Medallion Financial Corp. Reports 2012 Second Quarter Results
- Second quarter earnings of $5,917,000, or $0.30 per share, increased 34% from the 2011 second quarter
- Managed assets hit an all time high at $1.16 billion, including $667 million at Medallion Bank
- Quarterly dividend of $0.21 per share declared
NEW YORK--(BUSINESS WIRE)-- Medallion Financial Corp. (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 was $5,917,000 or $0.30 per diluted common share in the 2012 second quarter, up $1,501,000 or 34% from $4,416,000 or $0.25 per diluted common share in the 2011 second quarter, primarily reflecting higher net realized/unrealized gains, as well as lower operating expenses and higher net interest and noninterest income.
Medallion Bank, the Companys unconsolidated wholly-owned portfolio company, had net income of $4,828,000 in the 2012 second quarter, compared to $4,132,000 in the 2011 second quarter, an increase of $696,000 or 17%, primarily reflecting higher net interest income and reduced loan losses, partially offset by higher income taxes and operating expenses, and also by lower noninterest income. As the Company continues to use Medallion Bank as a primary funding source, it refers more loans to Medallion Bank for origination to take advantage of current short term borrowing rates which are at historically low levels, and which are our least expensive source of funds.
Medallion Financials net interest margin was 4.77% for the 2012 second quarter, compared to 4.33% in the 2011 second quarter. On a combined basis with Medallion Bank, the net interest margin was 6.32%, compared to 6.40% a year ago, reflecting the continued low cost of funds at the Bank, and the Banks higher-yielding loan portfolio. Net investment income after income taxes was $1,793,000 or $0.09 per diluted common share in the 2012 quarter, up $314,000 or 21% from $1,479,000 or $0.08 per share in the 2011 quarter.
Andrew Murstein, President of Medallion Financial stated, We are extremely pleased with the quarters results, especially since we raised almost $35,000,000 in a follow on offering led by Morgan Stanley, Stifel Nicholas, and Sandler ONeill. Even with our higher share count we still were able to increase our per share earnings immediately due in part to continued strong loan demand and near record low delinquencies and losses. Our stock is also trading above the offering price and we feel confident in our future.
This quarters dividend also remains at the highest level it has been in over 10 years, said Mr. Murstein. The taxi industry remains resilient in this type of economic environment for several reasons, including corporate and consumer cutbacks on more expensive limousine and town car services, high taxi fleet utilization, and continuing high taxi ridership levels. In addition, the loan to value ratio on our entire medallion portfolio is under 40%.
Larry D. Hall, Chief Financial Officer of Medallion Financial stated, Medallions capital and liquidity levels remained strong, with over $105,000,000 of deposit-raising capacity at Medallion Bank, in addition to over $136,000,000 of availability in our other funding sources. Additionally, Medallion was able to sell 3,500,000 shares of common stock during the quarter, raising almost $35,000,000 to further leverage the growth opportunities that we see with Medallion Bank and potentially with the proposed New York City taxi auctions.
Mr. Hall continued, In addition, during 2012 we have continued to replace higher cost borrowings with lower cost fixed and floating rate debt, further enhancing our profitability, and we see additional opportunities to continue this as rates remain near historic lows. For example, our $33,000,000 of Trust Preferred securities, which currently carry a fixed rate of 7.68%, will re-price to 90 day Libor plus 2.125% in September, or 2.59% at todays rates, which should be accretive to subsequent earnings.
Medallion Financials on-balance sheet taxicab medallion loan portfolio was $278,000,000 at quarter end, down from $312,000,000 a year ago, primarily due to the funding of most new medallion loan originations at Medallion Bank, and the Companys loan participations to third party banks. Total managed medallion loans increased $6,000,000 or 1% to $673,000,000 at quarter end, up from $667,000,000 a year ago.
