8-K: Medallion Bank Announces Full Redemption of Series F Preferred Stock Valued at $46 Million

Medallion Bank, a wholly owned subsidiary of Medallion Financial Corp., will redeem all 1,840,000 outstanding shares of its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series F, for $46 million on July 1, 2025.

Summary

• Medallion Bank, a wholly owned subsidiary of Medallion Financial Corp. (MFIN), announced its intention to redeem all 1,840,000 outstanding shares of its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series F (Nasdaq: MBKNP).
• The redemption will occur on July 1, 2025, at a price of $25.00 per share, totaling an aggregate redemption amount of $46,000,000.
• The redemption price does not include declared and unpaid dividends; the regular quarterly dividend on the Series F Preferred Stock will be paid separately on July 1, 2025, to holders of record.
• Upon redemption, the Series F Preferred Stock will no longer be deemed outstanding, and dividends on these shares will cease to accrue.
• Shares are held in book-entry form through The Depository Trust Company (DTC) and will be redeemed according to DTC procedures, with Equiniti Trust Company, LLC serving as the transfer, registrar, and redemption agent.

Sentiment

Score: 7

Explanation: The redemption of preferred stock is generally a positive sign, indicating financial health and potentially lower future financing costs, though the specific impact depends on the source of funds for the redemption and the overall capital strategy.

Positives

• The redemption of preferred stock typically indicates a strong financial position and sufficient liquidity within Medallion Bank to retire higher-cost capital.
• Eliminates future dividend obligations on the Series F Preferred Stock, which could lead to improved net income available to common shareholders over time.
• Simplifies the company's capital structure by reducing the number of outstanding preferred stock series.

Future Outlook

On and after the Redemption Date of July 1, 2025, the Series F Preferred Stock will no longer be deemed outstanding and dividends on these shares will cease to accrue, indicating a streamlined capital structure going forward.

Management Comments

• Medallion Bank, a wholly owned subsidiary of Medallion Financial Corp., announced the redemption of all outstanding shares of its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series F.

Industry Context

This redemption reflects a common practice among financial institutions to actively manage their capital structure, optimize funding costs, and potentially signal financial strength. It aligns with broader trends where banks may seek to reduce higher-cost capital instruments when market conditions or internal liquidity allow for more efficient financing.

Comparison to Industry Standards

• The document does not provide specific financial metrics or operational results that would allow for a direct comparison to global benchmarks or specific comparable companies.
• The redemption of callable preferred stock is a standard capital management action for financial institutions, but its strategic implications would depend on Medallion Bank's overall capital adequacy and funding strategy relative to peers in the specialized consumer lending or industrial bank sectors.

Stakeholder Impact

• Preferred Shareholders (Series F): Will receive $25.00 per share plus the regular quarterly dividend on July 1, 2025, and their shares will cease to accrue dividends and be outstanding.
• Common Shareholders: May benefit from reduced future dividend payments on the preferred stock, potentially leading to improved earnings per common share over time.
• Creditors: The redemption could be seen as a positive signal of financial strength, potentially improving the bank's credit profile.

Next Steps

• Medallion Bank will proceed with the redemption of Series F Preferred Stock on July 1, 2025.
• Holders of Series F Preferred Stock should contact their bank or broker for information on obtaining the redemption payment.

Key Dates

Recommendation

Keywords

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