Medallion Financial Corp. (MM) (NASDAQ:TAXI)
Historical Stock Chart
5 Years : From May 2008 to May 2013
Medallion Financial Corp. (Nasdaq: TAXI), a specialty finance company
with a leading position servicing the taxicab industry and other niche
markets, announced that earnings, or net increase in net assets
resulting from operations was a loss of $5,759,000 or $0.33 per diluted
common share in the 2009 fourth quarter, compared to income of
$2,832,000 or $0.16 per diluted common share in the 2008 fourth quarter.
The fourth quarter loss was primarily the result of establishing
valuation allowances of $9,342,000 for the Company’s investments in
special purpose acquisition corporations (SPAC), which have ceased
operations. Excluding these reserves, earnings would have been
$3,583,000 or $0.20 per diluted common share for the 2009 fourth
quarter, an increase of 27%.
Net investment income after taxes was $2,154,000 or $0.12 per diluted
common share in the 2009 fourth quarter, compared to $4,444,000, or
$0.25 per diluted common share for the 2008 quarter, reflecting
SPAC-related adjustments and lower net interest income. For the 2009
full year, net investment income after taxes was $8,180,000 or $0.46 per
diluted common share, compared to $15,090,000 or $0.85 per diluted
common share for 2008. On a combined basis with Medallion Bank, net
investment income after taxes was $24,730,000, or $1.40 per diluted
common share for 2009, compared to $24,668,000, or $1.39 per diluted
common share for 2008. As the Company continues to use Medallion Bank as
a primary funding source, more and more of the Company’s earnings should
flow from the other operating subsidiaries to the bank, to take
advantage of current short term borrowing rates as low as 0.65%.
Medallion Financial’s net interest margin was 4.60% for the year, down
from 4.69% in 2008. However, on a combined basis with Medallion Bank,
the Company’s unconsolidated wholly-owned portfolio company, the net
interest margin increased to 6.03% in 2009, up from 5.21% in 2008, and
reached 6.88% in the 2009 fourth quarter, reflecting the reduced cost of
funds at the bank. These quarterly numbers and the full year 2009
numbers were the highest net interest margins in the history of the
company.
Andrew Murstein, President of Medallion Financial stated, “For the most
part, we are pleased with the year’s operating results, particularly
given the continuing difficult credit environment for financial
institutions. We continued to see strong taxi medallion collateral
values demonstrated through price appreciation in taxi medallions
through 2009 and continuing to date through 2010. Prices in 2009 for
corporate medallions in New York City increased 7%, and are currently at
$775,000 per medallion through February 2010. We continue to experience
zero losses on any taxi medallion loan we have originated in New York
City,” said Mr. Murstein. The taxi industry remains resilient in this
type of economic environment for several reasons such as corporate and
consumer cutbacks on more expensive limousine and town car services,
high taxi fleet utilization and continuing high taxi ridership levels.
In addition, our loan to value ratio on our entire medallion portfolio
is now under 50%.
“Our SPAC looked at over 100 acquisition opportunities and did not feel
any of the targets were appropriate to recommend to our shareholders for
a vote,” said Mr. Murstein. Most, if not all, of those acquisition
opportunities are worth significantly less today than what they were
worth two years ago. We would rather not do a deal than do a bad deal
and risk our name and reputation. That is why our investment portfolio
is in such strong shape today. We are very selective in our investment
process. We like to do two types of loans, secure, and very secure. In
the long run, that is the best investment philosophy and the right
strategy.”
Larry D. Hall, Chief Financial Officer of Medallion Financial stated,
“We continue to focus very intently on the credit quality of our loan
portfolios. Unlike many other financial institutions, our credit quality
has remained very good, even in these turbulent times. Loans more than
90 days past due, on a combined basis with Medallion Bank were 1.4% at
December 31, 2009, compared to 1.3% a year ago, and 1.8% in the third
quarter of 2009.
“Medallion Financial’s capital and liquidity levels remained strong,
with over $135,000,000 of deposit-raising capacity at Medallion Bank, in
addition to our other funding sources. Medallion Financial’s leverage
continues to be well under the industry norms with a debt to equity
ratio of 2.35 to 1.
Mr. Hall continued, “In addition, Medallion Bank received $9.7 million
of new funds under the US Treasury’s TARP program. It should be noted
that the Company was not required to become a bank holding company in
connection with Medallion Bank’s receipt of these funds.
“In addition, that money can now be leveraged conservatively in our bank
with low cost deposits and help generate additional net interest income
for the bank as the funds are deployed.
“Furthermore, the new Small Business Loan Fund recently proposed by
President Obama to help small banks could also be of benefit to us if
passed by Congress. Medallion Bank could potentially see the 5% dividend
rate on the TARP money it received decrease to as low as 1% as we
continue to grow Medallion Bank’s commercial and medallion loan
portfolios.”
