We, Medallion
Financial Corp. or the Company, are a
closed-end,
non-diversified
management investment company organized as a Delaware corporation. We have elected to be treated as a
business development company, or BDC, under the Investment Company Act of 1940, as amended, or the 1940 Act. We are a specialty finance company that has historically had a leading position in originating, acquiring, and servicing loans that finance
taxicab medallions and various types of commercial businesses. Recently, our strategic growth has been through a wholly-owned portfolio company of ours, Medallion Bank, which originates consumer loans for the purchase of recreational vehicles,
boats, motorcycles, and trailers and to finance small-scale home improvements. Since Medallion Bank acquired a consumer loan portfolio and began originating consumer loans in 2004, it has increased its consumer loan portfolio at a compound annual
growth rate of 17%. Since 1996, the year in which we became a public company, we have increased our taxicab medallion loan portfolio at a compound annual growth rate of 3%, and our commercial loan portfolio at a compound annual growth rate of 3% (6%
and 3% on a managed basis when combined with Medallion Bank). In January 2017, we announced our plans to transform our overall strategy. We are transitioning away from medallion lending and placing our strategic focus on our growing consumer finance
portfolio. Total assets under our management and the management of our unconsolidated wholly-owned subsidiaries, which includes our managed net investment portfolio, as well as assets serviced for third party investors, were $1,606,000,000 as of
June 30, 2017, and $1,632,000,000 and $1,760,000,000 as of December 31, 2016 and June 30, 2016, and have grown at a compound annual growth rate of 10% from $215,000,000 at the end of 1996. Since our initial public offering in 1996, we
have paid/declared distributions in excess of $263,060,000 or $14.66 per share.
We conduct our business through various wholly-owned
investment company subsidiaries including:
We formed a wholly-owned portfolio company, Medallion Servicing Corporation, or MSC, to provide loan services to Medallion Bank, also a
portfolio company wholly-owned by us. We have assigned all of our loan servicing rights for Medallion Bank, which consists of servicing taxi medallion and commercial loans originated by Medallion Bank, to MSC, which bills and collects the related
service fee income from Medallion Bank, and is allocated and charged by us for MSCs share of these servicing costs.
In addition, we
conduct business through a wholly-owned portfolio company, Medallion Bank, a bank regulated by the FDIC and the Utah Department of Financial Institutions which originates consumer loans, raises deposits, and conducts other banking activities.
Medallion Bank generally provides us with our lowest cost of funds which it raises through bank certificates of deposit. To take advantage of this low cost of funds, historically we have referred a portion of our taxicab medallion and commercial
loans to Medallion Bank, who originated these loans, and have been serviced by MSC. However, at this time Medallion Bank is not originating any new taxi medallion loans and is working with MSC to service its existing portfolio. The FDIC restricts
the amount of taxicab medallion loans that Medallion Bank may finance to three times Tier 1 capital, or $485,826,000 as of June 30, 2017. MSC earns referral and servicing fees for these activities. As a
non-investment
company, Medallion Bank is not consolidated with the Company, which is an investment company under the 1940 Act.
Our diversified investments in other controlled subsidiaries are comprised of Medallion Fine Art, Inc., Medallion Motorsports, LLC, Medallion
Taxi Media, Inc., and LAX Group, LLC. In addition, we make other both marketable and nonmarketable equity investments.
The financial
information is divided into two sections. The first section, Item 1, includes our unaudited consolidated financial statements including related footnotes. The second section, Item 2, consists of Managements Discussion and Analysis of
Financial Condition and Results of Operations for the quarter ended June 30, 2017.
Our consolidated balance sheet as of
June 30, 2017, and the related consolidated statements of operations, changes in net assets, and cash flows for the three and six months ended June 30, 2017 and 2016 included in Item 1 have been prepared by us, without audit, pursuant
to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the US have been condensed or omitted pursuant to
such rules and regulations. In the opinion of management, the accompanying consolidated financial statements include all adjustments, which are of a normal and recurring nature, necessary to present fairly our consolidated financial position and
results of operations. The results of operations for the three and six months ended June 30, 2017 and 2016, or for any other interim period, may not be indicative of future performance. These financial statements should be read in conjunction
with the financial statements and notes thereto included in our Annual Report on Form
10-K
for the year ended December 31, 2016.
The accompanying notes should be read in conjunction with these consolidated financial statements.
The accompanying notes should be read in conjunction
with these consolidated financial statements.
The accompanying notes should be read in conjunction with these consolidated financial statements.
The accompanying notes should be read in conjunction with these consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2017
(1) ORGANIZATION OF
MEDALLION FINANCIAL CORP. AND ITS SUBSIDIARIES
Medallion Financial Corp. (the Company), is a
closed-end
management investment company organized as a Delaware corporation. The Company has elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940, as
amended (the 1940 Act). The Company conducts its business through various wholly-owned subsidiaries including its primary operating company, Medallion Funding LLC (MFC), a Small Business Investment Company (SBIC) which originates and services
taxicab medallion and commercial loans.
A wholly-owned portfolio investment, Medallion Bank, a Federal Deposit Insurance Corporation
(FDIC) insured industrial bank, originates consumer loans, raises deposits, and conducts other banking activities (see Note 3). Medallion Bank is subject to competition from other financial institutions and to the regulations of certain federal and
state agencies, and undergoes examinations by those agencies. Medallion Bank is not an investment company, and therefore, is not consolidated with the Company, but instead is treated as a portfolio investment. It was initially formed for the primary
purpose of originating commercial loans in three categories: 1) loans to finance the purchase of taxicab medallions, 2) asset-based commercial loans, and 3) SBA 7(a) loans. The loans are marketed and serviced by Medallion Banks affiliates who
have extensive prior experience in these asset groups. Subsequent to its formation, Medallion Bank began originating consumer loans to finance the purchases of RVs, boats, and other related items, and to finance small scale home improvements.
The Company formed a wholly-owned portfolio company, Medallion Servicing Corporation (MSC), to provide loan services to Medallion Bank, also a
portfolio company wholly-owned by the Company. The Company has assigned all of its loan servicing rights for Medallion Bank, which consists of servicing taxi medallion and commercial loans originated by Medallion Bank, to MSC, who bills and collects
the related service fee income from Medallion Bank, and is allocated and charged by the Company for MSCs share of these servicing costs.
The Company also conducts business through Medallion Capital, Inc. (MCI), an SBIC which conducts a mezzanine financing business, and
Freshstart Venture Capital Corp. (FSVC), an SBIC which originates and services taxicab medallion and commercial loans. MFC, MCI, and FSVC, as SBICs, are regulated by the Small Business Administration (SBA). MCI and FSVC are financed in part by the
SBA.
MFC established a wholly-owned subsidiary, Taxi Medallion Loan Trust III (Trust III), for the purpose of owning medallion loans
originated by MFC or others. Trust III is a separate legal and corporate entity with its own creditors who, in any liquidation of Trust III, will be entitled to be satisfied out of Trust IIIs assets prior to any value in Trust III becoming
available to Trust IIIs equity holders. The assets of Trust III, aggregating $109,659,000 at June 30, 2017, are not available to pay obligations of its affiliates or any other party, and the assets of affiliates or any other party are not
available to pay obligations of Trust III. Trust IIIs loans are serviced by MFC.
The Company established a wholly-owned subsidiary,
Medallion Financing Trust I (Fin Trust) for the purpose of issuing unsecured preferred securities to investors. Fin Trust is a separate legal and corporate entity with its own creditors who, in any liquidation of Fin Trust, will be entitled to be
satisfied out of Fin Trusts assets prior to any value in Fin Trust becoming available to Fin Trusts equity holders. The assets of Fin Trust, aggregating $36,146,000 at June 30, 2017, are not available to pay obligations of its
affiliates or any other party, and the assets of affiliates or any other party are not available to pay obligations of Fin Trust.
MFC
through several wholly-owned subsidiaries (together, Medallion Chicago), purchased $8,689,000 of City of Chicago taxicab medallions out of foreclosure, which are leased to fleet operators while being held for sale. The 159 medallions are carried at
a fair value of $9,510,000 on the consolidated balance sheet at June 30, 2017, compared to $9,510,000 and $33,127,000 at December 31, 2016 and June 30, 2016, and are considered
non-qualifying
assets under the 1940 Act.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The
preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the US requires management to make estimates that affect the amounts reported in the consolidated financial statements and the
accompanying notes. Accounting estimates and assumptions are those that management considers to be the most critical to an understanding of the consolidated financial statements because they inherently involve significant judgments and
uncertainties. All of these estimates reflect managements best judgment about current economic and market conditions and their effects based on information available as of the date of these consolidated financial statements. If such conditions
change, it is reasonably possible that the judgments and estimates could change, which may result in future impairments of loans and other receivables, investments other than securities, loans held for sale, and investments, among other effects.
Page 8 of 90
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, except for Medallion Bank and
other portfolio investments. All significant intercompany transactions, balances, and profits have been eliminated in consolidation. As a
non-investment
company, Medallion Bank is not consolidated with the
Company, which is an investment company under the 1940 Act. See Note 3 for the presentation of financial information for Medallion Bank and other controlled subsidiaries.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with an original purchased maturity of three months or less to be cash equivalents. Cash
balances are generally held in accounts at large national or regional banking organizations in amounts that exceed the federally insured limits, and includes $0 and $500,000 related to compensating balance requirements of regional banking
institutions, and $7,846,000 and $7,840,000 pledged to a lender of an affiliate as of June 30, 2017 and December 31, 2016.
Fair Value of Assets and Liabilities
The Company follows FASB Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures, (FASB ASC 820), which defines
fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. FASB ASC 820 defines fair value as an exit price (i.e. a price that would be received to sell, as opposed to acquire, an asset or
transfer a liability), and emphasizes that fair value is a market-based measurement. It establishes a fair value hierarchy that distinguishes between assumptions developed based on market data obtained from independent external sources and the
reporting entitys own assumptions. Further, it specifies that fair value measurement should consider adjustment for risk, such as the risk inherent in the valuation technique or its inputs. See also Notes 2, 12, and 13 to the consolidated
financial statements.
Investment Valuation
The Companys loans, net of participations and any unearned discount, are considered investment securities under the 1940 Act and are
recorded at fair value. As part of the fair value methodology, loans are valued at cost adjusted for any unrealized appreciation (depreciation). Since no ready market exists for these loans, the fair value is determined in good faith by the Board of
Directors. In determining the fair value, the Board of Directors considers factors such as the financial condition of the borrower, the adequacy of the collateral, individual credit risks, cash flows of the borrower, market condition for loans (e.g.
values used by other lenders and any active bid/ask market), historical loss experience, and the relationships between current and projected market rates and portfolio rates of interest and maturities. Investments other than securities, which
represent collateral received from defaulted borrowers, are valued similarly.
Equity investments (common stock and stock warrants,
including certain controlled subsidiary portfolio investments) and investment securities (US Treasuries and mortgage backed bonds), in total representing 50% and 46% of the investment portfolio at June 30, 2017 and December 31, 2016, are
recorded at fair value, represented as cost, plus or minus unrealized appreciation or depreciation. The fair value of investments that have no ready market are determined in good faith by the Board of Directors, based upon the financial condition
and operating performance of the underlying investee companies as well as general market trends for businesses in the same industry. Included in equity investments were marketable securities of $318,000 and $537,000 at June 30, 2017 and
December 31, 2016, and
non-marketable
securities of $9,998,000 and $7,931,000 in the comparable periods. The $301,819,000 and $293,360,000 related to portfolio investments in controlled subsidiaries at
June 30, 2017 and December 31, 2016 were all
non-marketable
in each period. Because of the inherent uncertainty of valuations, the Board of Directors estimates of the values of the investments
may differ significantly from the values that would have been used had a ready market for the investments existed, and the differences could be material.
The Companys investment in Medallion Bank, as a wholly owned portfolio investment, is also subject to quarterly assessments of fair
value. The Company conducts a thorough valuation analysis as described previously, and also receives an opinion regarding the valuation from an independent third party to assist the Board of Directors in its determination of the fair value of
Medallion Bank on at least an annual basis. The Companys analysis includes factors such as various regulatory restrictions that were established at Medallion Banks inception, by the FDIC and State of Utah, and also by additional
regulatory restrictions, such as the prior moratorium imposed by the Dodd-Frank Act on the acquisition of control of an industrial bank by a commercial firm (a company whose gross revenues are primarily derived from
non-financial
activities) which expired in July 2013 and the lack of any new charter issuances since the moratoriums expiration. Because of these restrictions and other factors, the Companys Board of
Directors had previously determined that Medallion Bank had little value beyond its recorded book value. As a result of this valuation process, the Company had previously used Medallion Banks actual results of operations as the best estimate
of changes in fair value, and recorded the results as a component of unrealized appreciation (depreciation) on investments. In the second quarter of 2015, the Company first became aware of external interest in Medallion Bank and its portfolios
assets at values in excess of their book value. Expression of interest in Medallion Bank from both investment bankers and interested parties has continued through 2016 and 2017. The Company incorporated these new factors in the Medallion Banks
fair value analysis and the Board of Directors determined that Medallion Bank
Page 9 of 90
had a fair value in excess of book value. In addition, in the 2016 third quarter there was a court ruling involving a marketplace lender that the Company believes heightens the interest of
marketplace lenders to acquire or merge with Utah industrial banks. The Company also engaged a valuation specialist to assist the Board of Directors in their determination of Medallion Banks fair value, and this appreciation of $15,500,000 was
thereby recorded in 2015, and additional appreciation of $128,918,000 was recorded in 2016, and $563,000 was recorded in 2017. See Note 3 for additional information about Medallion Bank.
A majority of the Companys investments consist of long-term loans to persons defined by SBA regulations as small business concerns.
Approximately 37% and 41% of the Companys investment portfolio at June 30, 2017 and December 31, 2016 had arisen in connection with the financing of taxicab medallions, taxicabs, and related assets, of which 68% and 69% were in New
York City at June 30, 2017 and December 31, 2016. These loans are secured by the medallions, taxicabs, and related assets, and are personally guaranteed by the borrowers, or in the case of corporations, are generally guaranteed personally
by the owners. A portion of the Companys portfolio (13% at June 30, 2017 and December 31, 2016) represents loans to various commercial enterprises in a wide variety of industries, including manufacturing, retail trade, information,
recreation, and various other industries. Approximately 54% of these loans are made primarily in the Midwest and 5% in the metropolitan New York City area, with the balance widely scattered across the United States. Investments in controlled
unconsolidated subsidiaries, equity investments, and investment securities were 48%, 2%, and 0% at June 30, 2017, and were 45%, 1%, and 0% at December 31, 2016.
On a managed basis, which includes the investments of Medallion Bank after eliminating the Companys investment in Medallion Bank,
medallion loans were 31% and 35% at June 30, 2017 and December 31, 2016 (77% and 76% in New York City), commercial loans were 5% and 6%, and consumer loans were 49% and 46% in all 50 states collateralized by recreational vehicles, boats,
motorcycles, trailers, and home improvements. Investment securities were 3% and 2% at June 30, 2017 and December 31, 2016, and equity investments (including investments in controlled subsidiaries) were 12% and 11%.
Investment Transactions and Income Recognition
Loan origination fees and certain direct origination costs are deferred and recognized as an adjustment to the yield of the related loans. At
June 30, 2017 and December 31, 2016, net loan origination costs were $107,000 and $175,000. Net (accretion) amortization to income for the three months ended June 30, 2017 and 2016 was ($18,000) and ($1,000), and was ($38,000) and
($5,000) for the comparable six month periods.
Investment securities are purchased from
time-to-time
in the open market at prices that are greater or lesser than the par value of the investment. The resulting premium or discount is deferred and recognized as an adjustment to the yield of the
related investment. At June 30, 2017 and December 31, 2016, there were no premiums or discounts on investment securities, and their related income accretion or amortization was immaterial for 2017 and 2016.
Interest income is recorded on the accrual basis. Taxicab medallion and commercial loans are placed on nonaccrual status, and all uncollected
accrued interest is reversed, when there is doubt as to the collectability of interest or principal, or if loans are 90 days or more past due, unless management has determined that they are both well-secured and in the process of collection.
Interest income on nonaccrual loans is generally recognized when cash is received, unless a determination has been made to apply all cash receipts to principal. At June 30, 2017, December 31, 2016, and June 30, 2016, total nonaccrual
loans were $122,042,000, $77,161,000, and $40,132,000, and represented 34%, 20%, and 10% of the gross medallion and commercial loan portfolio at each period end, and were primarily concentrated in the taxi medallion portfolio. The amount of interest
income on nonaccrual loans that would have been recognized if the loans had been paying in accordance with their original terms was $14,934,000 ($9,711,000 of which had been applied to principal), $10,658,000, and $8,516,000 as of June 30,
2017, December 31, 2016, and June 30, 2016, of which $2,248,000 ($679,000 of which had been applied to principal) and $584,000 would have been recognized in the quarters ended June 30, 2017 and 2016 and $2,895,000 ($2,160,000 of which
had been applied to principal) and $1,080,000 would have been recognized in the comparable six months.
