director upon election to the Board of Directors, with an adjustment for directors who were elected to serve less than a full term. The option price per share could not be less than the current market value of the Company’s common stock on the date the option was granted. Options granted under the 2015 Director Plan vested annually, as defined in the 2015 Director Plan. The term of the options could not exceed ten years.

The Company’s Board of Directors approved the First Amended and Restated 2006 Director Plan, or the Amended Director Plan, on April 16, 2009, which was approved by the Company’s shareholders on June 5, 2009, and on which exemptive relief to implement the Amended Director Plan was received from the SEC on July 17, 2012. A total of 200,000 shares of the Company’s common stock were issuable under the Amended Director Plan. No additional shares are available for issuance under the Amended Director Plan. Under the Amended Director Plan, unless otherwise determined by a committee of the Board of Directors comprised of directors who are not eligible for grants under the Amended Director Plan, the Company would grant options to purchase 9,000 shares of the Company’s common stock to an Eligible Director upon election to the Board of Directors, with an adjustment for directors who were elected to serve less than a full term. The option price per share could not be less than the current market value of the Company’s common stock on the date the option was granted. Options granted under the Amended Director Plan vested annually, as defined in the Amended Director Plan. The term of the options could not exceed ten years.

Additional shares are only available for future issuance under the 2018 Plan. As of December 31, 2025, 798,058 options on the Company’s common stock were outstanding under the Company’s plans, all of which have previously vested and are exercisable. Additionally, as of December 31, 2025, there were 751,750 unvested shares of restricted stock, 823,854 unvested PSUs, 88,480 unvested restricted stock units, and 331,799 vested, unissued restricted stock units outstanding under the 2018 Plan. As of December 31, 2025, the total remaining unrecognized compensation cost related to unvested restricted stock, restricted stock units, and PSUs, was $5.0 million, which is expected to be recognized over the next nine quarters. Total stock-based compensation expense was $6.7 million, $6.1 million, and $4.7 million for the years ended December 31, 2025, 2024, and 2023.

The fair value of each restricted stock grant, each restricted stock unit, and each PSU is determined on the date of grant by the closing market price of the Company’s common stock on the grant date. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. There were no options granted during the year ended December 31, 2025.

The Company’s Compensation Committee of the Board of Directors grants PSUs, to certain officers and employees of the Company. Granted PSUs are subject to specified performance criteria for a particular performance period. The number of PSUs that vest can range from zero to 200% of the grant amount. In addition, dividends that accrue during the vesting period are reinvested in dividend equivalent PSUs. PSUs and the related dividend equivalent PSUs are converted into shares of common stock after vesting. Once the PSUs and dividend equivalent PSUs have vested, shares of common stock are delivered.

The PSUs have vesting conditions based upon certain levels of total pre-tax income as well as return on common equity attained over a three-year period. The PSUs cliff vest after three years based upon the performance of the Company. Dividend equivalent PSUs accumulate and convert to additional shares for the benefit of the grantee at the vesting date or are forfeited if the performance conditions are not met. The following table presents the PSU activity for the years ended December 31, 2025, 2024, and 2023.


	Number of Shares			Grant Price Per Share		Weighted Average Grant Price
Outstanding at December 31, 2022		—	$		—	$	—
Granted		296,444			6.08		6.08
Cancelled		—			—		—
Vested		—			—		—
Outstanding at December 31, 2023		296,444	$		6.08	$	6.08
Granted		215,687			8.97		8.97
Cancelled		—			—		—
Vested		—			—		—
Outstanding at December 31, 2024		512,131	$	6.08 - 8.97		$	7.30
Granted		311,723			8.47		8.47
Cancelled		—			—		—
Vested		—			—		—
Outstanding at December 31, 2025		823,854	$	6.08 - 8.97		$	7.74

The following table presents the restricted stock activity for the years ended December 31, 2025, 2024, and 2023.


	Number of Shares				Grant Price Per Share	Weighted Average Grant Price
Outstanding at December 31, 2022		857,288		$	4.89 - 7.25	$	7.27
Granted		399,793			7.67 - 9.37		8.34
Cancelled		(12,807	)		4.89 - 8.40		7.24
Vested (1)		(248,898	)		4.89 - 7.68		7.10
Outstanding at December 31, 2023		995,376		$	4.89 - 9.37		7.74
Granted		347,158			8.97 - 10.32		9.17
Cancelled		(32,521	)		4.89 - 10.32		8.07
Vested (1)		(400,985	)		4.89 - 8.40		7.69
Outstanding at December 31, 2024		909,028		$	4.89 - 10.32		8.30
Granted		332,918			8.47 - 10.57		8.63
Cancelled		(5,373	)		4.89 - 10.32		9.16
Vested (1)		(484,823	)		4.89 - 8.97		7.70
Outstanding at December 31, 2025 (2)		751,750		$	8.08 - 10.57	$	8.83

(1)

The aggregate fair value of the restricted stock vested was $4.2 million, $2.7 million, and $2.1 million for the years ended December 31, 2025, 2024, and 2023.

(2)

The aggregate fair value of the restricted stock was $7.7 million as of December 31, 2025. The remaining vesting period was 2.2 years at December 31, 2025.

The following table presents stock option activity for the years ended December 31, 2025, 2024, and 2023.


