MEDALLION FINANCIAL CORP

Previous wording

The information contained in this section should be read in conjunction with the consolidated financial statements and the accompanying notes thereto for the three and six months ended June 30, 2025 and the year ended December 31, 2024. This section is intended to provide management’s perspective of our financial condition and results of operations. In addition, this section contains forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors that could cause actual results and conditions to differ materially from those projected in these forward-looking statements are described in the Risk Factors section in our Annual Report on Form 10-K.

Current wording

The information contained in this section should be read in conjunction with the consolidated financial statements and the accompanying notes thereto for the three and nine months ended September 30, 2025 and the year ended December 31, 2024. This section is intended to provide management’s perspective of our financial condition and results of operations. In addition, this section contains forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors that could cause actual results and conditions to differ materially from those projected in these forward-looking statements are described in the Risk Factors section in our Annual Report on Form 10-K.

Previous wording

We are a specialty finance company whose focus and growth has been our consumer finance and commercial lending businesses operated by Medallion Bank, or the Bank, and Medallion Capital, Inc., or Medallion Capital. The Bank is a wholly-owned subsidiary that originates consumer loans for the purchase of recreational vehicles, boats, collector cars, and home improvements, and provides loan origination and other services to fintech partners. Medallion Capital is a wholly-owned subsidiary that originates commercial loans through its mezzanine financing business. As of June 30, 2025, our consumer loans represented 95% of our gross loan portfolio, inclusive of loans held for sale, and commercial loans represented 5%. Total assets were $2.88 billion and $2.87 billion as of June 30, 2025 and December 31, 2024.

Current wording

We are a specialty finance company whose focus and growth has been our consumer finance and commercial lending businesses operated by Medallion Bank, or the Bank, and Medallion Capital, Inc., or Medallion Capital. The Bank is a wholly-owned subsidiary that originates consumer loans for the purchase of recreational vehicles, boats, collector cars, and home improvements, and provides loan origination and other services to financial technology, or fintech, partners. Medallion Capital is a wholly-owned subsidiary that originates commercial loans through its mezzanine financing business. As of September 30, 2025, our consumer loans represented 94% of our gross loan portfolio, inclusive of loans held for sale, and commercial loans represented 5%. Total assets were $2.90 billion and $2.87 billion as of September 30, 2025 and December 31, 2024.

Previous wording

In 2019, the Bank launched a strategic partnership program to provide lending and other services to financial technology, or fintech, companies. The Bank entered into an initial partnership in 2020 and began issuing its first loans. The Bank continues to evaluate and launch additional partnership programs with fintech companies.

Current wording

In 2019, the Bank launched a strategic partnership program to provide lending and other services to fintech companies. The Bank entered into an initial partnership in 2020 and began issuing its first loans. The Bank continues to evaluate and launch additional partnership programs with fintech companies.

Previous wording

The following table presents our consolidated average balance sheets, interest income and expense, and the average interest earning/bearing assets and liabilities, and which reflect the average yield on assets and average costs on liabilities as of and for the six months ended June 30, 2025 and 2024.

Current wording

The following table presents our consolidated average balance sheets, interest income and expense, and the average interest earning/bearing assets and liabilities, and which reflect the average yield on assets and average costs on liabilities as of and for the nine months ended September 30, 2025 and 2024.

Previous wording

For the three months ended June 30, 2025, our total loans yielded 12.27%, as compared to 11.98% for the three months ended June 30, 2024. The 29 basis point increase reflects a higher yield on our loan portfolios, as we have increased the rates charged on new consumer originations over the past year as prevailing market interest rates have remained high. Similarly, for the six months ended June 30, 2025, our total loans yielded 12.16%, as compared to 11.89% for the six months ended June 30, 2024.We have continued to use the higher interest rate environment as an opportunity to increase the rates on both newly issued recreation and home improvement loans, as well as seek to increase the credit quality of our new issuances, particularly in our recreation segment, with the weighted average FICO scores, measured at origination, of our outstanding recreation loans being 685 (684 exclusive of loans held for sale) as of June 30, 2025, consistent with outstanding recreation loans as of June 30, 2024. We use weighted average FICO scores as an indicator of portfolio risk.