Loan Sales and Servicing Fee
Receivable
The Company accounts for its sales of loans in accordance with FASB Accounting Standards Codification Topic 860, Transfers
and Servicing (FASB ASC 860) which provides accounting and reporting standards for transfers and servicing of financial assets and extinguishments of liabilities. In accordance with FASB ASC 860, the Company has elected the fair value measurement
method for its servicing assets and liabilities. The principal portion of loans serviced for others by the Company and its affiliates was $346,620,000 and $352,191,000 at June 30, 2017 and December 31, 2016, and included $318,961,000 and
$325,751,000 of loans serviced for Medallion Bank. The Company has evaluated the servicing aspect of its business in accordance with FASB ASC 860, most of which relates to servicing assets held by Medallion Bank, and determined that no material
servicing asset or liability exists as of June 30, 2017 and December 31, 2016. The Company has assigned its servicing rights to the Medallion Bank portfolio to MSC, a wholly-owned unconsolidated portfolio investment. The costs of servicing
are allocated to MSC by the Company, and the servicing fee income is billed to and collected from Medallion Bank by MSC. During 2016, the Company exited the asset based lending business and sold the entire portfolio of $45,023,000, including
$42,919,000 on the books of Medallion Bank to a third party bank for a gain of $2,701,000, before deductions for closing costs.
Page 10 of 90
Unrealized Appreciation (Depreciation) and Realized Gains (Losses) on Investments
Unrealized appreciation (depreciation) on investments is the amount by which the fair value estimated by the Company is greater (less) than the
cost basis of the investment portfolio. Realized gains or losses on investments are generated through sales of investments, foreclosure on specific collateral, and writeoffs of loans or assets acquired in satisfaction of loans, net of recoveries.
Unrealized appreciation (depreciation) on investments was $110,374,000, $127,367,000, and $48,104,000 as of June 30, 2017, December 31, 2016, and June 30, 2016. The Companys investment in Medallion Bank, a wholly owned portfolio
investment, is also subject to quarterly assessments of fair value. The Company conducts a thorough valuation analysis as described previously, and determines whether any factors give rise to a valuation different than recorded book value, including
various regulatory restrictions that were established at Medallion Banks inception, by the FDIC and State of Utah, and also by additional marketplace restrictions, such as the ability to transfer industrial bank charters. Because of these
restrictions and other factors, the Companys Board of Directors had previously determined that Medallion Bank had little value beyond its recorded book value. As a result of this valuation process, the Company had previously used Medallion
Banks actual results of operations as the best estimate of changes in fair value, and recorded the results as a component of unrealized appreciation (depreciation) on investments. In the second quarter of 2015, the Company became first aware
of external interest in Medallion Bank and its portfolio assets at values in excess of their book value. Expression of interest in Medallion Bank from both investment bankers and interested parties has continued through 2016 and 2017. The Company
incorporated these new factors in the Medallion Banks fair value analysis and the Board of Directors determined that Medallion Bank had a fair value in excess of book value. In addition, in the 2016 third quarter there was a court ruling
involving a marketplace lender that the Company believes heightens the interest of marketplace lenders to acquire or merge with Utah industrial banks. The Company also engaged a valuation specialist to assist the Board of Directors in their
determination of Medallion Banks fair value, and this appreciation of $15,500,000 was thereby recorded in 2015, and additional appreciation of $128,918,000 was recorded in 2016, and $563,000 was recorded in 2017. See Note 3 for additional
information about Medallion Bank.
The following tables set forth the
pre-tax
changes in the
Companys unrealized appreciation (depreciation) on investments for the 2017 and 2016 quarters shown below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
Medallion
Loans
|
|
|
Commercial
Loans
|
|
|
Investment in
Subsidiaries
|
|
|
Equity
Investments
|
|
|
Investment
Securities
|
|
|
Investments
Other
Than Securities
|
|
|
Total
|
|
Balance December 31, 2016
|
|
($
|
28,523
|
)
|
|
($
|
1,378
|
)
|
|
$
|
152,750
|
|
|
$
|
3,934
|
|
|
$
|
|
|
|
$
|
584
|
|
|
$
|
127,367
|
|
Net change in unrealized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appreciation on investments
|
|
|
|
|
|
|
|
|
|
|
3,751
|
|
|
|
1,261
|
|
|
|
|
|
|
|
|
|
|
|
5,012
|
|
Depreciation on investments
|
|
|
(8,670
|
)
|
|
|
(332
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9,002
|
)
|
Reversal of unrealized
appreciation (depreciation) related to realized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains on investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,093
|
)
|
|
|
|
|
|
|
|
|
|
|
(2,093
|
)
|
Losses on investments
|
|
|
825
|
|
|
|
|
|
|
|
|
|
|
|
486
|
|
|
|
|
|
|
|
|
|
|
|
1,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance March 31, 2017
|
|
($
|
36,368
|
)
|
|
($
|
1,710
|
)
|
|
$
|
156,501
|
|
|
$
|
3,588
|
|
|
$
|
|
|
|
$
|
584
|
|
|
$
|
122,595
|
|
Net change in unrealized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appreciation on investments
|
|
|
|
|
|
|
|
|
|
|
(771
|
)
|
|
|
120
|
|
|
|
|
|
|
|
|
|
|
|
(651
|
)
|
Depreciation on investments
|
|
|
(12,425
|
)
|
|
|
(118
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,543
|
)
|
Reversal of unrealized appreciation (depreciation) related to realized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains on investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses on investments
|
|
|
337
|
|
|
|
636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
973
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance June 30, 2017
|
|
($
|
48,456
|
)
|
|
($
|
1,192
|
)
|
|
$
|
155,730
|
|
|
$
|
3,708
|
|
|
$
|
|
|
|
$
|
584
|
|
|
$
|
110,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 11 of 90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
Medallion
Loans
|
|
|
Commercial
Loans
|
|
|
Investment in
Subsidiaries
|
|
|
Equity
Investments
|
|
|
Investment
Securities
|
|
|
Investments
Other
Than Securities
|
|
|
Total
|
|
Balance December 31, 2015
|
|
($
|
3,438
|
)
|
|
($
|
2,239
|
)
|
|
$
|
18,640
|
|
|
$
|
2,582
|
|
|
($
|
18
|
)
|
|
$
|
28,956
|
|
|
$
|
44,483
|
|
Net change in unrealized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appreciation on investments
|
|
|
|
|
|
|
|
|
|
|
6,115
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
(1,585
|
)
|
|
|
4,523
|
|
Depreciation on investments
|
|
|
(2,359
|
)
|
|
|
173
|
|
|
|
305
|
|
|
|
12
|
|
|
|
(47
|
)
|
|
|
|
|
|
|
(1,916
|
)
|
Reversal of unrealized appreciation (depreciation) related to
realized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains on investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
|
|
|
|
|
|
|
|
12
|
|
Losses on investments
|
|
|
|
|
|
|
348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance March 31, 2016
|
|
|
(5,797
|
)
|
|
|
(1,718
|
)
|
|
|
25,060
|
|
|
|
2,587
|
|
|
|
(53
|
)
|
|
|
27,371
|
|
|
|
47,450
|
|
Net change in unrealized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appreciation on investments
|
|
|
|
|
|
|
|
|
|
|
2,213
|
|
|
|
1,538
|
|
|
|
7
|
|
|
|
(3,170
|
)
|
|
|
588
|
|
Depreciation on investments
|
|
|
(2,758
|
)
|
|
|
245
|
|
|
|
|
|
|
|
(8
|
)
|
|
|
52
|
|
|
|
|
|
|
|
(2,469
|
)
|
Reversal of unrealized appreciation (depreciation) related to realized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains on investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses on investments
|
|
|
2,346
|
|
|
|
195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,541
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance June 30, 2016
|
|
($
|
6,209
|
)
|
|
($
|
1,278
|
)
|
|
$
|
27,273
|
|
|
$
|
4,117
|
|
|
$
|
|
|
|
$
|
24,201
|
|
|
$
|
48,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below summarizes
pre-tax
components of unrealized and
realized gains and losses in the investment portfolio for the three and six months ended June 30, 2017 and 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
(Dollars in thousands)
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Net change in unrealized appreciation (depreciation) on investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized appreciation
|
|
$
|
235
|
|
|
$
|
1,546
|
|
|
$
|
1,493
|
|
|
$
|
1,539
|
|
Unrealized depreciation
|
|
|
(12,659
|
)
|
|
|
(2,469
|
)
|
|
|
(21,661
|
)
|
|
|
(4,708
|
)
|
Net unrealized appreciation on investment in Medallion Bank and other controlled
subsidiaries
|
|
|
930
|
|
|
|
9,840
|
|
|
|
9,054
|
|
|
|
18,308
|
|
Realized gains
|
|
|
|
|
|
|
|
|
|
|
(2,090
|
)
|
|
|
12
|
|
Realized losses
|
|
|
974
|
|
|
|
2,541
|
|
|
|
2,285
|
|
|
|
2,889
|
|
Net unrealized gains (losses) on investments other than securities and other assets
|
|
|
|
|
|
|
(3,170
|
)
|
|
|
|
|
|
|
(4,755
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
(10,520
|
)
|
|
$
|
8,288
|
|
|
$
|
(10,919
|
)
|
|
$
|
13,285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains (losses) on investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized gains
|
|
$
|
1
|
|
|
$
|
|
|
|
$
|
2,091
|
|
|
$
|
34
|
|
Realized losses
|
|
|
(974
|
)
|
|
|
(2,541
|
)
|
|
|
(2,285
|
)
|
|
|
(2,889
|
)
|
Other gains
|
|
|
2,958
|
|
|
|
205
|
|
|
|
3,002
|
|
|
|
369
|
|
Direct recoveries (chargeoffs)
|
|
|
11
|
|
|
|
18
|
|
|
|
33
|
|
|
|
(20
|
)
|
Realized gains on investments other than securities and other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,996
|
|
|
($
|
2,318
|
)
|
|
$
|
2,841
|
|
|
($
|
2,506
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table provides additional information on attributes of the nonperforming loan portfolio as of
June 30, 2017, December 31, 2016, and June 30, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars
in
thousands)
|
|
Recorded
Investment
(1)
(2)
|
|
|
Unpaid Principal
Balance
|
|
|
Average Recorded
Investment
|
|
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Medallion
(3)
|
|
$
|
112,327
|
|
|
$
|
114,351
|
|
|
$
|
124,084
|
|
Commercial
(3)
|
|
|
9,714
|
|
|
|
17,403
|
|
|
|
9,904
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Medallion
(3)
|
|
$
|
73,192
|
|
|
$
|
74,078
|
|
|
$
|
87,999
|
|
Commercial
(3)
|
|
|
3,969
|
|
|
|
11,118
|
|
|
|
4,695
|
|
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Medallion
(3)
|
|
$
|
37,034
|
|
|
$
|
37,321
|
|
|
$
|
37,220
|
|
Commercial
(3)
|
|
|
3,259
|
|
|
|
9,895
|
|
|
|
3,279
|
|
(1)
|
As of June 30, 2017, December 31, 2016, and June 30, 2016, $43,486, $29,901, and $7,439 of unrealized depreciation had been recorded as a valuation allowance on these loans.
|
Page 12 of 90
(2)
|
Interest income of $608 and $1,283 was recognized in the three and six months ended June 30, 2017, compared to $206 and $305 for the comparable 2016 periods on these loans.
|
(3)
|
Included in the unpaid principal balance is unearned
paid-in-kind
interest on nonaccrual loans of $9,712, $8,035, and $6,923, which is
included in the nonaccrual disclosures in the section titled Investment Transactions and Income Recognition on page 10 as of June 30, 2017, December 31, 2016, and June 30, 2016.
|
The following tables show the aging of medallion and commercial loans as of June 30, 2017 and December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
Days Past Due
|
|
|
|
|
|
|
|
|
Recorded
Investment >
90 Days and
|
|
(Dollars in thousands)
|
|
31-60
|
|
|
61-90
|
|
|
91 +
|
|
|
Total
|
|
|
Current
|
|
|
Total
|
|
|
Accruing
|
|
Medallion loans
|
|
$
|
11,385
|
|
|
$
|
7,903
|
|
|
$
|
89,830
|
|
|
$
|
109,118
|
|
|
$
|
172,537
|
|
|
$
|
281,655
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured mezzanine
|
|
|
|
|
|
|
|
|
|
|
2,117
|
|
|
|
2,117
|
|
|
|
74,361
|
|
|
|
76,478
|
|
|
|
|
|
Other secured commercial
|
|
|
|
|
|
|
150
|
|
|
|
618
|
|
|
|
768
|
|
|
|
2,146
|
|
|
|
2,914
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial loans
|
|
|
|
|
|
|
150
|
|
|
|
2,735
|
|
|
|
2,885
|
|
|
|
76,507
|
|
|
|
79,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
11,385
|
|
|
$
|
8,053
|
|
|
$
|
92,565
|
|
|
$
|
112,003
|
|
|
$
|
249,044
|
|
|
$
|
361,047
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
Days Past Due
|
|
|
|
|
|
|
|
|
|
|
|
Recorded
Investment >
90 Days and
|
|
(Dollars in thousands)
|
|
31-60
|
|
|
61-90
|
|
|
91 +
|
|
|
Total
|
|
|
Current
|
|
|
Total
|
|
|
Accruing
|
|
Medallion loans
|
|
$
|
12,350
|
|
|
$
|
13,064
|
|
|
$
|
71,976
|
|
|
$
|
97,390
|
|
|
$
|
197,660
|
|
|
$
|
295,050
|
|
|
$
|
4,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured mezzanine
|
|
|
|
|
|
|
|
|
|
|
1,390
|
|
|
|
1,390
|
|
|
|
75,079
|
|
|
|
76,469
|
|
|
|
|
|
Other secured commercial
|
|
|
69
|
|
|
|
472
|
|
|
|
734
|
|
|
|
1,275
|
|
|
|
7,382
|
|
|
|
8,657
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial loans
|
|
|
69
|
|
|
|
472
|
|
|
|
2,124
|
|
|
|
2,665
|
|
|
|
82,461
|
|
|
|
85,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
12,419
|
|
|
$
|
13,536
|
|
|
$
|
74,100
|
|
|
$
|
100,055
|
|
|
$
|
280,121
|
|
|
$
|
380,176
|
|
|
$
|
4,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 13 of 90
A third party finance company sold various participations in asset based loans to Medallion
Business Credit and Medallion Bank. In April 2013 the aggregate balance of the participations was approximately $13.8 million, $12.9 million of which were held by Medallion Bank. That amount was divided between seven separate borrowers
operating in a variety of industries. In April 2013, the third party finance company became the subject of an involuntary bankruptcy petition filed by its bank lenders. Among other things, the bank lenders alleged that the third party finance
company fraudulently misrepresented its borrowing availability under its credit facility with the bank lenders and are seeking the third party finance companys liquidation. In May 2013, the bankruptcy court presiding over the third party
finance companys case entered an order converting the involuntary chapter 7 case to a chapter 11 case. The Company and Medallion Bank have placed these loans on nonaccrual, and reversed interest income. In addition, the Company and Medallion
Bank have established valuation allowances against the outstanding balances. On May 31, 2013, the Company and Medallion Bank commenced an adverse proceeding against the third party finance company and the bank lenders seeking declaratory
judgment that the Companys and Medallion Banks loan participations are true participations and not subject to the bankruptcy estate or to the bank lenders security interest in the third party finance companys assets. The
third party finance company and bank lenders are contesting the Companys and Medallion Banks position. In April 2014, the Company and Medallion Bank received a decision from the court granting summary judgment in their favor with respect
to the issue of whether the Companys and Medallion Banks loan participations are true participations. In March 2015, the Company and Medallion Bank received a decision from the court finding that the bank lenders generally held a first
lien on the Companys and Medallion Banks loan participations subject to, among other things, defenses still pending prosecution by the parties and adjudication by the court. The Company and Medallion Bank are appealing the decision. The
remaining issues are still being litigated. Although the Company and Medallion Bank believe the claims raised by the third party finance company and the bank lenders are without merit and will vigorously defend against them, the Company and
Medallion Bank cannot at this time predict the outcome of this litigation or determine their potential exposure. At June 30, 2017, five of the seven secured borrowers had refinanced their loans in full with third parties, and the related
proceeds are held in escrow pending resolution of the bankruptcy proceedings. In September 2015, one loan was sold at a discount to a third party, and the related proceeds are held in escrow pending resolution of the bankruptcy proceeding. One loan
was charged off in September 2014. The balances related to the paid off loans have been reclassified to other assets on the consolidated balance sheet. The table below summarizes these receivables and their status with the Company and Medallion Bank
as of June 30, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars
in
thousands)
|
|
The Company
|
|
|
Medallion Bank
|
|
|
Total
|
|
Loans outstanding
|
|
$
|
258
|
|
|
$
|
1,953
|
|
|
$
|
2,211
|
|
Loans charged off
(1)
|
|
|
(258
|
)
|
|
|
(1,953
|
)
|
|
|
(2,211
|
)
|
Valuation allowance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loans outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other receivables
|
|
|
590
|
|
|
|
11,062
|
|
|
|
11,652
|
|
Valuation allowance
|
|
|
(236
|
)
|
|
|
(4,425
|
)
|
|
|
(4,661
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net other receivables
|
|
|
354
|
|
|
|
6,637
|
|
|
|
6,991
|
|
Total net outstanding
|
|
|
354
|
|
|
|
6,637
|
|
|
|
6,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income foregone in 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income foregone
|
|
$
|
74
|
|
|
$
|
108
|
|
|
$
|
182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The income foregone on the charged off loan was $99 for the Company and $213 for Medallion Bank.
|
The following table shows troubled debt restructurings which the Company entered into during the quarter ended June 30, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars
in
thousands)
|
|
Number of Loans
|
|
|
Pre-
Modification
Investment
|
|
|
Post-Modification
Investment
|
|
Medallion loans
|
|
|
12
|
|
|
$
|
8,249
|
|
|
$
|
8,175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
12
|
|
|
$
|
8,249
|
|
|
$
|
8,175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 14 of 90
The following table shows troubled debt restructurings which the Company entered into during the
six months ended June 30, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars
in
thousands)
|
|
Number of Loans
|
|
|
Pre-
Modification
Investment
|
|
|
Post-Modification
Investment
|
|
Medallion loans
|
|
|
47
|
|
|
$
|
31,911
|
|
|
$
|
31,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans
|
|
|
2
|
|
|
|
6,547
|
|
|
|
6,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
49
|
|
|
$
|
38,458
|
|
|
$
|
38,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the twelve months ended June 30, 2017, ten loans modified as troubled debt restructurings were in
default and had an investment value of $3,503,000 as of June 30, 2017, net of $2,456,000 of unrealized depreciation.
