Medallion Financial Corp. (NASDAQ:MFIN) Q1 2023 Earnings Call Transcript

Christopher Nolan: And do you have a target reserve ratio for year-end?

Anthony Cutrone: We think where we ended up at the end of Q1 is — should be and I’ll put a caveat on that. It should be where we are at the end of the year. That being said, with our adoption of CECL in January 1, any fluctuations in charge-offs that we experienced from what we anticipate is going to cause some — could cause a significant change in our reserve rates.

Christopher Nolan: Great. And has the reserve — excuse me, has the capital ratios at the bank increased at all?

Anthony Cutrone: The Tier 1 at the end of the year — at the end of 2022 was $16.2 million — sorry, 16.2%, and it ended at 16.4% at the end of March. And most of those recoveries on the Medallions — the benefits that ran through the income statement were at Medallion Bank and that helped bolster the Tier 1 level.

Christopher Nolan: So is the plan just to basically keep the Tier 1 ratio sort of in the 16% range and just grow the balance sheet?

Anthony Cutrone: That’s where we’re at now. We’ve got to maintain 15%. So we don’t want to get too close to that. But that’s the plan as of now.

Christopher Nolan: Okay. That’s it for me. Thank you.

Anthony Cutrone: Thanks Chris.

Operator: Thank you. This concludes our question-and-answer session. I’ll turn the call back over to Mr. Andrew Murstein for closing remarks. Please go ahead.

Andrew Murstein: Thank you. We appreciate you taking the time to join us today. We’re very pleased with our performance so far this year and look forward to our next update. As always, if you need anything, please reach out to our Investor Relations team at (212) 328-2176. Thank you, and have a great day.

Operator: That was today’s presentation. Thank you for attending. You may now disconnect.