Current wording

For the three months ended September 30, 2025, our total loans yielded 12.39%, as compared to 12.12% for the three months ended September 30, 2024. The 27 basis point increase primarily reflects a higher yield on our loan portfolios, as we continued to charge higher rates on new consumer originations over what we had charged in past years as prevailing market interest rates remained high. Similarly, for the nine months ended September 30, 2025, our total loans yielded 12.23%, as compared to 12.02% for the nine months ended September 30, 2024. We have continued to use the higher interest rate environment as an opportunity to increase the rates on both newly issued recreation and home improvement loans, as well as seek to maintain the credit quality of our new issuances, particularly in our recreation segment, with the weighted average FICO scores, measured at origination, of our outstanding recreation loans being 685 (685 exclusive of loans held for sale) as of September 30, 2025, consistent with outstanding recreation loans as of September 30, 2024. We use weighted average FICO scores as an indicator of portfolio risk.

Previous wording

Our debt, with certificates of deposits being our largest source, funds our growing lending business. Our average interest cost for the three and six months ended June 30, 2025 of 4.20% and 4.19% increased 38 and 44 basis points from the three and six months ended June 30, 2024, attributable to the current higher interest rate environment, particularly the higher cost associated with our deposits. To the extent that prevailing market interest rates remain at current levels, we expect our cost of funds to continue to increase as we issue new certificates of deposit to replace maturing certificates of deposit and fund our growth. During the three months ended June 30, 2025, we issued deposits at rates up to 4.23% and 4.28% for three and five year certificates of deposit. As described above, we have taken, and continue to take, steps to pass along a portion of the interest rate increases on newly originated loans, the process for which is slower than the pace of funding cost increases, thereby compressing our net interest margins.

Current wording

Our debt, with certificates of deposit being our largest source, funds our growing lending business. Our average interest cost for the three and nine months ended September 30, 2025 of 4.28% and 4.22% increased 23 and 36 basis points from the three and nine months ended September 30, 2024, attributable to the current higher interest rate environment, particularly the higher cost associated with our deposits. To the extent that prevailing market interest rates remain at current levels, we expect our cost of funds to continue to increase as we issue new certificates of deposit to replace maturing certificates of deposit and fund our growth. During the three months ended September 30, 2025, we issued deposits at rates up to 3.98% and 4.03% for three and five year certificates of deposit with the most recent three and five year certificates of deposit issued at rates of 3.73% and 3.78%. As described above, we have taken, and continue to take, steps to pass along a portion of the interest rate increases on newly originated loans, the process for which is slower than the pace of funding cost increases, thereby compressing our net interest margins.

Previous wording

The following table presents the change in interest income and expense due to changes in the average balances (volume) and average rates, calculated for the periods indicated.

Current wording

The following tables present the change in interest income and expense due to changes in the average balances (volume) and average rates, calculated for the periods indicated.

Previous wording

During the three and six months ended June 30, 2025, the increase in interest income over the prior year periods was mainly driven by the increase in the size of the consumer loan portfolios, as well as an increase in overall yield on interest-earning assets as we issue new loans at interest rates greater than the weighted average rates of our current portfolio. The increase in interest expense was driven by an increase in borrowing costs, primarily due to the increases in deposits as older deposits mature and are replaced at current market rates, as well as an overall increase in borrowings.

Current wording

During the three and nine months ended September 30, 2025, the increase in interest income over the prior year periods was mainly driven by the increase in the size of the consumer loan portfolios, particularly recreation loans, as well as an increase in overall yield on interest-earning assets as we continued to issue new consumer loans at interest rates greater than the weighted average rates of our current portfolio. The increase in interest expense was driven by an increase in borrowing costs, primarily due to the increases in deposits as older deposits mature and are replaced at current market rates, as well as an overall increase in borrowings.

