Medallion Financial Corp. Reports Record Third Quarter Results
Net Investment Income After Taxes Increases 185% to $0.10 Per Share
Earnings Exceed $20,000,000 With Media Division Merger
Delinquencies At An All Time Low Board Approves Additional $10,000,000 Buyback Dividend Increased 25%
NEW YORK, N.Y., Nov. 4 -- Medallion Financial Corp. , a specialty finance company with a leading position servicing the taxicab industry, and other niche markets in small business and consumer lending, announced that net investment income after income taxes increased approximately 185% to $1,841,000 or $0.10 per share in the 2004 third quarter, up from $643,000 or $0.03 per share in the 2003 third quarter. Net increase in net assets resulting from operations rose dramatically to $20,055,000 or $1.09 per diluted common share in the quarter, up from $1,111,000 or $0.06 per share in the 2003 third quarter.
"We are extremely pleased with our results this quarter," commented President Andrew Murstein. "With the gain from the merger of our taxi top advertising division into Clear Channel, this was the most profitable quarter in the history of our Company. The merger of the division will also enable us to focus on what we do best, providing financing to the taxicab industry and other niche sectors."
Mr. Murstein added, "We have experienced very strong growth across the board. Compared to a year ago, our taxicab medallion loan portfolio has grown by over 26% to $348,000,000, from $277,000,000. Our commercial loan portfolio has grown by 28%, to $134,000,000, from $105,000,000. Our net investment income after income taxes is the highest it has been in over three years."
Mr. Murstein continued, "Over the last seven weeks we have continued our stock repurchase program, and have now repurchased over $6,460,000 in Company stock, from the authorized amount of $10,000,000. Furthermore, the Board has approved an additional buyback of another $10,000,000 of Medallion's common stock. Our capital remains extremely strong, with more than $173,000,000 of equity and only $485,000,000 of liabilities, for a debt to equity ratio of less than 3 to 1. We plan on leveraging our balance sheet while at the same time continuing our stock repurchase program, so that we can improve our return on equity and increase shareholder value."
Chief Financial Officer Larry Hall stated, "Increasing taxicab medallion values are having a positive impact on our business. Within the last few weeks, the City of New York auctioned off 300 new medallions and sold them at record prices. A corporate medallion was sold for an unprecedented $408,000, establishing an all-time record. This is an increase of more than 100% from just three years ago when medallions sold for around $200,000.
"We estimate our average loan to value on the medallion portfolio is currently less than 60%," Mr. Hall said. "This factor, plus our continued focus on originating conservative loans have given us the lowest delinquency levels in the history of the Company. Total delinquencies dropped from 12.2% to 6.7% over the last year, and 90 day delinquencies dropped from 6.2% to 3.8%, reaching all time lows."
Mr. Hall continued, "Due to our earnings this quarter, our liquidity position, and our bright business prospects, the Board of Directors has increased the Company's dividend by 25%, from $0.08 per share to $0.10 per share. The dividend will be payable on November 22, 2004 to shareholders of record as of November 12, 2004."
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 and consumer loans in targeted niche industries. The Company and its subsidiaries have lent over $2 billion to its taxicab, commercial, and consumer customers.
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 Corporation
Consolidated Income Statements
Quarter Ended
September June September 30, Nine Months Ended
30, 30, 30, September 30,
2004 2004 2003 2004 2003
Total
investment
income $10,977,995 $10,400,888 $6,693,333 $27,864,132 $19,689,715
Total
interest
expense 4,526,575 3,656,395 2,811,803 11,080,662 9,338,790
Net
interest
income 6,451,420 6,744,493 3,881,530 16,783,470 10,350,925
Gain on sale
of loans 331,685 185,163 87,967 730,126 803,666
Other income 596,587 671,371 905,534 1,818,222 2,765,880
Total non
interest
income 928,272 856,534 993,501 2,548,348 3,569,546
Salaries
and benefits 2,463,084 2,302,759 2,070,463 7,167,565 6,943,720
Professional
fees 307,528 549,073 430,916 1,311,133 819,241
Other
operating
expenses 2,201,942 2,175,953 1,709,192 5,889,500 4,876,287
Total
operating
expenses 4,972,554 5,027,785 4,210,571 14,368,198 12,639,248
Income tax
provision 566,180 1,062,997 21,846 1,674,277 41,149
Net investment
income after
income
taxes 1,840,958 1,510,245 642,614 3,289,343 1,240,074
Net realized
gains
(losses) on
investments (2,784,101) (315,328) 4,494,411 (3,298,663) 12,146,878
Net change in
unrealized
appreciation
(depreciation)
on investments 20,998,466 (946,054) (4,025,981) 18,933,821 (11,090,773)
Net realized/
unrealized
gain (loss)
on
investments 18,214,365 (1,261,382) 468,430 15,635,158 1,056,105
Net increase
in net assets
resulting
from
operations $20,055,323 $248,863 $1,111,044 $18,924,501 $2,296,179
Weighted
average
shares
Basic 18,075,879 18,141,427 18,245,228 18,144,724 18,243,570
Diluted 18,456,246 18,540,419 18,517,491 18,540,732 18,355,123
Net investment
income after
income taxes
per share
Basic $0.10 $0.08 $0.04 $0.18 $0.07
Diluted 0.10 0.08 0.03 0.18 0.07
Net increase in
net assets
per share
Basic $1.11 $0.01 $0.06 $1.04 $0.13
Diluted 1.09 0.01 0.06 1.02 0.13
Medallion Financial Corporation
Consolidated Balance Sheets
September 30, December 31,
2004 2003
ASSETS
Medallion loans $348,412,907 $288,211,557
Commercial loans 134,013,635 85,970,205
Consumer loans 67,389,895 -
Equity investments 34,150,233 4,976,763
Investment securities 15,407,620 -
Net investments 599,374,290 379,158,525
Investments in and loans to Media - 3,614,485
Total investments 599,374,290 382,773,010
Cash 28,150,202 47,675,537
Accrued interest receivable 3,309,105 1,727,719
Servicing fee receivable 2,429,623 2,663,468
Fixed assets, net 1,079,688 1,351,887
Goodwill, net 5,007,583 5,007,583
Other assets 18,670,871 15,295,253
Total assets $658,021,362 $456,494,457
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses $11,556,172 $5,726,830
Accrued interest payable 554,131 1,197,248
Floating rate borrowings 239,986,032 230,519,057
Fixed rate borrowings 232,530,101 56,935,000
Total liabilities 484,626,436 294,378,135
Total shareholders' equity 173,394,926 162,116,322
Total liabilities and shareholders'
equity $658,021,362 $456,494,457
Number of common shares outstanding 17,860,611 18,242,178
Net asset value per share $9.71 $8.89
Total managed loans $686,570,822 $549,068,762
Total managed assets 794,775,747 631,381,457