Medallion Financial : Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

About this update from Medallion Financial Corp.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information contained in this section should be read in conjunction with the consolidated financial statements and the accompanying notes thereto for the three months ended March 31, 2026 and the year ended December 31, 2025. 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. COMPANY BACKGROUND 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 March 31, 2026, our consumer loans represented 95% of our gross loan portfolio and commercial loans represented 5%. Total assets were $2.95 billion and $2.96 billion as of March 31, 2026 and December 31, 2025. Our loan-related earnings depend primarily on our level of net interest income. Net interest income is the difference between the total yield on our loan portfolio and the average cost of borrowed funds. We fund our operations through a wide variety of interest-bearing sources, including bank certificates of deposit issued to consumers, privately placed notes, debentures issued to and guaranteed by the SBA, trust preferred securities, and preferred stock of the Bank. Net interest income fluctuates with changes in the yield on our loan portfolios and changes in the cost of borrowed funds, as well as changes in the amount of interest-earning assets and interest-bearing liabilities held by us. Net interest income is also affected by economic, regulatory, and competitive factors that influence interest rates, loan demand, and the availability of funding to finance our lending activities. We, like other financial institutions, are subject to interest rate risk to the degree that our interest-earning assets reprice, either due to inflation or other factors, on a different basis than our interest-bearing liabilities. We continue to monitor global supply chain disruptions, the impact of tariffs, the impact of geopolitical events, including the conflict with Iran, gas prices, labor shortages, unemployment, and other factors contributing to U.S. inflation, the risk of recession and economic health, as well as other factors which contribute to competition and changes in the demand for our loan products. We have been, and continue to, seek borrowers with strong credit ratings and moderate the pace of our recent growth in the event of a potential economic downturn and in light of the current uncertainties and inflationary environment. We also provide debt, mezzanine, and equity investment capital to companies in a variety of commercial industries. These investments may be venture capital style investments which may not be fully collateralized. Our investments are typically in the form of secured debt instruments with fixed interest rates accompanied by an equity stake or warrants to purchase an equity interest for a nominal exercise price (such warrants are included in equity investments on the consolidated balance sheets). Interest income is earned on the debt instruments. The Bank is an industrial bank regulated by the FDIC and the Utah Department of Financial Institutions that originates consumer loans, raises deposits, and conducts other banking activities. The Bank generally provides us with our lowest cost of funds which it raises through bank certificates of deposit. To take advantage of this low cost of funds, historically we referred a portion of our taxi medallion and commercial loans to the Bank, which originated these loans. However, other than in connection with dispositions of existing taxi medallion assets, the Bank has not originated any new taxi medallion loans since 2014 (and Medallion Financial Corp. has not originated any new taxi medallion loans since 2015) and in the fourth quarter of 2025 sold its remaining taxi medallion portfolio to one of our subsidiaries. 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. We continue to consider various alternatives for the Bank, which may include an initial public offering of its common stock, the sale of all or part of the Bank, a spin-off or other potential transaction. We do not have a deadline for its consideration of these alternatives, and there can be no assurance that this process will result in any transaction being announced or consummated. Page 34 of 55 CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our accounting policies are fundamental to understanding management's discussion and analysis of its financial condition and results of operations. At March 31, 2026, we identified our policies for the allowance for credit losses and goodwill and intangible assets to be critical accounting policies because management has to make subjective and/or complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions. Our critical accounting policies are described in detail in Part I, Item 7 in Medallion Financial Corp.'s Annual Report on Form 10-K for the year ended December 31, 2025, and there have been no material changes in such policies and estimates since the date of such report. 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. We are assessing the impact of the update on the accompanying financial statements. CONTROL STATUTES AND REGULATIONS Because the Bank is an "insured depository institution" within the meaning of the Federal Deposit Insurance Act and the Change in Bank Control Act as well as Medallion Financial Corp. being a "financial institution holding company" within the meaning of the Utah Financial Institutions Act, federal and Utah law and regulations prohibit any person or company from acquiring control of the Bank or Medallion Financial Corp., without, in most cases, prior written approval of the FDIC or the Commissioner of the Utah Department of Financial Institutions, as applicable. Under the Change in Bank Control Act, control is conclusively presumed if, among other things, a person or company acquires 25% or more of any class of the Bank's voting stock. A rebuttable presumption of control arises if a person or company acquires 10% or more of any class of voting stock and is subject to a number of specified "control factors" as set forth in the applicable regulations. Although the Bank is an "insured depository institution" within the meaning of the Federal Deposit Insurance Act and the Change in Bank Control Act, your investment in the Company is not insured or guaranteed by the FDIC, or any other agency, and is subject to loss. Under the Utah Financial Institutions Act, control is defined as the power, directly or indirectly, or through or in concert with one or more persons to: (a) direct or exercise a controlling influence over (i) the management or policies of a financial institution or (ii) the election of a majority of the directors or trustees of an institution; or (b) to vote 25% or more of any class of voting securities of a financial institution. In addition, under Utah law, there is a rebuttable presumption that a person has control of a Utah financial institution if the person has the power, directly or indirectly, or through or in concert with one or more persons, to vote more than 10% but less than 25% of any class of voting securities of a financial institution. If any holder of any series of the Bank's preferred stock is or becomes entitled to vote for the election of the Bank's directors, such series will be deemed a class of voting stock, and any other person will be required to obtain the non-objection of the FDIC under the Change in Bank Control Act to acquire or maintain 10% or more of that series. Investors are responsible for ensuring that they do not, directly or indirectly, acquire shares of our common stock in excess of the amount which can be acquired without regulatory approval. In addition to the regulations detailed above, our operations are subject to supervision and regulation by other federal, state, and local laws and regulations. Additionally, our operations may be subject to various laws and judicial and administrative decisions. This oversight may serve to: • regulate credit granting activities, including establishing licensing requirements, if any, in various jurisdictions; • establish maximum interest rates, finance charges and other charges; • require disclosures to customers; • govern secured transactions; • set collection, foreclosure, repossession, and claims handling procedures and other trade practices; • prohibit discrimination in the extension of credit and administration of loans; and • regulate the use and reporting of information related to a borrower's credit experience and other data collection. Changes to laws