	Number of Options				Exercise Price Per Share		Weighted Average Exercise Price
Outstanding at December 31, 2022		1,061,849			2.14 - 9.38			6.51
Granted		—				—		—
Cancelled		(33,382	)		4.89 - 9.38			6.80
Exercised (1)		(68,945	)		4.89 - 7.25			6.44
Outstanding at December 31, 2023		959,522			2.14 - 9.38			6.51
Granted		—				—		—
Cancelled		(4,748	)		4.89 - 7.25			6.15
Exercised (1)		(40,865	)		4.89 - 7.25			6.35
Outstanding at December 31, 2024		913,909			2.14 - 9.38			6.52
Granted		—				—		—
Cancelled		(33,770	)		4.89 - 9.38			7.37
Exercised (1)		(82,081	)		4.89 - 7.25			6.29
Outstanding at December 31, 2025 (2)		798,058		$	2.14 - 9.38		$	6.50
Options exercisable at
December 31, 2023		697,647			2.14 - 9.38		$	6.51
December 31, 2024		829,286			2.14 - 9.38			6.53
December 31, 2025		798,058			2.14 - 9.38			6.50

(1)

The aggregate intrinsic value, which represents the difference between the price of the Company’s common stock at the exercise date and the related exercise price of the underlying options, was $0.3 million, $0.1 million, and $0.1 million for the years ended December 31, 2025, 2024, and 2023.

(2)

The aggregate intrinsic value of outstanding options, which represents the difference between the price of the Company’s common stock at December 31, 2025 and the related exercise price of the underlying options, was $3.0 million for outstanding options all of which had previously vested. The remaining contractual life was 4.2 years for outstanding options and at December 31, 2025.

The following table presents the activity for the unvested options outstanding under the plans for the year ended December 31, 2025.


	Number of Options				Exercise Price Per Share		Weighted Average Exercise Price
Outstanding at December 31, 2022		513,423			4.89 - 7.25		$	6.52
Granted		—				—		—
Cancelled		(3,336	)		4.89 - 7.25			5.51
Vested (1)		(248,212	)		4.89 - 7.25			6.55
Outstanding at December 31, 2023		261,875			4.89 - 7.25			6.49
Granted		—				—		—
Cancelled		(3,822	)		4.89 - 7.25			6.22
Vested (1)		(173,430	)		4.89 - 7.25			6.56
Outstanding at December 31, 2024		84,623			4.89 - 6.79			6.37
Granted		—				—		—
Cancelled		(119	)			4.89		4.89
Vested (1)		(84,504	)		4.89 - 6.79			6.37
Outstanding at December 31, 2025		—		$		—	$	—

(1)

The intrinsic value of the options vested was $0.1 million, $0.4 million, and $0.4 million for the years ended December 31, 2025, 2024, and 2023.

During the year ended December 31, 2025, the Company granted 86,410 restricted stock units, or RSUs, with a vesting date of June 12, 2026 at a grant price of $9.49. During the year ended December 31, 2024, the Company granted 92,350 RSUs which vested on June 11, 2025 at a grant price of $8.23. During the year ended December 31, 2023, the Company granted 83,158, which vested on June 22, 2024 at a grant price of $9.14. For the RSUs granted in 2025, 2024, and 2023, unitholders had the option of deferring settlement until a future date if the recipient makes a formal election under the guidelines of IRC Section 409A. As of December 31, 2025, there were 420,279 RSUs outstanding, including 331,799 which had previously vested.

(9) SEGMENT REPORTING

The Company has five business segments, which include four lending segments and one non-operating segment, which are reflective of how Company management makes decisions about its business and operations.

The four lending segments reflect the main types of lending performed at the Company, which are recreation, home improvement, commercial, and taxi medallion lending. The recreation and home improvement lending segments are operated by the Bank and loans are made to borrowers residing nationwide. The recreation lending segment is a consumer finance business that works with third-party dealers and financial service providers to finance RVs, boats, collector cars, and other consumer recreational equipment, of which RVs, boats, and collector cars make up 54%, 21%, and 13% of the segment portfolio, with no other product lines at or above 10%, as of December 31, 2025. The highest concentrations of recreation loans are in Texas and Florida at 17% and 10% of loans outstanding and with no other states at or above 10% as of December 31, 2025. The home improvement lending segment works with contractors and financial service providers to finance residential home improvement with the largest product lines being swimming pools, roofs, and windows at 32%, 28%, and 11% of total home improvement loans outstanding, and with no other product lines at or above 10% as of December 31, 2025. The highest concentrations of home improvement loans are in Florida and Texas at 14% and 12% of loans outstanding and with no other states at or above 10% as of December 31, 2025. The commercial lending segment focuses on serving a wide variety of industries, with concentrations in manufacturing, wholesale trade, and construction making up 63%, 11%, and 10% of the loans outstanding as of December 31, 2025, with no other product lines exceeding 10% as of December 31, 2025. The commercial lending segment invests across the United States with concentrations in California, Wisconsin, and New York having 20%, 12%, and 11% of the segment portfolio, and no other states having a concentration at or greater than 10% as of December 31, 2025. The taxi medallion lending segment arose in connection with the financing of taxi medallions, taxis, and related assets, primarily all of which are located in the New York City metropolitan area as of December 31, 2025.

The Company's corporate and other investments segment is a non-operating segment that includes items not allocated to the Company's operating segments such as investment securities, equity investments, intercompany eliminations, goodwill, and other corporate elements. The Company allocates portions of centrally incurred costs inclusive of overhead and interest expense formulaically based upon overall capital allocated to the lending segments.

As part of segment reporting, capital ratios for all operating segments have been normalized as a percentage of consolidated total equity divided by total assets, with the net adjustment applied to corporate and other investments. In addition, the commercial segment primarily represents the mezzanine lending business, with certain legacy commercial loans (immaterial to total) allocated to corporate and other investments.