Previous wording

We measure our borrowing costs as our aggregate interest expense for all of our interest-bearing liabilities divided by the average amount of such liabilities outstanding during the period. The above tables present the average borrowings and related borrowing costs for the three and six months ended June 30, 2025 and 2024. We expect our borrowing costs to further increase as we take deposits and borrow other funds at the currently higher prevailing rates.

Current wording

We measure our borrowing costs as our aggregate interest expense for all of our interest-bearing liabilities divided by the average amount of such liabilities outstanding during the period. The above tables present the average borrowings and related borrowing costs for the three and nine months ended September 30, 2025 and 2024. We expect our borrowing costs to further increase as we take deposits and borrow other funds at the currently higher prevailing rates.

Previous wording

We continue to seek SBA funding through Medallion Capital to the extent it offers attractive rates. SBA financing subjects recipients to limits on the amount of secured bank debt they may incur. We use SBA funding to fund loans that qualify under the Small Business Investment Act of 1985, as amended, or the SBIA, and SBA regulations. In February 2024, we obtained an $18.5 million commitment from the SBA, with $10.3 million currently drawable.

Current wording

We continue to seek SBA funding through Medallion Capital to the extent it offers attractive rates. SBA financing subjects recipients to limits on the amount of secured bank debt they may incur. We use SBA funding to fund loans that qualify under the Small Business Investment Act of 1985, as amended, or the SBIA, and SBA regulations. In February 2024, we obtained an $18.5 million commitment from the SBA, all of which had been utilized as of September 30, 2025.

Previous wording

Loans are reported at the principal amount outstanding, inclusive of deferred loan acquisition costs, which primarily includes deferred fees paid to loan originators, which are amortized to interest income over the life of the loan. For the three and six months ended June 30, 2025, there was continued growth in the recreation segment, but a decline in the home improvement lending segment, as compared to the prior year quarter. The tables below present the activity of the loan portfolio, inclusive of loans held for sale and loans held for investment.

Current wording

Loans are reported at the principal amount outstanding, inclusive of deferred loan acquisition costs, which primarily includes deferred fees paid to loan originators, which are amortized to interest income over the life of the loan. For the three and nine months ended September 30, 2025, there was continued growth in the recreation segment, but a decline in the home improvement lending segment, as compared to the prior year quarter. The following tables present the activity of the loan portfolio, inclusive of loans held for sale and loans held for investment.

Previous wording

Excludes $47.6 million of capitalized loan origination costs.

Current wording

Excludes $51.5 million of capitalized loan origination costs.

Previous wording

The allowance for credit losses is maintained at a level estimated by management to absorb expected future losses in the portfolios. As of June 30, 2025 and December 31, 2024, the allowance totaled $106.9 million and $97.4 million, which represented 4.43% and 4.12% of total loans held for investment, respectively. The provision for credit losses was $21.6 million and $43.6 million for the three and six months ended June 30, 2025 compared to $18.6 million and $35.8 million for the three and six months ended June 30, 2024 as a result of rising loss rates, fluctuation in delinquencies, and expected losses in our recreation loans, partially offset by a decrease in expected losses in our home improvement loans.

Current wording

The allowance for credit losses is maintained at a level estimated by management to absorb expected future losses in the portfolios. As of September 30, 2025 and December 31, 2024, the allowance totaled $111.1 million and $97.4 million, which represented 4.47% and 4.12% of total loans held for investment, respectively. The provision for credit losses was $18.6 million for the three months ended September 30, 2025 compared to $20.2 million for the three months ended September 30, 2024 as a result of fewer originations in the current quarter as compared to the prior year quarter. The provision for credit losses was $62.1 million for the nine months ended September 30, 2025 compared to $55.9 million for the nine months ended September 30, 2024 as a result of rising loss rates, fluctuation in delinquencies, and expected losses in our recreation loans, partially offset by a decrease in expected losses in our home improvement loans.