of states in which we do business could affect the operating environment in substantial and unpredictable ways. We cannot predict whether such changes will occur or, if they occur, the ultimate effect they would have upon our financial condition or results of operations. Page 35 of 55 AVERAGE BALANCES AND RATES 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 three months ended March 31, 2026 and 2025. Three Months Ended March 31, 2026 2025 (Dollars in thousands) Average Balance Interest Average Yield/Cost Average Balance Interest Average Yield/Cost Interest-earning assets Interest earning cash equivalents $ 35,577 $ 268 3.06 % $ 37,291 $ 352 3.83 % Federal funds sold 60,605 859 5.75 46,665 817 7.10 Investment securities 62,200 605 3.94 57,960 519 3.63 Loans Recreation 1,636,409 54,034 13.39 1,542,323 50,466 13.25 Home improvement 812,577 19,376 9.67 820,012 19,771 9.78 Commercial 120,876 3,449 11.57 112,557 3,098 11.16 Taxi medallion 1,171 59 20.43 1,697 80 19.12 Strategic partnerships 10,066 418 16.84 8,050 322 16.22 Total loans 2,581,099 77,336 12.15 2,484,639 73,737 12.04 Total interest-earning assets, before allowance 2,739,481 11.70 2,626,555 11.65 Allowance for credit losses (115,560 ) (98,261 ) Total interest-earning assets, net of allowance $ 2,623,921 $ 79,068 12.21 % $ 2,528,294 $ 75,425 12.10 % Non-interest-earning assets Cash 59,936 65,941 Equity investments 8,099 9,117 Loan collateral in process of foreclosure 6,972 9,547 Goodwill and intangible assets 168,325 169,770 Other assets 57,196 56,616 Total non-interest-earning assets 300,528 310,991 Total assets $ 2,924,449 $ 2,839,285 Interest-bearing liabilities Deposits $ 2,126,975 $ 20,736 3.95 % $ 2,093,173 $ 19,617 3.80 % Privately placed notes 130,875 2,902 8.99 146,500 3,175 8.79 SBA debentures and borrowings 79,250 867 4.44 67,813 660 3.95 Trust preferred securities 33,000 504 6.19 33,000 561 6.89 Total interest-bearing liabilities 2,370,100 25,009 4.28 2,340,486 24,013 4.16 Non-interest-bearing liabilities Deferred tax liability 19,480 20,510 Other liabilities (1) 25,583 33,036 Total non-interest-bearing liabilities 45,063 53,546 Total liabilities 2,415,163 2,394,032 Non-controlling interest 100,013 69,166 Total stockholders' equity 409,273 376,087 Total liabilities and stockholders' equity $ 2,924,449 $ 2,839,285 Net interest income $ 54,059 $ 51,412 Net interest margin, gross 8.00 7.94 Net interest margin, net of allowance 8.35 % 8.25 % (1) Includes deferred financing costs of $8.2 million and $8.1 million as of March 31, 2026 and 2025. For the three months ended March 31, 2026, our total loans yielded 12.15%, as compared to 12.04% for the three months ended March 31, 2025. The 11 basis point increase reflects, on average, a higher interest rate charged on our loan portfolios, as we have increased the rates charged on new consumer originations over the past years. In recent years, we have used the higher interest rate environment as an opportunity to increase the rates on both newly issued recreation and home improvement loans, which has increased the yield on these portfolios over time, as well to increase the credit quality of our new issuances, particularly in our recreation lending segment, with the average FICO scores, measured at origination, of our total recreation loans outstanding being 686 as of March 31, 2026, compared to 685 (683 exclusive of loans held for sale) as of March 31, 2025. We use weighted average FICO scores as an indicator of portfolio risk. In the first quarter of 2026, we reduced the rate charged on our recreation loans to improve our loss adjusted yield, writing new recreation loans at an average rate of 14.74% compared to 16.06% in the prior year quarter, and bringing our origination rate more in line with the market and our competition. Page 36 of 55 Our debt, with certificates of deposit being our largest source, funds our growing lending business. Our average interest cost for the three months ended March 31, 2026 of 4.28% increased 12 basis points from the three months ended March 31, 2025, attributable to the higher interest rate environment experienced over the past several years, particularly the higher cost associated with issuing certificates of deposit. 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 March 31, 2026, we issued certificates of deposit for 60 months at rates as high as 3.90% (3.97% inclusive of broker fees). Over the past several years we have taken 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. RATE/VOLUME ANALYSIS 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. Three Months Ended March 31, 2026 2025 (Dollars in thousands) Increase (Decrease) In Volume Increase (Decrease) In Rate Net Change Increase (Decrease) In Volume Increase (Decrease) In Rate Net Change Interest-earning assets Interest earning cash and cash equivalents $ 143 $ (185 ) $ (42 ) $ (370 ) $ 157 $ (213 ) Investment securities 41 45 86 39 13 52 Loans Recreation 3,107 461 3,568 6,573 (34 ) 6,539 Home improvement (177 ) (218 ) (395 ) 1,538 786 2,324 Commercial 237 114 351 (8 ) (557 ) (565 ) Taxi medallion (27 ) 6 (21 ) (90 ) 31 (59 ) Strategic partnerships 84 12 96 293 (16 ) 277 Total loans $ 3,224 $ 375 $ 3,599 $ 8,306 $ 210 $ 8,516 Total interest-earning assets $ 3,408 $ 235 $ 3,643 $ 7,975 $ 380 $ 8,355 Interest-bearing liabilities Deposits 330 789 1,119 2,230 2,633 4,863 Privately placed notes (346 ) 73 (273 ) 168 - 168 SBA debentures and borrowings 125 82 207 (60 ) (24 ) (84 ) Trust preferred securities - (57 ) (57 ) - (87 ) (87 ) Total interest-bearing liabilities $ 109 $ 887 $ 996 $ 2,338 $ 2,522 $ 4,860 Net $ 3,299 $ (652 ) $ 2,647 $ 5,637 $ (2,142 ) $ 3,495 During the three months ended March 31, 2026, the increase in interest income over the prior year period 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 increase in deposits as older deposits mature and are replaced at current market rates, as well as an overall increase in borrowings. Our interest expense is driven by the interest rates payable on our bank certificates of deposit, privately placed notes, fixed-rate, long-term debentures issued to the SBA, trust preferred securities, and has historically included credit facilities with banks and other short-term notes payable. The Bank issues brokered time certificates of deposit, which are, on average, our lowest borrowing costs. The Bank is able to bid on these deposits at a variety of maturity options, which allows for more flexible interest rate management strategies. Our cost of funds is primarily driven by the rates paid on our various borrowings and changes in the levels of average borrowings outstanding. See Note 5 to the consolidated financial statements for details on the terms of our outstanding debt. 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 table presents the average borrowings and related borrowing costs for the three months ended March 31, 2026 and 2025. We expect our borrowing costs to further increase as we take deposits and borrow other funds, including the private placement completed in April 2026, at the current prevailing rates. We have sought 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 have used SBA funding to fund loans that qualify under the SBIA and SBA regulations. As of March 31, 2026, SBA borrowings were approximately 3% of total borrowed funds. In February 2024, we obtained an $18.5 million commitment from the SBA, all of which had been utilized as of March 31, 2026. We do not currently have any commitments available from the SBA. Page 37 of 55 In 2025, the SBA informed Medallion Capital that it needs to have Medallion Capital's management team reviewed through the SBA's licensing division; until successful completion of that review, Medallion Capital is not deemed by the SBA to have a qualified management team. Medallion Capital submitted a management team for review through the SBA's licensing division on March 31, 2026 and on the same day, the SBA notified Medallion Capital that it has declared an event of default with respect to outstanding debentures and directed Medallion Capital, within 120 days, to identify and submit at least one qualified candidate for consideration as a full-time principal and investment committee member of Medallion Capital. The SBA's notice and event of default do not trigger any cross-default clauses in any of the parent's debt arrangements. In subsequent discussions with the SBA, the SBA has indicated that Medallion Capital must supplement its submission by identifying and submitting at least one qualified candidate for consideration. Medallion Capital is currently