The Company's chief operating decision maker (CODM) is a group comprised of the Executive Chairman, Chief Executive Officer, and Chief Financial Officer, and other senior members of management. The CODM primarily uses segment information to identify areas to improve efficiency of resources allocation, determine where to reinvest profits, and minimize unnecessary expenses. The CODM assesses segment performance mainly through selected financial ratios such as returns on average assets and net interest margin, which identifies areas requiring action.

The following table presents segment data as of and for the year ended December 31, 2025.


Year Ended December 31, 2025	Consumer Lending
(Dollars in thousands)	Recreation			Home Improvement			Commercial Lending			Taxi Medallion Lending			Corporate and Other Investments			Consolidated
Total interest income	$	209,321		$	80,624		$	15,904		$	432		$	9,039		$	315,320
Total interest expense		51,966			28,931			4,824			73			12,633			98,427
Net interest income (loss)		157,355			51,693			11,080			359			(3,594	)		216,893
Provision (benefit) for credit losses		73,908			10,181			9,027			(3,294	)		—			89,822
Net interest income (loss) after loss provision		83,447			41,512			2,053			3,653			(3,594	)		127,071
Other income		1,937			12			25,249			4,671			6,124			37,993
Operating expenses		(40,567	)		(19,246	)		(6,201	)		(3,647	)		(15,518	)		(85,179	)
Net income (loss) before taxes		44,817			22,278			21,101			4,677			(12,988	)		79,885
Income tax (provision) benefit		(13,770	)		(6,845	)		(6,497	)		(1,438	)		4,006			(24,544	)
Net income (loss) after taxes		31,047			15,433			14,604			3,239			(8,982	)		55,341
Income attributable to the non-controlling interest																	8,782
Less: redemption of Series F preferred stock - funds paid in excess of carrying value																	3,515
Total net income attributable to Medallion Financial Corp.																$	43,044
Balance Sheet Data
Total loan, gross (1)	$	1,617,221		$	810,237		$	123,068		$	1,179		$	15,144		$	2,566,849
Total assets		1,552,257			796,254			115,601			4,329			487,023			2,955,464
Total funds borrowed (2)		1,262,575			647,657			94,028			3,521			396,135			2,403,916
Selected Financial Ratios
Return on average assets		2.05	%		1.94	%		12.80	%	NM			NM				1.93	%
Return on average stockholders' equity	*			*			*			NM			NM				11.06
Return on average equity		12.00			11.36			76.06		NM			NM				11.43
Interest yield		13.37			9.95			13.00		NM			NM				11.74
Net interest margin, gross		10.05			6.38			9.09		NM			NM				8.06
Net interest margin, net of allowance		10.56			6.54			9.78		NM			NM				8.40
Reserve coverage (3)		5.32			2.41			7.36		NM			NM				4.50
Delinquency status (4)		0.82			0.16			8.34		NM			NM				0.97
Charge-off (recovery) ratio (5)		3.77			1.38			4.22		NM			NM				2.88

(1) Inclusive of recreation and strategic partnership loans held for sale, at lower of amortized cost or fair value.

(2) Excludes deferred financing costs of $8.4 million as of December 31, 2025.

(3) Allowance for credit loss as a percent of gross loans held for investment and excludes loans held for sale.

(4) Loans 90 days or more past due as a percent of total gross loans.

(5) Net charge-offs as a percent of annual average gross loans. Charge-off ratio in the recreation lending segment was 3.95% when excluding loans held for sale.

(NM) Not meaningful.

(*) Line item is not applicable to segments.

The following table presents segment data as of and for the year ended December 31, 2024.


Year Ended December 31, 2024	Consumer Lending
(Dollars in thousands)	Recreation			Home Improvement			Commercial Lending			Taxi Medallion Lending			Corporate and Other Investments			Consolidated
Total interest income	$	194,131		$	74,036		$	14,007		$	659		$	7,869		$	290,702
Total interest expense		46,123			26,277			4,294			102			11,371			88,167
Net interest income (loss)		148,008			47,759			9,713			557			(3,502	)		202,535
Provision (benefit) for credit losses		67,995			13,458			1,093			(6,035	)		(9	)		76,502
Net interest income (loss) after loss provision		80,013			34,301			8,620			6,592			(3,493	)		126,033
Other income		756			11			7,860			910			1,793			11,330
Operating expenses		(33,128	)		(15,586	)		(4,992	)		(4,573	)		(16,148	)		(74,427	)
Net income (loss) before taxes		47,641			18,726			11,488			2,929			(17,848	)		62,936
Income tax (provision) benefit		(15,181	)		(5,967	)		(3,661	)		(933	)		4,731			(21,011	)
Net income (loss) after taxes		32,460			12,759			7,827			1,996			(13,117	)		41,925
Income attributable to the non-controlling interest																	6,047
Total net income attributable to Medallion Financial Corp.																$	35,878
Balance Sheet Data
Total loan, gross (1)	$	1,543,243		$	827,211		$	111,273		$	1,909		$	7,386		$	2,491,022
Total assets		1,494,445			811,442			106,258			6,573			449,888			2,868,606
Total funds borrowed (2)		1,239,592			673,064			88,137			5,452			373,168			2,379,413
Selected Financial Ratios
Return on average assets		2.29	%		1.66	%		7.38	%		24.25	%		(2.95	)%		1.54	%
Return on average stockholders' equity	*			*			*			*			*				10.12
Return on average equity		15.11			10.76			47.93			151.76			(18.94	)		9.89
Interest yield		13.30			9.45			12.71			23.39		NM				11.58
Net interest margin, gross		10.14			6.09			8.81			16.99		NM				8.05
Net interest margin, net of allowance		10.58			6.24			9.18			28.15		NM				8.35
Reserve coverage (3)		5.00			2.48			4.66			28.29		NM				4.12
Delinquency status (4)		0.67			0.17			14.66			—		NM				1.13
Charge-off (recovery) ratio (5)		3.72			1.78			0.04			(153.72	)	NM				2.69

(1) Inclusive of recreation and strategic partnership loans held for sale, at lower of amortized cost or fair value.

