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 $4,280,000 or $0.24 per
diluted common share in the 2011 first quarter, up $4,171,000 from
$109,000 or $0.01 per diluted common share in the 2010 first
quarter. Net investment income after income taxes was $2,841,000 or
$0.16 per diluted common share in the 2011 first quarter, up
$609,000 or 27% from $2,232,000 or $0.13 per diluted common share
in the 2010 first quarter.
On a combined basis with Medallion Bank, the Company’s
unconsolidated wholly-owned portfolio company, net investment
income after taxes was $7,218,000 or $0.41 per diluted common share
for the 2011 first quarter, compared to $7,020,000, or $0.40 per
diluted common share for the 2010 first quarter. 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 as low as
0.45%.
Medallion Financial’s net interest margin was 5.17% for the 2011
first quarter, up from 4.95% in the 2010 first quarter. On a
combined basis with Medallion Bank, the net interest margin was
approximately the same at 6.7% reflecting the continued low cost of
funds at the bank, and the Bank’s higher-yielding consumer loan
portfolio.
Andrew Murstein, President of Medallion Financial stated, “We
are extremely pleased with the quarter’s operating results. We
continued to see strong taxi medallion collateral values
demonstrated through price appreciation in taxi medallions
throughout 2010 and continuing to date through 2011. Prices for
corporate medallions in New York City increased 23% since 2009, and
are currently at over $930,000 per medallion through May 2011. We
continue to experience zero losses on any taxi medallion loan we
have originated. In addition, our loan to value ratio on our entire
medallion portfolio is under 50%.”
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 not only remained very good, but has
improved, even in these turbulent times. Loans more than 90 days
past due, on a combined basis with Medallion Bank, were at 1.26% at
March 31, 2011, down from 1.43% at year end, and down from 1.29% a
year ago.
“Medallion Financial’s capital and liquidity levels remained
strong with over $51,000,000 of availability from our funding
sources and Medallion Financial’s leverage continues to be well
under the industry norms with a debt to equity ratio of only 2.22
to 1. In addition, Medallion Bank had over $62,000,000 of
deposit-raising capacity.”
Mr. Hall continued, “In addition, the Company recently entered
into lending arrangements with new bank funding sources and
extended its facility agreement with another bank. These
arrangements will complement the Company’s existing facilities by
providing the Company with greater liquidity and low funding costs
to finance its growing taxi medallion portfolio. We could not be
more pleased with our new and extended credit relationships. This
is a reflection of many positive factors, including how well our
existing medallion lending facilities have performed to date and
the continued financial health, profitability, and prospects of
Medallion Financial. These credit arrangements ensure we have the
funding necessary to effectively grow the portfolio over the years
ahead. We look forward to working with our funding sources and
anticipate strong relationships going forward.”
Medallion Financial’s on-balance sheet taxicab medallion loan
portfolio decreased slightly to $310,000,000 from $311,000,000 a
year ago, due to the funding of most new loan originations by
Medallion Bank, and the Company’s sale of loan participations to
third party banks. However, total managed medallion loans increased
13% to $664,000,000 from $589,000,000 a year ago.
Medallion Financial’s on-balance sheet commercial loan portfolio
was roughly flat at $74,000,000. The managed commercial loan
portfolio increased 1% to $134,000,000 from $133,000,000 a year
ago. Medallion Bank’s consumer loan portfolio increased 1% to
$185,000,000 from $182,000,000 a year ago. Overall total managed
assets increased 9% to $1.119 billion, from $1.027 billion a year
ago.
The Company’s net asset value per share, or book value per share
increased to $9.41, up from $9.13 one year ago, in part due to
improved profitability in Medallion Bank, which is a taxable C
Corp. and is entitled to retain its after tax earnings, and to the
Company’s stock repurchase transactions. The Company also announced
an increase in the dividend to $0.17 per share for the 2011 first
quarter, bringing total amount to $0.63 over the last four
quarters. This equates to a yield of approximately 7.0% based on
the closing price of the Company’s stock on May 4, 2011. The
current dividend will be paid on May 31, 2011, to shareholders of
record on May 20, 2011. Since the Company’s initial public offering
in 1996, the Company has paid in excess of $157,000,000 or $10.03
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 $3.9 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
Three Months Ended March 31, (Dollars in
thousands, except per share data)
2011 2010
Total investment income $ 9,597 $ 9,230
Total interest expense 3,502
3,514
Net interest income 6,095
5,716
Total
noninterest income 409 796
Salaries and benefits
2,207 3,056 Professional
fees
331 591 Occupancy expense
227 334 Other
operating expenses
898 299
Total operating expenses 3,663
4,280
Net investment income before
income taxes 2,841 2,232 Income tax (provision) benefit
- -
Net investment
income after income taxes 2,841
2,232
Net realized gains
(losses) on investments 9
(8,222 ) Net change in unrealized depreciation on
investments
(216 ) (1,244 ) Net change in unrealized
appreciation on Medallion Bank and other controlled subsidiaries
1,646 7,343
Net
unrealized appreciation on investments 1,430
6,099
Net realized/unrealized gains
(losses) on investments 1,439
(2,123 )
Net increase in net assets resulting from
operations $ 4,280 $ 109
Net investment income after income taxes per common
share Basic
$ 0.16 $ 0.13 Diluted
0.16 0.13
Net increase in net
assets resulting from operations per common share Basic
$ 0.25 $ 0.01 Diluted
0.24
0.01
Dividends declared per
share $ 0.17 $ 0.15
Weighted average common shares outstanding Basic
17,400,233 17,575,877 Diluted
17,548,036 17,714,766
MEDALLION FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
March 31, 2011 December 31, 2010
Assets
Medallion loans, at fair value
$ 310,499 $
323,126 Commercial loans, at fair value
74,406 76,866
Investment in Medallion Bank and other controlled subsidiaries, at
fair value
79,935 78,735 Equity investments, at fair value
4,971 4,789 Investment securities, at fair value
- -
Net investments 469,811
483,516 Cash and cash equivalents
16,316 17,303
Accrued interest receivable
1,347 1,441 Fixed assets, net
356 419 Goodwill, net
5,069 5,069 Other assets, net
43,391 42,564
Total
assets $ 536,290 $ 550,312
Liabilities Accounts payable and accrued expenses
$
5,908 $ 5,102 Accrued interest payable
765 1,913
Funds borrowed
365,308 380,532
Total
liabilities 371,981 387,547
Commitments and contingencies
- -
Total shareholders' equity (net assets)
164,309 162,765
Total liabilities and
shareholders' equity $ 536,290 $
550,312 Number of common shares outstanding
17,468,973 17,400,233 Net asset value per share
$ 9.41 $ 9.35 Total managed loans
$ 983,043 $ 967,690 Total managed assets
1,118,773 1,093,379
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