Medallion Bank in New York has sold its asset-based lending division to an unnamed buyer.
The $1.1 billion-asset bank and Medallion Business Credit, both subsidiaries of Medallion Financial, sold more than $40 million in performing prime business credit loans to "a larger super regional bank," the company said in a press release Tuesday.
The sale of Medallion's "smallest and least profitable division" will be accretive to earnings and will enable the bank to redeploy the funds into higher-yielding consumer loans, a sector where the bank continues to have "over a 50% pre-tax return on equity," President Andrew Murstein said in the release.
Medallion Bank in July sold nearly $100 million in prime-credit consumer loans, originated by its consumer lending business, to an unnamed buyer. The bank also originates taxi medallion loans, prime-credit home improvement loans and nonprime recreation vehicle loans.