Previous wording

Additionally, during the three and six months ended June 30, 2025 we recognized provisions of $2.9 million and $6.0 million related to specific commercial loans. Provisions and the correlated allowance for credit losses of commercial loans are assessed on specific indicators, such as, the underlying borrower not performing as expected and consideration of the current economic environment and economic policies which impact, or are likely to impact, the borrower's underlying business operations.

Current wording

During the three and nine months ended September 30, 2025, we recognized provisions of $1.4 million and $7.4 million related to specific commercial loans. Provisions and the correlated allowance for credit losses of commercial loans are assessed on specific indicators, such as, the underlying borrower not performing as expected and consideration of the current economic environment and economic policies which impact, or are likely to impact, the borrower's underlying business operations.

Previous wording

The following tables present the activity in the allowance for credit losses for the three and six months ended June 30, 2025 and 2024.

Current wording

The following table presents the activity in the allowance for credit losses for the three and nine months ended September 30, 2025.

Previous wording

As of June 30, 2025, cumulative net charge-offs of loans and loan collateral in process of foreclosure in the taxi medallion portfolio were $161.5 million, including $95.2 million related to loans secured by New York City taxi medallions, some of which may represent collection opportunities for the Company.

Current wording

As of September 30, 2025, cumulative net charge-offs of loans and loan collateral in process of foreclosure in the taxi medallion portfolio were $172.6 million, including $107.5 million related to loans secured by New York City taxi medallions, some of which may represent collection opportunities for the Company.

Previous wording

The following tables present the gross charge-offs for the three and six months ended June 30, 2025, by the year of origination:

Current wording

The following tables present the gross charge-offs for the three and nine months ended September 30, 2025, by the year of origination:

Previous wording

The following tables present the gross charge-offs for the three and six months ended June 30, 2024, by the year of origination:

Current wording

The following tables present the gross charge-offs for the three and nine months ended September 30, 2024, by the year of origination:

Previous wording

As of June 30, 2025, total allowance for credit losses as a percent of nonaccrual loans was 288.09%.

Current wording

As of September 30, 2025, total allowance for credit losses as a percent of nonaccrual loans was 297.41%.

Previous wording

As of June 30, 2025, the total allowance for credit losses as a percent of loans increased 31 basis points from December 31, 2024.

Current wording

As of September 30, 2025, the total allowance for credit losses as a percent of loans increased 35 basis points from December 31, 2024.

Previous wording

As of June 30, 2025, taxi medallion loans in the process of foreclosure included 304 taxi medallions in the New York City market, 187 taxi medallions in the Chicago market, 24 taxi medallions in the Newark market, and 31 taxi medallions in various other markets.

Current wording

As of September 30, 2025, taxi medallion loans in the process of foreclosure included 292 taxi medallions in the New York City market, 187 taxi medallions in the Chicago market, 23 taxi medallions in the Newark market, and 31 taxi medallions in various other markets.

Previous wording

Recreation lending is a return-oriented business focused on originating prime and non-prime recreation loans which is a significant source of income for us, accounting for 66% of our interest income for each of the three and six months ended June 30, 2025 and 67% and 66% for the three and six months ended June 30, 2024.

Current wording

Recreation lending is a return-oriented business focused on originating prime and non-prime recreation loans which is a significant source of income for us, accounting for 66% of our interest income for each of the three and nine months ended September 30, 2025 and 67% for both the three and nine months ended September 30, 2024.

Previous wording

We maintain relationships with approximately 3,300 dealers and financial service providers, or FSPs, not all of which are active at any one time. FSPs are entities that provide finance and insurance, or F&I, services to small dealers that do not have the desire or ability to provide F&I services themselves. The ability of FSPs to aggregate the financing and relationship management for many small dealers makes them valuable to us. We receive approximately half of our loan volume from dealers and the other half from FSPs. Our top ten dealer and FSP relationships were responsible for 40% of recreation lending’s new loan originations for the six months ended June 30, 2025 and 41% for the six months ended June 30, 2024. The percentage of new loan originations by the top ten dealer and FSP relationships is a measure of concentration, which management uses to determine whether to undertake diversification efforts, and which provides investors with information about origination concentration.