The Company had
no troubled debt restructurings during the quarter and six months ended June 30, 2016. During the twelve months ended June 30, 2016, 22 loans modified as troubled debt restructurings were in default and had an investment value of $14,301
as of June 30, 2016.
Fixed Assets
Fixed assets are carried at cost less accumulated depreciation and amortization, and are depreciated on a straight-line basis over their
estimated useful lives of 3 to 10 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the estimated economic useful life of the improvement. Depreciation and amortization expense was
$24,000 and $28,000 for the quarters ended June 30, 2017 and 2016, and was $49,000 and $57,000 for the comparable six months.
Deferred Costs
Deferred
financing costs, included in other assets, represents costs associated with obtaining the Companys borrowing facilities, and are amortized on a straight line basis over the lives of the related financing agreements. Amortization expense was
$240,000 and $170,000 for the quarters ended June 30, 2017 and 2016, and was $468,000 and $253,000 for the comparable six months, recorded as interest expense on the Consolidated Statement of Operations. In addition, the Company capitalizes
certain costs for transactions in the process of completion (other than business combinations), including those for potential investments, and the sourcing of other financing alternatives. Upon completion or termination of the transaction, any
accumulated amounts will be amortized against income over an appropriate period, or written off. The amounts on the balance sheet for all of these purposes were $3,567,000, $4,003,000, and $3,942,000 as of June 30, 2017, December 31, 2016,
and June 30, 2016.
Income Taxes
Income taxes are accounted for using the asset and liability approach in accordance with FASB ASC Topic 740, Income Taxes (ASC
740). Deferred tax assets and liabilities reflect the impact of temporary differences between the carrying amount of assets and liabilities and their tax basis and are stated at tax rates expected to be in effect when taxes are actually paid
or recovered. Deferred tax assets are also recorded for net operating losses, capital losses and any tax credit carryforwards. A valuation allowance is provided against a deferred tax asset when it is more likely than not that some or all of the
deferred tax assets will not be realized. All available evidence, both positive and negative, is considered to determine whether a valuation allowance for deferred tax assets is needed. Items considered in determining our valuation allowance include
expectations of future earnings of the appropriate tax character, recent historical financial results, tax planning strategies, the length of statutory carryforward periods and the expected timing of the reversal of temporary differences. Under ASC
740, forming a conclusion that a valuation allowance is not needed is difficult when there is negative evidence, such as cumulative losses in recent years. The Company recognizes tax benefits of uncertain tax positions only when the position is
more likely than not to be sustained assuming examination by tax authorities. The Company records income tax related interest and penalties, if applicable, within current income tax expense. Through December 31, 2015 the Company
qualified to be taxed as a RIC under the Code. Generally, a RIC is entitled to deduct dividends it pays to its shareholders from its income to determine taxable income.
Net Increase in Net Assets Resulting from Operations per Share (EPS)
Basic earnings per share are computed by dividing net increase in net assets resulting from operations available to common shareholders by the
weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if option contracts to issue common stock were exercised, or if restricted stock vests, and has been
computed after giving consideration to the weighted average dilutive effect of the Companys stock options and restricted stock. The
Page 15 of 90
Company uses the treasury stock method to calculate diluted EPS, which is a method of recognizing the use of proceeds that could be obtained upon exercise of options and warrants, including
unvested compensation expense related to the shares, in computing diluted EPS. It assumes that any proceeds would be used to purchase common stock at the average market price during the period.
The table below shows the calculation of basic and diluted EPS.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
(Dollars in thousands)
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Net increase in net assets resulting from operations available to common shareholders
|
|
$
|
(4
,797
|
)
|
|
$
|
4,568
|
|
|
$
|
(3,686
|
)
|
|
$
|
11,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding applicable to basic EPS
|
|
|
23,925,567
|
|
|
|
24,209,556
|
|
|
|
23,909,344
|
|
|
|
24,192,555
|
|
Effect of dilutive stock options
|
|
|
|
|
|
|
707
|
|
|
|
|
|
|
|
460
|
|
Effect of restricted stock grants
|
|
|
|
|
|
|
55,301
|
|
|
|
|
|
|
|
55,439
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted weighted average common shares outstanding applicable to diluted EPS
|
|
|
23,925,567
|
|
|
|
24,265,564
|
|
|
|
23,909,344
|
|
|
|
24,248,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
$
|
(0.20
|
)
|
|
$
|
0.19
|
|
|
$
|
(0.15
|
)
|
|
$
|
0.47
|
|
Diluted earnings per share
|
|
|
(0.20
|
)
|
|
|
0.19
|
|
|
|
(0.15
|
)
|
|
|
0.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potentially dilutive common shares excluded from the above calculations aggregated 682,000 and 324,000 shares
as of June 30, 2017 and 2016.
Stock Compensation
The Company follows FASB Accounting Standard Codification Topic 718 (ASC 718), Compensation Stock Compensation, for its
stock option and restricted stock plans, and accordingly, the Company recognizes the expense of these grants as required. Stock-based employee compensation costs pertaining to stock options is reflected in net increase in net assets resulting from
operations for any new grants using the fair values established by usage of the Black-Scholes option pricing model, expensed over the vesting period of the underlying option. Stock-based employee compensation costs pertaining to restricted stock are
reflected in net increase in net assets resulting from operations for any new grants using the grant date fair value of the shares granted, expensed over the vesting period of the underlying stock.
During the six months ended June 30, 2017 and 2016, the Company issued 258,232 restricted shares and no restricted shares of stock-based
compensation awards, and 12,000 and 12,000 of other stock-based compensation awards, and recognized $200,000 and $329,000, or $0.01 and $0.01 per diluted common share for the 2017 second quarter and six months, and $81,000 and $285,000, or $0.00 and
$0.01 per share in the comparable 2016 periods, of
non-cash
stock-based compensation expense related to the grants. As of June 30, 2017, the total remaining unrecognized compensation cost related to
unvested stock options and restricted stock was $593,000, which is expected to be recognized over the next 12 quarters (see Note 6).
Derivatives
The Company
manages its exposure to increases in market rates of interest by periodically purchasing interest rate caps to lock in the cost of funds of its variable-rate debt in the event of a rapid run up in interest rates. The Company entered into contracts
to purchase interest rate caps on $110,000,000 of notional value of principal from various multinational banks, with termination dates up to December 2018. The caps provide for payments to the Company if various LIBOR thresholds are exceeded during
the cap terms. Total cap purchases were generally fully expensed when paid, including $19,000 and $19,000 for the three and six months ended June 30, 2017 and $0 for the comparable 2016 periods, and all are carried at $0 on the balance sheet at
June 30, 2017.
Reclassifications
Certain reclassifications have been made to prior year balances to conform with the current quarters presentation. These
reclassifications have no effect on the previously reported results of operations.
Page 16 of 90
(3) INVESTMENT IN MEDALLION BANK AND OTHER CONTROLLED SUBSIDIARIES
The following table presents information derived from Medallion Banks statement of comprehensive income and other valuation adjustments
on other controlled subsidiaries for the three and six months ended June 30, 2017 and 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
(Dollars in thousands)
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Statement of comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income
|
|
$
|
26,660
|
|
|
$
|
26,340
|
|
|
$
|
52,989
|
|
|
$
|
50,817
|
|
Interest expense
|
|
|
3,186
|
|
|
|
2,957
|
|
|
|
6,293
|
|
|
|
5,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
|
23,474
|
|
|
|
23,383
|
|
|
|
46,696
|
|
|
|
45,114
|
|
Noninterest income
|
|
|
37
|
|
|
|
99
|
|
|
|
72
|
|
|
|
169
|
|
Operating expenses
|
|
|
6,650
|
|
|
|
5,953
|
|
|
|
12,700
|
|
|
|
11,449
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income before income taxes
|
|
|
16,861
|
|
|
|
17,529
|
|
|
|
34,068
|
|
|
|
33,834
|
|
Income tax provision
|
|
|
(1,638
|
)
|
|
|
(5,788
|
)
|
|
|
(4,095
|
)
|
|
|
(9,492
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income after income taxes
|
|
|
15,223
|
|
|
|
11,741
|
|
|
|
29,973
|
|
|
|
24,342
|
|
Net realized/unrealized losses of Medallion Bank
|
|
|
(13,306
|
)
|
|
|
(3,004
|
)
|
|
|
(23,728
|
)
|
|
|
(9,444
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets resulting from operations of Medallion Bank
|
|
|
1,917
|
|
|
|
8,737
|
|
|
|
6,245
|
|
|
|
14,898
|
|
Unrealized appreciation (depreciation) on Medallion Bank
(1)
|
|
|
(592
|
)
|
|
|
1,008
|
|
|
|
(620
|
)
|
|
|
(2,467
|
)
|
Net realized/unrealized gains (losses) on controlled subsidiaries other than Medallion
Bank
|
|
|
(395
|
)
|
|
|
95
|
|
|
|
3,429
|
|
|
|
5,877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets resulting from operations of Medallion Bank and other controlled
subsidiaries
|
|
$
|
930
|
|
|
$
|
9,840
|
|
|
$
|
9,054
|
|
|
$
|
18,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Unrealized depreciation on Medallion Bank reflects the adjustment to the investment carrying amount to reflect the dividends declared to the Company and the US Treasury, and the fair value adjustments to the carrying
amount of Medallion Bank.
|
The following table presents Medallion Banks balance sheets and the net investment in other
controlled subsidiaries as of June 30, 2017 and December 31, 2016.
|
|
|
|
|
|
|
|
|
(Dollars
in
thousands)
|
|
2017
|
|
|
2016
|
|
Loans
|
|
$
|
950,670
|
|
|
$
|
965,082
|
|
Investment securities, at fair value
|
|
|
40,007
|
|
|
|
36,861
|
|
|
|
|
|
|
|
|
|
|
Net investments
(1)
|
|
|
990,677
|
|
|
|
1,001,943
|
|
Cash
|
|
|
30,130
|
|
|
|
30,881
|
|
Other assets, net
|
|
|
52,529
|
|
|
|
43,134
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,073,336
|
|
|
$
|
1,075,958
|
|
|
|
|
|
|
|
|
|
|
Other liabilities
|
|
$
|
5,166
|
|
|
$
|
3,453
|
|
Due to affiliates
|
|
|
925
|
|
|
|
1,084
|
|
Deposits and other borrowings, including accrued interest payable
|
|
|
900,298
|
|
|
|
909,536
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
906,389
|
|
|
|
914,073
|
|
Medallion Bank equity
(2)
|
|
|
166,947
|
|
|
|
161,885
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
1,073,336
|
|
|
$
|
1,075,958
|
|
|
|
|
|
|
|
|
|
|
Investment in other controlled subsidiaries
|
|
$
|
15,805
|
|
|
$
|
12,771
|
|
Total
investment
in
Medallion
Bank
and
other
controlled
subsidiaries
(3)
|
|
|
301,819
|
|
|
$
|
293,360
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Included in Medallion Banks net investments is $3 and $4 for purchased loan premium at June 30, 2017 and December 31, 2016.
|
(2)
|
Includes $26,303 of preferred stock issued to the US Treasury under the Small Business Lending Fund Program (SBLF).
|
(3)
|
Includes $144,981 and $144,418 of unrealized appreciation on Medallion Bank, in excess of Medallion Banks book value as of June 30, 2017 and December 31, 2016.
|
Page 17 of 90
The following paragraphs summarize the accounting and reporting policies of Medallion Bank, and
provide additional information relating to the tables presented above.
Investment securities are purchased from
time-to-time
in the open market at prices that are greater or lesser than the par value of the investment. The resulting premium or discount is deferred and recognized on a
level yield basis as an adjustment to the yield of the related investment. At June 30, 2017 and December 31, 2016, the net premium on investment securities totaled $271,000 and $238,000, and $20,000 and $40,000 was amortized into interest
income for the quarter and six months ended June 30, 2017, and $18,000 and $42,000 was amortized in the comparable 2016 periods.
Loan origination fees and certain direct origination costs are deferred and recognized as an adjustment to the yield of the related loans. At
June 30, 2017 and December 31, 2016, net loan origination costs were $12,439,000 and $12,371,000. Net amortization expense for the quarter and six months ended June 30, 2017 was $834,000 and $1,663,000, and was $920,000 and
$1,741,000 for the comparable 2016 periods.
Medallion Banks policies regarding nonaccrual of medallion and commercial loans are
similar to those of the Company. The consumer portfolio has different characteristics compared to commercial loans, typified by a larger number of lower dollar loans that have similar characteristics. These loans are placed on nonaccrual, when they
become 90 days past due, or earlier if they enter bankruptcy, and are charged off in their entirety when deemed uncollectible, or when they become 120 days past due, whichever occurs first, at which time appropriate collection and recovery efforts
against both the borrower and the underlying collateral are initiated. At June 30, 2017, $3,703,000 or less than 1% of consumer loans, no commercial loans and $39,543,000 or 16% of medallion loans were on nonaccrual, compared to $4,179,000 or
1% of consumer loans, no commercial loans, and $47,841,000 or 16% of medallion loans on nonaccrual at December 31, 2016, and $2,913,000 or less than 1% of consumer loans, no commercial loans and $37,111,000 or 11% of medallion loans were on
nonaccrual at June 30, 2016. The amount of interest income on nonaccrual loans that would have been recognized if the loans had been paying in accordance with their original terms was $1,379,000, $514,000, and $762,000 as of June 30, 2017,
December 31, 2016, and June 30, 2016. See also the paragraph and table on page 57 following the delinquency table for a discussion of other past due amounts. As of June 30, 2017 $1,065,000 of interest paid on nonaccrual loans has been
applied to principal.
Medallion Banks loan and investment portfolios are assessed for collectability on a monthly basis, and a loan
loss allowance is established for any realizability concerns on specific investments, and general reserves have also been established for any unknown factors. Adjustments to the value of this portfolio are based on the Companys own historical
loan loss data developed since 2004, adjusted for changes in delinquency trends and other factors as described previously in Note 2.
Medallion Bank raises deposits to fund loan originations. The deposits were raised through the use of investment brokerage firms who package
deposits qualifying for FDIC insurance into pools that are sold to Medallion Bank. The rates paid on the deposits are highly competitive with market rates paid by other financial institutions, and include a brokerage fee depending on the maturity of
the deposit, which averages less than 0.15%, and which is capitalized and amortized to interest expense over the life of the respective pool. The total amount capitalized at June 30, 2017 and December 31, 2016 was $2,056,000 and
$1,996,000, and $316,000 and $645,000 was amortized to interest expense during the quarter and six months ended June 30, 2017, and $351,000 and $690,000 was amortized in the comparable 2016 periods. Interest on the deposits is accrued daily and
paid monthly, quarterly, semiannually, or at maturity.
The outstanding balances of fixed rate borrowings were as follows.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due for the Fiscal Year Ending June 30,
|
|
|
June 30,
|
|
|
December 31,
|
|
|
Interest
|
|
(Dollars
in
thousands)
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
2021
|
|
|
2022
|
|
|
Thereafter
|
|
|
2017
|
|
|
2016
|
|
|
Rate
(1)
|
|
Deposits and other borrowings
|
|
$
|
437,231
|
|
|
$
|
207,692
|
|
|
$
|
140,397
|
|
|
$
|
38,456
|
|
|
$
|
75,394
|
|
|
$
|
|
|
|
$
|
899,170
|
|
|
$
|
908,442
|
|
|
|
1.39
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Weighted average contractual rate as of June 30, 2017.
|
Medallion Bank is subject to
various regulatory capital requirements administered by the FDIC and State of Utah Department of Financial Institutions. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional disciplinary actions by
regulators that, if undertaken, could have a direct material effect on Medallion Banks and the Companys financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, Medallion Bank
must meet specific capital guidelines that involve quantitative measures of Medallion Banks assets, liabilities, and certain
off-balance
sheet items as calculated under regulatory accounting practices.
Medallion Banks capital amounts and classification are also subject to qualitative judgments by Medallion Bank regulators about components, risk weightings, and other factors.
FDIC-insured banks, including Medallion Bank, are subject to certain federal laws, which impose various legal limitations on the extent to
which banks may finance or otherwise supply funds to certain of their affiliates. In particular, Medallion Bank is subject to certain restrictions on any extensions of credit to, or other covered transactions, such as certain purchases of assets,
with the Company or its affiliates.