(2) Excludes deferred financing costs of $8.2 million as of December 31, 2024.

(3) Allowance for credit loss as a percent of gross loans held for investment and excludes loans held for sale.

(4) Loans 90 days or more past due as a percent of total gross loans.

(5) Net charge-offs as a percent of annual average gross loans.

(NM) Not meaningful.

(*) Line item is not applicable to segments.

The following table presents segment data as of and for the year ended December 31, 2023.


Year Ended December 31, 2023	Consumer Lending
(Dollars in thousands)	Recreation			Home Improvement			Commercial Lending			Taxi Medallion Lending			Corporate and Other Investments			Consolidated
Total interest income	$	167,765		$	62,703		$	12,719		$	1,596		$	6,257		$	251,040
Total interest expense		31,436			18,137			3,597			72			9,704			62,946
Net interest income (loss)		136,329			44,566			9,122			1,524			(3,447	)		188,094
Provision (benefit) for credit losses		44,592			17,583			1,988			(26,318	)		(35	)		37,810
Net interest income (loss) after loss provision		91,737			26,983			7,134			27,842			(3,412	)		150,284
Other income		376			6			5,971			3,358			1,609			11,320
Operating expenses		(32,601	)		(16,752	)		(3,547	)		(7,256	)		(15,412	)		(75,568	)
Net income (loss) before taxes		59,512			10,237			9,558			23,944			(17,215	)		86,036
Income tax (provision) benefit		(17,231	)		(2,964	)		(2,767	)		(6,933	)		4,985			(24,910	)
Net income (loss) after taxes		42,281			7,273			6,791			17,011			(12,230	)		61,126
Income attributable to the non-controlling interest																	6,047
Total net income attributable to Medallion Financial Corp.																$	55,079
Balance Sheet Data
Total loans, gross	$	1,336,222		$	760,621		$	114,827		$	3,663		$	553		$	2,215,886
Total assets		1,297,870			744,904			110,850			12,247			421,956			2,587,827
Total funds borrowed (1)		1,062,584			609,863			90,754			10,027			345,462			2,118,690
Selected Financial Ratios
Return on average assets		3.36	%		1.04	%		6.65	%		91.25	%		(3.13	)%		2.51	%
Return on average stockholders' equity	*			*			*			*			*				17.33
Return on average equity		21.24			6.60			41.51			574.86			(19.78	)		15.79
Interest yield		13.07			8.86			12.80			26.94		NM				11.19
Net interest margin, gross		10.62			6.29			9.18			25.73		NM				8.38
Net interest margin, net of allowance		11.09			6.45			9.45			61.60		NM				8.68
Reserve coverage (2)		4.31			2.76			3.61			41.93		NM				3.80
Delinquency status (3)		0.70			0.20			5.40			—		NM				0.77
Charge-off (recovery) ratio (4)		3.04			1.33			1.02			(309.96	)	NM				1.48

(1) Excludes deferred financing costs of $8.5 million as of December 31, 2023.

(2) Allowance for credit loss as a percent of gross loans.

(3) Loans 90 days or more past due as a percent of total gross loans.

(4) Net charge-offs as a percent of annual average gross loans.

(NM) Not meaningful.

(*) Line item is not applicable to segments.

(10) COMMITMENTS AND CONTINGENCIES

(A) EMPLOYMENT AGREEMENTS

The Company has employment agreements with certain key officers, including Mr. Alvin Murstein and Mr. Andrew M. Murstein, for either a one-, two-, or three-year term. Typically, the contracts will renew for new one-, two- or three- year terms unless prior to the term either the Company or the executive provides notice to the other party of its intention not to extend the employment period beyond the current one-, two- or three-year term (as applicable); however, there is currently one agreement that renews after two years for additional one-year terms and one agreement with a three-year term that does not have a renewal period. In the event of a change in control, as defined, during the employment period, the agreements provide for severance compensation to the executive in an amount equal to the balance of the salary, bonus, and value of fringe benefits which the executive would be entitled to receive for the remainder of the employment period.

On October 24, 2025, Mr. Alvin Murstein, the Company's current Executive Chairman of the Board of Directors, or the Board, entered into an amendment to the First Amended and Restated Employment Agreement, dated May 29, 1998, as amended, between him and the Company. Pursuant to such amendment: (i) effective as of January 31, 2026 (the “Transition Date”), Mr. Murstein no longer served as the Chief Executive Officer and became the Executive Chairman of the Board to serve through May 29, 2027 (the “Term”); (ii) during the period between the date of such amendment and the Transition Date, Mr. Murstein, among other things, continued to serve as Chief Executive Officer of the Company; (iii) during the period from the Transition Date until the end of the Term (the “Retirement Date”), Mr. Murstein shall, among other things, continue to serve as Executive Chairman of the Board with the Company's expectation that Mr. Murstein will be nominated to serve a new three-year term as a Board member at the 2026 Annual Meeting of Shareholders of the Company and a failure by the Board to so nominate Mr. Murstein would constitute termination without cause under his employment agreement; (iv) Mr. Murstein remains an employee of the Company in his role as Executive Chairman of the Board; (v) Mr. Murstein's compensation shall be determined without regard to the transition to Executive Chairman, provided that, all incentive equity awards that are determined to be granted to Mr. Murstein in respect of calendar years 2025, 2026 and 2027 shall be granted solely in the form of restricted stock and options; and (vi) on the Retirement Date (or earlier if termination occurs by reason of death or disability), all outstanding unvested equity awards, other than performance awards, will immediately vest and, if applicable, become exercisable and all outstanding performance awards will remain outstanding until the end of the relevant performance periods and vest and be earned to the extent applicable objects have been met, on a prorated basis for the portion of the performance period that Mr. Murstein was employed.