Current wording

We maintain relationships with approximately 3,300 dealers and financial service providers, or FSPs, not all of which are active at any one time. FSPs are entities that provide finance and insurance, or F&I, services to small dealers that do not have the desire or ability to provide F&I services themselves. The ability of FSPs to aggregate the financing and relationship management for many small dealers makes them valuable to us. We receive approximately half of our loan volume from dealers and the other half from FSPs. Our top ten dealer and FSP relationships were responsible for 39% of recreation lending’s new loan originations for the nine months ended September 30, 2025 consistent with the nine months ended September 30, 2024. The percentage of new loan originations by the top ten dealer and FSP relationships is a measure of concentration, which management uses to determine whether to undertake diversification efforts, and which provides investors with information about origination concentration.

Previous wording

The loans are secured primarily by RVs, boats, collector cars, and trailers, with RV loans making up 54% of the portfolio, boat loans making up 21%, and collector car loans making up 12% of the portfolio as of June 30, 2025, compared to 54%, 21%, and 11% as of June 30, 2024. Recreation loans are made to borrowers residing nationwide, with the highest concentrations as of June 30, 2025 in Texas and Florida at 16% and 10% of loans outstanding, consistent with concentrations as of June 30, 2024, and with no other states at or above 10%. As of June 30, 2025, the weighted average FICO scores, measured at origination, of our recreation loans outstanding were 685 (684 exclusive of loans held for sale) consistent with FICO scores as of June 30, 2024. The weighted average FICO scores at the time of origination for the loans funded in the six months ended June 30, 2025 and 2024 were 687 and 689.

Current wording

The loans are secured primarily by RVs, boats, collector cars, and trailers, with RV loans making up 54% of the portfolio, boat loans making up 21%, and collector car loans making up 12% of the portfolio as of September 30, 2025, compared to 55%, 20%, and 11% as of September 30, 2024. Recreation loans are made to borrowers residing nationwide, with the highest concentrations as of September 30, 2025 in Texas and Florida at 16% and 13% of loans outstanding, compared to 16% and 10% at September 30, 2024, and with no other states at or above 10%. As of September 30, 2025 and September 30, 2024, the weighted average FICO scores, measured at origination, of our recreation loans outstanding were 685. The weighted average FICO scores at the time of origination for the loans funded in the nine months ended September 30, 2025 and 2024 were 688 and 686.

Previous wording

As of June 30, 2025, the recreation loan portfolio was $1.5 billion, with the average interest rate increasing 32 basis points to 15.12% from a year ago. Additionally, the allowance for credit losses increased 15% from June 30, 2024, reflecting rising loss rates and various economic factors.

Current wording

As of September 30, 2025, the recreation loan portfolio was $1.6 billion, with the average interest rate increasing 25 basis points to 15.17% from a year ago. Additionally, the allowance for credit losses increased 12% from September 30, 2024, reflecting rising loss rates and various economic factors.

Previous wording

Seasonally, the second quarter typically has the greatest demand for our recreation loan products and results in higher originations. During the three and six months ended June 30, 2025, we originated $142.8 million and $229.6 million in recreation loans, compared to $209.6 million and $315.3 million for the three and six months ended June 30, 2024. The lower origination volumes reflect our focus on originating loans that we believe will perform better during economic downturns. The following table presents quarterly originations for 2025, 2024, and 2023.

Current wording

During the three and nine months ended September 30, 2025, we originated $141.7 million and $371.3 million in recreation loans, compared to $139.1 million and $454.4 million for the three and nine months ended September 30, 2024. The lower origination volumes during the nine month period reflect our focus on originating loans that we believe will perform better during economic downturns, as well as our efforts to maintain origination volumes that align with our capital levels. The following table presents quarterly originations for 2025, 2024, and 2023.

Previous wording

As of June 30, 2025, 37% of the recreation loan portfolio were non-prime receivables with obligors who do not qualify for conventional consumer finance products as a result of, among other things, adverse credit history. The following table presents non-prime originations in comparison to total originations for the six months ended June 30, 2025 and years ended December 31, 2024 and 2023.