in the process of identifying and submitting at least one qualified candidate in response to the above notice and discussions. At March 31, 2026 and 2025, adjustable rate debt constituted less than 2% of total debt and was comprised solely of our trust preferred securities borrowings. LOANS 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 months ended March 31, 2026, there was continued growth in the recreation lending and home improvement lending segments, as compared to the prior year. The following table presents the activity of gross loans, including loans held for sale for the three months ended March 31, 2026. Three Months Ended March 31, 2026 (Dollars in thousands) Recreation Home Improvement Commercial Taxi Medallion Strategic Partnership Total Gross loans - December 31, 2025 $ 1,617,221 $ 810,237 $ 123,068 $ 1,179 $ 15,144 $ 2,566,849 Loan originations 142,548 64,402 - - 169,984 376,934 Principal receipts, sales, and maturities (59,668 ) (56,093 ) (3,767 ) (15 ) (174,342 ) (293,885 ) Charge-offs (22,491 ) (4,351 ) - (38 ) - (26,880 ) Transfer to loan collateral in process of foreclosure, net (7,641 ) - - - - (7,641 ) Amortization of origination fees and costs, net (3,750 ) 737 8 - - (3,005 ) Origination fees and costs, net 5,319 1 - - - 5,320 Paid-in-kind interest - - 303 - - 303 Gross loans - March 31, 2026 $ 1,671,538 $ 814,933 $ 119,612 $ 1,126 $ 10,786 $ 2,617,995 The following table presents the activity of gross loans, including loans held for sale for the three months ended March 31, 2025. Three Months Ended March 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 86,833 48,796 9,707 72 136,240 281,648 Principal receipts, sales, and maturities (61,507 ) (59,611 ) (5,052 ) (316 ) (133,127 ) (259,613 ) Charge-offs (20,274 ) (4,227 ) (130 ) (15 ) - (24,646 ) Transfer to loan collateral in process of foreclosure, net (2,389 ) - - - - (2,389 ) Amortization of origination fees and costs, net (3,481 ) 1,133 12 - - (2,336 ) Origination fees and costs, net 3,419 (921 ) - - - 2,498 Paid-in-kind interest - - 249 - - 249 Gross loans - March 31, 2025 $ 1,545,844 $ 812,381 $ 116,059 $ 1,650 $ 10,499 $ 2,486,433 Page 38 of 55 The following table presents the maturities and sensitivity to change in interest rates for our loans as of March 31, 2026. Loan Maturity (Dollars in thousands) Within 1 year After 1 to 5 years After 5 to 15 years After 15 years Total Fixed-rate $ 24,327 $ 228,767 $ 2,011,392 $ 298,935 $ 2,563,421 Recreation 4,143 101,164 1,432,581 76,726 1,614,614 Home improvement 2,389 25,875 566,670 222,209 817,143 Commercial 6,472 101,139 12,141 - 119,752 Strategic partnerships 10,786 - - - 10,786 Taxi medallion 537 589 - - 1,126 Adjustable-rate $ 220 $ 15 $ - $ - $ 235 Recreation 220 15 - - 235 Home improvement - - - - - Commercial - - - - - Taxi medallion - - - - - Total loans (1) $ 24,547 $ 228,782 $ 2,011,392 $ 298,935 $ 2,563,656 (1) Excludes $54.3 million of capitalized loan origination costs. PROVISION AND ALLOWANCE FOR CREDIT LOSSES The allowance for credit losses is maintained at a level estimated by management to absorb expected future losses in the portfolios. As of March 31, 2026 and December 31, 2025, the allowance totaled $116.7 million and $114.8 million, which represented 4.48% and 4.50% of total loans held for investment. The provision for credit losses was $22.5 million for the three months ended March 31, 2026 compared to $22.0 million for the three months ended March 31, 2025 as a result of growth in our recreation portfolio, loss rates, fluctuation in delinquencies, and expected losses in our recreation loan portfolio and lower recoveries on taxi medallion loans. During the three months ended March 31, 2026, we recognized provisions of $0.5 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. The following table presents the activity in the allowance for credit losses for the three months ended March 31, 2026. (Dollars in thousands) Recreation Home Improvement Commercial Taxi Medallion (1) Total Balance at December 31, 2025 $ 85,956 $ 19,563 $ 9,052 $ 218 $ 114,789 Charge-offs (22,491 ) (4,351 ) - (38 ) (26,880 ) Recoveries 4,820 1,465 5 21 6,311 Provision (benefit) for credit losses 18,445 3,618 459 (46 ) 22,476 Balance at March 31, 2026 $ 86,730 $ 20,295 $ 9,516 $ 155 $ 116,696 (1) As of March 31, 2026, cumulative net charge-offs of loans and loan collateral in process of foreclosure in the taxi medallion portfolio were $170.1 million, including $105.5 million related to loans secured by New York taxi medallions, some of which may represent collection opportunities for us. The following table presents the activity in the allowance for credit losses for the three months ended March 31, 2025. (Dollars in thousands) Recreation Home Improvement Commercial Taxi Medallion (1) Total Balance at December 31, 2024 $ 71,102 $ 20,536 $ 5,190 $ 540 $ 97,368 Charge-offs (20,274 ) (4,227 ) (130 ) (15 ) (24,646 ) Recoveries 3,860 1,095 - 675 5,630 Provision (benefit) for credit losses 16,870 2,845 3,114 (815 ) 22,014 Balance at March 31, 2025 $ 71,558 $ 20,249 $ 8,174 $ 385 $ 100,366 (1) As of March 31, 2025 cumulative net charge-offs of loans and loan collateral in process of foreclosure in the taxi medallion portfolio were $161.7 million, including $95.2 million related to loans secured by New York taxi medallions, some of which may represent recovery opportunities for the Company. Page 39 of 55 The following table presents the gross charge-offs for the three months ended March 31, 2026, by the year of origination: Three Months Ended March 31, 2026 (Dollars in thousands) 2026 2025 2024 2023 2022 Prior Total Recreation $ - $ 3,685 $ 5,617 $ 4,501 $ 3,974 $ 4,714 $ 22,491 Home improvement - 399 916 1,328 952 756 4,351 Commercial - - - - - - - Taxi medallion - - - - - 38 38 Total $ - $ 4,084 $ 6,533 $ 5,829 $ 4,926 $ 5,508 $ 26,880 The following table presents the gross charge-offs for the three months ended March 31, 2025, by the year of origination: Three Months Ended March 31, 2025 (Dollars in thousands) 2025 2024 2023 2022 2021 Prior Total Recreation $ - $ 2,728 $ 3,707 $ 4,506 $ 1,933 $ 7,400 $ 20,274 Home improvement - 823 1,503 1,133 428 340 4,227 Commercial - - - 130 - - 130 Taxi medallion - - - - - 15 15 Total $ - $ 3,551 $ 5,210 $ 5,769 $ 2,361 $ 7,755 $ 24,646 The following table presents the allowance for credit losses for loans held for investment, by type, as of March 31, 2026. March 31, 2026 (Dollars in thousands) Amount Percentage of Allowance (1) Allowance as a Percent of Loan Category (2) Recreation $ 86,730 74 % 5.19 % Home improvement 20,295 17 2.49 Commercial 9,516 8 7.96 Taxi medallion 155 * 13.86 Total $ 116,696 100 % (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 March 31, 2026, total allowance for credit losses as a percentage of nonaccrual loans was 316%. (*) Less than 0.1%. The following table presents the allowance for credit losses for loans held for investment, by type, as of December 31, 2025. 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 $ 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%. The following table presents the trend in loans 90 days or more past due as of the dates indicated. March 31, 2026 December 31, 2025 (Dollars in thousands) Amount % (1) Amount % (1) Recreation $ 9,196 0.4 % $ 12,856 0.5 % Home improvement 1,396 0 1,300 0.1 Commercial 10,274 0 10,274 0.4 Taxi medallion - - 41 - Total loans 90 days or more past due $ 20,866 0.8 % $ 24,471 1.0 % (1) Percentages are calculated against the total loan portfolio. (*) Less than 0.1% As of March 31, 2026, taxi medallion loans in the process of foreclosure included 276 taxi medallions in the New York City market, 186 taxi medallions in the Chicago market, 22 taxi medallions in the Newark market, and 31 taxi medallions in various other markets. Page 40 of 55 SEGMENT RESULTS We manage our financial results under four operating segments; recreation lending, home improvement lending, commercial lending, and taxi medallion lending. We also present results for a non-operating segment, corporate and other investments. Recreation Lending 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 68% of our interest income for the three months ended March 31, 2026 and 67% for the three months ended March 31, 2025. We maintain relationships with approximately 3,400 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. We receive approximately half of our loan volume from dealers and the other half from FSPs. Our top ten relationships were responsible for 38% and 39% of recreation lending's new loan originations for the three months ended March 31, 2026 and 2025. The percentage of new loan originations by the top ten dealers and/or 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. The recreation loan portfolio consists of thousands of geographically distributed loans with an average loan size of approximately $22,600 as of March 31, 2026. The loans are fixed rate with an average term at origination of approximately 15 years. The weighted average maturity of our loans outstanding as of March 31, 2026 is approximately 11 years. 