After six years of painstaking development, a small New York bank’s fintech banking operation appears to be gaining traction.
The $2.9 billion-asset Medallion Financial originated $305 million in loans for strategic partners through the first six months of 2025, up from $203 million for all of 2024. Fees associated with those fintech originations totaled $1.5 million in the first half of the year, compared with $806,000 during the first six months of 2024.
Medallion entered the fintech banking market in 2019, seeking to speed its transformation from a legacy business model that focused heavily on financing the purchase of taxi medallions. Though the first partnership loan hit the company’s books in 2020, originations totaled less than $200 million through 2023. But the pace began to quicken last year.
Medallion generally holds fintech loans on its books for a few days before selling them to the partners for which it originated them.
Going forward, the prospects for additional fintech banking growth look increasingly promising, CEO Andrew Murstein told American Banker. Medallion has five strategic partners currently. It hopes to sign at least one more before the end of 2025, and several other candidates are in the pipeline.
“We’ve already been approached by multiple potential partners, and we’re in discussions that could lead to both new client relationships and new product offerings,” Murstein wrote in an email.
“We are very open-minded about new partners. We want to work with them and grow with them over time,” Murstein added.
The spike in loan originations and the accompanying jump in fee revenue contributed to a strong second-quarter earnings report. Medallion’s earnings for the three months ended June 30 totaled $11.1 million, or 46 cents per share. Analysts had been expecting about 33 cents per share.
Mike Grondahl, who covers Medallion for Northland Capital Markets, characterized the results as “inline” after accounting for one-time gains. The increased fintech loan volume helped offset weakness in the company’s home improvement and consumer recreational portfolios, Grondahl wrote in a July 31 research note.
Ladenburg Thallman analyst Christopher Nolan upgraded his rating on Medallion from “neutral” to “buy” following the release of the second-quarter report.
Medallion joins several other banks, including the $1.33 billion-asset
Coastal CEO Eric Sprink said in a recent interview that demand among fintechs for bank partners is “enormous” — an assessment that Murstein and Grasshopper CEO Mike Butler echoed.
“The opportunity set is substantial,” Murstein stated in the email.
Murstein’s family first got involved with the taxi industry in the 1930s, after his grandfather, Leon Murstein, emigrated from Poland. Leon Murstein started as a New York cab driver, but soon began financing the purchase of medallions, which are government-issued licenses allowing taxis to operate. The Mursteins founded Medallion Financial in 1995 after expanding into commercial lending. They founded Medallion Bank in 2002.
With the growth of Uber and other ride-share services over the past 15 years, Medallion was forced to shift its focus away from taxi financing. Just $6 million of medallion loans remained on its books as of June 30.
The move into strategic fintech partnerships, which came after
“They were producing very strong results, with a return on equity of over 30% at several banks,” Murstein told American Banker.
Medallion spent more than a year building its human and technological framework before onboarding the first fintech partner. The go-slow approach served the bank well, according to Murstein.
“Our early performance metrics are strong, and our compliance track record is spotless,” he said in the email.
The transition in Medallion’s business model has not been without bumps.
In June, Medallion agreed to pay a $3 million civil money penalty to the Securities and Exchange Commission to
The SEC also alleged that Murstein, who did not admit guilt, pressured a valuation firm to provide an inflated fair value estimate of Medallion.