EXHIBIT 99.1
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| For Further Information: | | |
| At Medallion Financial Corp. | | At Zlokower Company |
| 437 Madison Avenue, New York, NY 10022 | | Public Relations |
| Andrew Murstein, President | | Harry Zlokower |
| Larry D. Hall, CFO | | David Closs |
| (212) 328-2100 or 1-877-Medallion | | (212) 447-9292 |
FOR IMMEDIATE RELEASE
MEDALLION FINANCIAL CORP. REPORTS
2008 SECOND QUARTER RESULTS
— Earnings per share increases to $0.25 per share
— Net investment income after taxes highest in 32 quarters
— Delinquencies continue to decrease to an all time low
— Corporate NYC medallion prices reach all time highs of $633,000
NEW YORK, N.Y. – August 6, 2008 -Medallion Financial Corp. (NASDAQ: TAXI), 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 to $4,377,000 or $0.25 per diluted common share in the 2008 second quarter, up from $4,272,000 or $0.24 per diluted common share in the 2007 second quarter.
Net investment income after taxes increased to $3,825,000 or $0.22 per diluted common share for the 2008 second quarter, up from $1,618,000 or $0.09 per diluted common share for the 2007 second quarter. Net interest margin was 4.63% in the 2008 second quarter, compared to 3.86% in the 2007 second quarter, and on a combined basis with Medallion Bank, increased to 5.18% in the 2008 second quarter, up from 4.47% in the 2007 second quarter.
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Medallion Financial Corp. Reports 2008 Second Quarter Results, Page 2
Medallion’s on-balance sheet taxicab medallion loan portfolio was $401,751,000, down from $468,399,000 a year ago. This was due primarily to medallion loan participations to third parties, which also enhances the Company’s return on assets. The on-balance sheet commercial loan portfolio increased to $99,771,000, up from $93,018,000 a year ago. On a combined basis with Medallion Bank and including net loans serviced for third parties, the Company’s managed medallion loan portfolio decreased 1% to $557,452,000 from $561,435,000 a year ago. The managed commercial loan portfolio increased 6% to $174,838,000 from $164,582,000 year ago. In addition, Medallion Bank’s consumer loan portfolio increased 32% to $171,036,000, up from $129,395,000 a year ago. Total assets under management increased 5% to $1.015 billion, up from $967,000,000 a year ago.
Andrew Murstein, President of Medallion, stated, “We are very pleased with our second quarter results, as net increase in net assets resulting from operations is the highest it has been in the last six quarters. Net investment income after taxes reached the highest level it has been in 32 quarters since 2000.”
“We were able to increase our margins this quarter due primarily to our ability to reduce our borrowing costs,” said Mr. Murstein. “We also experienced continued strong unrealized gains relating to the 167 taxicab medallions that we own in Chicago. The price of Chicago medallions has increased to $140,000 per medallion, up from $50,000 several years ago. New York City corporate medallion prices also increased during the quarter to $633,000, near record levels.”
“In today’s market environment, we are happy to be involved in the taxi medallion business which has high asset quality and the ability to thrive in challenging times. The average loan to value ratio on our portfolio is well below 60%. We believe the continued increases in medallion prices this year indicate the business is doing quite well in this economy, and remains well positioned for future growth,” said Mr. Murstein. “This is due to many reasons, including lower interest rates and corporate cutbacks on perks such as limousines and car services, which result in increased taxi usage. It also has to do with an additional surge in manpower. When unemployment rates are high, there is a surplus labor pool available for driving taxis. Thus, occupancy rates for taxi fleets are at very high levels, as more than 95% of taxis are being leased out to drivers.”
Medallion Financial Corp. Reports 2008 Second Quarter Results, Page 3
Larry Hall, Medallion’s Chief Financial Officer, stated, “Credit quality also remains outstanding. On a managed basis, including Medallion Bank, loans 90 days or more past due decreased to 0.4% from 0.6% a year ago on our medallion loan portfolio, were flat at 0.4% on our consumer loan portfolio, and decreased to 0.2% from 3.7% on our commercial loan portfolio. These are the lowest levels of delinquency 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 2008 second quarter. The dividend is payable on August 29, 2008 to shareholders of record on August 15, 2008. Since the Company’s initial public offering in 1996, the Company has paid out over $124,900,000 in dividends, or $8.15 per share.
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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 $3 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 2007 Annual Report on Form 10-K.