Current wording

As of September 30, 2025, 36% of the recreation loan portfolio were non-prime receivables with obligors who do not qualify for conventional consumer finance products as a result of, among other things, adverse credit history. The following table presents non-prime originations in comparison to total originations for the nine months ended September 30, 2025 and years ended December 31, 2024 and 2023.

Previous wording

The charge-off ratio in the recreation lending segment was 3.11% and 3.71% for the three and six months ended June 30, 2025 when including loans held for sale.

Current wording

The charge-off ratio in the recreation lending segment was 3.23% and 3.58% for the three and nine months ended September 30, 2025 when including loans held for sale.

Previous wording

The home improvement lending segment works with contractors and FSPs to finance home improvements and is concentrated in roofs, swimming pools, and windows at 30%, 30%, and 11% of total home improvement loans outstanding as of June 30, 2025, as compared to 40%, 21%, and 13% as of June 30, 2024, with no other collateral types at or above 10%. Home improvement loans are made to borrowers residing nationwide, with the highest concentrations in Florida and Texas representing 13% and 12% of loans outstanding as of June 30, 2025, with each state representing 10% as of June 30, 2024 and no other states at or above 10%. As of June 30, 2025 and 2024, the weighted average FICO scores, measured at origination, of our home improvement loans outstanding, measured at origination, were 769 and 764. The weighted average FICO scores at the time of origination for the loans funded in the six months ended June 30, 2025 and 2024 were 781 and 778.

Current wording

The home improvement lending segment works with contractors and FSPs to finance home improvements and is concentrated in swimming pools, roofs, and windows at 31%, 29%, and 11% of total home improvement loans outstanding as of September 30, 2025, as compared to 38%, 24%, and 13% as of September 30, 2024, with no other collateral types at or above 10%. Home improvement loans are made to borrowers residing nationwide, with the highest concentrations in Florida and Texas representing 13% and 12% of loans outstanding as of September 30, 2025, with each state representing 11% as of September 30, 2024 and no other states at or above 10%. As of September 30, 2025 and 2024, the weighted average FICO scores, measured at origination, of our home improvement loans outstanding, measured at origination, were 767 and 766. The weighted average FICO scores at the time of origination for the loans funded in the nine months ended September 30, 2025 and 2024 were 779 and 781.

Previous wording

A large proportion of our home improvement-financed sales are facilitated by contractor salespeople with limited financing backgrounds rather than by contractor employees who provide F&I services. The result is contractor demand for financing services that facilitate an in-home transaction (e.g., digital tools, including mobile applications for phone or tablet, support for E-SIGN compliant electronic signatures, and extended operating hours), and additional resources for the salesperson throughout the financing process. We currently maintain relationships with approximately 700 contractors and FSPs. Our top ten contractors and FSP relationships were responsible for 64% of home improvement lending’s new loan originations for the six months ended June 30, 2025. The percentage of new loan originations by the top ten contractor and FSP relationships is a measure of concentration, which management uses to determine whether to undertake diversification efforts, and which provides investors with information about origination concentration.

Current wording

A large proportion of our home improvement-financed sales are facilitated by contractor salespeople with limited financing backgrounds rather than by contractor employees who provide F&I services. The result is contractor demand for financing services that facilitate an in-home transaction (e.g., digital tools, including mobile applications for phone or tablet, support for E-SIGN compliant electronic signatures, and extended operating hours), and additional resources for the salesperson throughout the financing process. We currently maintain relationships with approximately 700 contractors and FSPs. Our top ten contractors and FSP relationships were responsible for 62% of home improvement lending’s new loan originations for the nine months ended September 30, 2025. The percentage of new loan originations by the top ten contractor and FSP relationships is a measure of concentration, which management uses to determine whether to undertake diversification efforts, and which provides investors with information about origination concentration.

