RV retail sales in 2023 are trailing 2022’s levels by about 21%. Medallion Financial grew its Recreation Lending loans in the second quarter by that same amount over 2022 levels.
Medallion Financial said its Recreation Lending segment originated 11.6% more funding in the second quarter of 2023 compared with the second quarter of 2022. Total loans grew 21% to $1.3 billion as of June 30.
According to Andrew Murstein, Medallion Financial president and chief operating officer: “Our consumer lending businesses surged in the second quarter and had more strength than we have seen over the past several quarters. We believe that this is in part due to resilient US consumers who continue to invest in home remodel projects boats and RVs.”
Murstein said Medallion Financial believes some of the pickup in the second quarter came from competitors scaling back or leaving the RV indirect lending market. Growth occurred even as the lender tightened credit and raised interest rates.
“We just still had very strong loan demand,” he said. “We have been in this business for so long. The management team has been doing it for 30 years or so. They really have a loyal following. Other lenders come in and leave. The dealers know we are in it for the long haul and continue to send us a lot of their business.”
Interest rates in the Recreation Lending segment averaged 14.62% at the quarter’s end, up from 14.23% on June 30, 2022. Chief Financial Officer Anthony Cutrone said origination growth in the segment likely returned to seasonal strength, something the lender had not seen since before 2020.
“We have increased rates,” Cutrone said. “We will continue to do that, and we have tightened credit. I think Q3 historically is one of those ones where things start to slow down, and then it bumps up a little bit, and then comes down.”
Murstein agreed the loan growth should slow in the second half of the year.
“You would expect growth to slow,” he said. “We have been growing 20% on the RV and marine. Those are very impressive numbers. It will not continue forever. Frankly, about a year ago, we thought it would slow. It did not.”