Medallion Financial Corp. Reports 2007 Second Quarter Results
NEW YORK--Medallion Financial Corp. , a specialty finance company with a leading position servicing the taxicab industry and other niche markets, announced that earnings, or net increase in net assets resulting from operations, increased 5% to $4,272,000, or $0.24 per diluted common share for the 2007 second quarter, up from $4,076,000 or $0.23 per share for the 2006 second quarter. Net increase in net assets resulting from operations increased 37% to $8,052,000, or $0.45 per share for the 2007 six months, up from $5,862,000, or $0.33 per share for the 2006 six months.
Medallion’s on-balance sheet taxicab medallion loan portfolio increased 20% to $468,399,000, up from $390,061,000 a year ago. The on balance sheet commercial loan portfolio increased 6% to $93,018,000, up from $87,519,000. Including Medallion Bank, the Company’s unconsolidated wholly-owned portfolio investment, the managed medallion loan portfolio increased 19% to $556,139,000, up from $468,146,000 one year ago. The managed commercial loan portfolio increased 7% to $156,159,000, up from $146,523,000 one year ago. In addition, Medallion Bank’s consumer loan portfolio increased 24% to $129,395,000, up from $103,938,000 one year ago. Total assets under management increased 16% to $965,070,000, up from $834,546,000 a year ago. The managed portfolio amounts were all record highs for the Company.
The total yield in the quarter across the entire portfolio, including assets managed by Medallion Bank, increased to 9.37%, up from 8.35% one year ago. The net interest margin increased to 4.38%, up from 3.99% one year ago.
Andrew Murstein, President of Medallion, stated, “We are very pleased with our second quarter results, as the bottom line number is one of the highest it has been in several years. We were able to increase our margins while also growing our portfolio to an all time high. We also experienced strong unrealized gains relating to the approximately 175 taxicab medallions that we own in Chicago. New York City corporate medallion prices increased during the quarter to roughly $600,000, a record high, up from $485,000 last year. We anticipate similar gains in our medallion loans where we have upside appreciation benefits.”
Larry Hall, Medallion’s Chief Financial Officer, stated, “During the quarter, before the market turned, we were fortunate to borrow $35,000,000 of unsecured debt for 30 years at an initial fixed rate of 7.68% for the next five years. That money can now be leveraged and productively deployed to fuel TAXI’s growth for the foreseeable future.
“In addition, Medallion Bank is now permitted to pay dividends since its de novo period recently ended,” said Mr. Hall. “The Bank thus declared and paid a $1.5 million dividend to Medallion Financial which we, in turn, will dividend to our shareholders. As Medallion Bank is a taxable entity, that dividend will be taxed at just a 15% rate.
“Credit quality also remains outstanding,” said Mr. Hall. “On a managed basis, including Medallion Bank, delinquent loans 90 days or more past due decreased across the board during the year on our three major portfolios: to 0.4% from 0.9% on our medallion portfolio, to 0.7% from 0.9% on our commercial portfolio and to 0.09% from 0.1% on our consumer portfolio. These are the lowest levels they have been in the history of the Company.”
The Company also announced that its Board of Directors declared a dividend of $0.19 per share on its common stock for the 2007 second quarter, an increase of 12% from $0.17 a year ago. The dividend is payable on August 31, 2007 to shareholders of record on August 17, 2007. Since the Company’s initial public offering in 1996, the Company has paid out over $111,000,000 in dividends, or $7.39 per share.
About Medallion Financial
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 loans in other commercial industries and its wholly-owned portfolio company Medallion Bank also originates and services consumer loans. The Company and its subsidiaries have lent over $2.6 billion to the taxicab industry and other small businesses.
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 "Risk Factors," in Medallion’s 2006 Annual Report on Form 10-K.