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%, collector car loans making up 13%, and trailers making up 11% of the portfolio as of March 31, 2026, compared to 55%, 19%, 11%, and 9% as of March 31, 2025. Recreation loans are made to borrowers residing nationwide, with the highest concentrations as of March 31, 2026 in Texas and Florida at 17% and 10% of loans outstanding, compared to 16% and 10% at March 31, 2025, and with no other states at or above 10%. As of March 31, 2026 and March 31, 2025, the weighted average FICO scores, measured at origination, of our recreation loans outstanding were 686. The weighted average FICO scores at the time of origination for the loans funded in the three months ended March 31, 2026 and 2025 were 686 and 683. As of March 31, 2026, the recreation loan portfolio was $1.7 billion, with the average interest rate increasing 10 basis points to 15.11% from a year ago. Additionally, the allowance for credit losses increased 21% from March 31, 2025, reflecting rising loss rates, various economic factors, and overall growth in the portfolio. During the three months ended March 31, 2026, we originated $142.6 million in recreation loans, compared to $86.8 million for the three months ended March 31, 2025. Increased origination volumes reflect strong consumer demand and investment in technology and employees while maintaining our focus on originating loans that we believe will perform better during economic downturns and align with our capital levels. The following table presents quarterly originations for 2026, 2025, and 2024. (Dollars in thousands) 2026 2025 2024 First Quarter $ 142,548 $ 86,833 $ 105,765 Second Quarter - 142,789 209,563 Third Quarter - 141,667 139,105 Fourth Quarter - 97,178 72,201 Year Ended $ 142,548 $ 468,467 $ 526,634 As of March 31, 2026, 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 three months ended March 31, 2026 and years ended December 31, 2025 and 2024. (Dollars in thousands) Total Originations Non-prime Originations Non-prime Originations (%) March 31, 2026 $ 142,548 $ 49,776 35 % December 31, 2025 468,467 169,498 36 December 31, 2024 526,634 185,334 35 Page 41 of 55 The following table presents selected financial data and ratios as of and for the three months ended March 31, 2026 and 2025. Three Months Ended March 31, (Dollars in thousands) 2026 2025 Selected Earnings Data Total interest income $ 54,034 $ 50,466 Total interest expense 14,292 12,041 Net interest income 39,742 38,425 Provision for credit losses 18,445 16,870 Net interest income after credit loss provision 21,297 21,555 Other income, net 26 400 Other expenses: Salaries 4,105 3,642 Loan servicing fees, credit, and collection costs 4,290 3,182 Other costs 2,683 3,140 Net income before taxes 10,245 11,991 Income tax provision (3,817 ) (3,977 ) Net income after taxes $ 6,428 $ 8,014 Balance Sheet Data Total loans, gross (1) $ 1,671,538 $ 1,545,844 Allowance for credit losses 86,730 71,558 Total loans, net 1,584,808 1,474,286 Total assets 1,606,691 1,495,150 Total segment borrowings 1,304,451 1,229,818 Selected Financial Ratios Return on average assets 1.65 % 2.17 % Return on average equity 9.60 13.37 Interest yield 13.39 13.25 Net interest margin, gross 9.85 10.10 Net interest margin, net of allowance 10.40 10.59 Reserve coverage (2) 5.19 5.00 Delinquency status (3) 0.57 0.48 Charge-off ratio (4) 4.38 4.32 (1) Inclusive of both loans held for investment and loans held for sale. (2) Allowance for credit loss as a percent of gross loans held for investment and excludes loans held for sale. (3) Loans 90 days or more past due as a percent of total loans. (4) The charge-off ratio in the recreation lending segment was 4.67% for the three months ended March 31, 2025 when excluding loans held for sale. Home Improvement Lending The home improvement lending segment works with contractors and FSPs to finance home improvements and is concentrated in swimming pools, roofs, and windows at 35%, 27%, and 11% of total home improvement loans outstanding as of March 31, 2026, as compared to 29%, 35%, and 13% as of March 31, 2025, 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 14% and 13% of loans outstanding as of March 31, 2026, with each such state representing 13% and 11% as of March 31, 2025 and no other states at or above 10%. As of March 31, 2026 and 2025, the weighted average FICO scores, measured at origination, of our home improvement loans outstanding, measured at origination, were 768 and 767. The weighted average FICO scores at the time of origination for the loans funded in the three months ended March 31, 2026 and 2025 were 781 and 783. 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/or FSPs. Our top ten contractors and FSP relationships were responsible for 72% of home improvement lending's new loan originations for the three months ended March 31, 2026. The percentage of new loan originations by the top ten contractor and/or 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. The home improvement loan portfolio consists of tens of thousands of geographically distributed loans with an average loan size of approximately $22,900 as of March 31, 2026. The loans are fixed rate with an average term at origination, for loans originated in the current year of approximately 16 years. The weighted average maturity of our loans outstanding as of March 31, 2026 was approximately 13 years. As of March 31, 2026, the home improvement portfolio totaled $814.9 million, with an allowance for credit losses of $20.3 million. The average interest rate charged on our loans decreased 1 basis point to 9.82% at March 31, 2026 from a year ago. Page 42 of 55 During the three months ended March 31, 2026, we originated $64.4 million of home improvement loans, compared to $48.8 million for the three months ended March 31, 2025. The higher origination volumes reflect strong consumer demand and investment in technology and employees while maintaining 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 2026, 2025, and 2024. (Dollars in thousands) 2026 2025 2024 First Quarter $ 64,402 $ 48,796 $ 51,576 Second Quarter - 54,253 67,990 Third Quarter - 59,711 96,545 Fourth Quarter - 61,718 82,531 Year Ended $ 64,402 $ 224,478 $ 298,642 As of March 31, 2026, 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 three months ended March 31, 2026 and years ended December 31, 2025 and 2024. (Dollars in thousands) Total Originations Non-prime Originations Non-prime Originations (%) March 31, 2026 $ 64,402 $ - - % December 31, 2025 224,478 65 * December 31, 2024 298,642 586 * (*) Less than 1%. The following table presents selected financial data and ratios as of and for the three months ended March 31, 2026 and 2025. Three Months Ended March 31, (Dollars in thousands) 2026 2025 Selected Earnings Data Total interest income $ 19,376 $ 19,771 Total interest expense 7,370 6,964 Net interest income 12,006 12,807 Provision for credit losses 3,618 2,845 Net interest income after credit loss provision 8,388 9,962 Other income, net 7 2 Other expenses: Salaries 2,352 2,377 Loan servicing fees, credit, and collection costs 1,141 777 Other costs 1,378 1,830 Net income before taxes 3,524 4,980 Income tax provision (1,313 ) (1,652 ) Net income after taxes $ 2,211 $ 3,328 Balance Sheet Data Total loans, gross $ 814,933 $ 812,381 Allowance for credit losses 20,295 20,249 Total loans, net 794,638 792,132 Total assets 802,126 795,868 Total segment borrowings 651,235 654,632 Selected Financial Ratios Return on average assets 1.12 % 1.68 % Return on average equity 6.52 10.33 Interest yield 9.67 9.78 Net interest margin, gross 5.99 6.33 Net interest margin, net of allowance 6.14 6.50 Reserve coverage (1) 2.49 2.49 Delinquency status (2) 0.17 0.19 Charge-off ratio (3) 1.44 1.55 (1) Allowance for credit losses as a percent of gross loans. (2) Loans 90 days or more past due as a percent of total loans. (3) Net charge-offs as a percent of annual average gross loans. Page 43 of 55 Commercial Lending We originate both senior and subordinated loans nationwide to businesses in a variety of industries, with California, Wisconsin, and New York having 21%, 12%, and 11% 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 months ended March 31, 2026, net gains of $0.3 million was recognized with respect to these equity investments. The commercial lending business has concentrations in manufacturing, wholesale trade, and construction, and making up 62%, 11%, and 10% of the loans outstanding as of March 31, 2026. During the three months ended March 31, 2026, we did not originate any new commercial loans compared to $9.7 million originated during the three months ended March 31, 2025. The following table presents selected financial data and ratios as of and for the three months ended March 31, 2026 and 2025. 