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November 6, 2006
Medallion Financial Corp. Announces 2006 Third Quarter Results
- Medallion Portfolio Reaches an All-Time High
- Yields at a 5 Year High
- Net Interest Income of $8.7 Million is Second Highest All Time
- Dividend Raised to $0.18
Charts
- Consolidated Income Statements
- Consolidated Balance Sheets
NEW YORK, NY - Novebmer 6, 2006 -- Medallion Financial Corp. (NASDAQ: TAXI), a specialty finance company with a leading position servicing the taxi industry and other niche markets in small business and consumer lending, announced that net investment income after taxes increased 14% to $2,781,000 or $0.16 per diluted common share in the 2006 third quarter from $2,431,000 or $0.14 per diluted common share in the 2006 second quarter. Over the last 12 months, medallion loans grew to $484,398,000 from $433,562,000, an increase of 12%; commercial loans were at $143,752,000, down from $160,883,000, primarily due to the sale of one of the Company's divisions and up from $140,895,000 excluding that division, an increase of 2%; and consumer loans grew to $111,148,000, up from $84,080,000, an increase of 32%. Medallion loans and consumer loans reached all time highs for the Company.
"We are pleased with our results this quarter," commented President Andrew Murstein. "Our pre-tax net investment income is among the highest it has been, reaching $4,072,000 in the quarter, up 17% from $3,482,000 in the year ago quarter. As we continue to use our bank as a funding platform, we pay taxes and are able to retain earnings to help fuel our continued growth. Medallion loan demand continues to look positive, and we expect good growth in the fourth quarter. If trends continue we believe we will finish the year with over $500,000,000 in medallion loans."
Mr. Murstein continued, "Our industrial loan bank is a very valuable asset and is run exceptionally well. Our operating efficiencies, a measure of how much it costs to generate one dollar of net interest income, is among the best in the industry. Banks this year typically averaged over 50%, and we are at 28%. Our pre-tax return on equity in the bank was 25%."
Chief Financial Officer Larry Hall stated, "Net interest income, or our interest income minus our interest expense was $8,705,000, the second highest quarter in our history. Our portfolio yield continues to increase. This quarter it grew to 9.09%, up from 8.99% at the end of the second quarter, and 8.44% a year ago. Our net interest margin increased in the quarter to 4.43% from 4.09% in the second quarter. Our credit quality remains outstanding as delinquencies over 90 days decreased to 2.0% for the entire portfolio, down from 2.3% one year ago. Net increase in net assets resulting from operations was $0.08 per diluted share, down from $0.23 in the second quarter with a good part of the change coming from a decline during the quarter in the value of Clear Channel stock that we own. After the quarter ended however, the price increased substantially, and we sold 100,000 shares of our Clear Channel holdings at a price of $35.18 per share. We anticipate paying that realized gain to our shareholders as dividends over the next several quarters. We still hold approximately 480,000 shares of Clear Channel stock."
The Board of Directors increased the Company's dividend to $0.18 per share, continuing an upward trend that goes back to 2003. During the first nine months of 2006, our dividend increased 28% over the first nine months of 2005. The dividend will be payable on December 8, 2006 to shareholders of record as of November 24, 2006. Since Medallion's IPO, the Company has paid out more than $101,000,000 in dividends to shareholders, representing more than $6.82 per share.
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, provides refinancing for small businesses in niche industries. The Company and its subsidiaries have lent over $2.5 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 "Risk Factors" in Medallion's 2005 Annual Report on Form 10-K.
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