In addition, on October 24, 2025, Mr. Andrew Murstein, the Company’s current President, Chief Executive Officer and Chief Operating Officer, entered into an amendment to the First Amended and Restated Employment Agreement, dated May 29, 1998, as amended, between him and the Company. Pursuant to such amendment, effective as of January 31, 2026, Mr. Andrew Murstein became the President, Chief Executive Officer and Chief Operating Officer of the Company and shall remain President, Chief Executive Officer and Chief Operating Officer through the remainder of the employment term.

On January 12, 2026, the Company, Medallion Bank, and Mr. Donald Poulton entered into an amendment to the Employment Agreement, dated June 27, 2016 by and between Mr. Poulton, the Company and Medallion Bank. Pursuant to such Amendment, effective January 12, 2026, Donald Poulton no longer served as President of Medallion Bank, but remains the Chief Executive Officer of Medallion Bank through the remainder of the employment term. All other terms of his existing employment agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.

In addition, on January 12, 2026, the Company, Medallion Bank and Mr. D. Justin Haley entered into a Second Amended and Restated Employment Agreement. Pursuant to the agreement, effective January 12, 2026, Mr. Haley no longer served as Executive Vice President and Chief Financial Officer of Medallion Bank, but became the President of Medallion Bank. The employment agreement has a two-year term that automatically renews each year for an additional two-year term commencing on January 1, 2027 unless terminated by either party. Under the employment agreement, Mr. Haley is entitled to an annual base salary of $430,000 effective January 1, 2026, which shall be reviewed by the Board of Directors of the Company not less than once each fiscal year and may be increased but not decreased from the then existing base salary. The employment agreement provides for a severance payment if the employment agreement is terminated under certain conditions. The employment agreement contains a non-competition covenant from Mr. Haley in the Company’s and Medallion Bank’s favor.

As of December 31, 2025, employment agreements expire at various dates through 2028, with future minimum payments under these agreements of approximately $6.6 million as follows:


(Dollars in thousands)
2026	$	4,228
2027		1,921
2028		484
Total	$	6,633

(B) OTHER COMMITMENTS

As of December 31, 2025 the Company had no other commitments. Generally, any commitments would be on the same terms as loans to or investments in existing borrowers or investees, and generally have fixed expiration dates. Since some commitments would be expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

(C) SEC LITIGATION

On December 29, 2021, the SEC filed a civil complaint in the U.S. District Court for the Southern District of New York against the Company and its President and Chief Operating Officer alleging certain violations of the anti-fraud, books and records, internal controls and anti-touting provisions of the federal securities laws. The litigation related to certain issues that occurred during the period 2015 to 2017, including (i) the Company’s retention of third parties in 2015 and 2016 concerning posting information about the Company on certain financial websites and (ii) the Company’s financial reporting and disclosures concerning certain assets, including Medallion Bank, in 2016 and 2017, a period when the Company had previously reported as a business development company (BDC) under the Investment Company Act of 1940. In December 2024, the Company and its President and Chief Operating Officer reached an agreement in principle with the Division of Enforcement of the SEC, that if approved by the Commissioners of the SEC and the Court, would resolve this litigation. On May 30, 2025, the Court entered a Final Judgment as to the Company and its President and Chief Operating Officer resolving this litigation. The parties agreed to settle the matter with the SEC, consenting to the entry of the Final Judgment, without admitting or denying the allegations of the SEC complaint. Pursuant to the Final Judgment, among other things, (i) the parties were enjoined from violating specified provisions of the federal securities laws and rules thereunder, (ii) the Company paid a civil penalty of $3,000,000 (which amount was previously accrued in the fourth quarter of 2024) and (iii) the Company agreed to certain compliance-related undertakings.

(D) OTHER LITIGATION AND REGULATORY MATTERS

The Company and its subsidiaries are subject to inquiries from certain regulators and are currently involved in various legal proceedings incident to the normal course of business, including collection matters with respect to certain loans. The Company intends to vigorously defend any outstanding claims and pursue its legal rights. In the opinion of management, based on the advice of legal counsel, there is no proceeding pending, or to the knowledge of management threatened, which in the event of an adverse decision could result in a material adverse impact on the financial condition or results of operations of the Company.

(11) RELATED PARTY TRANSACTIONS

Certain directors, officers, and stockholders of the Company are also directors and officers of its main consolidated subsidiaries, MFC, Medallion Capital, FSVC, and the Bank, as well as other subsidiaries. Officer salaries are set by the Board of Directors of the Company.

Jeffrey Rudnick, the son of one of the Company’s directors and brother-in-law of one of the Company’s officers and directors, previously served as the Company’s Senior Vice President and effective July 24, 2025, serves as the Company's Executive Vice President at a salary of $269,000, $260,988, and $250,950 for the years ended December 31, 2025, 2024, and 2023, which was increased to $277,000 per year effective January 1, 2026. Mr. Rudnick received an annual cash bonus of $101,000, $75,000, and $95,000 as well as an equity grants in the amount of $54,000, $50,000, and $52,000 for the years ended December 31, 2025, 2024, and 2023.