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. Three Months Ended March 31, (Dollars in thousands) 2026 2025 Selected Earnings Data Total interest income $ 3,449 $ 3,343 Total interest expense 1,392 1,053 Net interest income 2,057 2,290 Provision for credit losses 459 3,114 Net interest income (loss) after credit loss provision 1,598 (824 ) Other income, net 448 9,642 Other expenses: Salaries 739 1,142 Other costs 543 331 Net income before taxes 764 7,345 Income tax provision (310 ) (2,436 ) Net income after taxes $ 454 $ 4,909 Balance Sheet Data Total loans, gross $ 119,612 $ 116,059 Allowance for credit losses 9,516 8,174 Total loans, net 110,096 107,885 Total assets 111,561 109,565 Total segment borrowings 90,575 90,121 Selected Financial Ratios Return on average assets 1.60 % 18.45 % Return on average equity 9.32 113.46 Interest yield 11.57 11.16 Net interest margin, gross 6.90 8.25 Net interest margin, net of allowance 7.47 8.71 Reserve coverage (1) 7.96 7.04 Delinquency status (2) 8.58 17.63 Charge-off ratio (3) NM 0.47 (1) Allowance for credit losses as a percent of gross loans. (2) Loans 90 days or more past due as a percent of total loans. (3) Net charge-offs as a percent of annual average gross loans. (NM) Not meaningful. As of March 31, 2026 2025 Geographic Concentrations (Dollars in thousands) Total Gross Loans % of Market Total Gross Loans % of Market California $ 24,605 21 % $ 35,409 31 % Wisconsin 14,791 12 10,682 9 New York 13,704 11 9,428 8 Illinois 8,099 7 12,084 10 Other (1) 58,413 49 48,456 52 Total $ 119,612 100 % $ 116,059 100 % (1) Includes 11 other states, which were all under 10% as of March 31, 2026, and 12 other states, which were all under 10% as of March 31, 2025. Page 44 of 55 Taxi Medallion Lending The taxi medallion lending segment operates in the New York City metropolitan area. During the three months ended March 31, 2026, 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 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. During the three months ended March 31, 2026, we collected $1.7 million related to taxi medallion and related assets, which resulted in net recoveries and gains of $1.1 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 levels experienced in prior years. The following table presents selected financial data and ratios as of and for the three months ended March 31, 2026 and 2025. Three Months Ended March 31, (Dollars in thousands) 2026 2025 Selected Earnings Data Total interest income $ 59 $ 80 Total interest expense 30 12 Net interest income 29 68 Benefit for credit losses (46 ) (815 ) Net interest income after credit loss benefit 75 883 Other income, net 1,117 844 Other expenses: Salaries 701 650 Loan servicing fees and collection costs 28 149 Other costs 34 184 Net income before taxes 429 744 Income tax provision (160 ) (247 ) Net income after taxes $ 269 $ 497 Balance Sheet Data Total loans, gross $ 1,126 $ 1,650 Allowance for credit losses 155 385 Total loans, net 971 1,265 Total assets 3,836 6,855 Total segment borrowings 3,114 5,638 Corporate and Other Investments This non-operating segment relates to our equity and investment securities as well as our legacy commercial business, and other assets, liabilities, revenues, and expenses, which are not specifically allocated to the operating segments. Additionally, we historically and continue to account for goodwill in this non-operating segment. All goodwill relates to the Bank, specifically the recreation and home improvement lending segments. Commencing with the 2020 second quarter, the Bank began issuing loans related to the new strategic partnership business, which is included within this segment. The associated activities of the strategic partnership business 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 $10.8 million as of March 31, 2026 and $10.5 million as of March 31, 2025, with originations of $170.0 million during the three months ended March 31, 2026 and $136.2 million during the three months ended March 31, 2025. Page 45 of 55 The following table presents selected financial data and ratios as of and for the three months ended March 31, 2026 and 2025. Three Months Ended March 31, (Dollars in thousands) 2026 2025 Selected Earnings Data Total interest income $ 2,150 $ 1,765 Total interest expense 1,925 3,943 Net interest expense (benefit) 225 (2,178 ) Other income, net 810 711 Other expenses: Salaries 3,103 2,182 Loan servicing fees and collection costs 15 448 Other costs 1,262 724 Net loss before taxes (3,345 ) (4,821 ) Income tax benefit 1,272 1,599 Net loss after taxes $ (2,073 ) $ (3,222 ) Balance Sheet Data Total loans $ 10,786 $ 10,499 Total assets 426,272 440,300 Total segment borrowings 346,085 362,164 SUMMARY CONSOLIDATED FINANCIAL DATA The table below presents our selected financial data for the three months ended March 31, 2026 and 2025. Three Months Ended March 31, (Dollars in thousands) 2026 2025 Return on average assets 1.01 % 1.93 % Return on average equity 5.80 % 12.32 % Return on average stockholders' equity 4.91 % 12.96 % Net interest margin, gross 8.00 % 7.94 % Equity to assets (1) 17.20 % 15.77 % Debt to equity (1) (2) 4.7x 5.2x Net loans receivable to assets (3) 85 % 79 % Net charge-offs $ 20,569 $ 19,016 Net charge-offs as a % of average loans receivable (4) 3.23 % 3.10 % Reserve coverage ratio (5) 4.48 % 4.25 % (1) Includes $99.4 million and $68.8 million related to non-controlling interests in consolidated subsidiaries as of March 31, 2026 and 2025. (2) Excludes deferred financing costs of $8.2 million and $8.1 million as of both March 31, 2026 and 2025. (3) Includes both loans held for investment and loans held for sale. (4) Net charge-offs as a percent of annual average gross loans. (5) Allowance for credit losses as a percent of loans held for investment. Loans held for sale are carried at the lesser of amortized cost or fair value, do not have an allowance for credit losses, and are excluded from this calculation. Page 46 of 55 CONSOLIDATED RESULTS OF OPERATIONS Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025 Net income attributable to stockholders was $5.0 million, or $0.20 per diluted share, for the three months ended March 31, 2026, compared to $12.0 million, or $0.50 per diluted share, for the three months ended March 31, 2025. Total interest income was $79.1 million for the three months ended March 31, 2026, compared to $75.4 million for the three months ended March 31, 2025. The increase in interest income reflects the continued growth in our lending segments, particularly recreation lending, as well as our continued efforts to increase the weighted average interest rates charged on loans over the past several years, with the average yield on our loans increasing to 12.15% for the three months ended March 31, 2026, compared to 12.04% for the three months ended March 31, 2025. Loans, inclusive of loans held for sale, were $2.618 billion as of March 31, 2026, comprised of recreation ($1.672 billion), home improvement ($814.9 million), commercial ($119.6 million), strategic partnership ($10.8 million), and taxi medallion ($1.1 million) loans. We had an allowance for credit losses as of March 31, 2026 of $116.7 million, which was attributable to recreation (74%), home improvement (17%), commercial (8%), and taxi medallion (less than 1%) loans. Loans increased $51.1 million, or 2% during the three months ended March 31, 2026. Originations for the three months ended March 31, 2026 were $376.9 million compared to $281.7 million for the three months ended March 31, 2025. Originations for the three months ended March 31, 2026 included $170.0 million of strategic partnership program loans, compared to $136.2 million of strategic partnership program loans for the three months ended March 31, 2025. Originations increased in both of our consumer segments in the current quarter from the prior year quarter, with recreation loan