Page 18 of 90
Quantitative measures established by regulation to ensure capital adequacy require Medallion Bank
to maintain minimum amounts and ratios as defined in the regulations (set forth in the table below). Additionally, as conditions of granting Medallion Banks application for federal deposit insurance, the FDIC ordered that the leverage capital
ratio (Tier 1 capital to average assets) be not less than 15%, and that an adequate allowance for loan losses be maintained. As a result, to facilitate maintenance of the capital ratio requirement and to provide the necessary capital for continued
growth, the Company has periodically made capital contributions to Medallion Bank, including $3,000,000 in 2016. Separately, Medallion Bank declared dividends to the Company of $3,000,000 in the 2016 six months.
On February 27, 2009 and December 22, 2009, Medallion Bank issued, and the US Treasury purchased under the TARP Capital Purchase
Program (the CPP) Medallion Banks fixed rate
non-cumulative
Perpetual Preferred Stock, Series A, B, C, and D for an aggregate purchase price of $21,498,000 in cash. On July 21, 2011, Medallion Bank
issued, and the US Treasury purchased 26,303 shares of Senior
Non-Cumulative
Perpetual Preferred Stock, Series E (Series E) for an aggregate purchase price of $26,303,000 under the Small Business Lending Fund
Program (SBLF). The SBLF is a voluntary program intended to encourage small business lending by providing capital to qualified smaller banks at favorable rates. In connection with the issuance of the Series E, the Bank exited the CPP by redeeming
the Series A, B, C, and D; and received approximately $4,000,000, net of dividends due on the repaid securities. The Bank previously paid a dividend rate of 1% on the Series E, which increased to 9% in the 2016 first quarter.
The following table represents Medallion Banks actual capital amounts and related ratios as of June 30, 2017 and December 31,
2016, compared to required regulatory minimum capital ratios and the ratios required to be considered well capitalized. As of June 30, 2017, Medallion Bank meets all capital adequacy requirements to which it is subject, and is well-capitalized.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory
|
|
|
|
|
|
|
|
(Dollars in Thousands)
|
|
Minimum
|
|
|
Well-capitalized
|
|
|
June 30, 2017
|
|
|
December 31, 2016
|
|
Common equity tier 1 capital
|
|
|
|
|
|
|
|
|
|
$
|
135,639
|
|
|
$
|
130,158
|
|
Tier 1 capital
|
|
|
|
|
|
|
|
|
|
|
161,942
|
|
|
|
156,461
|
|
Total capital
|
|
|
|
|
|
|
|
|
|
|
175,788
|
|
|
|
170,385
|
|
Average assets
|
|
|
|
|
|
|
|
|
|
|
1,034,631
|
|
|
|
1,081,522
|
|
Risk-weighted assets
|
|
|
|
|
|
|
|
|
|
|
1,061,539
|
|
|
|
1,067,103
|
|
Leverage ratio
(1)
|
|
|
4
|
%
|
|
|
5
|
%
|
|
|
15.7
|
%
|
|
|
14.5
|
%
|
Common equity tier 1 capital
ratio
(2)
|
|
|
5
|
|
|
|
7
|
|
|
|
12.8
|
|
|
|
12.2
|
|
Tier 1 capital ratio
(3)
|
|
|
6
|
|
|
|
8
|
|
|
|
15.3
|
|
|
|
14.7
|
|
Total capital ratio
(3)
|
|
|
8
|
|
|
|
10
|
|
|
|
16.6
|
|
|
|
16.0
|
|
(1)
|
Calculated by dividing Tier 1 capital by average assets.
|
(2)
|
Calculated by subtracting preferred stock or
non-controlling
interests from Tier 1 capital and dividing by risk-weighted assets.
|
(3)
|
Calculated by dividing Tier 1 or total capital by risk-weighted assets.
|
(4) FUNDS BORROWED
The outstanding balances of funds borrowed were as follows.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due for the Fiscal Year Ending June 30,
|
|
|
June 30,
|
|
|
December 31,
|
|
|
Interest
|
|
(Dollars
in
thousands)
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
2021
|
|
|
2022
|
|
|
Thereafter
|
|
|
2017
|
|
|
2016
|
|
|
Rate
(1)
|
|
DZ loan
|
|
$
|
102,459
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
102,459
|
|
|
$
|
106,244
|
|
|
|
2.87
|
%
|
Notes payable to banks
|
|
|
68,963
|
|
|
|
15,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84,115
|
|
|
|
94,219
|
|
|
|
3.69
|
%
|
SBA debentures and borrowings
|
|
|
2,343
|
|
|
|
3,093
|
|
|
|
25,981
|
|
|
|
8,500
|
|
|
|
|
|
|
|
40,000
|
|
|
|
79,917
|
|
|
|
81,985
|
|
|
|
3.39
|
%
|
Retail notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,625
|
|
|
|
|
|
|
|
|
|
|
|
33,625
|
|
|
|
33,625
|
|
|
|
9.00
|
%
|
Preferred securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,000
|
|
|
|
33,000
|
|
|
|
33,000
|
|
|
|
3.35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
173,765
|
|
|
$
|
18,245
|
|
|
$
|
25,981
|
|
|
$
|
42,125
|
|
|
$
|
|
|
|
$
|
73,000
|
|
|
$
|
333,116
|
|
|
$
|
349,073
|
|
|
|
3.87
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Weighted average contractual rate as of June 30, 2017.
|
Page 19 of 90
(A) DZ LOAN
In December 2008, Trust III entered into the DZ loan agreement with DZ Bank to provide up to $200,000,000 of financing through a commercial
paper conduit to acquire medallion loans from MFC (DZ loan), which was extended in December 2013 until December 2016, through an amended and restated credit agreement, further extended in December 2016 until June 2017, and was further extended in
June 2017 until July 2017, and the line reduced to $150,000,000, and which was further reduced in stages in December 2015 to $135,000,000, and to $125,000,000 on July 1, 2016, and remaining as an amortizing facility; and of which $102,459,000
was outstanding at June 30, 2017. During 2016 and 2017, the DZ loan was amended several times, for the most part to improve Trust IIIs flexibility under the credit facility.
Borrowings under Trust IIIs DZ loan is collateralized by Trust IIIs assets. MFC is the servicer of the loans owned by Trust III.
The DZ loan includes a borrowing base covenant and rapid amortization in certain circumstances. In addition, if certain financial tests are not met, MFC can be replaced as the servicer. The interest rate with the 2013 extension is a pooled
short-term commercial paper rate which approximates LIBOR (30 day LIBOR was 1.22% at June 30, 2017) plus 1.65%.
(B) SBA
DEBENTURES AND BORROWINGS
In 2016, the SBA approved $10,000,000 of commitments for MCI for a four and a half year term and a 1%
fee, which was paid. In 2015, the SBA approved $15,500,000 of commitments for MCI for a four year term and a 1% fee, which was paid. In 2014, the SBA approved $10,000,000 of commitments for MCI for a four year term and a 1% fee, which was paid. In
2013, the SBA approved $23,000,000 and $5,000,000 of commitments for FSVC and MCI, respectively, for a four year term and a 1% fee, which was paid, and of which FSVC issued $23,000,000 of debentures, $18,150,000 of which was used to repay maturing
debentures, and MCI issued $2,500,000 of debentures. During 2017, the SBA restructured FSVCs debentures with SBA totaling $33,485,000 in principal into a new loan by the SBA to Freshstart in the principal amount of $34,024,756 (the SBA
Loan). In connection with the SBA loan, FSVC executed a Note (the SBA Note), with an effective date of March 1, 2017, in favor of SBA, in the principal amount of $34,024,756. The SBA Loan bears interest at a rate of 3.25% per
annum and requires a minimum of $5,500,000 of principal and interest to be paid on or before February 1, 2018, a minimum of $9,500,000 of principal and interest to be paid on or before February 1, 2019, and all remaining unpaid principal
and interest on or before February 1, 2020, the final maturity date of the SBA Loan. The SBA Loan agreement contains covenants and events of defaults, including, without limitation, payment defaults, breaches of representations, and warranties
and covenants defaults. As of June 30, 2017, $169,985,000 of commitments had been fully utilized, there were $5,500,000 of commitments available, and $79,917,000 was outstanding.
(C) NOTES PAYABLE TO BANKS
The Company and its subsidiaries have entered into note agreements with a variety of local and regional banking institutions over the years.
The notes are typically secured by various assets of the underlying borrower.
The table below summarizes the key attributes of the
Companys various borrowing arrangements with these lenders as of June 30, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
Borrower
|
|
# of Lenders
/ Notes
|
|
|
Note
Dates
|
|
|
Maturity
Dates
|
|
|
Type
|
|
Note
Amounts
|
|
|
Balance
Outstanding at
June 30,
2017
|
|
|
Monthly Payment
|
|
|
Average
Interest
Rate at
June 30,
2017
|
|
|
Interest
Rate
Index
(1)
|
The Company
|
|
|
6/6
|
|
|
|
4/11 - 8/14
|
|
|
|
10/17 - 7/18
|
|
|
Term loans and demand notes secured by pledged loans
(2)
|
|
$
|
61,567
|
|
|
$
|
61,567
|
|
|
|
Interest
(3)
|
|
|
|
3.81
|
%
|
|
Various
(2)
|
Medallion Chicago
|
|
|
3/28
|
|
|
|
11/11 - 12/11
|
|
|
|
10/16 -12/17
|
|
|
Term loans secured by owned Chicago medallions
(4)
|
|
|
25,708
|
|
|
|
22,548
|
|
|
|
$135 principal & interest
|
|
|
|
3.34
|
%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
87,275
|
|
|
$
|
84,115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
At June 30, 2017, 30 day LIBOR was 1.22%, 360 day LIBOR was 1.74%, and the prime rate was 4.25%.
|
(2)
|
One note has an interest rate of Prime, one note has an interest rate of Prime plus 0.50%, and the other interest rates on these borrowings are LIBOR plus 2.00%.
|
Page 20 of 90
(3)
|
Various agreements call for remittance of all principal received on pledged loans subject to minimum monthly payments ranging from $0 to $50.
|
(4)
|
$13,758 guaranteed by the Company.
|
(D) PREFERRED SECURITIES
In June 2007, the Company issued and sold $36,083,000 aggregate principal amount of unsecured junior subordinated notes to Fin Trust which, in
turn, sold $35,000,000 of preferred securities to Merrill Lynch International and issued 1,083 shares of common stock to the Company. The notes bear a variable rate of interest of 90 day LIBOR (1.30% at June 30, 2017) plus 2.13%. The notes
mature in September 2037 and are prepayable at par. Interest is payable quarterly in arrears. The terms of the preferred securities and the notes are substantially identical. In December 2007, $2,000,000 of the preferred securities were
repurchased from a third party investor. At June 30, 2017, $33,000,000 was outstanding on the preferred securities.
(E) MARGIN
LOAN
In June 2015, the Company entered into a margin loan agreement with Morgan Stanley. The margin loan is secured by the pledge
of short-term, high-quality investment securities held by the Company, and is initially available at 90% of the current fair
market value of the
securities. The margin loan bears interest at
30-day
LIBOR (1.22% at June 30, 2017) plus 1.00%. As of June 30, 2017, there were no outstandings under the margin loan.
(F) RETAIL NOTES
In April 2016, the Company issued a total of $33,625,000 aggregate principal amount of 9.00% unsecured notes due 2021, with interest payable
quarterly in arrears. The Company used the net proceeds from the offering of approximately $31,786,000 to make loans and other investments in portfolio companies and for general corporate purposes, including repaying borrowings under its DZ loan in
the ordinary course of business.
(G) COVENANT COMPLIANCE
Certain of the Companys debt agreements contain restrictions that require the Company and its subsidiaries to maintain certain financial
ratios, including debt to equity and minimum net worth. The Company is in compliance with such restrictions as of June 30, 2017.
(5) INCOME TAXES
Through December 31, 2015, the Company qualified to be taxed as a RIC under Subchapter M of the Code. A RIC is not subject to
federal income tax on the portion of its taxable ordinary income and net long-term capital gains that are distributed to its shareholders. For the tax year ended December 31, 2015, the Company had an ordinary loss for tax purposes.
During 2016, the Companys assets did not meet the quarterly investment diversification requirements to qualify as a RIC, primarily due
to the increase in Medallion Banks fair value. Therefore, for the year ended December 31, 2016, the Company became subject to taxation as a regular corporation under Subchapter C of the Code. This change in tax status does not affect the
Companys status as a BDC under the 1940 Act or its compliance with the portfolio composition requirements of that statute.
As a
result of being taxed as a corporation under Subchapter C, the Company is subject to federal and applicable state corporate income taxes on its taxable ordinary income and capital gains.
As a corporation taxed under Subchapter C, the Company is able, and intends, to file a consolidated federal income tax return with corporate
subsidiaries, including portfolio companies such as Medallion Bank, in which it holds 80 percent or more of the outstanding equity interest measured by both vote and fair value.
Page 21 of 90
The following table sets forth the significant components of our deferred and other tax assets
and liabilities as of June 30, 2017 and December 31, 2016.
|
|
|
|
|
|
|
|
|
(Dollars
in
thousands)
|
|
2017
|
|
|
2016
|
|
Unrealized gain on investment in Medallion Bank
|
|
$
|
(58,740
|
)
|
|
$
|
(58,512
|
)
|
Unrealized losses on loans and nonaccrual interest
|
|
|
26,166
|
|
|
|
16,382
|
|
Unrealized gain on investments in other controlled subsidiaries
|
|
|
(6,888
|
)
|
|
|
(5,610
|
)
|
Unrealized gains on investments other than securities
|
|
|
(3,156
|
)
|
|
|
(3,206
|
)
|
Accrued expenses, compensation
|
|
|
519
|
|
|
|
1,263
|
|
Net operating loss carryforwards
(1)
|
|
|
694
|
|
|
|
732
|
|
Unrealized gains on other investments
|
|
|
(775
|
)
|
|
|
(299
|
)
|
|
|
|
|
|
|
|
|
|
Total deferred tax liability
|
|
|
(42,180
|
)
|
|
|
(49,250
|
)
|
Valuation allowance
|
|
|
(21
|
)
|
|
|
(30
|
)
|
|
|
|
|
|
|
|
|
|
Deferred tax liability, net
|
|
|
(42,201
|
)
|
|
|
(49,280
|
)
|
Taxes receivable (payable)
|
|
|
3,946
|
|
|
|
3,380
|
|
|
|
|
|
|
|
|
|
|
Net deferred and other tax liabilities
|
|
$
|
(38,255
|
)
|
|
$
|
(45,900
|
)
|
|
|
|
|
|
|
|
|
|
(1)
|
As of June 30, 2017, Medallion Chicago collectively had $1,712 of net operating loss carryforwards that expire at various dates between December 31, 2026 and December 31, 2035.
|
The components of our tax benefit for the three and six months ended June 30, 2017 and 2016 were as follows.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
(Dollars in thousands)
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
780
|
|
|
$
|
|
|
|
$
|
1,549
|
|
|
$
|
|
|
State
|
|
|
185
|
|
|
|
|
|
|
|
363
|
|
|
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
4,785
|
|
|
|
|
|
|
|
5,666
|
|
|
|
|
|
State
|
|
|
1,268
|
|
|
|
|
|
|
|
1,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net benefit for income taxes
|
|
$
|
7,018
|
|
|
$
|
|
|
|
$
|
8,990
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents a reconciliation of statutory federal income tax benefit to consolidated actual
income tax benefit reported in net increase in net assets for the three and six months ended June 31, 2017 and 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
(Dollars in thousands)
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Statutory Federal Income tax benefit at 35%
|
|
$
|
4,135
|
|
|
$
|
|
|
|
$
|
4,437
|
|
|
$
|
|
|
State and local income taxes, net of federal income tax benefit
|
|
|
652
|
|
|
|
|
|
|
|
699
|
|
|
|
|
|
Appreciation of Medallion Bank
|
|
|
537
|
|
|
|
|
|
|
|
2,061
|
|
|
|
|
|
Utilization of carry forwards
|
|
|
1,338
|
|
|
|
|
|
|
|
2,256
|
|
|
$
|
|
|
Other
|
|
|
356
|
|
|
|
|
|
|
|
(463
|
)
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income tax benefit expense
|
|
$
|
7,018
|
|
|
$
|
|
|
|
$
|
8,990
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not
that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible pursuant
to ASC 740. The Company considers the reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The Companys evaluation of the realizability of deferred tax assets must
consider both positive and negative evidence. The weight given to the potential effects of positive and negative evidence is based on the extent to which it can be objectively verified. It is based upon these considerations by which the Company has
determined the valuation allowance deemed necessary as of June 30, 2017.
Page 22 of 90
The Company has filed tax returns in many states. Federal, New York State, and New York City tax
filings of the Company for the tax years 2013 through the present are the more significant filings that are open for examination.
(6) STOCK OPTIONS
AND RESTRICTED STOCK
The Company has a stock option plan (2006 Stock Option Plan) available to grant both incentive and nonqualified
stock options to employees. The 2006 Stock Option Plan, which was approved by the Board of Directors on February 15, 2006 and shareholders on June 16, 2006, provided for the issuance of a maximum of 800,000 shares of common stock of the
Company. No additional shares are available for issuance under the 2006 Stock Option Plan. The 2006 Stock Option Plan is administered by the Compensation Committee of the Board of Directors. The option price per share may not be less than the
current market value of the Companys common stock on the date the option is granted. The term and vesting periods of the options are determined by the Compensation Committee, provided that the maximum term of an option may not exceed a period
of ten years.
