Medallion Loans Grow 29% From a Year Ago
Total Assets Grow 25% From a Year Ago
NEW YORK, Aug. 9 - Medallion Financial Corp. (Nasdaq: TAXI), a specialty commercial finance company with a leading position servicing the taxi industry and targeted niche markets, announced net investment income after taxes of $3,753,000 or $0.22 per diluted common share for the 2005 second quarter, the highest such amount in the last 5 years, and an increase of $2,243,000 from $1,510,000 or $0.08 in the 2004 second quarter.
Medallion loans grew to $423,799,000 from $328,616,000 in the last 12 months, an increase of $95,183,000 or 29%. Total assets increased to $761,001,000 from $608,710,000 a year ago, an increase of $152,291,000 or 25%. Managed assets reached $869,226,000 at June 30, 2005.
This is the highest the medallion portfolio has been in the sixty-eight year history of the company, the highest managed assets have been, and the highest net investment income after taxes since 2000.
Net increase in net assets resulting from operations was $447,000 or $.03 per share in the 2005 quarter, compared to $249,000 or $0.01 per share in the 2004 quarter. This reflects approximately $1,000,000 of refinancing fees the Company received from a few large loans, and a $2,597,000 decline in the value of the Company's investment in Clear Channel stock during the quarter, approximately $2,000,000 of which has been recovered to date in the third quarter.
Andrew Murstein, President of Medallion Financial, stated, "We are extremely pleased with our second quarter results. Our improved net investment income demonstrates the power of our asset growth and improved leverage on our bottom line. Our loan demand is robust, and we expect continued growth ahead especially with another planned medallion auction towards the end of this year. Medallion Bank is performing better than anticipated. It has contributed significantly to our earnings since opening for business only eighteen months ago. With the added growth of the consumer business, their loan production has been running on a seasonal pace of approximately $5,000,000 per month, up from less than $250,000 per month a year ago. The consumer portfolio is yielding over 18% and its 90 day past due delinquencies are under 1%. This has helped our overall yields to increase, and our net interest margin to reach 4.74% in the quarter."
Larry Hall, Medallion's CFO, stated, "We are making progress in achieving our goal of improved leverage on our balance sheet. With over $165,000,000 of equity, we improved our leverage to 3.5 to 1, up from 2.8 to 1 a year ago. We believe this is still far less than most other finance companies and banks, which typically have leverage of two to four times this amount. As we continue to grow our balance sheet, the benefits of improved leverage should allow our earnings to increase. Credit quality also remains good, as total delinquencies 90 days past due decreased to 2.5% from 4.8% one year ago."
Medallion also announced that its Board of Directors has declared and will pay a cash dividend of $0.13 per share. The dividend will be payable on August 31, 2005 to shareholders of record on August 19, 2005. The Company has now declared $0.25 per share of dividends for the first six months of 2005, up from $0.16 for the first six months of 2004, for an increase of 56%.
About Medallion Financial
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 financing small businesses and other targeted industries and niches. The Company and its subsidiaries have lent over $2 billion to the taxicab industry and small business.
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 "Investment Considerations," in Medallion's 2004 Annual Report on Form 10-K.
(Financial Tables Follow)
Medallion Financial Corporation
Consolidated Income Statements
Quarter Ended Six Months Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
Total investment
income $14,137,562 $10,400,888 $27,103,822 $16,886,137
Total interest
expense 5,870,877 3,656,395 11,092,212 6,554,088
Net interest
income 8,266,685 6,744,493 16,011,610 10,332,049
Gain on sale of
loans 375,431 185,163 614,950 398,441
Other income 1,142,481 671,371 1,815,719 1,221,635
Total non-interest
income 1,517,912 856,534 2,430,669 1,620,076
Salaries and
benefits 2,708,035 2,302,759 5,620,462 4,704,481
Professional fees 482,121 549,073 987,378 1,003,605
Other operating
expenses 2,156,655 2,175,953 4,079,966 3,687,560
Total operating
expenses 5,346,811 5,027,785 10,687,806 9,395,646
Income tax
provision 684,371 1,062,997 1,241,032 1,108,097
Net investment
income after
taxes 3,753,415 1,510,245 6,513,441 1,448,382
Net realized gains
(losses) on
investments (682,815) (315,328) 1,365,072 (514,562)
Net change in
unrealized
depreciation on
investments (2,623,257) (946,054) (5,195,493) (2,064,646)
Net realized/
unrealized losses
on investments (3,306,072) (1,261,382) (3,830,421) (2,579,208)
Net increase
(decrease) in
net assets from
operations $447,343 $248,863 $2,683,020 $(1,130,826)
Weighted average
shares
Basic 16,969,568 18,141,427 17,063,025 18,179,524
Diluted 17,413,963 18,540,419 17,507,421 18,179,524
Net investment
income after
income taxes
per share
Basic $0.22 $0.08 $0.38 $0.08
Diluted 0.22 0.08 0.37 0.08
Net increase
(decrease) in
net assets from
operations per
share
Basic $0.03 $0.01 $0.16 $(0.06)
Diluted 0.03 0.01 0.15 (0.06)
Dividends declared
per share $0.13 $0.08 $0.25 $0.16
Medallion Financial Corporation
Consolidated Balance Sheets
June 30, December 31,
2005 2004
ASSETS
Medallion loans $423,798,555 $392,131,108
Commercial loans 155,765,264 136,834,891
Consumer loans 76,628,773 66,330,748
Equity investments 28,373,891 33,645,424
Investment securities 18,285,207 14,598,837
Net investments 702,851,690 643,541,008
Cash 28,890,009 37,267,122
Accrued interest receivable 3,098,653 3,062,608
Servicing fee receivable 2,154,128 2,312,040
Fixed assets, net 922,963 991,901
Goodwill, net 5,007,583 5,007,583
Other assets 18,075,818 17,727,362
Total assets $761,000,844 $709,909,624
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses $10,937,179 $11,756,337
Accrued interest payable 2,036,404 1,758,956
Floating rate borrowings 309,909,102 274,959,911
Fixed rate borrowings 272,147,126 250,973,035
Total liabilities 595,029,811 539,448,239
Total shareholders' equity 165,971,033 170,461,385
Total liabilities and shareholders'
equity $761,000,844 $709,909,624
Number of common shares outstanding 17,027,161 17,344,999
Net asset value per share $ 9.75 $ 9.83
Total managed loans $764,417,642 $718,462,564
Total managed assets 869,225,894 833,075,441
