MEDALLION FINANCIAL CORP

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange of Act of 1934, registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

INDEX TO FINANCIAL STATEMENTS

To the Stockholders and Board of Directors

Medallion Financial Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Medallion Financial Corp. (the “Company”) as of December 31, 2024; the related consolidated statements of operations, comprehensive income, changes in stockholders' equity, and cash flows for the year then ended; and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

We also have audited the Company’s internal control over financial reporting as of December 31, 2024, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”), based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Our report dated March 13, 2025 expresses an unqualified opinion.

The Company's management is responsible for these financial statements. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Allowance for Credit Losses – Refer to Notes 2 and 4 to the Financial Statements

Critical Audit Matter Description

The Company has established an allowance for credit losses (the “ACL”) to recognize estimated credit losses over the lives of loans. The Company has segregated its ACL into five segments, (1) recreation, (2) home improvement, (3) commercial, (4) taxi medallion, and (5) strategic partnership loans. The ACL related to recreation, home improvement, and commercial loans is material to the consolidated financial statements. Recreation and home improvement loans are considered consumer loans whereby homogeneous pools of loans are reviewed for impairment collectively. The Company’s quantitative model for consumer loans uses historical loss rates and current delinquency characteristics and is adjusted for macroeconomic forecasts for the foreseeable future. The Company evaluates the output of the quantitative model 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 underlying collateral, prevailing economic conditions, and excess concentration risk and applies a qualitative adjustment, if warranted. For commercial loans, the ACL is estimated by determining the fair value of the borrowers’ equity interests securing the loan.

Significant judgment was required by management in the selection and application of the ACL, specifically those related to the consumer and commercial loan segments. Accordingly, performing audit procedures to evaluate the Company’s estimated ACL involved a high degree of auditor judgment and required significant effort, including the involvement of professionals with specialized skill and knowledge.

How the Critical Audit Matter was Addressed in the Audit

Our audit procedures related to the Company’s estimate of the ACL included, but were not limited to, the following:

•

We tested the design and operating effectiveness of management’s controls over key assumptions and judgments in the ACL model for the consumer and commercial loan portfolios.

•

We tested management’s process for determining reserves on collectively evaluated consumer loans and individually evaluated commercial loans, including the following:

o

Evaluation of the appropriateness of management’s methodology

o

Testing the completeness and accuracy of data utilized by management

o

Evaluation of the relevance and reliability of information used by management in the development of the estimate

o

For collectively evaluated consumer loans, evaluation of the reasonableness of significant assumptions used in the estimate, including consideration of whether assumptions used were reasonable given portfolio composition; consideration of relevant external factors, including economic conditions; and consideration of historical or recent experience and conditions and events affecting the Company

o

For individually evaluated commercial loans, evaluation of the reasonableness of significant assumptions used in the estimates of the fair value of the borrowers’ equity interests, including consideration of whether assumptions used were reasonable given nature of the commercial loan relationship, including its industry, trends, and market conditions relative to the type of entity on a sample basis

Goodwill - Refer to Note 2 to the Financial Statements

Critical Audit Matter Description

The Company used a combination of a weighted income valuation methodology, comprising a discounted cash flow analysis, and a market valuation methodology to determine the fair value of the reporting units. The discounted cash flow analysis included the use of assumptions, such as multiyear cash projections that rely on internal forecasts and discount rate. The market approach considers a combination of price to book value and price to earnings, adjusted based on peer data for companies similar to the reporting units. Auditing management’s impairment test of goodwill was complex and highly judgmental due to the significant measurement uncertainty in determining the fair value of the reporting units. In particular, the fair value estimates of the reporting units were sensitive to changes in significant assumptions, including discount rates, projected balance sheet growth, the selection of comparable company multiples, and the weighting of outcomes of the income- and market-based methods. All of these assumptions are affected by expected future market or economic conditions.

How the Critical Audit Matter was Addressed in the Audit

Our audit procedures related to the Company’s goodwill impairment assessment included, but were not limited to, the following:

•

We tested the design and operating effectiveness of management’s controls over the Company’s goodwill impairment process, including the review of significant assumptions and methodologies used in estimating the fair value of the reporting unit, and controls to ensure data used in the valuation model were accurate and complete.

•

Management’s evaluation of the reasonableness of the valuation methodologies and significant assumptions used in the discounted cash flow analysis, including the discount rate and multiyear cash projections

•

Management’s selection and review of selected peer market data and price to tangible book value and price to earnings assumptions. Substantively testing management’s estimate with the assistance of firm valuation specialists, which included:

o

Testing the completeness and accuracy of key financial internal data and evaluation of the relevance and reliability of external data

o

Evaluating the appropriateness of valuation methodologies and testing significant assumptions used in the discounted cash flow analysis, including the discount rate and multiyear cash projections

o

Testing the reasonableness of the peer group selected and assumptions related to price to book value and price to earnings assumptions

o

Evaluating the reasonableness of weighting applied to the discounted cash flow analysis and market models

/s/ Plante & Moran, PLLC

We have served as the Company’s auditor since 2024.

Chicago, Illinois

March 13, 2025

To the Stockholders and Board of Directors of Medallion Financial Corp.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Medallion Financial Corp. and subsidiaries (collectively, the “Company”) as of December 31, 2023, and the related consolidated statements of operations, other comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the years in the two year period ended December 31, 2023 and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations, changes in stockholders’ equity, and cash flows for each of the years in the two year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Mazars USA LLP

PCAOB ID 339

We served as the Company’s auditor from 2005 to 2024.

New York, New York

March 7, 2024