- First quarter earnings of $6,848,000,
or $0.28 per diluted common share
- Managed assets were $1.698 billion,
including $1.101 billion at Medallion Bank, both all-time
highs
- Net interest margin was 6.75% on a
combined basis
- All of the earnings came from outside
of the taxi medallion lending industry
- Consumer loans grew 32% from a year
ago
- Book value per share, or net asset
value, increased to $11.46 at March 31, 2016
- Quarterly distribution of $0.25 per
share declared
- Common stock ticker symbol change to
MFIN, Five-year notes ticker symbol change to MFINL
Medallion Financial Corp. (Nasdaq: TAXI) announced that
earnings, or net increase in net assets resulting from operations,
were $6,848,000 or $0.28 per diluted common share in the 2016 first
quarter, down $220,000 from $7,068,000 or $0.29 per share in the
2015 first quarter, primarily reflecting lower net interest and
noninterest income, partially offset by higher net
realized/unrealized gains and lower operating expenses.
Medallion Bank, the Company’s unconsolidated wholly-owned
portfolio company, had net income of $6,161,000 in the 2016 first
quarter, compared to $6,765,000 in the 2015 first quarter, a
decrease of $604,000. Medallion Bank’s consumer lending portfolio
grew 32% over the last year, all with a decrease in delinquencies
from a year ago, and with loss rates remaining at low levels.
Andrew Murstein, President of Medallion Financial stated, “We
are extremely pleased with the 2016 first quarter results. While
taxi medallion lending continues to have virtually zero losses,
almost all of our earnings came from non-taxi related loan
products, primarily from our consumer lending businesses, which
were responsible for 80% of our earnings in 2015. ”
Medallion Financial’s net interest margin was 4.33% in the 2016
first quarter, compared to 7.44% in the comparable 2015 period, a
decrease of 42%, primarily reflecting lower levels of dividends
from Medallion Bank and other controlled subsidiaries. On a
combined basis with Medallion Bank, the net interest margin was
6.75% in the quarter, down 6% from 7.20% a year ago, primarily
reflecting changes in the portfolio mix, where the home improvement
loans yield 9.8% compared to 16.6% for the RV portfolio and 15.6%
for the marine portfolio. Home improvement lending is now the
fastest growing area of the company as the portfolio increased by
over 50% in the last year. Both measures demonstrate the strong
portfolio earning power of Medallion and the Bank.
Larry D. Hall, Chief Financial Officer of Medallion Financial,
stated, “All the important indicators of our business continue to
demonstrate the quality of Medallion’s operations, including
continued growth and profitability, solid credit performance by the
portfolios, strong capital levels, and an experienced management
team.”
“For Medallion Financial, loans 90 days or more past due were
8.0%, compared to 3.6% last quarter. On a combined basis with
Medallion Bank, loans 90 days or more past due were 4.3%, compared
to 2.2% last quarter. These rates are comparable to historical
levels, such as during our first 10 years as a public company. The
Company still experienced virtually no losses even at those levels,
and we had virtually no losses on medallion loans during 2015 and
the first quarter of 2016. The current loan to value of our
combined taxi medallion portfolio was 82%, compared to 76% at year
end. Additionally, we have personal guarantees on virtually all of
these loans effectively making the loan to value significantly
lower. Our net unrealized depreciation on the loan portfolios was
1.91%, compared to 1.43% at year end. Medallion Bank had aggregate
loan loss reserves of 2.60%, compared to 2.35% last quarter, and
yet, despite these increased reserves, earnings remained strong,”
said Mr. Hall.
“Medallion Financial had realized losses of 0.13% in the 2016
quarter, compared to gains of 1.40% in the 2015 full year, and
Medallion Bank had a net loss rate of 1.11% in 2016, compared to
1.06% in the 2015 full year. Additionally, Medallion Financial and
Medallion Bank had no realized losses on medallion loans in 2016,
compared to 0.04% and 0.0%, respectively, for the 2015 full year.