Jameson Poulton, the son of one of Medallion Bank’s officers, serves as Medallion Bank’s Manager of Data Analytics at a salary of $107,120, $104,004, and $100,000 for the years ended December 31, 2025, 2024, and 2023, which was increased to $120,000 per year effective January 1, 2026. Mr. Poulton received an annual cash bonus of $16,068, $13,000, and $14,000 as well as equity grants in the amount of $0, $2,601, and $4,619 for the years ended December 31, 2025, 2024, and 2023.

.

(12) EMPLOYEE BENEFIT PLANS

The Company has a 401(k) Investment Plan, or the 401(k) Plan, which, effective June 1, 2022, covers all full-time and part-time employees of the Company who have attained the age of 18 and have a minimum of thirty (30) days of service. Under the 401(k) Plan, an employee may elect to defer not less than 1% of total annual compensation, up to the applicable limits set forth in the Internal Revenue Code. Employee contributions are invested in various mutual funds according to the directions of the employee. Once eligible full-time employees have completed a minimum of ninety (90) days of service, and part time employees have worked at least 1,000 hours, the Company matches employee contributions to the 401(k) Plan in an amount per employee equal to fifty percent of the first 8% of the employee’s annual contributions, subject to legal limits. Prior to June 1, 2022, the 401(k) Plan covered full- and part-time employees of the Company aged 21 and older that had completed a minimum of thirty (30) days of service, with the Company matching one-third of the first 6% of the contributions of eligible employees that had completed at least one (1) year of service (in the case of full-time employees) or 1,000 hours (in the case of part-time employees). The Company’s 401(k) plan expense was approximately $0.6 million, $0.6 million, and $0.5 million for the years ended December 31, 2025, 2024, and 2023.

(13) FAIR VALUE OF FINANCIAL INSTRUMENTS

FASB ASC Topic 825, “Financial Instruments,” requires disclosure of fair value information about certain financial instruments, whether assets, liabilities, or off-balance-sheet commitments, if practicable. The following tables present the carrying amounts and fair values of the Company’s financial instruments as of December 31, 2025 and 2024.


	December 31, 2025
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets
Cash, cash equivalents, and federal funds sold (1)	$	201,564	$	201,564	$	200,814	$	750	$	—
Investment securities		60,183		60,183		—		60,183		—
Loans held for investment, net of allowance		2,436,916		2,421,988		—		—		2,421,988
Loans held for sale, at lower of amortized cost or fair value		15,144		15,144		—		—		15,144
Accrued interest receivable		19,401		19,401		19,401		—		—
Equity securities (2)		1,787		1,787		1,787		—		—
Financial liabilities
Funds borrowed (3)		2,410,016		2,431,011		—		2,431,011		—
Accrued interest payable		6,319		6,319		6,319		—		—

(1)

Includes federal funds sold and interest bearing deposits in other banks.

(2)

Included within other assets on the balance sheet.

(3)

Excludes deferred financing costs of $8.4 million as of December 31, 2025.


	December 31, 2024
(Dollars in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets
Cash, cash equivalents, and federal funds sold (1)	$	169,572	$	169,572	$	168,322	$	1,250	$	—
Investment securities		54,805		54,805		—		54,805		—
Loans held for investment, net of allowance		2,265,428		2,238,645		—		—		2,238,645
Loans held for sale, at lower of amortized cost or fair value		128,226		133,244		—		—		133,244
Accrued interest receivable		15,314		15,314		15,314		—		—
Equity securities (2)		1,732		1,732		1,732		—		—
Financial liabilities
Funds borrowed (3)		2,379,413		2,371,434		—		2,371,434		—
Accrued interest payable		8,231		8,231		8,231		—		—

(1)

Includes federal funds sold and interest bearing deposits in other banks.

(2)

Included within other assets on the balance sheet.

(3)

Excludes deferred financing costs of $8.2 million as of December 31, 2024.

(14) FAIR VALUE OF ASSETS AND LIABILITIES

The Company follows the provisions of FASB ASC 820, which defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and enhances disclosure requirements for fair value measurements.

In accordance with FASB ASC 820, the Company has categorized its assets and liabilities measured at fair value, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3). The Company's assessment and classification of an investment within a level can change over time based upon maturity or liquidity of the investment and would be reflected at the beginning of the quarter in which the change occurred.

As required by FASB ASC 820, when the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a level 3 fair value measurement may include inputs that are observable (levels 1 and 2) and unobservable (level 3). Therefore, gains and losses for such assets and liabilities categorized within the level 3 table below may include changes in fair value that are attributable to both observable inputs (levels 1 and 2) and unobservable inputs (level 3).

Assets and liabilities measured at fair value, recorded on the consolidated balance sheets, are categorized based on the inputs to the valuation techniques as follows:

Level 1. Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company has the ability to access (examples include active exchange-traded equity securities, exchange-traded derivatives, most U.S. Government and agency securities, and certain other sovereign government obligations).

Level 2. Assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following:

a)

Quoted prices for similar assets or liabilities in active markets (for example, restricted stock);

b)

Quoted price for identical or similar assets or liabilities in non-active markets (for example, corporate and municipal bonds, which trade infrequently);

c)

Pricing models whose inputs are observable for substantially the full term of the asset or liability (examples include most over-the-counter derivatives, including interest rate and currency swaps); and

d)

Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability (examples include certain residential and commercial mortgage-related assets, including loans, securities, and derivatives).

The Company’s investment securities are recorded at the estimated fair value of such investments.