Medallion Financial’s on-balance sheet taxicab medallion loan portfolio
decreased to $322,000,000 from $403,000,000 year ago, due to funding of
new loan originations by Medallion Bank, and the Company’s sale of loan
participations to third party banks. Total managed medallion loans
decreased slightly to $584,000,000 from $591,000,000 a year ago. The
on-balance sheet commercial loan portfolio decreased to $78,000,000 from
$90,000,000 a year ago. The managed commercial loan portfolio decreased
to $136,000,000 from $168,000,000 a year ago. Medallion Bank’s consumer
loan portfolio increased to $193,000,000 from $190,000,000 a year ago.
Overall total managed assets decreased slightly to $1.040 billion from
$1.076 billion a year ago.
The Company also announced a $0.15 per share dividend for the 2009
fourth quarter, bringing the full year amount to $0.72. This equates to
a yield of approximately 9% based on the closing price of the Company’s
stock on March 4, 2010. None of the 2009 dividend represented a return
of capital as the Company’s taxable earnings covered the entire amount.
The current dividend will be paid on March 22, 2010, to shareholders of
record on March 15, 2010. Since the Company’s initial public offering in
1996, the Company has paid in excess of $144,000,000 or $9.25 per share
in dividends.
Medallion Financial Corp. is a specialty finance company with a
leading position in the origination and servicing of loans financing the
purchase of taxicab medallions and related assets. The Company
also originates and services loans in other commercial industries, and
its wholly-owned portfolio company, Medallion Bank, also originates and
services consumer loans. The Company and its subsidiaries have
lent over $3.5 billion to its taxicab industry and other small
businesses.
Please note that this press release contains forward-looking
statements that involve risks and uncertainties relating to business
performance, cash flow, costs, sales, net investment income, earnings,
and growth. Medallion’s actual results may differ significantly
from the results discussed in such forward-looking statements. Factors
that might cause such a difference include, but are not limited to,
those factors discussed under the heading “Risk Factors,” in Medallion’s
2010 Annual Report on Form 10-K.
MEDALLION FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31,
(Dollars in thousands, except per share data)
2009
2008
2007
Total investment income
$41,403
$52,284
$51,393
Total interest expense
16,876
23,711
30,704
Net interest income
24,527
28,573
20,689
Total noninterest income
3,383
3,837
2,444
Salaries and benefits
10,989
10,689
10,192
Professional fees
1,554
1,606
2,603
Occupancy expense
1,275
1,271
1,353
Other operating expenses
5,912
3,754
3,687
Total operating expenses
19,730
17,320
17,835
Net investment income before income taxes
8,180
15,090
5,298
Income tax (provision) benefit
-
-
-
Net investment income after income taxes
8,180
15,090
5,298
Net realized gains (losses) on investments
(4,135
)
(3,746
)
14,172
Net change in unrealized appreciation (depreciation) on investments
2,648
6,323
(6,326
)
Net change in unrealized appreciation (depreciation) on
Medallion Bank and other controlled subsidiaries
(5,671
)
(2,419
)
2,292
Net unrealized appreciation (depreciation) on investments
(3,023
)
3,904
(4,034
)
Net realized/unrealized gains (losses) on investments
(7,158
)
158
10,138
Net increase in net assets resulting from operations
$ 1,022
$15,248
$15,436
Net investment income after income taxes per common share
Basic
$0.47
$0.86
$0.30
Diluted
$0.46
$0.85
$0.30
Net increase in net assets resulting from operations per common
share
Basic
$0.06
$0.87
$0.88
Diluted
$0.06
$0.86
$0.87
Dividends declared per share
$0.72
$0.76
$0.76
Weighted average common shares outstanding
Basic
17,569,688
17,520,966
17,480,523
Diluted
17,691,437
17,722,575
17,786,310
MEDALLION FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
December 31, 2009
December 31, 2008
Assets
Medallion loans, at fair value
$321,915
$402,964
Commercial loans, at fair value
77,922
89,611
Investment in Medallion Bank and other controlled subsidiaries, at
fair value
72,279
74,750
Equity investments, at fair value
3,017
3,272
Investment securities, at fair value
-
-
Net investments ($261,332 at December 31, 2009 and $347,517
at
December 31, 2008 pledged as collateral under borrowing
arrangements)
475,133
570,597
Cash and cash equivalents
33,401
32,075
Accrued interest receivable
1,661
2,149
Fixed assets, net
302
411
Goodwill, net
5,069
5,008
Other assets, net
39,608
36,445
Total assets
$555,174
$646,685
Liabilities
Accounts payable and accrued expenses
$ 7,468
$ 7,074
Accrued interest payable
2,207
2,015
Funds borrowed
382,522
462,650
Total liabilities
392,197
471,739
Commitments and contingencies
-
-
Total shareholders' equity (net assets)
162,977
174,946
Total liabilities and shareholders' equity
$555,174
$646,685
Number of common shares outstanding
17,575,877
17,549,224
Net asset value per share
$9.27
$9.97
Total managed loans
$ 907,116
$ 945,294
Total managed assets
1,039,840
1,075,509
|
