Medallion Financial Corp. Reports 2005 Third Quarter Results
Net Investment Income After Taxes Increased 73% to $0.18 Per Share
Medallion Extends Stock Buyback
Credit Quality Remains Strong
Dividend Declared
Medallion to Present at Financial Services Conference
NEW YORK, Nov. 9 -- 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 73% to $3,186,000 or $.18 per diluted common share in the 2005 third quarter, up from $1,841,000 or $0.10 in the 2004 third quarter. Medallion loans grew to $434,000,000 from $348,000,000 in the last 12 months, an increase of $86,000,000 or 25%. Commercial loans grew to $161,000,000 from $134,000,000 in the last 12 months, an increase of $27,000,000 or 20%. Total assets grew to $783,000,000 from $658,000,000 in the last 12 months, an increase of $125,000,000 or 19%. All these levels were record highs for the Company.
"We are extremely pleased with our results this quarter," commented President Andrew Murstein. "Our net investment income is the highest it has been since 2000 and our asset growth has exceeded our expectations. We are starting to build some momentum that we hope to carry forward into the future."
Mr. Murstein continued, "Now that we have consummated the sale of our Business Lenders unit, we have further increased what was already a strong balance sheet. As a result of our increased liquidity, we are announcing the extension of our previously announced stock buyback program. Our capital remains strong, with $168,000,000 of equity and $605,000,000 of borrowed funds, for a debt to equity ratio of 3.6 to 1. We have improved our leverage from 2.7 to 1 a year ago, and plan on continuing to leverage our balance sheet so that we can continue to improve our return on equity and increase shareholder value."
Chief Financial Officer Larry Hall stated, "Strong loan demand across the board, combined with maintaining our credit quality and managing our expenses have led to our improved performance over the last several quarters. We have the equity and infrastructure in place to be a much larger company, and as we continue to grow our assets, we expect our profits will continue to increase."
Net interest margin increased to 4.50% for the quarter, up from 4.43% a year ago. Loans 90 days or more past due dropped to 2.2% during the 2005 third quarter from 3.7% in the 2004 third quarter.
The Board of Directors increased the Company's dividend to $0.14 per share continuing an upward trend that goes back to 2002. The dividend will be payable on December 12th to shareholders of record as of November 28th. Since Medallion's IPO, the Company has paid out more than $85,000,000 in dividends to shareholders, representing more than $6 per share.
Medallion is also pleased to announce that it will be a presenting company at the upcoming Nobel Financial Group Small-Cap Conference at the Seminole Hard Rock Hotel & Casino in Hollywood, Florida. Medallion's Executive Vice President, Chief Operating Officer and Chief Credit Officer Brian O'Leary will make his presentation at 4:15 p.m. on November 10, 2005. For conference information, contact Mark Pinvidic at mpinvidic@noblefinancialgroup.com or at 1-800-688-6262.
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 2004 Annual Report on Form 10-K.
Medallion Financial Corporation
Consolidated Income Statements
Quarter Ended Nine Months Ended
September September September September
30, 30, 30, 30,
2005 2004 2005 2004
Interest income on
investments $14,170,478 $10,692,530 $40,272,883 $27,169,393
Dividends and interest
income on short-term
investments 411,531 173,650 1,187,948 372,924
Medallion lease income 117,000 111,815 342,000 321,815
Total investment income $14,699,009 $10,977,995 $41,802,831 $27,864,132
Interest on floating
rate borrowings 3,613,645 2,493,258 9,780,888 6,158,612
Interest on fixed rate
borrowings 2,883,322 2,033,317 7,808,291 4,922,050
Total interest expense 6,496,967 4,526,575 17,589,179 11,080,662
Net interest income 8,202,042 6,451,420 24,213,652 16,783,470
Gain on sale of loans 222,784 331,685 837,735 730,126
Other income 635,810 596,587 2,451,530 1,818,222
Total noninterest
income 858,594 928,272 3,289,265 2,548,348
Salaries and benefits 2,885,908 2,463,084 8,506,370 7,167,565
Professional fees 562,843 307,528 1,550,221 1,311,133
Other operating expenses 2,129,716 2,201,942 6,209,681 5,889,500
Total operating
expenses 5,578,467 4,972,554 16,266,272 14,368,198
Net investment income
before income taxes 3,482,169 2,407,138 11,236,645 4,963,620
Income tax provision 296,003 566,180 1,537,034 1,674,277
Net investment income
after taxes 3,186,166 1,840,958 9,699,611 3,289,343
Net realized gains
(losses) on investments 2,150,192 (2,784,101) 3,515,263 (3,298,663)
Net change in unrealized
depreciation on
investments (1,760,437) 20,998,466 (6,955,930) 18,933,821
Net realized/unrealized
losses on investments 389,755 18,214,365 (3,440,667) 15,635,158
Net increase (decrease)
in net assets from
operations $3,575,921 $20,055,323 $6,258,944 $18,924,501
Weighted average shares
Basic 17,066,001 18,075,879 17,064,028 18,144,724
Diluted 17,564,203 18,456,246 17,543,201 18,540,732
Net investment income
after income
taxes per share
Basic $0.19 $0.10 $0.57 $0.18
Diluted 0.18 0.10 0.55 0.18
Net increase (decrease)
in net assets from
operations per share
Basic $0.21 $1.11 $0.37 $1.04
Diluted 0.20 1.09 0.36 1.02
Dividends declared per
share $0.14 $0.10 $0.39 $0.26
Medallion Financial Corporation
Consolidated Balance Sheets
September December
30, 31,
2005 2004
ASSETS
Medallion loans $434,085,343 $392,131,108
Commercial loans 161,002,465 136,834,891
Consumer loans 84,079,844 66,330,748
Equity investments 26,573,682 33,645,424
Investment securities 17,857,293 14,598,837
Net investments 723,598,627 643,541,008
Cash 30,720,763 37,267,122
Accrued interest receivable 3,293,738 3,062,608
Servicing fee receivable 2,072,782 2,312,040
Fixed assets, net 737,028 991,901
Goodwill, net 5,007,583 5,007,583
Other assets 17,576,969 17,727,362
Total assets $783,007,490 $709,909,624
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses $9,148,094 $11,756,337
Accrued interest payable 1,346,683 1,758,956
Floating rate borrowings 320,284,327 274,959,911
Fixed rate borrowings 284,250,521 250,973,035
Total liabilities 615,029,625 539,448,239
Total shareholders' equity 167,977,865 170,461,385
Total liabilities and shareholders'
equity $783,007,490 $709,909,624
Number of common shares outstanding 17,145,561 17,344,999
Net asset value per share $9.80 $9.83
Total managed loans $779,974,477 $718,462,564
Total managed assets 883,814,315 833,075,441