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MEDALLION FINANCIAL CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
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Three Months ended June 30, |
Six Months ended June 30, |
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| 2007 |
2006 (As adjusted) |
2007 |
2006 (As adjusted) |
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| Total investment income | $13,157,101 | $9,337,643 | $23,596,385 | $19,352,079 | |||||||||
| Total interest expense | 7,535,234 | 6,123,626 | 14,284,852 | 11,497,263 | |||||||||
| Net interest income | 5,621,867 | 3,214,017 | 9,311,533 | 7,854,816 | |||||||||
| Total noninterest income | 558,355 | 1,000,504 | 1,048,788 | 1,616,182 | |||||||||
| Salaries and benefits | 2,534,487 | 2,396,365 | 5,267,760 | 4,317,517 | |||||||||
| Professional fees | 609,981 | 463,967 | 1,214,974 | 1,020,019 | |||||||||
| Rent expense | 319,786 | 288,458 | 653,076 | 587,145 | |||||||||
| Other operating expenses | 1,098,241 | 736,676 | 2,001,748 | 1,490,422 | |||||||||
| Total operating expenses | 4,562,495 | 3,885,466 | 9,137,558 | 7,415,103 | |||||||||
| Net investment income before income taxes | 1,617,727 | 329,055 | 1,222,763 | 2,055,895 | |||||||||
| Income tax (provision) benefit | - | - | - | - | |||||||||
| Net investment income after income taxes | 1,617,727 | 329,055 | 1,222,763 | 2,055,895 | |||||||||
| Net realized gains on investments | 1,840,822 | 2,519,079 | 11,852,412 | 662,843 | |||||||||
| Net change in unrealized depreciation on investments | (127,295 | ) | (1,650,065 | ) | (8,165,815 | ) | (1,081,436 | ) | |||||
| Net change in unrealized appreciation on Medallion Bank and other controlled subsidiaries | 940,746 | 2,877,997 | 3,142,856 | 4,224,936 | |||||||||
| Net unrealized gains (losses) on investments | 813,451 | 1,227,932 | (5,022,959 | ) | 3,143,500 | ||||||||
| Net realized/unrealized gains on investments | 2,654,273 | 3,747,011 | 6,829,453 | 3,806,343 | |||||||||
| Net increase in net assets resulting from operations | $ 4,272,000 | $4,076,066 | $ 8,052,216 | $ 5,862,238 | |||||||||
| Net increase in net assets resulting from operations per common share | |||||||||||||
| Basic | $0.24 | $0.24 | $0.46 | $0.34 | |||||||||
| Diluted | 0.24 | 0.23 | 0.45 | 0.33 | |||||||||
| Net investment income after income taxes per common share | |||||||||||||
| Basic | $0.16 | $0.14 | $0.29 | $0.36 | |||||||||
| Diluted | 0.16 | 0.14 | 0.28 | 0.35 | |||||||||
| Dividends declared per share | $0.19 | $0.17 | $0.38 | $0.33 | |||||||||
| Weighted average common shares outstanding | |||||||||||||
| Basic | 17,485,785 | 17,283,907 | 17,456,748 | 17,248,007 | |||||||||
| Diluted | 17,809,258 | 17,799,377 | 17,787,122 | 17,760,920 | |||||||||
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MEDALLION FINANCIAL CORP. CONSOLIDATED BALANCE SHEETS |
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| UNAUDITED | AUDITED | ||||||
| June 30, 2007 | December 31, 2006 | ||||||
| Assets | |||||||
| Medallion loans, at fair value | $468,398,516 | $428,248,589 | |||||
| Commercial loans, at fair value | 93,018,370 | 88,206,661 | |||||
| Investment in Medallion Bank and other controlled subsidiaries, at fair value | 52,872,580 | 50,448,032 | |||||
| Investment securities, at fair value | 14,999,412 | 9,961,111 | |||||
| Equity investments, at fair value | 2,999,167 | 16,068,243 | |||||
| Net investments | 632,288,045 | 592,932,636 | |||||
| Cash | 19,412,865 | 15,398,740 | |||||
| Accrued interest receivable | 2,366,983 | 2,177,694 | |||||
| Fixed assets, net | 640,856 | 525,472 | |||||
| Goodwill, net | 5,007,583 | 5,007,583 | |||||
| Other assets, net | 20,208,788 | 15,562,763 | |||||
| Total assets | $679,925,122 | $631,604,888 | |||||
| Liabilities | |||||||
| Accounts payable and accrued expenses | $ 3,783,228 | $ 5,057,204 | |||||
| Accrued interest payable | 2,043,433 | 1,783,258 | |||||
| Funds borrowed | 502,494,098 | 455,136,424 | |||||
| Total liabilities | 508,320,759 | 461,976,886 | |||||
| Commitments and contingencies | - | - | |||||
| Total shareholders' equity (net assets) | 171,604,363 | 169,628,002 | |||||
| Total liabilities and shareholders' equity | $679,925,122 | $631,604,888 | |||||
| Number of common shares outstanding | 17,502,515 | 17,426,415 | |||||
| Net asset value per share | $9.80 | $9.73 | |||||
| Total managed loans | $854,413,070 | $795,980,453 | |||||
| Total managed assets | 965,070,459 | 907,132,484 | |||||