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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