These results continue to evidence the solid credit performance of
our businesses.”
“Medallion’s debt to equity ratio was only 1.50 to 1, providing
ample room for increasing our leverage and growing our businesses
down the road. Additionally, we had over $30 million of cash on
hand at quarter end and Medallion Bank continues to have the
capacity to raise significant additional deposits. Also, subsequent
to quarter end, Medallion Financial completed the sale of a retail
notes offering raising over $32,500,000 of net proceeds of five
year term, fixed rate debt,” said Mr. Hall.
Medallion loans were $303,352,000 at quarter end, down
$7,953,000 or 3% from $311,305,000 a year ago, representing 48% of
the investment portfolio, compared to 60% a year ago, and were
yielding 4.12% compared to 4.05% a year ago, reflecting our
increasing rates as loans refinance. The decrease in outstandings
primarily reflected increases in unrealized depreciation reflecting
current market conditions, and relatively stable portfolio markets.
The managed medallion portfolio, which includes loans at Medallion
Bank and those serviced for third parties, was $655,092,000 at
quarter end, down $42,005,000 or 6% from $697,097,000 a year ago,
reflecting the above and portfolio decreases in the New York and
Chicago markets, reflecting management’s decision to cull weaker
and less profitable borrowers from the portfolio.
The commercial loan portfolio was $82,719,000 at quarter end,
compared to $73,559,000 a year ago, an increase of $9,160,000 or
12%, and represented 13% of the investment portfolio compared to
14% a year ago. The increase primarily reflected growth in the
high-yield mezzanine portfolio. Commercial loans yielded 12.92% at
quarter end, up 5% from 12.30% a year ago, reflecting the change in
portfolio mix and higher yields on the mezzanine portfolio. The net
managed commercial loan portfolio, which includes loans at
Medallion Bank and those serviced for or by third parties, was
$122,835,000 at quarter end, up $9,084,000 or 8% from $113,751,000
a year ago, primarily reflecting the changes described above.
Investments in Medallion Bank and other controlled subsidiaries
were $168,227,000 at quarter end, up $39,369,000 or 31% from
$128,858,000 a year ago, primarily reflecting our equity in the
earnings of Medallion Bank and other portfolio company investments,
capital contributions made, portfolio sales, and net appreciation.
Such investments represented 27% of the investment portfolio,
compared to 25% a year ago, and yielded 10.97% at quarter end,
compared to 13.39% a year ago, primarily reflecting the dividends
from Medallion Bank.
Medallion Bank’s consumer loan portfolio increased by
$156,468,000 or 32% to $645,637,000 at quarter end from
$489,169,000 a year ago, and represented 42% of the managed loan
portfolio, compared with 37% a year ago. The consumer loan
portfolio yielded 13.99% compared to 14.58% a year ago, primarily
reflecting changes in the portfolio mix to loans with higher credit
scores including our home improvement lending division where
average FICO scores exceed 760. The increase in outstandings
reflected increases in all product lines, particularly the home
improvement and recreational vehicle lending portfolios.
Overall total managed assets increased $197,000,000 or 13% to
$1,698,000,000 at quarter end, up from $1,501,000,000 a year ago
and the Company’s book value per share, or net asset value,
increased from $11.16 a year ago to $11.46 at March 31, 2016. This
increase is primarily a result of the ability of Medallion Bank to
retain earnings in addition to providing a steady dividend source
to its parent company, Medallion Financial.
Medallion Financial also announced a distribution of $0.25 per
share for the 2016 first quarter. This brings the total
distributions declared over the last four quarters to $1.00, and
equates to a yield of over 13% based on the closing price of the
Company’s stock on May 9, 2016. The current distribution will be
paid on May 26, 2016 to shareholders of record on May 18, 2016.
Since the Company’s initial public offering in 1996, the Company
has paid or declared in excess of $261,000,000 or $14.56 per share
in distributions.