Previous wording

The home improvement loan portfolio consists of thousands of geographically distributed loans with an average loan size of approximately $22,000 as of June 30, 2025. The loans are fixed rate with an average term at origination, for loans originated in the current year of approximately 15 years. The weighted average maturity of our loans outstanding as of June 30, 2025 was approximately 13 years.

Current wording

The home improvement loan portfolio consists of tens of thousands of geographically distributed loans with an average loan size of approximately $22,000 as of September 30, 2025. The loans are fixed rate with an average term at origination, for loans originated in the current year of approximately 15 years. The weighted average maturity of our loans outstanding as of September 30, 2025 was approximately 13 years.

Previous wording

As of June 30, 2025, the home improvement portfolio totaled $803.5 million, with allowance for credit losses increasing 11% from a year ago reflecting higher delinquency and potential losses. The average interest rate charged on our loans increased 16 basis points to 9.87% at June 30, 2025 from a year ago.

Current wording

As of September 30, 2025, the home improvement portfolio totaled $804.0 million, with allowance for credit losses increasing 4% from a year ago reflecting higher delinquency and potential losses. The average interest rate charged on our loans increased 11 basis points to 9.87% at September 30, 2025 from a year ago.

Previous wording

During the three and six months ended June 30, 2025, we originated $54.3 million and $103.1 million of home improvement loans, compared to $68.0 million and $119.6 million for the three and six months ended June 30, 2024. Origination volumes were somewhat lower reflecting our focus on originating loans that we believe will perform better during economic downturns. The following table presents quarterly originations for 2025, 2024, and 2023.

Current wording

During the three and nine months ended September 30, 2025, we originated $59.7 million and $162.8 million of home improvement loans, compared to $96.5 million and $216.1 million for the three and nine months ended September 30, 2024. The lower origination volumes reflect our focus on originating loans that we believe will perform better during economic downturns, as well as our efforts to maintain origination volumes that align with our capital levels. The following table presents quarterly originations for 2025, 2024, and 2023.

Previous wording

As of June 30, 2025, less than 1% of the home improvement loan portfolio were non-prime receivables with obligors who do not qualify for conventional consumer finance products as a result of, among other things, adverse credit history. The following table presents non-prime originations in comparison to total originations for the six months ended June 30, 2025 and years ended December 31, 2024 and 2023.

Current wording

As of September 30, 2025, less than 1% of the home improvement loan portfolio were non-prime receivables with obligors who do not qualify for conventional consumer finance products as a result of, among other things, adverse credit history. The following table presents non-prime originations in comparison to total originations for the nine months ended September 30, 2025 and years ended December 31, 2024 and 2023.

Previous wording

We originate both senior and subordinated loans nationwide to businesses in a variety of industries, with California having 29% of the segment portfolio, and no other states having a concentration at or above 10%. These mezzanine loans are primarily secured by a second position on all assets of the businesses and generally range in amount from $2.5 million to $6.0 million at origination, and typically include an equity component as part of the financing. These equity components, although a small portion of the overall financing, have the potential to generate significant yield enhancement when the underlying portfolio company enters a capital transaction. During the three and six months ended June 30, 2025, net gains of $6.1 million and $15.5 million were recognized with respect to these equity investments. The commercial lending business has concentrations in manufacturing, construction, and wholesale trade making up 57%, 18%, and 11%, of the loans outstanding as of June 30, 2025. During the six months ended June 30, 2025, we originated $19.1 million of new commercial loans.

Current wording

We originate both senior and subordinated loans nationwide to businesses in a variety of industries, with California and New York having 25% and 10% of the segment portfolio, and no other states having a concentration at or above 10%. These mezzanine loans are primarily secured by a second position on all assets of the businesses and generally range in amount from $2.5 million to $6.0 million at origination, and typically include an equity component as part of the financing. These equity components, although a small portion of the overall financing, have the potential to generate significant yield enhancement when the underlying portfolio company enters a capital transaction. During the three and nine months ended September 30, 2025, net gains of $0.3 million and $15.8 million were recognized with respect to these equity investments. The commercial lending business has concentrations in manufacturing, construction, and wholesale trade making up 56%, 16%, and 10%, of the loans outstanding as of September 30, 2025. During the nine months ended September 30, 2025, we originated $36.6 million of new commercial loans.