The Companys Board of Directors approved the 2015 Employee Restricted Stock Plan (2015 Restricted Stock Plan) on
February 13, 2015 and which was approved by the Companys shareholders on June 5, 2015. The 2015 Restricted Stock Plan became effective upon the Companys receipt of exemptive relief from the SEC on March 1, 2016. The terms
of 2015 Restricted Stock Plan provide for grants of restricted stock awards to the Companys employees. A grant of restricted stock is a grant of shares of the Companys common stock which, at the time of issuance, is subject to certain
forfeiture provisions, and thus is restricted as to transferability until such forfeiture restrictions have lapsed. A total of 700,000 shares of the Companys common stock are issuable under the 2015 Restricted Stock Plan, and 400,247 remained
issuable as of June 30, 2017. Awards under the 2015 Restricted Stock Plan are subject to certain limitations as set forth in the 2015 Restricted Stock Plan. The 2015 Restricted Stock Plan will terminate when all shares of common stock
authorized for delivery under the 2015 Restricted Stock Plan have been delivered and the forfeiture restrictions on all awards have lapsed, or by action of the Board of Directors pursuant to the 2015 Restricted Stock Plan, whichever first occurs.
The Companys Board of Directors approved the 2009 Employee Restricted Stock Plan (the Employee Restricted Stock Plan) on
April 16, 2009. The Employee Restricted Stock Plan became effective upon the Companys receipt of exemptive relief from the SEC and approval of the Employee Restricted Stock Option Plan by the Companys shareholders on June 11,
2010. No additional shares are available for issuance under the Employee Restricted Stock Plan. The terms of the Employee Restricted Stock Plan provided for grants of restricted stock awards to the Companys employees. A grant of restricted
stock is a grant of shares of the Companys common stock which, at the time of issuance, is subject to certain forfeiture provisions, and thus is restricted as to transferability until such forfeiture restrictions have lapsed. A total of
800,000 shares of the Companys common stock were issuable under the Employee Restricted Stock Plan, and as of June 30, 2017, none of the Companys common stock remained available for future grants. Awards under the 2009 Employee Plan
are subject to certain limitations as set forth in the Employee Restricted Stock Plan. The Employee Restricted Stock Plan will terminate when all shares of common stock authorized for delivery under the Employee Restricted Stock Plan have been
delivered and the forfeiture restrictions on all awards have lapsed, or by action of the Board of Directors pursuant to the Employee Restricted Stock Plan, whichever first occurs.
The Companys Board of Directors approved the 2015
Non-Employee
Director Stock Option Plan (2015
Director Plan) on March 12, 2015, which was approved by the Companys shareholders on June 5, 2015, and on which exemptive relief to implement the 2015 Director Plan was received from the SEC on February 29, 2016. A total of
300,000 shares of the Companys common stock are issuable under the 2015 Director Plan, and 276,000 remained issuable as of June 30, 2017. Under the 2015 Director Plan, unless otherwise determined by a committee of the Board of Directors
comprised of directors who are not eligible for grants under the 2015 Director Plan, the Company will grant options to purchase 12,000 shares of the Companys common stock to a
non-employee
director upon
election to the Board of Directors, with an adjustment for directors who are elected to serve less than a full term. The option price per share may not be less than the current market value of the Companys common stock on the date the option
is granted. Options granted under the 2015 Director Plan are exercisable annually, as defined in the 2015 Director Plan. The term of the options may not exceed ten years.
The Companys Board of Directors approved the First Amended and Restated 2006 Director Plan (the Amended Director Plan) on April 16,
2009, which was approved by the Companys shareholders on June 5, 2009, and on which exemptive relief to implement the Amended Director Plan was received from the SEC on July 17, 2012. A total of 200,000 shares of the Companys
common stock were issuable under the Amended Director Plan. No additional shares are available for issuance under the Amended Director Plan. Under the Amended Director Plan, unless otherwise determined by a committee of the Board of Directors
comprised of directors who are not eligible for grants under the Amended Director Plan, the Company will grant options to purchase 9,000 shares of the Companys common stock to an Eligible Director upon election to the Board of Directors, with
an adjustment for directors who are elected to serve less than a full term. The option price per share may not be less than the current market value of the Companys common stock on the date the option is granted. Options granted under the
Amended Director Plan are exercisable annually, as defined in the Amended Director Plan. The term of the options may not exceed ten years.
Page 23 of 90
No additional shares are available for future issuance under the Employee Restricted Stock Plan
and the Amended Director Plan. At June 30, 2017, 335,960 options on the Companys common stock were outstanding under the 1996, 2006, and 2015 plans, of which 306,960 options were exercisable, and there were 345,962 unvested shares of the
Companys common stock outstanding under the Employee Restricted Stock Plan.
The fair value of each restricted stock grant is
determined on the date of grant by the closing market price of the Companys common stock on the grant date. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted
average fair value of the options granted was $0.26 and $0.53 for the six months ended June 30, 2017 and 2016. The following assumption categories are used to determine the value of any option grants.
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2017
|
|
|
2016
|
|
Risk free interest rate
|
|
|
1.84
|
%
|
|
|
1.22
|
%
|
Expected dividend yield
|
|
|
7.39
|
|
|
|
10.13
|
|
Expected life of option in years
(1)
|
|
|
6.00
|
|
|
|
6.00
|
|
Expected volatility
(2)
|
|
|
30.00
|
|
|
|
30.00
|
|
(1)
|
Expected life is calculated using the simplified method.
|
(2)
|
We determine our expected volatility based on our historical volatility.
|
The following table
presents the activity for the stock option programs for the 2017 quarters and the 2016 full year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Options
|
|
|
Exercise
Price Per
Share
|
|
|
Weighted
Average
Exercise Price
|
|
Outstanding at December 31, 2015
|
|
|
446,254
|
|
|
$
|
7.49-13.84
|
|
|
$
|
10.38
|
|
Granted
|
|
|
12,000
|
|
|
|
7.10
|
|
|
|
7.10
|
|
Cancelled
|
|
|
(110,636
|
)
|
|
|
9.22-13.84
|
|
|
|
12.25
|
|
Exercised
(1)
|
|
|
(2,100
|
)
|
|
|
9.22
|
|
|
|
9.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31, 2016
|
|
|
345,518
|
|
|
|
7.10-13.84
|
|
|
|
9.67
|
|
Granted
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancelled
|
|
|
(21,558
|
)
|
|
|
11.21
|
|
|
|
11.21
|
|
Exercised
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at March 31, 2017
|
|
|
323,960
|
|
|
|
7.10-13.84
|
|
|
|
9.57
|
|
Granted
|
|
|
12,000
|
|
|
|
2.22
|
|
|
|
2.22
|
|
Cancelled
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at June 30, 2017
(2)
|
|
|
335,960
|
|
|
$
|
2.22-13.84
|
|
|
$
|
9.31
|
|
Options exercisable at June 30, 2017
(2)
|
|
|
306,960
|
|
|
$
|
7.10-13.84
|
|
|
$
|
9.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The aggregate intrinsic value, which represents the difference between the price of the Companys common stock at the exercise date and the related exercise price of the underlying options, was $0 and $0 for the
2017 and 2016 second quarter and six months.
|
(2)
|
The aggregate intrinsic value, which represents the difference between the price of the Companys common stock at June 30, 2017 and the related exercise price of the underlying options, was $2 for outstanding
options and $0 for exercisable options as of June 30, 2017. The remaining contractual life was 2.34 years for outstanding options and 1.70 years for exercisable options at June 30, 2017.
|
The following table presents the activity for the restricted stock programs for the 2017 quarters and the 2016 full year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Shares
|
|
|
Grant Price
Per Share
|
|
|
Weighted
Average
Grant Price
|
|
Outstanding at December 31, 2015
|
|
|
209,040
|
|
|
$
|
9.08-15.61
|
|
|
$
|
10.96
|
|
Granted
|
|
|
48,527
|
|
|
|
3.95-7.98
|
|
|
|
4.47
|
|
Cancelled
|
|
|
(11,325
|
)
|
|
|
9.92-15.61
|
|
|
|
11.17
|
|
Vested
(1)
|
|
|
(78,539
|
)
|
|
|
9.08-15.61
|
|
|
|
11.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31, 2016
|
|
|
167,703
|
|
|
|
3.95-13.46
|
|
|
|
8.88
|
|
Granted
|
|
|
105,138
|
|
|
|
2.14
|
|
|
|
2.14
|
|
Cancelled
|
|
|
(5,186
|
)
|
|
|
2.14-10.08
|
|
|
|
2.94
|
|
Page 24 of 90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Shares
|
|
|
Grant Price
Per Share
|
|
|
Weighted
Average
Grant Price
|
|
Vested
(1)
|
|
|
(67,176
|
)
|
|
|
9.92-13.46
|
|
|
|
11.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at March 31, 2017
|
|
|
200,479
|
|
|
|
2.14-10.38
|
|
|
|
4.67
|
|
Granted
|
|
|
157,767
|
|
|
|
2.06
|
|
|
|
2.06
|
|
Cancelled
|
|
|
(6,492
|
)
|
|
|
2.14-10.08
|
|
|
|
2.80
|
|
Vested
(1)
|
|
|
(5,792
|
)
|
|
|
9.08
|
|
|
|
9.08
|
|
Outstanding at June 30, 2017
(2)
|
|
|
345,962
|
|
|
$
|
2.06-10.38
|
|
|
$
|
3.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The aggregate fair value of the restricted stock vested was $15,000 and $151,000 for the 2017 second quarter and six months, and was $6,000 and $694,000 for the comparable 2016 periods.
|
(2)
|
The aggregate fair value of the restricted stock was $827,000 as of June 30, 2017. The remaining vesting period was 2.41 years at June 30, 2017.
|
The following table presents the activity for the unvested options outstanding under the plans for the 2017 second quarter.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Options
|
|
|
Exercise Price
Per Share
|
|
|
Weighted Average Exercise
Price
|
|
Outstanding at December 31, 2016 and March 31, 2017
|
|
|
33,000
|
|
|
$
|
7.10-13.53
|
|
|
$
|
8.93
|
|
Granted
|
|
|
12,000
|
|
|
|
2.22
|
|
|
|
2.22
|
|
Cancelled
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested
|
|
|
(16,000
|
)
|
|
|
7.10-13.53
|
|
|
|
9.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at June 30, 2017
|
|
|
29,000
|
|
|
$
|
2.22-9.38
|
|
|
$
|
5.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The intrinsic value of the options vested was $0 for the 2017 second quarter and six months.
(7) SEGMENT REPORTING
The Company has
one business segment, its lending and investing operations. This segment originates and services medallion, secured commercial, and consumer loans, and invests in both marketable and nonmarketable securities.
(8) OTHER OPERATING EXPENSES
The major
components of other operating expenses were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
(Dollars in thousands)
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Travel, meals, and entertainment
|
|
$
|
220
|
|
|
$
|
246
|
|
|
$
|
415
|
|
|
$
|
472
|
|
Directors fees
|
|
|
114
|
|
|
|
109
|
|
|
|
129
|
|
|
|
148
|
|
Miscellaneous taxes
|
|
|
69
|
|
|
|
90
|
|
|
|
87
|
|
|
|
190
|
|
Computer expenses
|
|
|
65
|
|
|
|
67
|
|
|
|
125
|
|
|
|
111
|
|
Insurance
|
|
|
48
|
|
|
|
56
|
|
|
|
90
|
|
|
|
103
|
|
Office expense
|
|
|
52
|
|
|
|
40
|
|
|
|
109
|
|
|
|
89
|
|
Depreciation and amortization
|
|
|
24
|
|
|
|
28
|
|
|
|
49
|
|
|
|
57
|
|
Printing and stationery
|
|
|
23
|
|
|
|
10
|
|
|
|
49
|
|
|
|
34
|
|
Other expenses
|
|
|
92
|
|
|
|
41
|
|
|
|
158
|
|
|
|
192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other operating expenses
|
|
$
|
707
|
|
|
$
|
687
|
|
|
$
|
1,211
|
|
|
$
|
1,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 25 of 90
(9) SELECTED FINANCIAL RATIOS AND OTHER DATA
The following table provides selected financial ratios and other data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
(Dollars in thousands, except per share data)
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Net share data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value at the beginning of the period
|
|
$
|
11.91
|
|
|
$
|
11.46
|
|
|
$
|
11.91
|
|
|
$
|
11.42
|
|
Net investment income (loss)
|
|
|
(0.14
|
)
|
|
|
(0.06
|
)
|
|
|
(0.19
|
)
|
|
|
0.03
|
|
Income tax benefit
|
|
|
0.29
|
|
|
|
|
|
|
|
0.37
|
|
|
|
|
|
Net realized gains (losses) on investments
|
|
|
0.08
|
|
|
|
(0.09
|
)
|
|
|
0.12
|
|
|
|
(0.10
|
)
|
Net change in unrealized appreciation (depreciation) on investments
|
|
|
(0.43
|
)
|
|
|
0.34
|
|
|
|
(0.45
|
)
|
|
|
0.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets resulting from operations
|
|
|
(0.20
|
)
|
|
|
0.19
|
|
|
|
(0.15
|
)
|
|
|
0.47
|
|
Issuance of common stock
|
|
|
(0.06
|
)
|
|
|
0.01
|
|
|
|
(0.11
|
)
|
|
|
0.02
|
|
Repurchase of common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
|
|
|
(0.00
|
)
|
|
|
|
|
|
|
(0.00
|
)
|
Return of capital
|
|
|
|
|
|
|
(0.25
|
)
|
|
|
|
|
|
|
(0.50
|
)
|
Net realized gains on investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions
|
|
|
|
|
|
|
(0.25
|
)
|
|
|
|
|
|
|
(0.50
|
)
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total increase (decrease) in net asset value
|
|
|
(0.26
|
)
|
|
|
(0.05
|
)
|
|
|
(0.26
|
)
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value at the end of the period
(1)
|
|
$
|
11.65
|
|
|
$
|
11.41
|
|
|
$
|
11.65
|
|
|
$
|
11.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share market value at beginning of period
|
|
$
|
1.98
|
|
|
$
|
9.23
|
|
|
$
|
3.02
|
|
|
$
|
7.04
|
|
Per share market value at end of period
|
|
|
2.39
|
|
|
|
7.38
|
|
|
|
2.39
|
|
|
|
7.38
|
|
Total return
(2)
|
|
|
83
|
%
|
|
|
(71
|
%)
|
|
|
(42
|
%)
|
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/supplemental data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders equity (net assets)
|
|
$
|
282,739
|
|
|
$
|
277,651
|
|
|
$
|
282,739
|
|
|
$
|
277,651
|
|
Average net assets
|
|
$
|
287,153
|
|
|
$
|
277,618
|
|
|
$
|
286,123
|
|
|
$
|
276,403
|
|
Total expense ratio
(3)
(4)
|
|
|
0.10
|
%
|
|
|
10.52
|
%
|
|
|
2.58
|
%
|
|
|
10.29
|
%
|
Operating expenses to average net assets
(4)
|
|
|
5.14
|
|
|
|
5.64
|
|
|
|
4.16
|
|
|
|
6.03
|
|
Net investment income after income taxes to average net assets
(4)
|
|
|
(1.81
|
)
|
|
|
(2.03
|
)
|
|
|
(1.22
|
)
|
|
|
0.46
|
|
(1)
|
Includes $0 and $0 of undistributed net investment income per share and $0 and $0 of undistributed net realized gains per share as of June 30, 2017 and 2016.
|
(2)
|
Total return is calculated by dividing the change in market value of a share of common stock during the period, assuming the reinvestment of distributions on the payment date, by the per share market value at the
beginning of the period.
|
(3)
|
Total expense ratio represents total expenses (interest expense, operating expenses, and income taxes) divided by average net assets.
|
(4)
|
MSC has assumed certain of the Companys servicing obligations, and as a result, servicing fee income of $1,295 and $1,406, and operating expenses of $925 and $1,529, which formerly were the Companys were now
MSCs for the three months ended June 30, 2017 and 2016, and were $2,608 and $2,814 of servicing fee income, and $2,092 and $3,126 of operating expenses for the comparable six months. Excluding the impact of the MSC amounts, the total
expense ratio, operating expense ratio, and net investment income ratio would have been 1.66%, 6.44%, and (1.56)% in the 2017 quarter, 13%, 7.85%, and (2.19)% in the 2016 quarter, 4.25%, 5.64%, and (1.22%) in the 2017 six months, and 13%, 8.29%, and
0.23% in the 2016 six months.
|
(10) RECENTLY ISSUED ACCOUNTING STANDARDS
In January 2017, the FASB issued Accounting Standards Update (ASU)
2017-04.
Intangibles Goodwill
and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The objective of this update is to simplify the subsequent measurement of goodwill, by eliminating step 2 from the goodwill impairment test. The amendments in this update are
effective for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. The Company does not believe this update will have a material impact on its financial condition.
In August 2016, the FASB issued ASU
2016-15,
Statement of Cash Flows (Topic 230): Classification of
Certain Cash Receipts and Cash Payments. The update clarifies how entities should classify certain cash receipts and cash payments on the statement of cash
Page 26 of 90
flows with the objective of reducing the existing diversity in practice related to eight specific cash flow issues. The amendments in this update are effective for annual periods beginning after
December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU
2016-15
to have a material impact on its consolidated
financial statements.
In February 2016, the FASB issued ASU
2016-02,
Leases (Topic 842). ASU
2016-02
requires the recognition of lease assets and lease liabilities by lessees for leases classified as operating under current GAAP. ASU
2016-02
applies to all
entities and is effective for fiscal years beginning after December 15, 2018 for public entities and is effective for fiscal years beginning after December 15, 2019 for all other entities, with early adoption permitted. The Company is
assessing the impact the update will have on its financial condition and results of operations.