Level 3. Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the assets or liability (examples include certain private equity investments, and certain residential and commercial mortgage-related assets, including loans, securities, and derivatives).

A review of fair value hierarchy classification is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain assets or liabilities. Reclassifications impacting level 3 of the fair value hierarchy are reported as transfers in/out of the level 3 category as of the beginning of the quarter in which the reclassifications occur.

Equity investments were recorded at cost less impairment plus or minus observable price changes. Commencing in 2020, the Company elected to measure equity investments at fair value on a non-recurring basis.

The following tables present the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024.


December 31, 2025 (Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets
Investment securities (1)	$	—	$	60,183	$	—	$	60,183
Equity securities (2)		1,787		—		—		1,787
Total	$	1,787	$	60,183	$	—	$	61,970

(1)

Total unrealized gains of $1.8 million, net of tax, was included in other comprehensive income for the year ended December 31, 2025.

(2)

Included within other assets on the balance sheet.


December 31, 2024 (Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets
Investment securities (1)	$	—	$	54,805	$	—	$	54,805
Equity securities (2)		1,732		—		—		1,732
Total	$	1,732	$	54,805	$	—	$	56,537

(1)

Total unrealized gains of less than $0.1 million, net of tax, was included in other comprehensive loss for the year ended December 31, 2024.

(2)

Included within other assets on the balance sheet.

The following tables present the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2025 and 2024.

           December 31, 2025
(Dollars in thousands)

           Level 1

           Level 2

           Level 3

           Total

           Assets

Equity investments (1)

$

—

$

—

$

—

$

—

Total

$

—

$

—

$

—

$

—

(1)

As of December 31, 2025, the Company held 8 equity investments, measured on a non-recurring basis, that had a fair value of $0.


December 31, 2024 (Dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets
Equity investments	$	—	$	—	$	1,374	$	1,374
Total	$	—	$	—	$	1,374	$	1,374

Significant Unobservable Inputs

ASC Topic 820 requires disclosure of quantitative information about the significant unobservable inputs used in the valuation of assets and liabilities classified as level 3 within the fair value hierarchy. The tables below are not intended to be all-inclusive, but rather to provide information on significant unobservable inputs and valuation techniques used by the Company.

The valuation techniques and significant unobservable inputs used in non-recurring level 3 fair value measurements of assets and liabilities as of December 31, 2025 and 2024.


(Dollars in thousands)	Fair Value at December 31, 2025		Valuation Techniques	Unobservable Inputs	Range (Weighted Average)
Equity investments	$	—	Investee financial analysis	Financial condition and operating performance of the borrower (1)	N/A

(1)

Includes projections based on revenue, EBITDA, leverage and liquidation amounts. These assumptions are based on a variety of factors, including economic conditions, industry and market developments, market valuations of comparable companies, and company-specific developments, including exit strategies and realization opportunities.


(Dollars in thousands)	Fair Value at December 31, 2024		Valuation Techniques	Unobservable Inputs	Range (Weighted Average)
Equity investments	$	1,374	Investee financial analysis	Financial condition and operating performance of the borrower (1)	N/A

(1)

Includes projections based on revenue, EBITDA, leverage and liquidation amounts. These assumptions are based on a variety of factors, including economic conditions, industry and market developments, market valuations of comparable companies, and company-specific developments, including exit strategies and realization opportunities.

(15) MEDALLION BANK PREFERRED STOCK (Non-controlling interest)

On July 21, 2011, the Bank issued, and the U.S. Treasury purchased, 26,303 shares of Senior Non-Cumulative Perpetual Preferred Stock, Series E for an aggregate purchase price of $26.3 million under the Small Business Lending Fund Program, or SBLF, with a liquidation amount of $1,000 per share. The SBLF is a voluntary program intended to encourage small business lending by providing capital to qualified smaller banks at favorable rates. The Bank pays a dividend rate of 9% on the Series E.

On December 17, 2019, the Bank closed an initial public offering of 1,840,000 shares of its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series F, or Series F Preferred Stock, with a $46.0 million aggregate liquidation amount, or $25 per share, yielding net proceeds of $42.5 million. Dividends were payable quarterly from the date of issuance to, but excluding, April 1, 2025, at a rate of 8% per annum, and from and including April 1, 2025, at a floating rate equal to three-month Term 90-day Secured Overnight Financing Rate, or SOFR, plus a spread of 6.46% per annum.

On May 29, 2025, the Bank closed an initial public offering of 3,100,000 shares of its Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series G, with a $77.5 million aggregate liquidation amount, or $25 per share, yielding net proceeds of $73.1 million. Dividends are payable quarterly from the date of issuance to, but excluding July 1, 2030, at a fixed rate equal to 9.00% per annum, and from and including July 1, 2030, during each reset period at a rate equal to the five-year U.S. Treasury rate plus a spread of 4.94% per annum.

On July 1, 2025, the Bank redeemed its Series F Preferred Stock, in its entirety, at an aggregate redemption price of $46.0 million. Upon redemption, the Company incurred a charge of approximately $3.5 million in calculating earnings attributable to common shareholders representing the excess of the redemption price over the carrying amount of $42.5 million.

(16) PARENT COMPANY ONLY CONDENSED FINANCIAL STATEMENTS

The following presents the condensed financial information of Medallion Financial Corp. (parent company only).

