Exhibit 99_1
FOR FURTHER INFORMATION:
AT THE COMPANY: | AT ZLOKOWER COMPANY | |
Andrew Murstein-President | Harry Zlokower/Dave Closs | |
Larry D. Hall, CFO | (212) 447-9292 | |
1-212-328-2100 | ||
1-877-MEDALLION |
FOR IMMEDIATE RELEASE
November 5, 2003
MEDALLION FINANCIAL CORP. REPORTS
THIRD QUARTER RESULTS
OPERATING EARNINGS MORE THAN DOUBLE
COMPANY AUTHORIZES STOCK REPURCHASE PROGRAM
DIVIDEND INCREASES
NEW YORK, N.Y., November 5, 2003 — Medallion Financial Corp. (NASDAQ: TAXI), a specialty commercial finance company with a leading position servicing the taxicab industry and in small business commercial lending, and owner of the largest taxicab rooftop advertising company in the world, announced that operating earnings, or net investment income before taxes, more than doubled to $696,000 or $0.04 per share in the third quarter of 2003, up from $312,000 or $0.02 per share in the 2003 second quarter, and up from a loss of $6,462,000 or $0.35 per share in the 2002 third quarter. Net income or net increase in net assets resulting from operations, also rose sharply to $1,111,000 or $0.06 per share, up from $755,000 or $0.04 per share in the second quarter, and changed from a loss of $8,384,000 or $0.46 per share in the 2002 third quarter.
“We are very pleased with our results this quarter and with the continued positive progress of the Company,” stated President Andrew Murstein. “This was our most profitable quarter in eight quarters. Since we started to pay down our old bank facility back in September 2002, we have shown continued increases in both assets and profitability in each and every subsequent quarter.”
Mr. Murstein added, “Our interest rate spreads have also continued to increase. In the third quarter we had a net interest margin of 3.92%, up from 3.55% in the second quarter, and up from 2.93% in the 2002 third quarter. Our operating expenses have also declined in absolute dollars and as a percentage of our assets.”
Mr. Murstein continued, “We are also pleased to announce that the Board of Directors has approved the first ever stock buy back in the history of the Company. The Company has empowered the Company, in its discretion, to repurchase up to $10,000,000 of its outstanding common stock from time-to-time. Pursuant to relevant requirements, the Company, should it pursue this program, will send out notices to our shareholders of record indicating our intention to repurchase shares, and then start the program shortly thereafter. We have never been more confident in our prospects than we are today. Over the past 60 years we have always been successful in our ability to generate top quality loans, and always concentrated our efforts on the liability side of our balance sheet as we needed to reduce our cost of funds and find a reliable low cost funding source. We now feel we have finally achieved that goal with the approval of our industrial loan bank charter and approval by the FDIC for Federal deposit insurance, along with our other various funding sources. We currently remain over-capitalized, with more than $163,480,000 of equity, and only $260,914,000 of debt, setting our debt to equity ratio at only 1.6 to 1. We plan on leveraging up our balance sheet while at the same time considering the opportunity to buy back our stock so that we can improve our return on equity and increase shareholder value.”
CFO Larry Hall stated, “ This was a very solid quarter for us. Our interest income increased, our interest expense decreased, and our operating profits increased dramatically from the prior quarter. Medallion prices continue to remain very strong. In fact, New York City taxicab medallions recently sold at an average of over $275,000 each. This is an
increase of more than 33% from just two years ago, and this is also the highest average price in several years. Our 60 and 90 day and over delinquencies also came down from the second quarter. Taxicab medallion loans also continued to show gains as we increased the portfolio 4% to $277,243,000, from $266,067,000 in the second quarter.”
Mr. Hall continued, “Due to our earnings in the quarter, as well as our greatly improved liquidity position, we are pleased to increase the Company’s dividend for the third successive quarter. Also, for tax purposes, we intend to qualify as a regular taxable entity for fiscal year 2003. However, we expect not to be subject to any or just minimal taxes, as we expect to utilize net operating losses that occurred in prior periods to offset 2003 taxable income. The qualified dividend we pay to our shareholders on 2003 income would then be taxable at the rate of 15%, instead of ordinary taxable income rates of up to 35% that shareholders might otherwise pay if we elected to qualify as a RIC for 2003. The Board of Directors therefore agreed to increase the Company’s dividend to $0.05 per share, up from $0.03 per share in the second quarter. The dividend will be payable to shareholders of record as of November 14th, and is payable on November 21st, 2003.”
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 loans financing small businesses in other targeted industries, and operates the largest taxicab rooftop advertising business in the world. The Company and its subsidiaries have lent over $1 billion to the taxicab and commercial 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 2002 Annual Report on Form 10-K.
Financial tables follow.
3
Medallion Financial Corp.
