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., November 4, 2004 -- Medallion Financial Corp. (NASDAQ: TAXI), 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 rosedramatically 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.
Financial tables follow.
Medallion Financial Corporation
Consolidated Income Statements
| Quarter Ended | | |
| September 30, | June 30, | September 30, | Nine Months Ended 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 noninterest 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 |