In January 2016, the FASB issued ASU
2016-01,
Financial Instruments - Overall
(Topic 825-10):
Recognition and Measurement of Financial Assets and Financial Liabilities. The main objective of this Update is
to enhance the reporting model for financial instruments and provide users of financial statements with more decision-useful information.
ASU 2016-01
requires equity investments to be measured at fair
value, simplifies the impairment assessment of equity investment without readily determinable fair value, eliminates the requirements to disclose the fair value of financial instruments measured at amortized cost, and requires public business
entities to use the exit price notion when measuring the fair value of financial instruments. The update, as amended, is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company
does not believe this update will have a material impact on its financial condition.
(11) RELATED PARTY TRANSACTIONS
Certain directors, officers, and shareholders of the Company are also directors and officers of its wholly-owned subsidiaries, MFC, MCI, FSVC,
and Medallion Bank, as well as of certain portfolio investment companies. Officer salaries are set by the Board of Directors of the Company.
Jeffrey Rudnick, the son of one of the Companys directors, is an officer of LAX Group, LLC (LAX), one of the Companys portfolio
companies. Mr. Rudnick receives a salary from LAX of $166,000 per year, and certain equity from LAX consisting of 10% ownership in LAX Class B stock, vesting at 3.34% per year; 5% of any new equity raised from outside investors at a
valuation of $1,500,000 or higher; and 10% of LAXs profits as a year end bonus. In addition, Mr. Rudnick provides consulting services to the Company directly for a monthly retainer of $4,200.
At June 30, 2017, December 31, 2016, and June 30, 2016, the Company and MSC serviced $318,961,000, $325,751,000, and
$372,896,000 of loans for Medallion Bank. Included in net investment income were amounts as described in the table below that were received from Medallion Bank for services rendered in originating and servicing loans, and also for reimbursement of
certain expenses incurred on their behalf.
The Company has assigned its servicing rights to the Medallion Bank portfolio to MSC, a
wholly-owned unconsolidated portfolio investment. The costs of servicing are allocated to MSC by the Company, and the servicing fee income is billed and collected from Medallion Bank by MSC. As a result, $1,295,000 and $2,608,000 of servicing fee
income was earned by MSC in the 2017 second quarter and six months, and $1,406,000 and $2,814,000 was earned in the comparable 2016 periods.
The following table summarizes the net revenues received from Medallion Bank.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
(Dollars in thousands)
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Reimbursement of operating expenses
|
|
$
|
227
|
|
|
$
|
337
|
|
|
$
|
454
|
|
|
$
|
497
|
|
Loan origination and servicing fees
|
|
|
3
|
|
|
|
45
|
|
|
|
3
|
|
|
|
89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income
|
|
$
|
230
|
|
|
$
|
382
|
|
|
$
|
457
|
|
|
$
|
586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company had a loan to Medallion Fine Art, Inc. in the amount of $1,278,000 and $3,159,000 as of
June 30, 2017 and December 31, 2016. The loan bears interest at a rate of 12%, all of which is paid in kind. During 2017 and 2016, the Company advanced $0 and $300,000, and was repaid $2,015,000 and $6,111,000 with respect to this
loan. Additionally, the Company recognized $44,000 and $126,000 of interest income in the three and six months ended June 30, 2017, and $151,000 and $406,000 in the comparable 2016 periods with respect to this loan.
Page 27 of 90
The Company and MCI had loans to RPAC Racing LLC, an affiliate of Medallion Motorsports LLC which
totaled $8,645,000 and $8,589,000 as of June 30, 2017 and December 31, 2016. The loans bear interest at rates of 9.9% and 2%, all of which is paid in kind. The Company and MCI recognized $118,000 and $208,000 of interest income for the
three and six months ended June 30, 2017, and $129,000 and $255,000 for the comparable 2016 periods with respect to these loans.
(12) FAIR VALUE
OF FINANCIAL INSTRUMENTS
FASB ASC Topic 825, Financial Instruments, requires disclosure of fair value information about certain
financial instruments, whether assets, liabilities, or
off-balance-sheet
commitments, if practicable. The following methods and assumptions were used to estimate the fair value of each class of financial
instrument. Fair value estimates that were derived from broker quotes cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument.
(a)
Investments
The Companys investments are recorded at the estimated fair value of such investments.
(b)
Floating
rate
borrowings
Due to the short-term nature of these instruments, the carrying amount
approximates fair value.
(c)
Commitments
to
extend
credit
The fair value of commitments to extend
credit is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and present creditworthiness of the counter parties. For fixed rate loan commitments, fair value also
includes a consideration of the difference between the current levels of interest rates and the committed rates. At June 30, 2017 and December 31, 2016, the estimated fair value of these
off-balance-sheet
instruments was not material.
(d)
Fixed
rate
borrowings
- The fair value of the debentures payable to the SBA is estimated based on current market interest rates for similar debt.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
|
December 31, 2016
|
|
(Dollars
in
thousands)
|
|
Carrying Amount
|
|
|
Fair Value
|
|
|
Carrying Amount
|
|
|
Fair Value
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
$
|
623,642
|
|
|
$
|
623,642
|
|
|
$
|
652,278
|
|
|
$
|
652,278
|
|
Cash
(1)
|
|
|
22,126
|
|
|
|
22,126
|
|
|
|
20,962
|
|
|
|
20,962
|
|
Accrued interest receivable
(2)
|
|
|
755
|
|
|
|
755
|
|
|
|
769
|
|
|
|
769
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds borrowed
(3)
|
|
|
333,116
|
|
|
|
330,762
|
|
|
|
349,073
|
|
|
|
340,290
|
|
Accrued interest payable
(2)
|
|
|
3,167
|
|
|
|
3,167
|
|
|
|
2,883
|
|
|
|
2,883
|
|
(1)
|
Categorized as level 1 within the fair value hierarchy.
|
(2)
|
Categorized as level 3 within the fair value hierarchy.
|
(3)
|
As of June 30, 2017 and December 31, 2016, publicly traded retail notes traded at a discount to par of $2,354 and $8,783.
|
(13) FAIR VALUE OF ASSETS AND LIABILITIES
The Company follows the provisions of FASB ASC 820, which defines fair value, establishes a framework for measuring fair value, establishes a
fair value hierarchy based on the quality of inputs used to measure fair value, and enhances disclosure requirements for fair value measurements. The Company accounts for substantially all of its financial instruments at fair value or considers fair
value in its measurement, in accordance with the accounting guidance for investment companies. See Note 2 sections Fair Value of Assets and Liabilities and Investment Valuation for a description of our valuation
methodology which is unchanged during 2017.
In accordance with FASB ASC 820, the Company has categorized its assets and liabilities
measured at fair value, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or
liabilities (level 1) and the lowest priority to unobservable inputs (level 3). Our assessment and classification of an investment within a level can change over time based upon maturity or liquidity of the investment and would be reflected at
the beginning of the quarter in which the change occurred.
As required by FASB ASC 820, when the inputs used to measure fair value fall
within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a level 3 fair value
measurement may include inputs that are observable (level 1 and 2) and unobservable (level 3). Therefore gains and losses for such assets and liabilities categorized within the level 3 table below may include changes in fair value
that are attributable to both observable inputs (level 1 and 2) and unobservable inputs (level 3).
Page 28 of 90
Assets and liabilities measured at fair value, recorded on the consolidated balance sheets, are
categorized based on the inputs to the valuation techniques as follows:
Level 1. Assets and liabilities whose values are based on
unadjusted quoted prices for identical assets or liabilities in an active market that the Company has the ability to access (examples include active exchange-traded equity securities, exchange-traded derivatives, most US Government and agency
securities, and certain other sovereign government obligations).
Level 2. Assets and liabilities whose values are based on quoted
prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following:
|
A)
|
Quoted prices for similar assets or liabilities in active markets (for example, restricted stock);
|
|
B)
|
Quoted price for identical or similar assets or liabilities in
non-active
markets (for example, corporate and municipal bonds, which trade infrequently);
|
|
C)
|
Pricing models whose inputs are observable for substantially the full term of the asset or liability (examples include most
over-the-counter
derivatives, including interest rate and currency swaps); and
|
|
D)
|
Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability (examples include certain
residential and commercial mortgage-related assets, including loans, securities, and derivatives).
|
Level 3. Assets and
liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect managements own assumptions about the assumptions a
market participant would use in pricing the assets or liability (examples include certain private equity investments, and certain residential and commercial mortgage-related assets, including loans, securities, and derivatives).
A review of fair value hierarchy classification is conducted on a quarterly basis. Changes in the observability of valuation inputs may result
in a reclassification for certain assets or liabilities. Reclassifications impacting level 3 of the fair value hierarchy are reported as transfers in/out of the level 3 category as of the beginning of the quarter in which the
reclassifications occur. The following paragraphs describe the sensitivity of the various level 3 valuations to the factors that are relevant in their valuation analysis.
Medallion loans are primarily collateral-based lending, whereby the collateral value exceeds the amount of the loan, providing sufficient
excess collateral to protect against losses to the Company. As a result, the initial valuation assessment is that as long as the loan is current and performing, its fair value approximates the par value of the loan. To the extent a loan becomes
nonperforming, the collateral value has been adequate to result in a complete recovery. In a case where the collateral value was inadequate, an unrealized loss would be recorded to reflect any shortfall. Collateral values for medallion loans are
typically obtained from transfer prices reported by the regulatory agency in a particular local market (e.g. New York City Taxi and Limousine Commission). Recently, as transfer price activity and the collateral value of medallion loans has declined,
and greater weight has been placed on the operating cash flows of the borrowers and the values of their personal guarantees in determining whether or not a valuation adjustment is necessary. Those portfolios had historically been at very low loan to
collateral value ratios, and as a result, historically have not been highly sensitive to changes in collateral values. Over the last few years, as medallion collateral values have declined, the impact on the Companys valuation analysis has
become more significant, which could result in a significantly lower fair value measurement.
The mezzanine and other secured commercial
portions of the commercial loan portfolio are a combination of cash flow and collateral based lending. The initial valuation assessment is that as long as the loan is current and performing, its fair value approximates the par value of the loan. If
a loan becomes nonperforming, an evaluation is performed which considers and analyzes a variety of factors which may include the financial condition and operating performance of the borrower, the adequacy of the collateral, individual credit risks,
historical loss experience, the relationships between current and projected market rates and portfolio rates of interest and maturities, as well as general market trends for businesses in the same industry. Since each individual nonperforming loan
has its own unique attributes, the factors analyzed, and their relative importance to each valuation analysis, differ between each asset, and may differ from period to period for a particular asset. The valuation is highly sensitive to changes in
the assumptions used. To the extent that any assumption in the analysis changes significantly from one period to another, that change could result in a significantly lower or higher fair market value measurement. For example, if a borrowers
valuation was determined primarily on the cash flow generated from their business, then if that cash flow deteriorated significantly from a prior period valuation, that could have a material impact on the valuation in the current period.
The investment in Medallion Bank is subject to a thorough valuation analysis as described previously, and on an annual basis, the Company also
receives an opinion regarding the valuation from an independent third party to assist the Board of Directors in its determination of the fair value. The Company determines whether any factors give rise to a valuation different than recorded book
value, including various regulatory restrictions that were established at Medallion Banks inception, by the FDIC and State of Utah, and also by additional regulatory restrictions, such as the prior moratorium imposed by the Dodd-Frank Act on
the acquisition of control of an industrial bank by a commercial firm (a company whose gross revenues are primarily derived from
non-financial
activities) which
Page 29 of 90
expired in July 2013, and the lack of any new charter issuances since the moratoriums expiration. Because of these restrictions and other factors, the Companys Board of Directors had
previously determined that Medallion Bank had little value beyond its recorded book value. As a result of this valuation process, the Company had previously used Medallion Banks actual results of operations as the best estimate of changes in
fair value, and recorded the results as a component of unrealized appreciation (depreciation) on investments In the second quarter of 2015, the Company first became aware of external interest in Medallion Bank and its portfolios assets at
values in excess of their book value. Expression of interest in Medallion Bank from both investment bankers and interested parties has continued through 2016 and 2017. The Company incorporated these new factors in the Medallion Banks fair
value analysis and the Board of Directors determined that Medallion Bank had a fair value in excess of book value. In addition, in the 2016 third quarter there was a court ruling involving a marketplace lender that the Company believes heightens the
interest of marketplace lenders to acquire or merge with Utah industrial banks. The Company also engaged a valuation specialist to assist the Board of Directors in their determination of Medallion Banks fair value, and this appreciation of
$15,500,000 was thereby recorded in 2015, $128,918,000 was recorded in 2016, and additional appreciation of $563,000 was recorded in 2017. See Note 3 for additional information about Medallion Bank.
Investments in controlled subsidiaries, other than Medallion Bank, equity investments, and investments other than securities are valued
similarly, while also considering available current market data, including relevant and applicable market trading and transaction comparables, the nature and realizable value of any collateral, applicable interest rates and market yields, the
portfolio companys ability to make payments, its earnings and cash flows, the markets in which the portfolio company does business, and borrower financial analysis, among other factors. As a result of this valuation process, the Company uses
the actual results of operations of the controlled subsidiaries as the best estimate of changes in fair value, in most cases, and records the results as a component of unrealized appreciation (depreciation) on investments. For the balance of
controlled subsidiary investments, equity investments, and investments other than securities positions, the result of the analysis results in changes to the value of the position if there is clear evidence that its value has either decreased
or increased in light of the specific facts considered for each investment. The valuation is highly sensitive to changes in the assumptions used. To the extent that any assumption in the analysis changes significantly from one period to another,
that change could result in a significantly lower or higher fair market value measurement. For example, if an investees valuation was determined primarily on the cash flow generated from their business, then if that cash flow deteriorated
significantly from a prior period valuation, that could have a material impact on the valuation in the current period.
The following
tables present the Companys fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 and December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars
in
thousands)
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
2017 Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medallion loans
|
|
$
|
|
|
|
$
|
|
|
|
$
|
233,415
|
|
|
$
|
233,415
|
|
Commercial loans
|
|
|
|
|
|
|
|
|
|
|
78,092
|
|
|
|
78,092
|
|
Investment in Medallion Bank and other controlled subsidiaries
|
|
|
|
|
|
|
|
|
|
|
301,819
|
|
|
|
301,819
|
|
Equity investments
|
|
|
|
|
|
|
|
|
|
|
10,316
|
|
|
|
10,316
|
|
Investment other than securities
|
|
|
|
|
|
|
|
|
|
|
9,510
|
|
|
|
9,510
|
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
354
|
|
|
|
354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medallion loans
|
|
$
|
|
|
|
$
|
|
|
|
$
|
266,816
|
|
|
$
|
266,816
|
|
Commercial loans
|
|
|
|
|
|
|
|
|
|
|
83,634
|
|
|
|
83,634
|
|
Investment in Medallion Bank and other controlled subsidiaries
|
|
|
|
|
|
|
|
|
|
|
293,360
|
|
|
|
293,360
|
|
Equity investments
|
|
|
61
|
|
|
|
|
|
|
|
8,407
|
|
|
|
8,468
|
|
Investments other than securities
|
|
|
|
|
|
|
|
|
|
|
9,510
|
|
|
|
9,510
|
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
354
|
|
|
|
354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in level 3 investments in Medallion Bank and other controlled subsidiaries is primarily the
investment in Medallion Bank, as well as other consolidated subsidiaries such as MSC, and other investments detailed in the consolidated summary schedule of investments following these footnotes. Included in level 3 equity investments are
unregistered shares of common stock in a publicly-held company, as well as certain private equity positions in
non-marketable
securities.
