Medallion Financial Corp. Reports Record 2005 Fourth Quarter and Full Year Results
NEW YORK--March 2, 2006--Medallion Financial Corp. :
Quarterly Highlights
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-- 4th quarter net investment income after taxes increased 75% to
$0.21 per share from $0.12 per share.
-- 4th quarter net interest margin increased to 4.66% from 3.96%.
-- Medallion loans and total assets reach all-time highs.
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 net investment income after taxes increased 75% to $3,763,000, or $0.21 per diluted common share in the 2005 fourth quarter, up from $2,138,000, or $0.12 per share in the 2004 fourth quarter.
Net investment income after taxes increased 148% to $13,462,000, or $0.77 per diluted common share for 2005, up from $5,427,000 or $0.29 per share for 2004. This was the highest operating earnings, in total and per share, that the company has earned since it went public in 1996.
Andrew Murstein, President of Medallion Financial stated, "We are very pleased with the year's results, and especially this quarter. We greatly improved our net investment income. As a result, net investment income in the fourth quarter was the highest it has ever been."
Mr. Murstein continued, "We grew our taxicab medallion loan portfolio by 15%. Medallion loans reached approximately $450,000,000, an all-time high. Medallion Bank grew as we continued to take in federally insured deposits at the lowest relative cost of funds in our history. We increased our annual dividend by 46%. Following the sale of our Business Lenders unit, we are focusing on our medallion lending and other 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. In January 2006, we extended the term and increased our main credit facility with Merrill Lynch to $475,000,000 from $325,000,000. We remain extremely well capitalized, with a total debt to equity ratio of only 3.7 to 1. In the last two years we have reduced our operating expense ratio, which is our operating expenses divided by our average interest-earnings assets, by 34%. This is still a little high, and our goal is to further reduce it by using our existing infrastructure and available liquidity to leverage our balance sheet by adding assets and increasing earnings."
Mr. Hall continued, "In addition to improvements in profitability and asset growth, medallion prices have also continued to grow, with corporate medallion values growing from $200,000 a few years ago to $425,000 as of March 1. This represents the highest values ever in the history of New York city taxi medallions. The average loan-to-value ratio on our loan portfolio is now under 60%, and our customers have more equity to tap into by borrowing from us to grow their businesses. In addition we anticipate the City of New York will conduct another taxi medallion auction within the next 120 days. Many of our customers should be winning bidders, thus we anticipate further increasing the size of our New York portfolio."
Mr. Hall continued, "During the year we made over $330,000,000 of investments. Loan quality remains a trademark of Medallion, as loans 90 days or more past due decreased to 2.5% from 3.2% a year ago."
The Company also announced that it is increasing its quarterly dividend to $0.15 per share from $0.11 in the 2004 fourth quarter. For the year, the Company declared dividends of $0.54 per share, up from $0.37 in 2004. Over the last eight quarters, dividends, as well as other key measures, have increased steadily, as indicated on the attached exhibit. The current dividend will be paid on March 27, 2005, to shareholders of record on March 10, 2005. Since our initial public offering in 1996, the Company has paid in excess of $90,000,000 or $6.31 per share in dividends.
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 Corp.
Consolidated Income Statements
Quarter Ended Year Ended
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December 31, December 31, December 31, December 31,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Total investment
income $15,370,385 $11,255,249 $57,173,216 $39,119,381
Total interest
expense 6,807,594 4,982,920 24,396,773 16,063,583
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Net interest income 8,562,791 6,272,329 32,776,443 23,055,798
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Gain on sale of loans 46,874 173,948 884,608 904,074
Other income 544,219 757,133 2,995,749 2,575,355
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Total noninterest
income 591,093 931,081 3,880,357 3,479,429
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Salaries and
benefits 2,423,767 2,249,618 10,930,137 9,417,185
Professional fees 716,618 465,118 2,266,839 1,776,251
Other operating
expenses 1,828,683 1,854,145 8,038,363 7,743,645
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Total operating
expenses 4,969,068 4,568,881 21,235,339 18,937,081
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Income tax
provision 422,061 496,460 1,959,095 2,170,737
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Net investment
income after taxes 3,762,755 2,138,069 13,462,366 5,427,409
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Net realized gains
(losses) on
investments (2,434,258) 3,272,873 1,081,005 (25,791)
Net change in
unrealized
depreciation on
investments (725,938) (1,823,409) (7,681,869) 17,110,411
------------ ------------ ------------ ------------
Net realized/
unrealized
losses on
investments (3,160,196) 1,449,464 (6,600,864) 17,084,620
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net increase
(decrease) in net
assets from
operations $602,559 $3,587,533 $6,861,502 $22,512,029
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Weighted average
shares
Basic 17,155,302 17,575,356 17,087,034 18,001,604
Diluted 17,591,130 18,030,899 17,552,228 18,424,518
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Net investment income after
income taxes per share
Basic $0.22 $0.12 $0.79 $0.30
Diluted 0.21 0.12 0.77 0.29
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Net increase (decrease) in net assets from operations per
share
Basic $0.04 $0.20 $0.40 $1.25
Diluted 0.03 0.20 0.39 1.22
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Dividends declared
per share $0.15 $0.11 $0.54 $0.37
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December 31,
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2005 2004
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ASSETS
Medallion loans $449,672,510 $392,131,108
Commercial loans 145,796,651 136,834,891
Consumer loans 85,678,412 66,330,748
Equity investments 24,012,508 33,645,424
Investment securities 18,092,838 14,598,837
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Net investments 723,252,919 643,541,008
Cash 43,035,506 37,267,122
Accrued interest receivable 3,580,460 3,062,608
Servicing fee receivable - 2,312,040
Fixed assets, net 614,858 991,901
Goodwill, net 5,007,583 5,007,583
Other assets 17,481,876 17,727,362
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Total assets $792,973,202 $709,909,624
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LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses $4,837,461 $11,756,337
Accrued interest payable 1,759,737 1,758,956
Floating rate borrowings 323,664,951 274,959,911
Fixed rate borrowings 296,357,214 250,973,035
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Total liabilities 626,619,363 539,448,239
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Total shareholders' equity 166,353,839 170,461,385
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Total liabilities and shareholders'
equity $792,973,202 $709,909,624
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Number of common shares outstanding 17,173,297 17,344,999
Net asset value per share $9.69 $9.83
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