The Auto Channel: North America | Europe

Medallion Financial Corp. Announces First Quarter Results

- NYC Medallion Auction Sets New Records

- Loan Portfolio Acquisition To Close Today

- Dividend Increased

NEW YORK, May 6 -- Medallion Financial Corp. , a specialty finance company with a leading position in servicing the taxicab industry and in small business commercial lending, and owner of the largest taxi top advertising company in the world, announced net interest income of $3,588,000 for the first quarter of 2004, compared to $3,199,000 in the 2003 first quarter. Net investment income before tax was $.00 per share for the 2004 first quarter, compared to $.02 per share in the comparable 2003 period.

Total assets increased 5% to $479,000,000 from $456,000,000 in the 2004 first quarter compared to the 2003 year end. Medallion loans increased 6%, to $306,000,000 in the 2004 first quarter, up from $288,000,000 in the 2003 fourth quarter. Commercial loans increased 23%, to $105,000,000 from $86,000,000 in the comparable quarters. Commercial yields at quarter end also increased to 9.07% from 8.98% at year-end.

Not included in the quarter were results from the recently announced acquisition of the RV/Marine portfolio, expected to close imminently, which will increase the commercial loan portfolio by more than 80%. Also not included was the effect of the first round of the New York City taxicab medallion auction, which was concluded in April 2004. New York City sold a total of 300 medallions, and market values reached all-time highs. There were four bids submitted for every corporate medallion sold, and the average corporate winning bid was $345,000, up from sale transactions recorded at $280,000 just three months ago.

Andrew Murstein, President of Medallion Financial, stated, "Even though we have consistently said that New York City taxicab medallions have been one of the best long term appreciating investments to own over the last 70 years, we were happily surprised with the auction's strong results. Prior to this auction, no New York City medallion had sold for more than $307,000. In this auction, every winning corporate bid was in excess of that amount, with the highest bid recorded at an impressive $356,000. The auction results and the winning bid values are a very good business indicator for the Company. First, it clearly reflects that the business of owning and driving a taxi is indeed thriving. Second, the collateral value on our $306,000,000 of existing New York City medallion loans has increased significantly, and we now estimate our average loan-to-value in our New York market to be below 60%. Third, the Company's customer base included many winning bidders which we expect to finance as they close their purchases over the next few months."

Medallion Financial also announced that its Medallion Bank subsidiary has received all necessary state and FDIC regulatory approvals to close the $85,000,000 acquisition of the RV/Marine portfolio it previously announced. Medallion Bank received the approvals and raised the necessary deposits to fund the acquisition faster than expected. We expect the transaction will close today, and is expected to be $.11 per share accretive to the full 2004 earnings, as opposed to the $.10 per share we previously announced, as the transaction is closing earlier than planned.

Larry Hall, Medallion's CFO, stated, "From the auction results, as well as from the growing pipeline in every one of our lending divisions, we are anticipating strong loan demand volume through the remainder of 2004. With our capital ratio at 33% and our excellent liquidity position, we anticipate funding all the business in our pipeline which meet our high credit quality standards. At March 31, 2004, the Company had more than $100,000,000 of cash and funds available under existing loan commitments. In addition, Medallion Bank will continue to have access to FDIC-insured deposits to provide an additional flexible funding source. During the 2004 first quarter, we started taking in deposits at Medallion Bank. The Bank accepted more than $70,000,000 of deposits, and purchased $70,000,000 of loans from various affiliates. These loans will now enjoy a much-improved net interest margin because of the Bank's significantly lower borrowing costs. To ensure a smooth transition, we gathered the deposits prior to the portfolio purchase, and as a result incurred higher net interest costs in the quarter than we would expect going forward. The long-term result will be beneficial as our deposit cost was more than 100 basis points less than the debt that we paid off in our other operating subsidiaries. The only area that did not perform up to our expectations was our Medallion Taxi Media division, although its sales were up 35% from the 2003 first quarter."

Mr. Hall continued, "Loan quality continued to remain strong, and remains one of the hallmarks of Medallion Financial. Our net realized/unrealized loss in our loan portfolio was only $140,000 in the quarter, even though outstandings grew by over $40,000,000. Delinquencies remained relatively flat from the prior quarter, and dropped by 40% from last year. Our loan loss reserve is 6% of our commercial loan portfolio. Finally, we were active with our stock repurchase program, and to date we effected open market purchases of over $1,000,000 of the Company's common stock."

The Company also announced that its Board of Directors declared a dividend of $.08 per share on its common stock for the 2004 first quarter, facilitated in part by cash proceeds from prior portfolio gains. The dividend is payable on May 24, 2004 to shareholders of record on May 14, 2004.

