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March 19, 2007
Medallion Financial Corp. Announces 2006 Fourth Quarter and Full Year Results
- Earnings per share increased 90% in 2006 to $0.74 from $0.39 in 2005
- Delinquencies continue to drop to lowest historical levels
- Medallion loans and total managed assets reach all-time highs
- Dividend increased to $0.19 per share
Charts
- Consolidated Statements of Operations
- Consolidated Balance Sheets
- Medallion Bank Financial Information
NEW YORK, NY - March 19, 2007 - 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 $5,844,000 or $0.33 per diluted common share in the 2006 fourth quarter, up from $603,000, or $0.03 per diluted common share in the 2005 fourth quarter. For the 2006 full year, net increase in net assets resulting from operations increased 90% to $13,108,000 or $0.74 per diluted common share from $6,862,000 or $0.39 per diluted common share in 2005.
Andrew Murstein, President of Medallion Financial stated, "We are very pleased with the year's results, especially the results this quarter. We continued to sell off our Clear Channel position at an optimal time and thus were able to realize substantial gains. We have realized proceeds from the sale of Medallion Taxi Media, our taxi top division, valued at over $35,000,000, representing cash received on the Media sale and from the sale of Clear Channel stock, as well as the carrying value of the shares still held at year end."
The Company also changed its accounting methodology for Medallion Bank at year-end. Historically, the Company consolidated Medallion Bank's accounts with those of its own, but will now treat the bank as a portfolio investment, similar to the Company's past treatment of large non-investment company subsidiaries such as Medallion Taxi Media. Although this creates changes in the reported levels of assets, liabilities, revenues, and expenses, our earnings, shareholders' equity, and the related amounts per share are unchanged. At year end, the Company determined the fair value of its investment in Medallion Bank was approximately $47 million. As a growing significant subsidiary, Medallion Bank's financial information is also attached to this release.
The Company's on balance sheet taxicab medallion loan portfolio grew by 14% to $428,249,000 at December 31, 2006 from $375,263,000 at December 31, 2005. The commercial loan portfolio decreased 4% to $88,207,000 at December 31, 2006 from $91,485,000 at December 31, 2005. Total managed loans, including taxicab medallion loans and commercial loans sourced and serviced by the Company but owned by Medallion Bank, are shown in the following table. This reflected growth of the Company's managed taxicab medallion loan portfolio by 16% to $522,193,000 at December 31, 2006, an all-time high, and of the Company's managed commercial loan portfolio by 2% to $148,444,000 at December 31, 2006. In addition, Medallion Bank's consumer loan portfolio increased by 30% to $111,799,000 at December 31, 2006, also an all-time high.
The following chart shows the components of the Company's $833,639,000 managed net investment portfolio at December 31, 2006.
|
On-Balance Sheet |
Off-Balance Sheet (1) |
Total Managed Investments |
| Medallion loans |
$428,249,000 |
$93,944,000 |
$522,193,000 |
| Commercial loans |
88,207,000 |
60,237,000 |
148,444,000 |
| Consumer loans |
0 |
111,799,000 |
111,799,000 |
| Investment securities |
9,961,000 |
21,683,000 |
31,644,000 |
| Equity investments |
16,068,000 |
0 |
16,068,000 |
| Investments in Medallion Bank and other controlled subsidiaries |
50,448,000 |
(46,957,000) |
3,491,000 |
| Net investment portfolio |
$592,933,000 |
$240,706,000 |
$833,639,000 |
(1) Off-balance sheet investments are those owned by our wholly-owned unconsolidated portfolio companies, primarily Medallion Bank.
Net investment income after taxes was $965,000 or $0.05 per share in the 2006 fourth quarter, compared to $144,000 or $0.01 per share in the 2006 third quarter and $1,040,000 or $0.06 per share in the 2005 fourth quarter. Including Medallion Bank's net investment income after taxes with our own, as was the reporting methodology in prior periods, the amounts were $3,522,000 or $0.20 per share in the 2006 fourth quarter, compared to $2,781,000 or $0.16 per share in the 2006 third quarter and $3,763,000 or $0.21 per share in the 2005 fourth quarter.
Larry Hall, the CFO of Medallion Financial stated, "During the year our liquidity sources and financing options improved. In late December 2006, we entered into a new relationship with Citibank which lowered our cost of funds. While that benefit was not meaningful in the fourth quarter, it should start to show results in 2007."
Mr. Hall continued, "In addition to improvements in profitability and asset growth, medallion prices have also continued to grow, with corporate medallion values growing from $425,000 to $525,000 in the last 12 months. This represents the highest values ever in the history of New York City taxi medallions. The average loan-to-value ratio on our loan portfolio is now under 58%, and our customers have more equity to tap into by borrowing from us to grow their businesses."
Mr. Hall continued, "During the year we made over $470,000,000 of investments, a record for us, which includes $125,000,000 of loans made by Medallion Bank. Loan quality remains the Company's trademark, as loans 90 days or more past due decreased to 2.1% from 3.5% a year ago. Loans 90 days or more past due in Medallion Bank's consumer portfolio decreased to 0.5%, down from 0.8% one year ago, and in its total portfolio loans 90 days or more past due decreased to 0.2% down from 0.3% a year ago.
The Company also announced that it is increasing its quarterly dividend to $0.19 per share from $0.15 in the 2005 fourth quarter. For the year, the Company declared dividends of $0.70 per share, up from $0.54 per share in 2005, an increase of 30%. Also, 47% of the 2006 dividend will qualify as capital gains and thus be taxed at a lower tax rate to certain investors. The current dividend will be paid on April 13, 2007, to shareholders of record on March 30, 2007. Since the Company's initial public offering in 1996, the Company has paid in excess of $104,951,000 or $7.01 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 commercial and consumer loans in targeted niche industries. The Company and its subsidiaries have lent over $3 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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