originations increasing 64% and home improvement loan originations increasing 32%. The provision for credit losses was $22.5 million for the three months ended March 31, 2026, compared to $22.0 million for the three months ended March 31, 2025. The current year provision included net charge-offs of $20.6 million, compared to $19.0 million in the prior year quarter, with recreation and home improvement loans accounting for $17.7 million and $2.9 million compared to $16.4 million and $3.1 million in the prior year quarter. Additionally, the allowance for credit losses for the three months ended March 31, 2026, included net recoveries on taxi medallion loans of less than $0.1 million compared to $0.8 million for the three months ended March 31, 2025 and provisions of $0.5 million for commercial loans in the current quarter compared to $3.1 million in the prior year quarter. The provision for credit losses for the three months ended March 31, 2026 also included the impact of growth of our consumer loan portfolio, particularly the recreation loan portfolio which grew 3% during the quarter and required an allowance for credit losses of approximately $2.8 million, compared to the prior year for which the loan portfolio did not grow and, therefore, did not require a provision charge. Net charge-offs in the recreation loan portfolio, excluding loans held for sale, continued to be elevated from historic norms, however net charge-offs improved to 4.38% from 4.67% in the prior quarter year. For home improvement loans, net charge offs were 1.44% during the quarter improving from 1.55% in the prior year quarter. As of March 31, 2026, current loans (those less than 30 days past due) were 95% and 99% of the recreation and home improvement loan portfolios, in line with March 31, 2025. Charge-off activity and loan delinquency are two of the more prominent indicators of future loss experience and thus have a significant impact on our determination of allowance for credit loss. As of March 31, 2026, the allowance for credit loss was 5.19% and 2.49% of recreation and home improvement loans, compared to 5.00% and 2.49% a year ago. See Note 4 of the accompanying consolidated financial statements for additional information on loans and allowance for credit losses. Interest expense was $25.0 million for the three months ended March 31, 2026, compared to $24.0 million for the three months ended March 31, 2025, reflecting both higher average borrowings and higher average borrowing costs during the three months ended March 31, 2026, with borrowing costs expected to remain elevated in the current interest rate environment. The average cost of borrowed funds was 4.28% for the three months ended March 31, 2026, compared to 4.16% for the three months ended March 31, 2025. The increases of 12 basis points over the prior year quarter is largely attributable to the increased cost of newly issued certificates of deposit used both to fund our growth and to replace older maturing loans with lower rates, with our deposit costs increasing 15 basis point to 3.95%. As we replace upcoming deposit maturities with new issues, we expect our cost of funds to further increase. During the three months ended March 31, 2026, we issued certificates of deposit for 60 months at rates as high as 3.90% (3.97% inclusive of broker fees). Average debt outstanding was $2.370 billion for the three months ended March 31, 2026 which is comparable to $2.340 billion for the three months ended March 31, 2025, as we increased our borrowings, particularly certificates of deposit to fund our loan growth. In addition, in April 2026, we issued and sold $75.0 million aggregate principal amount of our 8.25% senior notes due 2031, which will increase our interest costs in the future. Page 47 of 55 Net interest income was $54.1 million for the three months ended March 31, 2026, an increase of 5% from $51.4 million in the three months ended March 31, 2025. The net interest margin before the impact of the allowance for credit losses was 8.00% for the three months ended March 31, 2026, compared to 7.94% for the three months ended March 31, 2025, reflecting the above, particularly our higher yield over the prior year, partially offset by the rising cost of borrowings experienced. With the rates we charge on outstanding loans being fixed, and our average cost of funds increasing, our net interest margin had tightened in prior years, as we can only increase our yield through higher rates charged on new originations, and have only been able to pass along a portion of rate increases on new originations. Accordingly, during the three months ended March 31, 2026, our net interest margins improved from the prior year as we have continued to originate new loans at rates above what had been offered in prior years. Additionally, to the extent that our loan portfolio mix changes significantly in the future, we may experience fluctuation in our net interest margins. Net other income, which is typically comprised of gains on equity investments, gains related to and in connection with the disposition of taxi medallion assets, fees associated with our strategic partnership program, prepayment fees, servicing fee income, and late charges, was $2.4 million for the three months ended March 31, 2026, compared to $11.6 million for the three months ended March 31, 2025. Net gains on equity investments were $0.3 million for the three months ended March 31, 2026, compared to $9.4 million for the three months ended March 31, 2025. Additionally, for the three months ended March 31, 2026, other income included $1.1 million of gains on the disposition of taxi medallion assets, compared to $0.8 million in the prior year quarter, and $0.8 million of strategic partnership fees, compared to $0.6 million in the prior year quarter. Operating expenses were $22.4 million for the three months ended March 31, 2026, compared to $20.8 million for the three months ended March 31, 2025. Such amount was inclusive of salaries and benefits of $11.0 million in the current quarter, up from $10.0 million for the prior year quarter, with the increase reflecting higher costs associated with a greater head count at our operating subsidiary, Medallion Bank, and higher equity compensation costs in the current year quarter. Additionally, other expenses were higher, particularly loan servicing expense reflecting the overall larger portfolio. ASSET/LIABILITY MANAGEMENT Interest Rate Sensitivity We, like other financial institutions, are subject to interest rate risk to the extent that our interest-earning assets (consisting of consumer, commercial, and taxi medallion loans, and investment securities) reprice on a different basis over time in comparison to our interest-bearing liabilities (consisting primarily of bank certificates of deposit, historically credit facilities, and borrowings from banks and other lenders). Having interest-bearing liabilities that mature or reprice more frequently on average than assets may be beneficial in times of declining interest rates, although such an asset/liability structure may result in declining net earnings during periods of rising interest rates. Abrupt increases in market rates of interest may have an adverse impact on our earnings until we are able to originate new consumer loans at the higher prevailing interest rates. Conversely, having interest-earning assets that mature or reprice more frequently on average than liabilities may be beneficial in times of rising interest rates, although this asset/liability structure may result in declining net earnings during periods of falling interest rates. This mismatch between maturities and interest rate sensitivities of our interest-earning assets and interest-bearing liabilities results in interest rate risk. The effect of changes in interest rates is mitigated by regular turnover of the portfolios. We believe that the average life of our loan portfolios varies to some extent as a function of changes in interest rates. Borrowers are more likely to exercise prepayment rights in a decreasing interest rate environment because the interest rate payable on the borrower's loan is high relative to prevailing interest rates. Conversely, borrowers are less likely to prepay in a rising interest rate environment. However, borrowers may prepay for a variety of other reasons, such as to monetize increases in the underlying collateral values. In addition, we manage our exposure to increases in market rates of interest by incurring fixed-rate indebtedness and by setting repricing intervals on certificates of deposit, for terms of up to