Medallion Announces 2004 Fourth Quarter and Full Year Results
Annual Highlights
* Net Investment Income After Taxes Increases To $0.29 From $0.08 * EPS Increases To $1.22 From $0.11 * Medallion Loans Increase 36% To All-Time High * Commercial Loans Increase 59% * Total Assets Increase 55% To All-Time High
NEW YORK, March 10 -- Medallion Financial Corp. , a specialty finance company with a leading position servicing the taxicab industry and targeted niche markets in commercial and consumer finance, announced net investment income after taxes of $2,138,000 or $0.12 per share in the 2004 fourth quarter, compared to $174,000 or $0.01 per share in the 2003 fourth quarter. Net increase in net assets resulting from operations was $3,588,000 or $0.20 per share in the quarter, compared to a decrease of $278,000 or $0.01 per share in the 2003 fourth quarter.
Net investment income after taxes was $5,427,000 or $0.29 per share for the 2004 full year, compared to $1,414,000 or $0.08 per share in 2003. Net increase in net assets resulting from operations was $22,512,000 or $1.22 per share for the year, compared to $2,018,000 or $0.11 per share for 2003.
Andrew Murstein, President of Medallion Financial stated, "We are very pleased with the year's results. Net investment income in the fourth quarter was the highest it has been in over three years. Year 2004 earnings, due in large part from the sale of our taxi top advertising division, were the highest they have been in the history of the Company.
Mr. Murstein continued, "During 2004, we improved our profitability and significantly grew our taxicab medallion loan portfolio by a substantial 36%. Medallion loans reached $391 million, an all-time high. We opened Medallion Bank for business and began taking federally-insured deposits at the lowest cost of funds in our history. We more than doubled our dividend, reduced the percentage of delinquent loans, and successfully completed our first stock repurchase program. We also increased our book value per share to $9.83 from $8.89. We have sold off underperforming divisions, and are focusing on our medallion lending and other more profitable divisions. We are confident that we are well positioned to build on this success, and we remain optimistic about our prospects for the future."
Larry Hall, Medallion's CFO stated, "During the year our net interest margin increased to 4.37% from 3.72%. In January 2005, we extended the term and lowered the cost of funds of our Merrill Lynch credit facility, and those results should be evident in the coming quarters. We remain extremely well capitalized, with a total debt to equity ratio of only 3.1 to 1. We plan on continuing to leverage our balance sheet to further maximize shareholder value."
Mr. Hall continued, "In addition to substantial improvements in profitability and asset growth, one of the things we are proud of is our continued improvement in credit quality. During the year, loans 90 days or more past due decreased to 3.2% from 5.0% of the total loan portfolio. Our delinquencies are now the lowest they have been in over three years. Medallion prices continue to outperform, with corporate medallion values growing from $200,000 a few years ago to almost $400,000 today. The average loan-to-value ratio on our loan portfolio is now under 60%."
The Company also announced that it is increasing its quarterly dividend to $0.11 per share from $0.07 in the 2003 fourth quarter. For the year, the Company declared dividends of $0.37 per share, up from $0.16 in 2003. Approximately half of this dividend is eligible for capital gains tax treatment. Over the last eight quarters, dividends have increased steadily, from $0.01, to $0.03, to $0.05, to $0.07, to $0.08, to $0.08, to $0.10, to $0.11. The current $0.11 dividend will be paid on March 26, 2005 to shareholders of record on March 11, 2005.
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 financing small businesses and other targeted industries. The Company and its subsidiaries have lent over $2 billion to the taxicab and other targeted industries.
Medallion Financial Corp.
Consolidated Income Statements
Quarter Ended Full Year Ended
December 31 December 31,
2004 2003 2004 2003
Total investment
income $11,255,249 $6,524,650 $39,119,381 $26,214,365
Total interest
expense 4,982,921 2,703,141 16,063,583 12,041,931
Net interest income 6,272,328 3,821,509 23,055,798 14,172,434
Gain on sale of loans 173,948 52,417 904,074 856,083
Other income 757,133 834,903 2,575,355 3,600,783
Total noninterest
income 931,081 887,320 3,479,429 4,456,866
Salaries and
benefits 2,249,620 2,166,338 9,417,185 9,110,058
Professional fees 465,118 428,446 1,776,251 1,247,687
Other operating
expenses 1,854,145 1,939,631 7,743,645 6,815,918
Total operating
expenses 4,568,883 4,534,415 18,937,081 17,173,663
Income tax provision 496,460 2,170,737 41,149
Net investment
income after
income taxes 2,138,066 174,414 5,427,409 1,414,488
Net realized gains
(losses) on
investments 3,272,872 (620,250) (25,791) 11,526,628
Net change in
unrealized
appreciation
(depreciation)
on investments (1,823,410) 167,680 17,110,411 (10,923,093)
Net realized/
unrealized gain
(loss) on
investments 1,449,462 (452,570) 17,084,620 603,535
Net increase in net
assets resulting
from operations $3,587,528 $(278,156) $22,512,029 $2,018,023
Weighted average
shares
Basic 17,575,356 18,252,311 18,001,604 18,245,774
Diluted 18,030,899 18,691,954 18,424,518 18,287,952
Declared dividends
per share $ 0.11 $ 0.07 $ 0.37 $ 0.16
Net investment
income after
income taxes
per share
Basic $ 0.12 $ 0.01 $ 0.30 $ 0.08
Diluted 0.12 0.01 0.29 0.08
Net increase in net
assets per share
Basic $0.20 $ (0.02) $ 1.25 $0.11
Diluted 0.20 (0.01) 1.22 0.11
Medallion Financial Corp.
Consolidated Balance Sheets
December 31,
2004 2003
ASSETS
Medallion loans $ 391,131,108 $288,211,557
Commercial loans 136,834,891 85,970,205
Consumer loans 66,330,748 -
Equity investments 33,645,424 4,976,763
Investment securities 14,598,837 -
Net investments 642,541,008 379,158,525
Investments in and loans to Media - 3,614,485
Total investments 642,541,008 382,773,010
Cash 37,267,122 47,675,537
Accrued interest receivable 3,062,608 1,727,719
Servicing fee receivable 2,312,040 2,663,468
Fixed assets, net 991,901 1,351,887
Goodwill, net 5,007,583 5,007,583
Other assets 17,727,362 15,295,253
Total assets $708,909,624 $456,494,457
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses $10,756,337 $5,726,830
Accrued interest payable 1,758,956 1,197,248
Floating rate borrowings 274,959,911 230,519,057
Fixed rate borrowings 250,973,035 56,935,000
Total liabilities 538,448,239 294,378,135
Total shareholders' equity 170,461,385 162,116,322
Total liabilities and
shareholders' equity $708,909,624 $456,494,457
Number of common shares outstanding 17,344,999 18,242,178
Net asset value per share $ 9.83 $ 8.89
Total managed loans $717,462,564 $549,068,762
Total managed assets 832,075,441 631,381,457