Medallion Financial announced that the Company’s common stock
and notes will commence trading on the Nasdaq Global Select Market
under the new ticker symbols MFIN and MFINL at the start of trading
on May 11, 2016. Mr. Murstein stated, “We are pleased to begin
trading under the new MFIN and MFINL ticker symbols. When we went
public twenty years ago almost all of our earnings came from our
taxi related loan products. Today nearly all of our earnings come
from our other loan products, primarily from our consumer lending
businesses. The new ticker symbols more accurately reflect who we
are and our focus on the future.”
* * *
Medallion Financial Corp. is a specialty finance company that
originates and services loans in various commercial industries, and
its wholly-owned portfolio company, Medallion Bank, also originates
and services consumer loans. The Company and its subsidiaries have
lent approximately $7 billion to 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 2015 Annual Report on Form 10-K.
MEDALLION FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF
OPERATIONS
Three Months Ended March 31, (Dollars in thousands,
except per share data)
2016 2015
Total
investment income $8,986 $11,831
Total
interest expense 2,531 2,212
Net
interest income 6,455 9,619
Total noninterest income 40 56
Salaries and benefits
3,109 3,343 Professional fees
435 412 Occupancy expense
203 230 Other operating
expenses
709 786
Total operating
expenses 4,456 4,771
Net
investment income before income taxes 2,039 4,904 Income
tax (provision) benefit
- -
Net
investment income after income taxes 2,039
4,904
Net realized gains (losses) on
investments (188 ) 7,899 Net
change in unrealized depreciation on investments
(3,471
) (3,309 ) Net change in unrealized appreciation
(depreciation) on
Medallion Bank and other controlled
subsidiaries
8,468 (2,426 )
Net unrealized appreciation
(depreciation) on investments 4,997 (5,735
)
Net realized/unrealized gains on investments 4,809
2,164
Net increase in net assets
resulting from operations $6,848 $
7,068
Net investment income after income taxes per common
share Basic
$0.08 $0.20 Diluted
0.08
0.20
Net increase in net assets resulting
from operations per common share Basic
$0.28 $0.29
Diluted
0.28 0.29
Distributions declared per share $0.25
$0.25
Weighted average common shares
outstanding Basic
24,175,554 24,446,419 Diluted
24,231,344 24,542,727
MEDALLION FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
March 31, 2016 December 31, 2015
Assets
Medallion loans, at fair value
$303,352 $308,408 Commercial
loans, at fair value
82,719 81,895 Investment in Medallion
Bank and other controlled subsidiaries, at fair value
168,227 159,913 Equity investments, at fair value
7,163 6,859 Investment securities, at fair value
69,541 49,884
Net investments 631,002
606,959 Cash and cash equivalents
30,685 30,912
Accrued interest receivable
945 1,003 Fixed assets, net
159 198 Investments other than securities
36,297
37,882 Goodwill, net
5,099 5,099 Other assets, net
3,951 6,997
Total assets
$708,138 $689,050
Liabilities Accounts
payable and accrued expenses
$ 9,413 $ 5,120 Accrued
interest payable
971 1,302 Funds borrowed
418,681
404,540
Total liabilities 429,065
410,962 Commitments and contingencies
- -
Total shareholders' equity (net assets)
279,073 278,088
Total liabilities and
shareholders' equity $708,138 $689,050
Number of common shares outstanding
24,348,579
24,346,693 Net asset value per share
$11.46
$11.42 Total managed loans
$1,423,563 $1,410,213
Total managed assets
1,697,248 1,654,658
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160510006135/en/
AT THE COMPANY:Medallion
Financial Corp.Andrew M. Murstein, PresidentLarry D. Hall,
CFO1-212-328-21001-877-MEDALLIONorAT
ZLOKOWER COMPANY:Public RelationsHarry Zlokower/Dave
Closs1-212-863-4193
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