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Medallion Financial Corp. Reports 2012 First Quarter Results

Date : 05/02/2012 @ 8:54AM
Source : Business Wire
Stock : Medallion Financial Corp. (MM) (TAXI)
Quote : 11.1  -0.11 (-0.98%) @ 1:21PM
Medallion Financial Corp. (MM) share price Chart

Medallion Financial Corp. Reports 2012 First Quarter Results

Medallion Financial Corp. (MM) (NASDAQ:TAXI)
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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 earnings, or net increase in net assets resulting from operations was $5,466,000 or $0.30 per diluted common share in the 2012 first quarter, up $1,186,000 or 28% from $4,280,000 or $0.24 per diluted common share in the 2011 first quarter. Medallion Bank, the Company’s unconsolidated wholly-owned portfolio company, had net income of $4,125,000 in the 2012 first quarter, compared to $3,082,000 in the 2011 first quarter, an increase of $1,043,000 or 34%, primarily reflecting improved net interest income and reduced loan losses, partially offset by higher income taxes, compared to the prior year. As the Company continues to use Medallion Bank as a primary funding source it refers more loans to Medallion Bank for origination to take advantage of current short term borrowing rates.

Andrew Murstein, President of Medallion Financial stated, “We are extremely pleased with the quarter’s results, and our increased dividend. This marks the 6th consecutive quarter that we have been able to increase the dividend. It is now at the highest level it has been in over 10 years. We continue to experience zero losses on New York City taxi medallion loans that we originated,” 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, the loan to value ratio on our entire medallion portfolio is approximately 40%.

“In April, The New York City Taxi and Limousine Commission approved a new taxi auction to sell up to 2,000 new taxi medallions within the next few years. We know there have been objections to the plan, including but not limited to understandable concerns from those who would like to see more wheelchair accessible taxis on the road in conformity with the Americans with Disability Act. We hope that a mutually acceptable plan can be worked out by all parties,” said Mr. Murstein.

Larry D. Hall, Chief Financial Officer of Medallion Financial stated, “Medallion Financial’s capital and liquidity levels remained strong, with over $107,000,000 of deposit-raising capacity at Medallion Bank, in addition to over $89,000,000 of availability in our other funding sources.”

Mr. Hall continued, “In addition, during 2012 we have continued to replace higher cost borrowings with lower cost fixed and floating rate debt, further enhancing our profitability, and we see additional opportunities to continue this. For example, our $33,000,000 of Trust Preferred securities, which currently carry a fixed rate of 7.68%, will re-price to 90 day Libor plus 2.125% in September, or 2.59% at today’s rates, which should be accretive to subsequent earnings.”

Medallion Financial’s on-balance sheet taxicab medallion loan portfolio was $291,000,000 at quarter end, down from $310,000,000 a year ago, primarily due to the funding of most new medallion loan originations at Medallion Bank, and the Company’s sale of loan participations to third party banks. Total managed medallion loans increased $10,000,000 or 2% to $674,000,000 at quarter end, up from $664,000,000 a year ago.

Medallion Financial’s on-balance sheet commercial loan portfolio was $56,000,000 at quarter end, down from $74,000,000 a year ago. The managed commercial loan portfolio was $120,000,000 at quarter end, down from $134,000,000 last year. In both cases, the declines primarily reflected portfolio repayments. Medallion Bank’s consumer loan portfolio increased 7% to $198,000,000 at quarter end from $185,000,000 a year ago. Overall, total managed assets increased 1% to $1,134,348,000 at year end, up from $1,118,255,000 a year ago. Asset quality remained very strong, with managed loans 90 days or more past due of only 1.5% at quarter end, down from 1.8% at year end, and up slightly from 1.3% a year ago.

The Company also announced an increase in the dividend of 24% to $0.21 per share for the 2012 first quarter, up from $0.17 per share in the 2011 first quarter. This brings the total dividends paid over the last four quarters to $0.78, and equates to a yield of over 7% based on the closing price of the Company’s stock on May 1, 2012. The current dividend will be paid on May 25, 2012, to shareholders of record on May 15, 2012. Since the Company’s initial public offering in 1996, the Company has paid in excess of $171,714,000 or $10.81 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 approximately $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 2011 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)   2012   2011 Total investment income   $ 7,863     $ 9,597   Total interest expense   3,247       3,502   Net interest income   4,616       6,095     Total noninterest income   335       409     Salaries and benefits 2,050 2,207 Professional fees 313 331 Occupancy expense 211 227 Other operating expenses   766       898   Total operating expenses   3,340       3,663     Net investment income before income taxes 1,611 2,841 Income tax (provision) benefit   -       -   Net investment income after income taxes   1,611       2,841     Net realized gains (losses) on investments   (58 )     9     Net change in unrealized appreciation (depreciation) on investments 2,013 (216 ) Net change in unrealized appreciation on Medallion Bank and other controlled subsidiaries   1,900       1,646   Net unrealized appreciation on investments   3,913       1,430   Net realized/unrealized gains on investments   3,855       1,439     Net increase in net assets resulting from operations   $ 5,466     $ 4,280   Net investment income after income taxes per common share Basic $ 0.09 $ 0.16 Diluted     0.09       0.16   Net increase in net assets resulting from operations per common share Basic $ 0.31 $ 0.25 Diluted     0.30       0.24   Dividends declared per share   $ 0.21     $ 0.17   Weighted average common shares outstanding Basic 17,657,222 17,400,233 Diluted     17,936,958       17,548,036    

MEDALLION FINANCIAL CORP.

CONSOLIDATED BALANCE SHEETS

  (Dollars in thousands, except per share data)   March 31, 2012   December 31, 2011 Assets     Medallion loans, at fair value $ 291,025 $ 307,167 Commercial loans, at fair value 56,111 54,159 Investment in Medallion Bank and other controlled subsidiaries, at fair value 88,207 85,932 Equity investments, at fair value 5,524 4,577 Investment securities, at fair value   -     - Net investments 440,867 451,835   Cash and cash equivalents 24,566 29,352 Accrued interest receivable 1,089 1,120 Fixed assets, net 527 466 Goodwill, net 5,069 5,069 Other assets, net     50,529     49,189 Total assets   $ 522,647   $ 537,031   Liabilities Accounts payable and accrued expenses $ 4,104 $ 6,040 Accrued interest payable 764 1,708 Funds borrowed   343,520     357,779 Total liabilities     348,388     365,527   Commitments and contingencies - -       Total shareholders' equity (net assets)     174,259     171,504 Total liabilities and shareholders' equity   $ 522,647   $ 537,031   Number of common shares outstanding 17,942,510 17,719,570 Net asset value per share   $ 9.71   $ 9.68   Total managed loans $ 991,391 $ 984,576 Total managed assets     1,134,348     1,141,806



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