(Financial Tables Follow)
MEDALLION FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| (Dollars in thousands, except per share data) | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
Total investment income | | $ | 12,730 | | | $ | 13,157 | | | $ | 27,174 | | | $ | 23,596 | |
Total interest expense | | | 5,605 | | | | 7,535 | | | | 12,808 | | | | 14,285 | |
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Net interest income | | | 7,125 | | | | 5,622 | | | | 14,366 | | | | 9,311 | |
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Total noninterest income | | | 1,310 | | | | 558 | | | | 2,113 | | | | 1,049 | |
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Salaries and benefits | | | 2,717 | | | | 2,534 | | | | 5,344 | | | | 5,268 | |
Professional fees | | | 588 | | | | 610 | | | | 957 | | | | 1,215 | |
Rent expense | | | 335 | | | | 320 | | | | 661 | | | | 653 | |
Other operating expenses | | | 970 | | | | 1,098 | | | | 2,295 | | | | 2,001 | |
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Total operating expenses | | | 4,610 | | | | 4,562 | | | | 9,257 | | | | 9,137 | |
| | | | | | | | | | | | | | | | |
Net investment income before income taxes | | | 3,825 | | | | 1,618 | | | | 7,222 | | | | 1,223 | |
Income tax (provision) benefit | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Net investment income after income taxes | | | 3,825 | | | | 1,618 | | | | 7,222 | | | | 1,223 | |
| | | | | | | | | | | | | | | | |
Net realized gains (losses) on investments | | | (5,124 | ) | | | 1,841 | | | | (3,977 | ) | | | 11,852 | |
| | | | | | | | | | | | | | | | |
Net change in unrealized appreciation (depreciation) on investments | | | 5,905 | | | | (127 | ) | | | 5,688 | | | | (8,166 | ) |
Net change in unrealized appreciation (depreciation) on Medallion Bank and other controlled subsidiaries | | | (229 | ) | | | 940 | | | | (635 | ) | | | 3,143 | |
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Net unrealized appreciation (depreciation) on investments | | | 5,676 | | | | 813 | | | | 5,053 | | | | (5,023 | ) |
| | | | | | | | | | | | | | | | |
Net realized/unrealized gains on investments | | | 552 | | | | 2,654 | | | | 1,076 | | | | 6,829 | |
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Net increase in net assets resulting from operations | | $ | 4,377 | | | $ | 4,272 | | | $ | 8,298 | | | $ | 8,052 | |
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Net investment income after income taxes | | | | | | | | | | | | | | | | |
Basic | | $ | 0.22 | | | $ | 0.09 | | | $ | 0.41 | | | $ | 0.07 | |
Diluted | | | 0.22 | | | | 0.09 | | | | 0.41 | | | | 0.07 | |
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Net increase in net assets resulting from operations per common share | | | | | | | | | | | | | | | | |
Basic | | $ | 0.25 | | | $ | 0.24 | | | $ | 0.47 | | | $ | 0.46 | |
Diluted | | | 0.25 | | | | 0.24 | | | | 0.47 | | | | 0.45 | |
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Dividends declared per share | | $ | 0.19 | | | $ | 0.19 | | | $ | 0.38 | | | $ | 0.38 | |
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Weighted average common shares outstanding | | | | | | | | | | | | | | | | |
Basic | | | 17,508,354 | | | | 17,485,785 | | | | 17,500,616 | | | | 17,456,748 | |
Diluted | | | 17,714,888 | | | | 17,809,997 | | | | 17,722,161 | | | | 17,787,942 | |
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MEDALLION FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
| | | | | | |
| | | UNAUDITED | | |
| (Dollars in thousands, except per share data) | | June 30, 2008 | | December 31, 2007 |
| Assets | | | | | | |
Medallion loans, at fair value | | $ | 401,751 | | $ | 498,883 |
Commercial loans, at fair value | | | 99,771 | | | 91,782 |
Investment in Medallion Bank and other controlled subsidiaries, at fair value | | | 68,921 | | | 57,501 |
Investment securities, at fair value | | | — | | | — |
Equity investments, at fair value | | | 4,919 | | | 4,880 |
| | | | | | |
Net investments ($357,065 at June 30, 2008 and $458,102 at December 31, 2007 pledged as collateral under borrowing arrangements) | | | 575,362 | | | 653,046 |
| | |
Cash and cash equivalents($865 at June 30, 2008 and $852 at December 31, 2007 restricted as to use by lender) | | | 25,033 | | | 33,454 |
Accrued interest receivable | | | 2,024 | | | 2,449 |
Fixed assets, net | | | 476 | | | 558 |
Goodwill, net | | | 5,007 | | | 5,007 |
Other assets, net | | | 27,544 | | | 26,748 |
| | | | | | |
| Total assets | | $ | 635,446 | | $ | 721,262 |
| | | | | | |
| Liabilities | | | | | | |
Accounts payable and accrued expenses | | $ | 5,623 | | $ | 4,203 |
Accrued interest payable | | | 1,899 | | | 2,087 |
Funds borrowed | | | 453,549 | | | 542,549 |
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| Total liabilities | | | 461,071 | | | 548,839 |
| | | | | | |
Commitments and contingencies | | | — | | | — |
| | | | | | |
| Total shareholders’ equity (net assets) | | | 174,375 | | | 172,423 |
| | | | | | |
| Total liabilities and shareholders’ equity | | $ | 635,446 | | $ | 721,262 |
| | | | | | |
Number of common shares outstanding | | | 17,529,224 | | | 17,495,865 |
Net asset value per share | | $ | 9.95 | | $ | 9.86 |
| | | | | | |
Total managed loans | | $ | 903,324 | | $ | 896,370 |
Total managed assets | | | 1,015,491 | | | 1,017,433 |
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