Consolidated Income Statements
| Quarter Ended | Nine Months Ended September 30, | |||||||||||||||||||
| September 30, 2003 | June 30, 2003 | September 30, 2002 | ||||||||||||||||||
| 2003 | 2002 | |||||||||||||||||||
Total investment income | $ | 6,693,333 | $ | 6,468,097 | $ | 7,952,209 | $ | 19,689,715 | $ | 26,253,609 | ||||||||||
Total interest expense | 2,811,803 | 3,197,815 | 5,044,839 | 9,338,790 | 15,792,026 | |||||||||||||||
Net interest income | 3,881,530 | 3,270,282 | 2,907,370 | 10,350,925 | 10,461,583 | |||||||||||||||
Gain on sale of loans | 87,967 | 526,769 | 147,295 | 803,666 | 735,514 | |||||||||||||||
Other income | 905,534 | 739,232 | 782,692 | 2,765,880 | 3,765,365 | |||||||||||||||
Total noninterest income | 993,501 | 1,266,001 | 929,987 | 3,569,546 | 4,500,879 | |||||||||||||||
Salaries and benefits | 2,070,463 | 2,438,868 | 2,220,918 | 6,943,720 | 6,958,765 | |||||||||||||||
Professional fees | 430,916 | 268,346 | 557,842 | 819,241 | 2,074,370 | |||||||||||||||
Costs of debt extinguishment | 123,057 | (88,616 | ) | 5,870,517 | 63,302 | 8,972,299 | ||||||||||||||
Other operating expenses | 1,554,510 | 1,605,998 | 1,649,581 | 4,781,360 | 5,002,790 | |||||||||||||||
Total operating expenses | 4,178,946 | 4,224,596 | 10,298,858 | 12,607,623 | 23,008,224 | |||||||||||||||
Net investment income (loss) before income taxes | 696,085 | 311,687 | (6,461,501 | ) | 1,312,848 | (8,045,762 | ) | |||||||||||||
Income tax provision | 53,471 | 9,304 | 68,323 | 72,774 | 68,323 | |||||||||||||||
Net investment income (loss) | 642,614 | 302,383 | (6,529,824 | ) | 1,240,074 | (8,114,085 | ) | |||||||||||||
Net realized gains (losses) on investments | 4,494,411 | 8,214,032 | (975,416 | ) | 12,146,878 | (5,044,686 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) on investments | (4,025,981 | ) | (7,761,295 | ) | (878,499 | ) | (11,090,773 | ) | 358,987 | |||||||||||
Net realized/unrealized gain (loss) on investments | 468,430 | 452,737 | (1,853,915 | ) | 1,056,105 | (4,685,699 | ) | |||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 1,111,044 | $ | 755,120 | $ | (8,383,739 | ) | $ | 2,296,179 | $ | (12,799,784 | ) | ||||||||
Weighted average shares | ||||||||||||||||||||
Basic | 18,245,228 | 18,242,728 | 18,242,728 | 18,243,570 | 18,242,728 | |||||||||||||||
Diluted | 18,517,491 | 18,366,749 | 18,242,728 | 18,355,123 | 18,242,728 | |||||||||||||||
Declared dividends per share | $ | 0.05 | $ | 0.03 | $ | 0.03 | $ | 0.09 | $ | 0.03 | ||||||||||
Net investment income (loss) before income taxes per share | ||||||||||||||||||||
Basic | $ | 0.04 | $ | 0.02 | $ | (0.35 | ) | $ | 0.07 | $ | (0.44 | ) | ||||||||
Diluted | 0.04 | 0.02 | (0.35 | ) | 0.07 | (0.44 | ) | |||||||||||||
Net investment income (loss) per share | ||||||||||||||||||||
Basic | $ | 0.04 | $ | 0.02 | $ | (0.36 | ) | $ | 0.07 | $ | (0.44 | ) | ||||||||
Diluted | 0.03 | 0.02 | (0.36 | ) | 0.07 | (0.44 | ) | |||||||||||||
Net increase (decrease) in net assets per share | ||||||||||||||||||||
Basic | $ | 0.06 | $ | 0.04 | $ | (0.46 | ) | $ | 0.13 | $ | (0.70 | ) | ||||||||
Diluted | 0.06 | 0.04 | (0.46 | ) | 0.13 | (0.70 | ) | |||||||||||||
Medallion Financial Corp.
Consolidated Balance Sheets
| September 30, 2003 | December 31, 2002 | |||||
ASSETS | ||||||
Medallion loans | $ | 277,242,543 | $ | 210,475,921 | ||
Commercial loans | 104,849,594 | 138,360,895 | ||||
Equity investments | 1,596,499 | 7,409,628 | ||||
Net investments | 383,688,636 | 356,246,444 | ||||
Investments in and loans to Media | 3,748,683 | 4,505,356 | ||||
Total investments | 387,437,319 | 360,751,800 | ||||
Cash | 16,867,843 | 35,369,285 | ||||
Accrued interest receivable | 2,230,247 | 2,546,101 | ||||
Servicing fee receivable | 2,765,172 | 2,838,417 | ||||
Fixed assets, net | 1,244,759 | 1,551,781 | ||||
Goodwill, net | 5,007,583 | 5,007,583 | ||||
Other assets | 15,488,674 | 17,222,825 | ||||
Total assets | $ | 431,041,597 | $ | 425,287,792 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Accounts payable and accrued expenses | $ | 6,339,624 | $ | 7,066,118 | ||
Accrued interest payable | 308,697 | 5,589,754 | ||||
Floating rate borrowings | 209,978,623 | 182,922,241 | ||||
Fixed rate borrowings | 50,935,000 | 67,845,000 | ||||
Total liabilities | 267,561,944 | 263,423,113 | ||||
Total shareholders' equity | 163,479,653 | 161,864,679 | ||||
Total liabilities and shareholders' equity | $ | 431,041,597 | $ | 425,287,792 | ||
Number of common shares outstanding | 18,252,728 | 18,242,728 | ||||
Net asset value per share | $ | 8.96 | $ | 8.87 | ||