five years. A relative measure of interest rate risk can be derived from our interest rate sensitivity gap. The interest rate sensitivity gap represents the difference between interest-earning assets and interest-bearing liabilities, which mature and/or reprice within specified intervals of time. The gap is considered to be positive when repriceable assets exceed repriceable liabilities, and negative when repriceable liabilities exceed repriceable assets. A relative measure of interest rate sensitivity is provided by the cumulative difference between interest sensitive assets and interest sensitive liabilities for a given time interval expressed as a percentage of total assets Page 48 of 55 The following table presents our interest rate sensitivity gap at March 31, 2026. The principal amounts of interest earning assets are assigned to the time frames in which such principal amounts are contractually obligated to be repriced. We do not reflect any prepayment assumptions in preparing the analysis, despite historical average life experience being significantly shorter than contractual terms. March 31, 2026 Cumulative Gap (1) (Dollars in thousands) Less Than 1 Year More Than 1 and Less Than 2 Years More Than 2 and Less Than 3 Years More Than 3 and Less Than 4 Years More Than 4 and Less Than 5 Years More Than 5 and Less Than 6 Years Thereafter Total Earning assets Fixed-rate (2) $ 24,327 $ 30,858 $ 41,381 $ 60,968 $ 95,560 $ 80,555 $ 2,229,772 $ 2,563,421 Adjustable rate (2) 220 - 15 - - - - 235 Investment securities and equity investments 3,548 2,856 3,615 15,441 6,005 5,796 38,772 76,033 Cash and cash equivalents 138,649 - - - - - - 138,649 Total earning assets $ 166,744 $ 33,714 $ 45,011 $ 76,409 $ 101,565 $ 86,351 $ 2,268,544 $ 2,778,338 Interest bearing liabilities Deposits (3) $ 700,449 $ 554,188 $ 446,890 $ 198,831 $ 227,102 $ - $ - $ 2,127,460 Privately placed notes - 53,750 39,000 - - - 22,500 115,250 SBA debentures and borrowings 4,500 - 2,500 - 3,000 - 63,500 73,500 Trust preferred securities - - - - - - 33,000 33,000 Federal reserve and other borrowings 40,000 - - - - - - 40,000 Strategic partner collateral deposits 6,250 - - - - - - 6,250 Total liabilities $ 751,199 $ 607,938 $ 488,390 $ 198,831 $ 230,102 $ - $ 119,000 $ 2,395,460 Interest rate gap $ (584,455 ) $ (574,224 ) $ (443,379 ) $ (122,422 ) $ (128,537 ) $ 86,351 $ 2,149,544 $ 382,878 Cumulative interest rate gap $ (584,455 ) $ (1,158,679 ) $ (1,602,058 ) $ (1,724,480 ) $ (1,853,017 ) $ (1,766,666 ) $ 382,878 $ - December 31, 2025 (4) $ (547,621 ) $ (590,262 ) $ (420,387 ) $ (100,477 ) $ (143,859 ) $ 91,152 $ 2,092,209 $ - December 31, 2024 (4) $ (584,817 ) $ (456,813 ) $ (426,717 ) $ (114,216 ) $ (80,863 ) $ 70,765 $ 1,930,856 $ - (1) The ratio of the cumulative one-year gap to total interest rate sensitive assets was (21%) as of March 31, 2026, and was (20%) as of December 31, 2025. (2) Fixed and adjustable rate assets exclude $54.3 million of capitalized loan origination costs. (3) Excludes deferred financing costs of $8.2 million. (4) Excludes federal funds sold and investment securities. Our interest rate sensitive assets were $2.8 billion and interest rate sensitive liabilities were $2.4 billion at March 31, 2026. The one-year cumulative interest rate gap was a negative $584.5 million, or 21% of interest rate sensitive assets. We actively monitor the level of exposure with the goal that movements in interest rates not adversely and unexpectedly negatively affect future earnings. We use net interest income sensitivity analysis as our primary metric to measure and manage the interest rate sensitivities of our loan and investment securities portfolios. Our trust preferred securities bear a variable rate of interest of the 90-day Secured Overnight Financing Rate, or SOFR, adjusted by a relevant spread adjustment of approximately 26 basis points. As of March 31, 2026, these borrowings had a cost of 6.06%, a reduction of 63 basis points from a year ago. Liquidity and Capital Resources Our sources of liquidity include brokered certificates of deposit and other borrowings at the Bank, loan amortization and prepayments, private and public issuances of debt securities, participations or sales of loans to third parties, issuances of preferred securities at our subsidiaries, and the disposition of our other assets. On April 28, 2026, we issued and sold $75.0 million aggregate principal amount of senior unsecured notes to a group of institutional investors. The notes, which will mature on May 1, 2031, bear a fixed interest rate of 8.25% per year, paid semi-annually. In February 2026, we repaid, at maturity, $31.25 million aggregate principal amount of our February 2021 privately placed notes. In February 2026, we repaid $11.5 million of SBA debentures, in full, which had a maturity date of March 1, 2026. We currently do not have any commitments to access new debentures from the SBA. Page 49 of 55 In May 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. In August 2024, we completed a private placement to certain institutional investors of $5.0 million aggregate principal amount of 8.625% unsecured senior notes due August 2039, with interest payable semiannually. We used the net proceeds from the offering for general corporate purposes. In June 2024, we amended the notes previously issued in a private placement to certain institutional investors in December 2023, increasing the principal amount from $12.5 million to $17.5 million, reducing the interest rate to 8.875% from 9.0%, and extending the maturity date from December 2033 to June 2039. We used the net proceeds from the offering for general corporate purposes, which included the repayment of the remaining 8.25% notes that matured in March 2024 described below. 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 fully utilized in 2025. We do not currently have any commitments available from the SBA. In September 2023, we completed a private placement to certain institutional investors of $39.0 million aggregate principal amount of 9.25% unsecured senior notes due September 2028, with interest payable semiannually. In April 2023, the Bank began to originate retail savings deposits through a third-party service provider and, as of March 31, 2026, the Bank had $2.8 million in retail savings deposit balances. In March 2023, the Bank established a discount window line of credit at the Federal Reserve. As of March 31, 2026, the Bank had $1.5 billion of consumer loans pledged as collateral to the Federal Reserve. The advance rate on the pledged securities is approximately 58% of book value, for a total of approximately $884.2 million in secured borrowing capacity, of which $40.0 million was utilized as of March 31, 2026. 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 March 31, 2026. The Bank has borrowing arrangements with several correspondent 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 March 31, 2026, there was no amount outstanding with respect to these arrangements. Subject to market conditions, the Bank may seek to issue one or more additional series of preferred stock in order to increase capital levels, grow the consumer loan portfolios or, depending on the size and other terms of any such issuance and subject to receipt of any required regulatory approvals, redeem some or all of its outstanding preferred stock. Any determination to seek to redeem some or all of the Bank's outstanding preferred stock would be based on its actual and anticipated capital levels and capital deployment opportunities. There can be no assurance that the Bank will issue additional series of preferred stock or, if it does, that it will apply the proceeds to redeem any series of preferred stock. On July 1, 2025, the Bank redeemed its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, or Series F, in its entirety, for an aggregate amount of $46.0 million, which resulted in a $3.5 million charge to earnings attributable to common stockholders upon the redemption. The table below presents the components of our debt as of March 31, 2026, exclusive of deferred financing costs of $8.2 million. See Note 5 to the consolidated financial statements for details of the contractual terms of our borrowings. (Dollars in thousands) Balance Percentage Rate (1) Deposits $ 2,127,460 89 % 3.88 % Privately placed notes 115,250 5 8.35 SBA debentures and borrowings 73,500 3 4.11 Trust preferred securities 33,000 1 6.06 Federal reserve and other borrowings 40,000 2 3.75 Strategic partner collateral deposits 6,250 * 3.64 Total outstanding debt $ 2,395,460 100 % 4.13 % (1) Weighted average