Medallion Financials on-balance sheet commercial loan portfolio was $54,000,000 at quarter end, down from $66,000,000 a year ago. The managed commercial loan portfolio was $115,000,000 at quarter end, down from $126,000,000 last year. In both cases, the declines primarily reflected portfolio repayments. Medallion Banks consumer loan portfolio increased 16% to $227,000,000 at quarter end from $195,000,000 a year ago. Overall, total managed assets increased 3% to $1,159,971,000 at quarter end, up from $1,125,924,000 a year ago. Asset quality remained very strong, with managed loans 90 days or more past due of only 1.1% at quarter end, down from 1.8% at year end and 1.2% a year ago.
The Company also announced a dividend of $0.21 per share for the 2012 second quarter, up from $0.18 per share in the 2011 second quarter. This brings the total dividends paid over the last four quarters to $0.81, and equates to a yield of over 7% based on the closing price of the Companys stock on July 31, 2012. The current dividend will be paid on August 24, 2012, to shareholders of record on August 16, 2012. Since the Companys initial public offering in 1996, the Company has paid in excess of $176,220,000 or $11.02 per share in dividends.
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 approximately $5 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. Medallions 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 Medallions 2011 Annual Report on Form 10-K.
|MEDALLION FINANCIAL CORP.|
|CONSOLIDATED STATEMENTS OF OPERATIONS|
|Three Months Ended June 30,||Six Months Ended June 30,|
|(Dollars in thousands, except per share data)||2012||2011||2012||2011|
|Total investment income||$8,064||$8,413||$15,927||$18,010|
|Total interest expense||2,908||3,343||6,155||6,845|
|Net interest income||5,156||5,070||9,772||11,165|
|Total noninterest income||342||326||677||735|
|Salaries and benefits||2,287||1,752||4,337||3,959|
|Other operating expenses||772||1,747||1,539||2,646|
|Total operating expenses||3,705||3,917||7,046||7,580|
|Net investment income before income taxes||1,793||1,479||3,403||4,320|
|Income tax (provision) benefit||-||-||-||-|
|Net investment income after income taxes||1,793||1,479||3,403||4,320|
|Net realized gains on investments||323||575||265||584|
|Net change in unrealized appreciation on investments||1,834||311||3,847||95|
|Net change in unrealized appreciation on Medallion Bank and other controlled subsidiaries||1,967||2,051||3,867||3,696|
|Net unrealized appreciation on investments||3,801||2,362||7,714||3,791|
|Net realized/unrealized gains on investments||4,124||2,937||7,979||4,375|
|Net increase in net assets resulting from operations||$5,917||$4,416||$11,382||$ 8,695|
|Net investment income after income taxes per common share|
|Net increase in net assets resulting from operations per common share|
|Dividends declared per share||$0.21||$0.18||$0.42||$0.35|
|Weighted average common shares outstanding|
|MEDALLION FINANCIAL CORP.|
|CONSOLIDATED BALANCE SHEETS|
|(Dollars in thousands, except per share data)||
June 30, 2012
|December 31, 2011|
|Medallion loans, at fair value||$277,756||$307,167|
|Commercial loans, at fair value||54,280||54,159|
|Investment in Medallion Bank and other controlled subsidiaries, at fair value||89,035||85,932|
|Equity investments, at fair value||5,400||4,577|
|Investment securities, at fair value||-||-|
|Cash and cash equivalents||26,175||29,352|
|Accrued interest receivable||1,068||1,120|
|Fixed assets, net||458||466|
|Other assets, net||52,972||49,189|
|Accounts payable and accrued expenses||$ 4,577||$ 6,040|
|Accrued interest payable||1,383||1,708|
|Commitments and contingencies||-||-|
|Total shareholders' equity (net assets)||211,675||171,504|
|Total liabilities and shareholders' equity||$512,213||$537,031|
|Number of common shares outstanding||21,452,753||17,719,570|
|Net asset value per share||$9.87||$9.68|
|Total managed loans||$1,014,644||$ 984,576|
|Total managed assets||1,159,971||1,141,806|
At the Company:
Medallion Financial Corp.
Andrew M. Murstein, President
Larry D. Hall, CFO
At Zlokower Company
Harry Zlokower/Dave Closs
Source: Medallion Financial Corp.Copyright Business Wire 2012