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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