contractual rate as of March 31, 2026. (*) Less than 1%. Page 50 of 55 Our contractual obligations expire on or mature at various dates through September 2037. The following table presents our contractual obligations at March 31, 2026. Payments due by period (Dollars in thousands) Less than 1 year 1 - 2 years 2 - 3 years 3 - 4 years 4 - 5 years More than 5 years Total (1) Borrowings Deposits $ 700,449 $ 554,188 $ 446,890 $ 198,831 $ 227,102 $ - $ 2,127,460 Privately placed notes - 53,750 39,000 - - 22,500 115,250 SBA debentures and borrowings 4,500 - 2,500 - 3,000 63,500 73,500 Trust preferred securities - - - - - 33,000 33,000 Federal reserve and other borrowings 40,000 - - - - - 40,000 Strategic partner collateral deposits 6,250 - - - - - 6,250 Total outstanding borrowings 751,199 607,938 488,390 198,831 230,102 119,000 2,395,460 Operating lease obligations 2,396 887 756 777 798 2,172 7,786 Total contractual obligations $ 753,595 $ 608,825 $ 489,146 $ 199,608 $ 230,900 $ 121,172 $ 2,403,246 (1) Total debt is exclusive of deferred financing costs of $8.2 million as of March 31, 2026. In addition, as described above, in April 2026, we issued and sold $75.0 million aggregate principal amount of our 8.25% senior notes due 2031. Approximately $1.4 billion of our borrowings have maturity dates during the next two years, a majority of which are brokered certificates of deposit that have no right of voluntary withdrawal. In addition, the illiquidity of portions of our loan portfolio and investments may adversely affect our ability to dispose of them at times when it may be advantageous for us to liquidate such portfolio or investments. In addition, if we were required to liquidate some or all of our portfolio, the proceeds of such liquidation may be significantly less than the current value of such investments. Because we borrow money to make loans and investments, our net operating income is dependent upon the difference between the rate at which we borrow funds and the rate at which we invest these funds. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our interest income. In periods of sharply rising interest rates, our cost of funds would increase, which would reduce our net interest income. We use a combination of long-term and short-term borrowings and equity capital to finance our lending and investing activities. Our long-term fixed-rate investments are financed primarily with fixed-rate debt. We may use interest rate risk management techniques in an effort to limit our exposure to interest rate fluctuations. We have analyzed the potential impact of changes in interest rates on net interest income. Assuming that the balance sheet were to remain constant and no actions were taken to alter the existing interest rate sensitivity a hypothetical immediate 1% increase in interest rates would result in an increase to net income as of March 31, 2026 by $1.1 million on an annualized basis, and the impact of such an immediate increase of 1% over a one year period would have been a reduction in net income by $5.8 million at March 31, 2026. Although management believes that this measure is indicative of our sensitivity to interest rate changes, it does not adjust for potential changes in credit quality, size, and composition of the assets on the balance sheet, and other business developments that could affect net income from operations in a particular quarter or for the year taken as a whole. Accordingly, no assurances can be given that actual results would not differ materially from the potential outcome simulated by these estimates. From time to time, we work with investment banking firms and other financial intermediaries to investigate the viability of several other financing options which include, among others, the sale or spinoff of certain assets or divisions, the development of a securitization conduit program, and other independent financing for certain subsidiaries or asset classes. These financing options would also provide additional sources of funds for both external expansion and continuation of internal growth. Page 51 of 55 The following table illustrates sources of available funds for us and each of our subsidiaries, and amounts outstanding under trust preferred securities and borrowings and their respective end of period weighted average interest rates at March 31, 2026. See Note 5 to the consolidated financial statements for additional information about each borrowing. (Dollars in thousands) Medallion Financial Corp. Medallion Capital, Inc. Freshstart Venture Capital Corp. Medallion Bank March 31, 2026 December 31, 2025 Cash, cash equivalents and federal funds sold $ 11,878 $ 8,474 (1) $ 2,806 $ 115,491 $ 138,649 $ 201,564 Trust preferred securities 33,000 33,000 33,000 Average interest rate 6.06 % 6.06 % 6.12 % Maturity 9/37 9/37 9/37 Privately placed notes 115,250 115,250 146,500 Average interest rate 8.35 % 8.35 % 8.12 % Maturity 12/27 - 8/39 12/27 - 8/39 2/26 - 8/39 SBA debentures & borrowings Amounts available - - - Amounts outstanding 73,500 73,500 85,000 Average interest rate 4.11 % 4.11 % 3.98 % Maturity 9/26 - 9/35 9/26 - 9/35 3/25- 9/35 Brokered certificates of deposit 2,133,710 (2) 2,133,710 2,089,416 Average interest rate 3.88 % 3.88 % 3.87 % Maturity 10/25 - 9/30 10/25 - 9/30 1/26 - 12/30 Federal reserve and other borrowings 40,000 40,000 50,000 Average interest rate 3.75 % 3.75 % 3.75 % Maturity N/A N/A N/A Total cash $ 11,878 $ 8,474 $ 2,806 $ 115,491 $ 138,649 $ 201,564 Total debt outstanding $ 148,250 $ 73,500 $ - $ 2,173,710 $ 2,395,460 $ 2,403,916 (1) Cash resides in the applicable SBIC and is generally not available for corporate use. (2) Includes deposits of $6.3 million related to the strategic partnership business and $18.2 million related to listing services. Loan amortization, prepayments, and sales also provide a source of funding for us. Prepayments on loans are influenced significantly by general interest rates, taxi medallion loan market values, economic conditions, and competition. We also generate liquidity through deposits generated at the Bank, the offering of privately placed notes, through our trust preferred securities, and through preferred securities at our subsidiaries and have utilized borrowing arrangements with other banks in the past, as well as from cash flow from operations. In addition, we may choose to participate out a greater portion of our loan portfolio to third parties. We regularly seek additional sources of liquidity; however, given current market conditions, there can be no assurance that we will be able to secure additional liquidity on terms favorable to us or at all. If that occurs, we may decline to underwrite lower yielding loans in order to conserve capital until credit conditions in the market become more favorable; or we may be required to dispose of assets when we would not otherwise do so, and at prices which may be below the net book value of such assets in order for us to repay indebtedness on a timely basis. Dividends and Stock Repurchases Beginning in March 2022, the Company's board of directors reinstated our quarterly dividend at $0.08 per share. The Company's board of directors authorized and increased the quarterly dividend to $0.10 per share on October 24, 2023, authorized and increased the quarterly dividend to $0.11 per share on October 25, 2024, authorized and increased the quarterly dividend to $0.12 per share on April 25, 2025, and further authorized and increased the quarterly dividend to $0.14 per share on April 28, 2026, beginning with the dividend payable on May 21, 2026. The Company currently expects to continue to pay quarterly dividends at the current rate for the foreseeable future. We may, however, re-evaluate the dividend policy in the future depending on market conditions. There can be no assurance that we will continue to pay any cash distributions, as we may retain our earnings to facilitate the growth of our business, to finance our investments, to provide liquidity, or for other corporate purposes. On April 29, 2022, our board of directors authorized a new stock repurchase program with no expiration date, pursuant to which we were authorized to repurchase up to $35 million of our shares, which was increased to $40 million on August 10, 2022, also with no expiration date. During the three months ended March 31, 2026, the Company did not repurchase any of its common stock. Accordingly, as of March 31, 2026, up to $14,406,534 of shares remained authorized for repurchase under our stock repurchase program. Page 52 of 55

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