This is an increase from $.07 in the 2003 fourth quarter, and is up from $.01 in the 2003 first quarter. The dividend is the highest quarterly distribution to our shareholders since 2001.

Mr. Hall concluded, "Since our initial public offering in 1996, we have paid out over $78,000,000 in dividends, or more than $5 per share. As our earnings improve, we continue to build momentum, and as we execute certain strategies, we hope to increase the dividend throughout the balance of this year and in the years to come."

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 commercial loans financing small businesses in other targeted industries, and operates the largest taxicab rooftop advertising business in the world. The Company and its subsidiaries have lent over $1 billion to the taxicab industry and commercial equipment industries.

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 2003 Annual Report on Form 10-K.

                        Medallion Financial Corp.
                      Consolidated Income Statements

                                                  Quarter Ended
                                        March 31,   December 31,  March 31,
                                          2004         2003         2003

  Total investment income              $6,485,248   $6,524,649   $6,528,284
  Total interest expense                2,897,692    2,703,141    3,329,171
  Net interest income                   3,587,556    3,821,508    3,199,113

  Gain on sale of loans                   213,278       52,417      188,930
  Other income                            550,264      834,904    1,121,113
  Total noninterest income                763,542      887,321    1,310,043

  Salaries and benefits                 2,401,722    2,166,339    2,434,388
  Professional fees                       454,532      428,445      119,979
  Costs of debt extinguishment                -            -         28,861
  Other operating expenses              1,511,606    1,939,632    1,620,848
  Total operating expenses              4,367,860    4,534,416    4,204,076

  Net investment income (loss)
   before income taxes                    (16,762)     174,413      305,080

  Income tax provision                     45,100          -          9,999

  Net investment income (loss)            (61,862)     174,413      295,081

  Net realized gains
   (losses) on investments               (199,234)    (620,250)    (561,565)
  Net change in unrealized appreciation
   (depreciation) on investments       (1,118,591)     167,681      696,505
  Net realized/unrealized gain
   (loss) on investments               (1,317,825)    (452,569)     134,940

  Net increase (decrease) in net
   assets resulting from operations   $(1,379,687)   $(278,156)    $430,021

  Weighted average shares
  Basic                                18,219,999   18,253,604   18,242,728
  Diluted                              18,219,999   18,253,604   18,242,728
  Net investment income (loss)
   before income taxes per share
  Basic                                    $(0.00)       $0.01        $0.02
  Diluted                                   (0.00)        0.01         0.02
  Net increase (decrease)
   in net assets per share
  Basic                                    $(0.08)      $(0.02)       $0.02
  Diluted                                   (0.08)       (0.02)        0.02

  Declared dividends per share              $0.08        $0.07        $0.01

                        Medallion Financial Corp.
                       Consolidated Balance Sheets

                                     March 31,   December 31,    March 31,
                                       2004          2003          2003
  ASSETS
  Medallion loans                  $306,330,557  $288,211,557  $230,097,124
  Commercial loans                  105,403,494    85,970,205   114,412,457
  Equity investments                  4,982,393     4,976,763     8,985,448
  Investment securities               3,226,539         -             -
  Net investments                   419,942,983   379,158,525   353,495,029
  Investments in and loans to Media   2,612,422     3,614,485     3,749,195
  Total investments                 422,555,405   382,773,010   357,244,224
  Cash                               32,486,160    47,675,537    30,725,792
  Accrued interest receivable         1,991,469     1,727,719     2,022,198
  Servicing fee receivable            2,556,439     2,663,468     2,968,081
  Fixed assets, net                   1,223,469     1,351,887     1,487,773
  Goodwill, net                       5,007,583     5,007,583     5,007,583
  Other assets                       13,055,113    15,295,253    14,624,700
  Total assets                     $478,875,638  $456,494,457  $414,080,351

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Accounts payable and
   accrued expenses                  $5,392,611    $5,726,829    $6,930,864
  Accrued interest payable              310,476     1,197,248     4,418,257
  Floating rate borrowings          184,877,915   230,519,058   172,507,560
  Fixed rate borrowings             129,524,893    56,935,000    67,928,970
  Total liabilities                 320,105,895   294,378,135   251,785,651

  Total shareholders' equity        158,769,743   162,116,322   162,294,700
  Total liabilities and
   shareholders' equity            $478,875,638  $456,494,457  $414,080,351

  Number of common
   shares outstanding                18,163,743   18,242,178    18,242,728
  Net asset value per share               $8.74         $8.89         $8.90

  Total managed loans              $566,170,159  $547,873,962  $559,815,831
  Total managed assets              633,311,746   630,186,657   629,386,601