Condensed Balance Sheets


	December 31,
(Dollars in thousands)	2025		2024
Assets
Cash	$	20,102	$	26,395
Investment in bank subsidiary (1)		618,677		552,326
Investment in non-bank subsidiaries		82,080		96,653
Income tax receivable		11,859		21,870
Intercompany receivable		850		—
Net loans receivable		542		782
Loan collateral in process of foreclosure		159		361
Other assets		2,994		4,933
Total assets	$	737,263	$	703,320
Liabilities
Long-term borrowings (2)	$	146,693	$	177,169
Short-term borrowings		31,250		—
Deferred tax liabilities		38,453		38,096
Intercompany payables		—		31,435
Other liabilities		12,821		17,662
Total liabilities		229,217		264,362
Parent company equity		408,617		370,170
Non-controlling interest		99,429		68,788
Total stockholders’ equity		508,046		438,958
Total liabilities and equity	$	737,263	$	703,320

(1)

Includes $168.5 million and $169.9 million of goodwill and intangible assets of the Company which relate specifically to the Bank and $99.4 million and $68.8 million related to non-controlling interests in consolidated subsidiaries as of December 31, 2025 and 2024.

(2)

Includes $1.8 million and $2.3 million of deferred financing costs as of December 31, 2025 and 2024.

Condensed Statements of Operations


	Year Ended December 31,
(Dollars in thousands)	2025			2024			2023
Dividend income	$	29,616		$	25,600		$	25,125
Interest income		804			1,260			1,243
Total dividend and interest income		30,420			26,860			26,368
Interest expense		14,893			14,800			12,771
Net interest income		15,527			12,060			13,597
Benefit for credit losses		(229	)		(133	)		(310	)
Net interest income after allowance for credit losses		15,756			12,193			13,907
Other income, net (1)		1,266			997			2,625
Other expense, net		21,605			18,656			22,781
Loss before income taxes and undistributed earnings of subsidiaries		(4,583	)		(5,466	)		(6,249	)
Income tax benefit		7,083			3,095			5,291
Loss before undistributed earnings of subsidiaries		2,500			(2,371	)		(958	)
Undistributed earnings of subsidiaries		40,544			38,249			56,037
Net income attributable to parent company	$	43,044		$	35,878		$	55,079

(1)

Includes $1.3 million, $1.0 million, and $3.1 million of net gains on the disposition of taxi medallion assets for the years ended December 31, 2025, 2024, and 2023.

Condensed Statements of Other Comprehensive Income


	Year Ended December 31,
(Dollars in thousands)	2025			2024			2023
Net income attributable to parent company	$	43,044		$	35,878		$	55,079
Change in unrealized gains (losses) on investment securities		1,757			68			(482	)
Tax effect on unrealized (losses) gains on investments		(491	)		(19	)		135
Total comprehensive income attributable to Medallion Financial Corp.	$	44,310		$	35,927		$	54,732

Condensed Statements of Cash Flow


	Year Ended December 31,
(Dollars in thousands)	2025			2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income/net decrease in net assets resulting from operations	$	43,044		$	35,878		$	55,079
Adjustments to reconcile net income/net decrease in net assets resulting from operations to net cash provided by operating activities:
Equity in undistributed earnings of subsidiaries		(71,606	)		(63,846	)		(81,164	)
Benefit for credit losses		(229	)		(133	)		(310	)
Depreciation and amortization		2,237			2,252			2,198
Change in deferred and other tax assets/liabilities, net		10,368			2,458			(947	)
Net change in loan collateral in process of foreclosure		—			—			252
Stock-based compensation expense		6,735			6,053			4,713
Decrease in other assets		1,939			1,680			990
Decrease (increase) in deferred financing costs		(10	)		(272	)		(1,437	)
Decrease in intercompany payables		(503	)		(1,165	)		(778	)
Decrease in other liabilities		(4,796	)		(7,614	)		(134	)
Net cash used for operating activities		(12,821	)		(24,709	)		(21,538	)
CASH FLOWS FROM INVESTING ACTIVITIES
Loans originated		(72	)		(110	)		(1,612	)
Proceeds from principal receipts, sales, and maturities of loans and investments		541			1,864			2,057
Proceeds from sale and principal payments of loan collateral in process of foreclosure		202			434			954
Investment in subsidiaries		(11,116	)		—			(5,125	)
Dividends from subsidiaries		29,616			25,600			25,125
Net cash provided by investing activities		19,171			27,788			21,399
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from funds borrowed		—			10,000			51,500
Repayments of funds borrowed		—			(3,000	)		(33,000	)
Treasury stock repurchased		(986	)		(4,606	)		—
Dividends paid to shareholders		(10,971	)		(9,394	)		(7,703	)
Payment of withholding taxes on net settlement of vested stock		(1,202	)		(944	)		(768	)
Proceeds from the exercise of stock options		516			259			442
Net cash (used for) provided by financing activities		(12,643	)		(7,685	)		10,471
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(6,293	)		(4,606	)		10,332
Cash and cash equivalents, beginning of period		26,395			31,001			20,669
Cash and cash equivalents, end of period	$	20,102		$	26,395		$	31,001

(17) SUBSEQUENT EVENTS

On January 13, 2026, approximately $1 billion of recreation loans, in addition to the previously-pledged home improvement loans, were pledged as secured collateral to the Federal Reserve Discount Window, increasing the total loans pledged to just under $1.6 billion. As of January 31, 2026, the blended advance rate was 57%, with a total borrowing capacity of approximately $900 million.

On February 26, 2026, the Company repaid $31.25 million of privately placed notes, in full, at maturity.

In February 2026, the Company repaid $11.5 million of SBA debentures, in full, which had a maturity date of March 1, 2026.

The Company has evaluated the effects of events that have occurred subsequent to December 31, 2025, through the date of financial statement issuance for potential recognition or disclosure. As of such date, there were no additional subsequent events that required recognition or disclosure.