Page 30 of 90
The following tables provide a summary of changes in fair value of the Companys level 3
assets and liabilities for the quarters and six months ended June 30, 2017 and 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars
in
thousands)
|
|
Medallion
Loans
|
|
|
Commercial
Loans
|
|
|
Investments in
Medallion
Bank & Other
Controlled
Subs
|
|
|
Equity
Investments
|
|
|
Investments
Other Than
Securities
|
|
|
Other
Assets
|
|
March 31, 2017
|
|
$
|
250,976
|
|
|
$
|
73,748
|
|
|
$
|
300,886
|
|
|
$
|
9,640
|
|
|
$
|
9,510
|
|
|
$
|
354
|
|
Gains (losses) included in earnings
|
|
|
(12,452
|
)
|
|
|
(109
|
)
|
|
|
930
|
|
|
|
2,894
|
|
|
|
|
|
|
|
|
|
Purchases, investments, and issuances
|
|
|
320
|
|
|
|
7,720
|
|
|
|
402
|
|
|
|
856
|
|
|
|
|
|
|
|
|
|
Sales, maturities, settlements, and distributions
|
|
|
(5,429
|
)
|
|
|
(3,267
|
)
|
|
|
(399
|
)
|
|
|
(3,074
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
$
|
233,415
|
|
|
$
|
78,092
|
|
|
$
|
301,819
|
|
|
$
|
10,316
|
|
|
$
|
9,510
|
|
|
$
|
354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts related to held
assets
(1)
|
|
($
|
12,426
|
)
|
|
($
|
118
|
)
|
|
$
|
930
|
|
|
$
|
120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Total realized and unrealized gains (losses) included in income for the period which relate to assets held as of June 30, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars
in
thousands)
|
|
Medallion
Loans
|
|
|
Commercial
Loans
|
|
|
Investments in
Medallion
Bank & Other
Controlled
Subs
|
|
|
Equity
Investments
|
|
|
Investments
Other Than
Securities
|
|
|
Other
Assets
|
|
December 31, 2016
|
|
$
|
266,816
|
|
|
$
|
83,634
|
|
|
$
|
293,360
|
|
|
$
|
8,407
|
|
|
$
|
9,510
|
|
|
$
|
354
|
|
Gains (losses) included in earnings
|
|
|
(21,147
|
)
|
|
|
(403
|
)
|
|
|
9,054
|
|
|
|
4,155
|
|
|
|
|
|
|
|
|
|
Purchases, investments, and issuances
|
|
|
320
|
|
|
|
7,816
|
|
|
|
402
|
|
|
|
856
|
|
|
|
|
|
|
|
|
|
Sales, maturities, settlements, and distributions
|
|
|
(12,574
|
)
|
|
|
(12,955
|
)
|
|
|
(997
|
)
|
|
|
(3,102
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
$
|
233,415
|
|
|
$
|
78,092
|
|
|
$
|
301,819
|
|
|
$
|
10,316
|
|
|
$
|
9,510
|
|
|
$
|
354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts related to held
assets
(1)
|
|
($
|
21,095
|
)
|
|
($
|
450
|
)
|
|
$
|
9,054
|
|
|
$
|
1,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Total realized and unrealized gains (losses) included in income for the period which relate to assets held as of June 30, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
Medallion
Loans
|
|
|
Commercial
Loans
|
|
|
Investments in
Medallion
Bank & Other
Controlled
Subs
|
|
|
Equity
Investments
|
|
|
Investments
Other Than
Securities
|
|
|
Other
Assets
|
|
March 31, 2016
|
|
$
|
303,352
|
|
|
$
|
82,719
|
|
|
$
|
168,227
|
|
|
$
|
7,090
|
|
|
$
|
36,297
|
|
|
$
|
354
|
|
Gains (losses) included in earnings
|
|
|
(2,811
|
)
|
|
|
343
|
|
|
|
9,840
|
|
|
|
1,689
|
|
|
|
(3,170
|
)
|
|
|
|
|
Purchases, investments, and issuances
|
|
|
10,413
|
|
|
|
8,957
|
|
|
|
3,745
|
|
|
|
850
|
|
|
|
|
|
|
|
|
|
Sales, maturities, settlements, and distributions
|
|
|
(13,587
|
)
|
|
|
(4,198
|
)
|
|
|
(858
|
)
|
|
|
(844
|
)
|
|
|
|
|
|
|
|
|
Transfers in (out)
(1)
|
|
|
|
|
|
|
224
|
|
|
|
|
|
|
|
(224
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2016
|
|
$
|
297,367
|
|
|
$
|
88,045
|
|
|
$
|
180,954
|
|
|
$
|
8,561
|
|
|
$
|
33,127
|
|
|
$
|
354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts related to held
assets
(2)
|
|
($
|
2,759
|
)
|
|
($
|
245
|
)
|
|
$
|
9,840
|
|
|
$
|
1,689
|
|
|
($
|
3,170
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
During 2016, the equity interest in WRWP LLC was exchanged for a loan and has resulted in the transfer from equity investments to commercial loans.
|
(2)
|
Total realized and unrealized gains (losses) included in income for the period which relate to assets held as of June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
Medallion
Loans
|
|
|
Commercial
Loans
|
|
|
Investments in
Medallion
Bank & Other
Controlled
Subs
|
|
|
Equity
Investments
|
|
|
Investments
Other Than
Securities
|
|
|
Other
Assets
|
|
December 31, 2015
|
|
$
|
308,408
|
|
|
$
|
81,895
|
|
|
$
|
159,913
|
|
|
$
|
6,797
|
|
|
$
|
37,882
|
|
|
$
|
354
|
|
Gains (losses) included in earnings
|
|
|
(5,230
|
)
|
|
|
539
|
|
|
|
21,308
|
|
|
|
1,732
|
|
|
|
(4,755
|
)
|
|
|
|
|
Purchases, investments, and issuances
|
|
|
12,443
|
|
|
|
16,016
|
|
|
|
3,746
|
|
|
|
1,150
|
|
|
|
|
|
|
|
|
|
Page 31 of 90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
Medallion
Loans
|
|
|
Commercial
Loans
|
|
|
Investments in
Medallion
Bank & Other
Controlled
Subs
|
|
|
Equity
Investments
|
|
|
Investments
Other Than
Securities
|
|
|
Other
Assets
|
|
Sales, maturities, settlements, and distributions
|
|
|
(18,254
|
)
|
|
|
(10,629
|
)
|
|
|
(4,013
|
)
|
|
|
(894
|
)
|
|
|
|
|
|
|
|
|
Transfers in (out)
(1)
|
|
|
|
|
|
|
224
|
|
|
|
|
|
|
|
(224
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2016
|
|
$
|
297,367
|
|
|
$
|
88,045
|
|
|
$
|
180,954
|
|
|
$
|
8,561
|
|
|
$
|
33,127
|
|
|
$
|
354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts related to held
assets
(2)
|
|
($
|
5,118
|
)
|
|
($
|
418
|
)
|
|
$
|
21,308
|
|
|
$
|
1,732
|
|
|
($
|
4,755
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
During 2016, the equity interest in WRWP LLC was exchanged for a loan and has resulted in the transfer from equity investments to commercial loan.
|
(2)
|
Total realized and unrealized gains (losses) included in income for the period which relate to assets held as of June 30, 2016.
|
Significant Unobservable Inputs
ASC
Topic 820 requires disclosure of quantitative information about the significant unobservable inputs used in the valuation of assets and liabilities classified as Level 3 within the fair value hierarchy. The tables below are not intended to be
all-inclusive,
but rather to provide information on significant unobservable inputs and valuation techniques used by the Company.
The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of assets and liabilities
as of June 30, 2017 and December 31, 2016 were as follows.
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars
in
thousands)
|
|
Fair Value
at 6/30/17
|
|
|
Valuation Techniques
|
|
Unobservable Inputs
|
|
Range
(Weighted Average)
|
|
Medallion Loans
|
|
$
|
233,415
|
|
|
Precedent market transactions
|
|
Adequacy of collateral (loan to value)
|
|
|
2% - 376% (140
|
%)
|
Commercial Loans Mezzanine and Other
|
|
|
78,092
|
|
|
Borrower financial analysis
|
|
Financial condition and operating performance of
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
the borrower
Portfolio yields
|
|
|
3% - 19.00% (13.18
|
%)
|
Investment in Medallion Bank
|
|
|
286,014
|
|
|
Publicly traded comparables
|
|
Price / Tangible Book Value multiples
|
|
|
1.4x to 1.6x
|
|
|
|
|
|
|
|
|
|
Price / Earnings multiples
|
|
|
9.0x to 12.0x
|
|
|
|
|
|
|
|
|
|
Weight of the valuation method
|
|
|
40%
|
|
|
|
|
|
|
|
Precedent M&A transactions
|
|
Price / Tangible Book Value multiples
|
|
|
1.5x to 1.7x
|
|
|
|
|
|
|
|
|
|
Price / Earnings multiples
|
|
|
11.5x to 13.5x
|
|
|
|
|
|
|
|
|
|
Weight of the valuation method
|
|
|
40%
|
|
|
|
|
|
|
|
Discounted cash flow
|
|
Risk-free rate
|
|
|
2.30%
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
|
14.31%
|
|
|
|
|
|
|
|
|
|
Terminal value
|
|
$
|
759,400
|
|
|
|
|
|
|
|
|
|
Weight of the valuation method
|
|
|
20%
|
|
Investment in Other Controlled Subsidiaries
|
|
|
8,017
|
|
|
Investee financial analysis
|
|
Financial condition and operating performance
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Implied value of individual franchises
|
|
$
|
30,000
|
|
|
|
|
|
|
|
|
|
Equity value
|
|
$
|
3,000 - $5,000
|
|
|
|
|
4,455
|
|
|
Investee book value adjusted for asset appreciation
|
|
Financial condition and operating performance of the investee
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Third party valuation/ offer to purchase asset
|
|
|
N/A
|
|
Page 32 of 90
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars
in
thousands)
|
|
Fair Value
at 6/30/17
|
|
|
Valuation Techniques
|
|
Unobservable Inputs
|
|
Range
(Weighted Average)
|
|
|
|
|
3,099
|
|
|
Investee book value adjusted for market appreciation
|
|
Financial condition and operating performance of the investee
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Third party offer to purchase investment
|
|
|
N/A
|
|
|
|
|
234
|
|
|
Investee book value and equity pickup
|
|
Financial condition and
operating
performance of the investee
|
|
|
N/A
|
|
Equity Investments
|
|
|
5,786
|
|
|
Investee financial analysis
|
|
Financial condition and operating performance of the borrower
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Collateral support
|
|
|
N/A
|
|
|
|
|
1,822
|
|
|
Investee financial analysis
|
|
Equity value
|
|
$
|
3,000 - $5,000
|
|
|
|
|
|
|
|
|
|
Preferred equity yield
|
|
|
12
|
%
|
|
|
|
1,395
|
|
|
Precedent Market transaction
|
|
Offering price
|
|
$
|
8.37 / share
|
|
|
|
|
995
|
|
|
Investee book value
|
|
Valuation indicated by investee filings
|
|
|
N/A
|
|
|
|
|
318
|
|
|
Market comparables
|
|
Discount for lack of marketability
|
|
|
10% (10
|
%)
|
Investments Other Than Securities
|
|
|
9,510
|
|
|
Precedent market transaction
|
|
Transfer prices of Chicago medallions
|
|
|
N/A
|
|
|
|
|
|
|
|
Cash flow analysis
|
|
Discount rate in cash flow analysis
|
|
|
6
|
%
|
Other Assets
|
|
|
354
|
|
|
Borrower collateral analysis
|
|
Adequacy of collateral (loan to value)
|
|
|
0
|
%
|
Page 33 of 90
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars
in
thousands)
|
|
Fair Value
at 12/31/16
|
|
|
Valuation Techniques
|
|
Unobservable Inputs
|
|
Range
(Weighted Average)
|
|
Medallion Loans
|
|
$
|
266,816
|
|
|
Precedent market transactions
|
|
Adequacy of collateral (loan to value)
|
|
|
0% - 379% (135
|
%)
|
Commercial Loans Mezzanine and Other
|
|
|
83,634
|
|
|
Borrower financial analysis
|
|
Financial condition and operating performance of the borrower
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Portfolio yields
|
|
|
3% - 19.00% (13.05
|
%)
|
Investment in Medallion Bank
|
|
|
280,589
|
|
|
Publicly traded comparables
|
|
Price / Tangible Book Value multiples
|
|
|
1.4x to 1.6x
|
|
|
|
|
|
|
|
|
|
Price / Earnings multiples
|
|
|
10.5x to 12.5x
|
|
|
|
|
|
|
|
|
|
Weight of the valuation method
|
|
|
40
|
%
|
|
|
|
|
|
|
Precedent M&A transactions
|
|
Price / Tangible Book Value multiples
|
|
|
1.5x to 1.7x
|
|
|
|
|
|
|
|
|
|
Price / Earnings multiples
|
|
|
12.0x to 14.0x
|
|
|
|
|
|
|
|
|
|
Weight of the valuation method
|
|
|
40
|
%
|
|
|
|
|
|
|
Discounted cash flow
|
|
Risk-free rate
|
|
|
2.40
|
%
|
|
|
|
|
|
|
|
|
Discount rate
|
|
|
11.74
|
%
|
|
|
|
|
|
|
|
|
Terminal value
|
|
$
|
468,700
|
|
|
|
|
|
|
|
|
|
Weight of the valuation method
|
|
|
20
|
%
|
Investment in Other Controlled Subsidiaries
|
|
|
6,980
|
|
|
Investee financial analysis
|
|
Financial condition and operating performance
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Implied value of individual franchises
|
|
$
|
30,000
|
|
|
|
|
|
|
|
|
|
Equity value
|
|
$
|
3,000 - $5,000
|
|
|
|
|
3,647
|
|
|
Investee book value adjusted for asset appreciation
|
|
Financial condition and operating performance of the investee
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Third party valuation/ offer to purchase asset
|
|
|
N/A
|
|
|
|
|
1,690
|
|
|
Investee book value adjusted for market appreciation
|
|
Financial condition and operating performance of the investee
|
|
|
N/A
|
|
|
|
|
454
|
|
|
Investee book value and equity pickup
|
|
Financial condition and
operating
performance of the investee
|
|
|
N/A
|
|
Equity Investments
|
|
|
5,480
|
|
|
Investee financial analysis
|
|
Financial condition and operating performance of the borrower
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Collateral support
|
|
|
N/A
|
|
|
|
|
1,351
|
|
|
Investee financial analysis
|
|
Equity value
|
|
$
|
3,000 - $5,000
|
|
|
|
|
|
|
|
|
|
Preferred equity yield
|
|
|
12
|
%
|
|
|
|
1,101
|
|
|
Investee book value
|
|
Valuation indicated by investee filings
|
|
|
N/A
|
|
|
|
|
475
|
|
|
Market comparables
|
|
Discount for lack of marketability
|
|
|
10% (10
|
%)
|
Investments Other Than Securities
|
|
|
9,510
|
|
|
Precedent market transaction
|
|
Transfer prices of Chicago medallions
|
|
|
N/A
|
|
|
|
|
|
|
|
Cash flow analysis
|
|
Discount rate in cash flow analysis
|
|
|
6
|
%
|
Other Assets
|
|
|
354
|
|
|
Borrower collateral analysis
|
|
Adequacy of collateral (loan to value)
|
|
|
0
|
%
|
Page 34 of 90
(14) INVESTMENTS OTHER THAN SECURITIES
The following table presents the Companys investments other than securities as of June 30, 2017 and December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Type
(Dollars
in
thousands)
|
|
Number of
Investments
|
|
|
Investment
Cost
|
|
|
Value as of
6/30/17
|
|
|
Value as of
12/31/16
|
|
City of Chicago Taxicab Medallions
|
|
|
154
|
(1)
|
|
$
|
8,411
|
|
|
$
|
9,240
|
(2)
|
|
$
|
9,240
|
(2)
|
City of Chicago Taxicab Medallions (handicap accessible)
|
|
|
5
|
(1)
|
|
|
278
|
|
|
|
270
|
(3)
|
|
|
270
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments Other Than Securities
|
|
|
|
|
|
$
|
8,689
|
|
|
$
|
9,510
|
|
|
$
|
9,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Investment is not readily marketable, is considered income producing, is not subject to option, and is a
non-qualifying
asset under the 1940 Act.
|
(2)
|
Gross unrealized appreciation, gross unrealized depreciation, and net unrealized appreciation for Federal income tax purposes was $7,568, $0, and $7,568 as of June 30, 2017 and $7,287, $0, and $7,287 as of
December 31, 2016. The aggregate cost for Federal income tax purposes was $1,672 at June 30, 2017 and $1,953 at December 31, 2016.
|
(3)
|
Gross unrealized appreciation, gross unrealized depreciation, and net unrealized appreciation for Federal income tax purposes was $222, $0, and $222 as of June 30, 2017 and $212, $0, and $212 as of
December 31, 2016. The aggregate cost for Federal income tax purposes was $48 at June 30, 2017 and $58 at December 31, 2016.
|
(15) SUBSEQUENT EVENTS
The maturity date
of the DZ loan was extended in July 2017 until March 2018.
We have evaluated subsequent events that have occurred through the date of
financial statement issuance.
Page 35 of 90
Medallion Financial Corp.
