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Medallion Financial Corp. Reports 2010 First Quarter Results

Date : 05/07/2010 @ 9:00AM
Source : Business Wire
Stock : Medallion Financial Corp. (MM) (TAXI)
Quote : 11.4  -0.04 (-0.35%) @ 8:10PM
Medallion Financial Corp. (MM) share price Chart

Medallion Financial Corp. Reports 2010 First Quarter Results

Medallion Financial Corp. (MM) (NASDAQ:TAXI)
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5 Years : From Jul 2009 to Jul 2014

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Medallion Financial Corp. (NASDAQ:TAXI), a specialty finance company with a leading position servicing the taxicab industry and other niche markets, announced that net increase in net assets resulting from operations, was $109,000 or $0.01 per diluted common share in the 2010 first quarter, down from $1,889,000 or $0.11 per share in the 2009 first quarter. Net investment income after income taxes was $2,232,000, or $0.13 per share, the highest in five quarters, up from $1,909,000, or $0.11 per share in the 2009 first quarter. Net investment income after income taxes on a combined basis with Medallion Bank was $7,022,000 or $0.40 per share in the quarter, up from $5,761,000 or $0.33 per share in the year ago quarter.

Medallion’s on balance sheet taxicab medallion loan portfolio was $311,000,000 at the end of the 2010 first quarter, down from $400,000,000 at the end of the 2009 first quarter. The decrease reflected our ability to participate a portion of these high-quality loans to other financial institutions which desire safe and profitable loan growth, enabling Medallion to earn a greater spread on the retained business, while maintaining the customer relationship. In addition, we continue to book loans into Medallion Bank, which is not consolidated. Our on balance sheet commercial loan portfolio was $74,000,000 at quarter end, down from $91,000,000.

Medallion’s managed taxicab medallion loan portfolio, which includes Medallion Bank, our unconsolidated wholly-owned portfolio investment, and loans serviced for or by third parties, was $589,000,000, up from $585,000,000 a year ago. Our managed commercial loan portfolio was $133,000,000, down from $166,000,000 a year ago. Medallion Bank’s consumer loan portfolio decreased to $182,000,000, down from $188,000,000 a year ago. Total assets under management decreased to $1,027,000,000, down from $1,069,000,000 a year ago.

Andrew Murstein, President of Medallion stated, “We continue to be pleased with our core operating earnings and our continuing trends of increased spreads and low delinquency levels. During this quarter, New York City and Chicago medallion prices also continued to rise. It is great to have this rock solid foundation of medallion loans in our portfolio which have never experienced a single loss on any loan we have originated in the history of the company.

Larry Hall, CFO, stated, “The yield on the portfolio increased to 7.99% in the 2010 first quarter, up from 7.58% in the 2009 first quarter. On a combined basis with Medallion Bank, the yield was 8.81% in the quarter, down from 8.90% a year ago, a very solid performance given the declining interest rate environment over the last two years.

“Medallion Bank, which has a low cost of funds, continues to fund much of our growth,” Mr. Hall said. Our weighted average cost of borrowed funds dropped to 3.89% in the quarter, down from 4.16% a year ago. Combined with Medallion Bank, it was 2.98%, compared to 4.06% a year ago. As a result, our net interest margin was 4.95% in 2010, up from 4.30% in 2009. Our net interest margin including Medallion Bank increased to 6.71%, up from 5.43%. These are the highest margins we have ever had.

“Medallion Bank’s current average cost of funds on their CD’s at the end of the month was 1.65%. However, new CD’s issued during the month averaged 0.55%. Thus, as the CD’s mature and are replaced, their cost of funds should continue to drop, and our spreads should increase,” Mr. Hall added.

“Our loan quality, which is one of the hallmarks of Medallion, remains strong. The unrealized depreciation that we recorded in connection with our investment in the SPAC’s at the end of 2009 was reversed and realized during the 2010 quarter, and unrealized depreciation was increased on a single secured mezzanine commercial loan. Even with that, on a combined basis, including Medallion Bank, delinquent medallion loans 90 days or more past due were 0.4%, up from 0.3% last year. Delinquent consumer loans were 0.7%, up from 0.6% a year ago. Delinquent commercial loans were 4.6%, down from 9.2% a year ago. For the portfolio as a whole, delinquent loans were 1.3%, down from 2.2% a year ago.”

The Company also announced that its Board of Directors declared a dividend of $0.15 per share on its common stock for the 2010 first quarter. The dividend is payable on May 28, 2010 to shareholders of record on May 21, 2010. Since the Company’s initial public offering in 1996, the Company has paid out over $146,000,000 in dividends, or $9.40 per share.

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 other commercial loans in targeted niche industries and its wholly owned portfolio company Medallion Bank also originates and services consumer loans. The Company and its subsidiaries have lent over $3 billion.

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 2009 Annual Report on Form 10-K.

  MEDALLION FINANCIAL CORP. CONSOLIDATED STATEMENTS OF OPERATIONS           Three Months Ended March 31, (Dollars in thousands, except per share data)   2010   2009 Total investment income   $9,230   $10,734 Total interest expense 3,514     4,645   Net interest income 5,716     6,089     Total noninterest income 796     699     Salaries and benefits 3,056 3,114 Professional fees 591 403 Occupancy expense 334 293 Other operating expenses 299     1,069   Total operating expenses 4,280     4,879     Net investment income before income taxes 2,232 1,909 Income tax (provision) benefit -     -   Net investment income after income taxes 2,232     1,909     Net realized losses on investments (8,222 )   (364 )   Net change in unrealized appreciation (depreciation) on investments (1,244 ) 867 Net change in unrealized appreciation (depreciation) on Medallion Bank and other controlled subsidiaries 7,343     (523 ) Net unrealized appreciation on investments 6,099     344   Net realized/unrealized losses on investments (2,123 )   (20 )   Net increase in net assets resulting from operations   $ 109     $ 1,889   Net investment income after income taxes per common share Basic $0.13 $0.11 Diluted   0.13     0.11   Net increase in net assets resulting from operations per common share Basic $0.01 $0.11 Diluted   0.01     0.11   Dividends declared per share   $0.15     $0.19   Weighted average common shares outstanding Basic 17,575,877 17,555,799 Diluted   17,714,766     17,649,531     MEDALLION FINANCIAL CORP. CONSOLIDATED BALANCE SHEETS           (Dollars in thousands, except per share data)   March 31, 2010   December 31, 2009 Assets     Medallion loans, at fair value $311,496 $321,915 Commercial loans, at fair value 73,522 77,922 Investment in Medallion Bank and other controlled subsidiaries, at fair value 72,598 72,279 Equity investments, at fair value 3,176 3,017 Investment securities, at fair value -   - Net investments 460,792 475,133   Cash and cash equivalents 19,840 33,401 Accrued interest receivable 1,693 1,661 Fixed assets, net 289 302 Goodwill, net 5,069 5,069 Other assets, net   40,643   39,608 Total assets   $528,326   $555,174   Liabilities Accounts payable and accrued expenses $ 5,789 $ 7,468 Accrued interest payable 886 2,207 Funds borrowed 361,146   382,522 Total liabilities   367,821   392,197   Commitments and contingencies - -       Total shareholders' equity (net assets)   160,505   162,977 Total liabilities and shareholders' equity   $528,326   $555,174   Number of common shares outstanding 17,575,877 17,575,877 Net asset value per share   $9.13   $9.27   Total managed loans $ 904,958 $ 907,116 Total managed assets   1,026,536   1,039,840



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