Previous wording

The following table presents selected financial data and ratios as of and for the three and six months ended June 30, 2025 and 2024. The commercial segment encompasses the mezzanine lending business, and the other legacy commercial loans (immaterial to total) have been allocated to corporate and other investments.

Current wording

The following table presents selected financial data and ratios as of and for the three and nine months ended September 30, 2025 and 2024. The commercial segment encompasses the mezzanine lending business, and the other legacy commercial loans (immaterial to total) have been allocated to corporate and other investments.

Previous wording

The taxi medallion lending segment operates in the New York City metropolitan area. During the three and six months ended June 30, 2025, we continued to utilize a taxi medallion value of $79,500 in the New York City and Newark markets despite fluctuating transfer prices that have exceeded that value, with all other markets being valued at $0 at the end of the quarter. We continued to not recognize interest income with all loans being placed on nonaccrual (except for settled loans with interest being paid in excess of the loan balance), and by transferring underperforming loans from the portfolio to loan collateral in process of foreclosure with charge-offs to collateral value, once loans become more than 120 days past due.

Current wording

The taxi medallion lending segment operates in the New York City metropolitan area. During the three and nine months ended September 30, 2025, we continued to utilize a taxi medallion value of $79,500 in the New York City and Newark markets despite fluctuating transfer prices that have exceeded that value, with all other markets being valued at $0 at the end of the quarter. We continued to not recognize interest income with all loans being placed on nonaccrual (except for settled loans with interest being paid in excess of the loan balance), and by transferring underperforming loans from the portfolio to loan collateral in process of foreclosure with charge-offs to collateral value, once loans become more than 120 days past due.

Previous wording

During the three and six months ended June 30, 2025, we collected $2.3 million and $5.0 million related to taxi medallion and related assets, which resulted in net recoveries and gains of $1.4 million and $3.0 million. The amount of cash collected as well as recoveries recorded vary greatly from period to period due to a wide variety of circumstances surrounding each of the underlying assets, and while we continue to focus on collection and recovery efforts, it is unlikely that there will be future collections at the higher levels experienced in prior years.

Current wording

During the three and nine months ended September 30, 2025, we collected $6.1 million and $11.1 million related to taxi medallion and related assets, which resulted in net recoveries and gains of $3.4 million and $6.5 million. The amount of cash collected as well as recoveries recorded vary greatly from period to period due to a wide variety of circumstances surrounding each of the underlying assets, and while we continue to focus on collection and recovery efforts, it is unlikely that there will be future collections at the higher levels experienced in prior years.

Previous wording

This segment includes loans related to our strategic partnership program, which are issued by the Bank. The associated activities of the strategic partnership program are currently limited to originating loans or other receivables facilitated by our strategic partners and selling those loans or receivables to our strategic partners or other third parties, without recourse, within a specified time after origination, such as three business days. Strategic partnership loans were $12.3 million as of June 30, 2025 and $1.3 million as of June 30, 2024, with originations of $168.6 million and $304.9 million during the three and six months ended June 30, 2025 and $24.3 million and $40.0 million during the three and six months ended June 30, 2024.

Current wording

This segment includes loans related to our strategic partnership program, which are issued by the Bank. The associated activities of the strategic partnership program are currently limited to originating loans or other receivables facilitated by our strategic partners and selling those loans or receivables to our strategic partners or other third parties, without recourse, within a specified time after origination, such as three business days. Strategic partnership loans were $15.3 million as of September 30, 2025 and $3.2 million as of September 30, 2024, with originations of $208.4 million and $513.2 million during the three and nine months ended September 30, 2025 and $39.9 million and $80.0 million during the three and nine months ended September 30, 2024.

Previous wording

The table below presents our selected financial data for the three and six months ended June 30, 2025 and 2024.

Current wording

The table below presents our selected financial data for the three and nine months ended September 30, 2025 and 2024.