Consolidated Summary Schedule of Investments
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
Obligor
Name/Interest Rate
Range
|
|
Security
Type (all
restricted
unless
otherwise
noted)
|
|
|
Acquisition
Date
|
|
|
Maturity
Date
|
|
|
No. of
Invest.
|
|
|
% of
Net
Assets
|
|
|
Interest
Rate
(1)
|
|
|
Original
Cost of 2017
Acquisitions
(5)
|
|
|
Principal
Outstanding
|
|
|
Cost
(4)
|
|
|
Fair
Value
|
|
Medallion Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
367
|
|
|
|
60
|
%
|
|
|
4.19
|
%
|
|
$
|
5,089
|
|
|
$
|
193,017
|
|
|
$
|
191,922
|
|
|
$
|
169,636
|
|
|
|
Sean Cab Corp ##
|
|
|
Term Loan
|
|
|
|
12/09/11
|
|
|
|
11/23/18
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
4.63
|
%
|
|
|
|
|
|
$
|
3,215
|
|
|
$
|
3,215
|
|
|
$
|
3,215
|
|
|
|
Real Cab Corp
|
|
|
Term Loan
|
|
|
|
08/19/14
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.31
|
%
|
|
|
|
|
|
$
|
49
|
|
|
$
|
49
|
|
|
$
|
49
|
|
|
|
Real Cab Corp ##
|
|
|
Term Loan
|
|
|
|
07/20/07
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
2.81
|
%
|
|
|
|
|
|
$
|
350
|
|
|
$
|
350
|
|
|
$
|
350
|
|
|
|
Real Cab Corp ##
|
|
|
Term Loan
|
|
|
|
07/20/07
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
2.81
|
%
|
|
|
|
|
|
$
|
2,545
|
|
|
$
|
2,545
|
|
|
$
|
2,545
|
|
|
|
Slo Cab Corp ##
|
|
|
Term Loan
|
|
|
|
08/19/14
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.31
|
%
|
|
|
|
|
|
$
|
29
|
|
|
$
|
29
|
|
|
$
|
29
|
|
|
|
Slo Cab Corp ##
|
|
|
Term Loan
|
|
|
|
07/20/07
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
2.81
|
%
|
|
|
|
|
|
$
|
210
|
|
|
$
|
210
|
|
|
$
|
210
|
|
|
|
Slo Cab Corp ##
|
|
|
Term Loan
|
|
|
|
07/20/07
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
2.81
|
%
|
|
|
|
|
|
$
|
1,527
|
|
|
$
|
1,527
|
|
|
$
|
1,527
|
|
|
|
Whispers Taxi Inc ## &
|
|
|
Term Loan
|
|
|
|
05/28/13
|
|
|
|
05/28/16
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.35
|
%
|
|
|
|
|
|
$
|
2,026
|
|
|
$
|
1,995
|
|
|
$
|
1,235
|
|
|
|
Junaid Trans Corp ## {Annually-Prime plus 1.00%}
|
|
|
Term Loan
|
|
|
|
04/30/13
|
|
|
|
04/29/19
|
|
|
|
1
|
|
|
|
*
|
|
|
|
5.00
|
%
|
|
|
|
|
|
$
|
1,395
|
|
|
$
|
1,395
|
|
|
$
|
1,395
|
|
|
|
Kby Taxi Inc ##
|
|
|
Term Loan
|
|
|
|
04/11/14
|
|
|
|
07/31/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.25
|
%
|
|
|
|
|
|
$
|
1,349
|
|
|
$
|
1,349
|
|
|
$
|
1,349
|
|
|
|
Anniversary Taxi Corp ##
|
|
|
Term Loan
|
|
|
|
04/11/14
|
|
|
|
07/31/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.25
|
%
|
|
|
|
|
|
$
|
1,349
|
|
|
$
|
1,349
|
|
|
$
|
1,348
|
|
|
|
Apple Cab Corp ##
|
|
|
Term Loan
|
|
|
|
04/11/14
|
|
|
|
07/31/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.25
|
%
|
|
|
|
|
|
$
|
1,349
|
|
|
$
|
1,349
|
|
|
$
|
1,348
|
|
|
|
Hj Taxi Corp ##
|
|
|
Term Loan
|
|
|
|
04/11/14
|
|
|
|
07/31/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.25
|
%
|
|
|
|
|
|
$
|
1,349
|
|
|
$
|
1,349
|
|
|
$
|
1,348
|
|
|
|
Avi Taxi Corporation ##
|
|
|
Term Loan
|
|
|
|
04/11/14
|
|
|
|
07/31/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.25
|
%
|
|
|
|
|
|
$
|
1,349
|
|
|
$
|
1,349
|
|
|
$
|
1,348
|
|
|
|
Penegali Taxi LLC ##
|
|
|
Term Loan
|
|
|
|
12/11/14
|
|
|
|
12/10/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.75
|
%
|
|
|
|
|
|
$
|
1,313
|
|
|
$
|
1,313
|
|
|
$
|
1,313
|
|
|
|
Sonu-Seema Corp ##
|
|
|
Term Loan
|
|
|
|
12/07/12
|
|
|
|
12/20/18
|
|
|
|
1
|
|
|
|
*
|
|
|
|
2.50
|
%
|
|
|
|
|
|
$
|
1,295
|
|
|
$
|
1,295
|
|
|
$
|
1,295
|
|
|
|
Uddin Taxi Corp ##
|
|
|
Term Loan
|
|
|
|
11/05/15
|
|
|
|
11/05/18
|
|
|
|
1
|
|
|
|
*
|
|
|
|
4.75
|
%
|
|
|
|
|
|
$
|
1,290
|
|
|
$
|
1,290
|
|
|
$
|
1,290
|
|
|
|
Bunty & Jyoti Inc ##
|
|
|
Term Loan
|
|
|
|
03/13/13
|
|
|
|
12/13/18
|
|
|
|
1
|
|
|
|
*
|
|
|
|
2.50
|
%
|
|
|
|
|
|
$
|
1,279
|
|
|
$
|
1,279
|
|
|
$
|
1,279
|
|
|
|
S600 Service Co Inc ## {Annually-Prime plus .25%}
|
|
|
Term Loan
|
|
|
|
05/01/16
|
|
|
|
05/01/21
|
|
|
|
1
|
|
|
|
*
|
|
|
|
4.25
|
%
|
|
|
|
|
|
$
|
1,235
|
|
|
$
|
1,235
|
|
|
$
|
1,237
|
|
|
|
Perem Hacking Corp ## {Annually-Prime plus .25%}
|
|
|
Term Loan
|
|
|
|
05/01/16
|
|
|
|
05/01/21
|
|
|
|
1
|
|
|
|
*
|
|
|
|
4.25
|
%
|
|
|
|
|
|
$
|
1,235
|
|
|
$
|
1,235
|
|
|
$
|
1,237
|
|
|
|
Ela Papou LLC ##
|
|
|
Term Loan
|
|
|
|
06/27/14
|
|
|
|
09/15/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
4.00
|
%
|
|
|
|
|
|
$
|
1,219
|
|
|
$
|
1,219
|
|
|
$
|
1,219
|
|
|
|
Cfn Cab Corp ##
|
|
|
Term Loan
|
|
|
|
02/26/14
|
|
|
|
02/26/18
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.75
|
%
|
|
|
|
|
|
$
|
1,184
|
|
|
$
|
1,184
|
|
|
$
|
1,184
|
|
|
|
Yosi Transit Inc ##
|
|
|
Term Loan
|
|
|
|
08/19/14
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.31
|
%
|
|
|
|
|
|
$
|
20
|
|
|
$
|
20
|
|
|
$
|
20
|
|
|
|
Yosi Transit Inc ##
|
|
|
Term Loan
|
|
|
|
07/20/07
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
2.81
|
%
|
|
|
|
|
|
$
|
140
|
|
|
$
|
140
|
|
|
$
|
140
|
|
|
|
Yosi Transit Inc ##
|
|
|
Term Loan
|
|
|
|
07/20/07
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
2.81
|
%
|
|
|
|
|
|
$
|
1,018
|
|
|
$
|
1,018
|
|
|
$
|
1,018
|
|
Various New York && ##
|
|
0.00% to 18.38% (interest rate includes deferred interest 1.00% to 9.19%)
|
|
|
Term Loan
|
|
|
|
03/23/01
to
06/07/17
|
|
|
|
05/28/16
to
12/21/26
|
|
|
|
342
|
|
|
|
50
|
%
|
|
|
4.30
|
%
|
|
$
|
5,089
|
|
|
$
|
163,698
|
|
|
$
|
162,634
|
|
|
$
|
141,108
|
|
|
|
(deferred interest of $759 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chicago
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
110
|
|
|
|
7
|
%
|
|
|
4.81
|
%
|
|
|
|
|
|
$
|
36,716
|
|
|
$
|
36,158
|
|
|
$
|
20,061
|
|
|
|
Sweetgrass Peach &Chadwick Cap ## (interest rate includes deferred interest of 1.00%)
|
|
|
Term Loan
|
|
|
|
08/28/12
|
|
|
|
02/24/18
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
6.00
|
%
|
|
|
|
|
|
$
|
1,419
|
|
|
$
|
1,419
|
|
|
$
|
1,419
|
|
Various Chicago && ##
|
|
0.00% to 8.00% (interest rate includes deferred interest .75% to 5.25%)
|
|
|
Term Loan
|
|
|
|
01/22/10
to
08/08/16
|
|
|
|
03/12/16
to
12/22/20
|
|
|
|
109
|
|
|
|
7
|
%
|
|
|
4.76
|
%
|
|
|
|
|
|
$
|
35,297
|
|
|
$
|
34,739
|
|
|
$
|
18,642
|
|
|
|
(deferred interest of $138 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newark && ##
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
110
|
|
|
|
8
|
%
|
|
|
5.31
|
%
|
|
$
|
352
|
|
|
$
|
22,834
|
|
|
$
|
22,792
|
|
|
$
|
22,386
|
|
|
|
Viergella Inc ##
|
|
|
Term Loan
|
|
|
|
02/20/14
|
|
|
|
02/20/18
|
|
|
|
1
|
|
|
|
*
|
|
|
|
4.75
|
%
|
|
|
|
|
|
$
|
1,295
|
|
|
$
|
1,295
|
|
|
$
|
1,295
|
|
Various Newark && ##
|
|
4.50% to 7.00% (interest rate includes deferred interest 1.50%)
|
|
|
Term Loan
|
|
|
|
04/09/10
to
05/18/17
|
|
|
|
06/11/17
to
05/14/25
|
|
|
|
109
|
|
|
|
7
|
%
|
|
|
5.34
|
%
|
|
$
|
352
|
|
|
$
|
21,539
|
|
|
$
|
21,497
|
|
|
$
|
21,091
|
|
|
|
(deferred interest of $1 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boston && ##
|
|
0.00% to 6.15%
|
|
|
Term Loan
|
|
|
|
06/12/07
to
06/02/17
|
|
|
|
12/07/15
to
11/06/25
|
|
|
|
61
|
|
|
|
7
|
%
|
|
|
4.47
|
%
|
|
$
|
316
|
|
|
$
|
25,706
|
|
|
$
|
25,442
|
|
|
$
|
19,290
|
|
Cambridge && ##
|
|
3.75% to 5.50%
|
|
|
Term Loan
|
|
|
|
05/06/11
to
12/15/15
|
|
|
|
03/29/16
to
01/26/20
|
|
|
|
13
|
|
|
|
1
|
%
|
|
|
4.47
|
%
|
|
|
|
|
|
$
|
4,437
|
|
|
$
|
4,392
|
|
|
$
|
1,486
|
|
Various Other && ##
|
|
4.75% to 9.00%
|
|
|
Term Loan
|
|
|
|
04/28/08
to
07/30/15
|
|
|
|
01/03/17
to
09/01/23
|
|
|
|
9
|
|
|
|
0
|
%
|
|
|
7.25
|
%
|
|
|
|
|
|
$
|
968
|
|
|
$
|
950
|
|
|
$
|
556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total medallion loans ($221,645 pledged as collateral under borrowing
arrangements)
|
|
|
|
|
|
|
|
|
|
|
|
670
|
|
|
|
83
|
%
|
|
|
4.40
|
%
|
|
$
|
5,757
|
|
|
$
|
283,678
|
|
|
$
|
281,656
|
|
|
$
|
233,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured mezzanine
(21% Minnesota, 15% North Carolina, 10% Oklahoma, 9% Ohio,
8% Texas, 7% Delaware 7% California, 5% Kansas, 5% North Dakota, 4% Pennsylvania, 4% Colorado, and 5% all other states)
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing (41% of the total)
|
|
Innovative Metal, Inc. dba Southwest Data Products (interest rate includes PIK interest of 2%)
|
|
|
|
|
|
|
04/06/17
|
|
|
|
04/06/24
|
|
|
|
1
|
|
|
|
2
|
%
|
|
|
14.00
|
%
|
|
$
|
5,000
|
|
|
$
|
5,000
|
|
|
$
|
5,000
|
|
|
$
|
4,979
|
|
|
|
Stride Tool Holdings, LLC (interest rate includes PIK interest of 3%)
|
|
|
Term Loan
|
|
|
|
04/05/16
|
|
|
|
04/05/21
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
15.00
|
%
|
|
|
|
|
|
$
|
4,153
|
|
|
$
|
4,153
|
|
|
$
|
4,109
|
|
|
|
(capitalized interest of $153 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AA Plush Holdings, LLC (interest rate includes PIK interest of 6%)
|
|
|
Term Loan
|
|
|
|
08/15/14
|
|
|
|
08/15/19
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
14.00
|
%
|
|
|
|
|
|
$
|
3,294
|
|
|
$
|
3,294
|
|
|
$
|
3,289
|
|
|
|
(capitalized interest of $294 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 36 of 90
Medallion Financial Corp.
Consolidated Summary Schedule of Investments
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
|
|
Obligor
Name/Interest Rate
Range
|
|
Security
Type (all
restricted
unless
otherwise
noted)
|
|
|
Acquisition
Date
|
|
|
Maturity
Date
|
|
|
No. of
Invest.
|
|
|
% of
Net
Assets
|
|
|
Interest
Rate
(1)
|
|
|
Original
Cost of 2017
Acquisitions
(5)
|
|
|
Principal
Outstanding
|
|
|
Cost
(4)
|
|
|
Fair
Value
|
|
|
|
|
|
Liberty Paper Products Acquisition LLC (interest rate includes PIK interest of 2%)
|
|
|
Term Loan
|
|
|
|
06/09/16
|
|
|
|
06/09/21
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
14.00
|
%
|
|
|
|
|
|
$
|
3,065
|
|
|
$
|
3,065
|
|
|
$
|
3,065
|
|
|
|
|
|
(capitalized interest of $65 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pinnacle Products International, Inc. & (interest rate includes PIK interest of 17%)
|
|
|
Term Loan
|
|
|
|
10/09/15
|
|
|
|
10/09/20
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
15.00
|
%
|
|
|
|
|
|
$
|
2,907
|
|
|
$
|
2,907
|
|
|
$
|
2,907
|
|
|
|
|
|
(capitalized interest of $107 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BB Opco, LLC d/b/a BreathableBaby, LLC (interest rate includes PIK interest of 3%)
|
|
|
Term Loan
|
|
|
|
08/01/14
|
|
|
|
08/01/19
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
14.00
|
%
|
|
|
|
|
|
$
|
2,677
|
|
|
$
|
2,677
|
|
|
$
|
2,679
|
|
|
|
|
|
(capitalized interest of $177 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EGC Operating Company, LLC (interest rate includes PIK interest of 2%)
|
|
|
Term Loan
|
|
|
|
09/30/14
|
|
|
|
09/30/19
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
15.00
|
%
|
|
|
|
|
|
$
|
2,450
|
|
|
$
|
2,450
|
|
|
$
|
2,455
|
|
|
|
|
|
(capitalized interest of $40 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Cylinder, Inc. d/b/a All Safe (interest rate includes PIK interest of 7%)
|
|
|
Term Loan
|
|
|
|
07/03/13
|
|
|
|
09/30/18
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
19.00
|
%
|
|
|
|
|
|
$
|
1,719
|
|
|
$
|
1,719
|
|
|
$
|
1,718
|
|
|
|
|
|
(capitalized interest of $219 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
+
|
|
Respiratory Technologies, Inc.
|
|
|
Term Loan
|
|
|
|
04/25/12
|
|
|
|
12/31/17
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
12.00
|
%
|
|
|
|
|
|
$
|
1,500
|
|
|
$
|
1,500
|
|
|
$
|
1,500
|
|
|
|
|
|
Tri-Tech
Forensics, Inc. (interest rate includes PIK interest of 2%)
|
|
|
Term Loan
|
|
|
|
06/15/17
|
|
|
|
06/15/22
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
14.00
|
%
|
|
$
|
1,500
|
|
|
$
|
1,500
|
|
|
$
|
1,500
|
|
|
$
|
1,500
|
|
|
|
|
|
Orchard Holdings, Inc. &
|
|
|
Term Loan
|
|
|
|
03/10/99
|
|
|
|
03/31/10
|
|
|
|
1
|
|
|
|
*
|
|
|
|
13.00
|
%
|
|
|
|
|
|
$
|
1,390
|
|
|
$
|
1,390
|
|
|
$
|
1,390
|
|
|
|
|
|
Filter Holdings, Inc. (interest rate includes PIK interest of 2%)
|
|
|
Term Loan
|
|
|
|
05/05/17
|
|
|
|
05/05/22
|
|
|
|
1
|
|
|
|
*
|
|
|
|
14.00
|
%
|
|
$
|
1,250
|
|
|
$
|
1,250
|
|
|
$
|
1,250
|
|
|
$
|
1,250
|
|
|
|
+
|
|
Various Other && 10.00% to 14.00%
|
|
|
Term Loan
|
|
|
|
03/31/06
to
03/28/17
|
|
|
|
03/31/18
to
03/28/22
|
|
|
|
3
|
|
|
|
*
|
|
|
|
12.31
|
%
|
|
$
|
200
|
|
|
$
|
515
|
|
|
$
|
515
|
|
|
$
|
390
|
|
Professional, Scientific, and Technical Services (21% of the total)
|
|
|
|
Weather Decision Technologies, Inc.
{One-time
on 1/1/18 to 15%} (interest rate includes PIK interest of 9.00%)
|
|
|
Term Loan
|
|
|
|
12/11/15
|
|
|
|
12/11/20
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
18.00
|
%
|
|
|
|
|
|
$
|
4,032
|
|
|
$
|
4,032
|
|
|
$
|
4,023
|
|
|
|
|
|
(capitalized interest of $532 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northern Technologies, LLC (interest rate includes PIK interest of 1%)
|
|
|
Term Loan
|
|
|
|
01/29/16
|
|
|
|
01/29/23
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
13.00
|
%
|
|
|
|
|
|
$
|
3,651
|
|
|
$
|
3,651
|
|
|
$
|
3,650
|
|
|
|
|
|
(capitalized interest of $51 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADSCO Opco, LLC (interest rate includes PIK interest of 2%)
|
|
|
Term Loan
|
|
|
|
10/25/16
|
|
|
|
10/25/21
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
13.00
|
%
|
|
|
|
|
|
$
|
3,650
|
|
|
$
|
3,650
|
|
|
$
|
3,639
|
|
|
|
|
|
(capitalized interest of $50 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
+
|
|
DPIS Engineering, LLC
|
|
|
Term Loan
|
|
|
|
12/01/14
|
|
|
|
06/30/20
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
12.00
|
%
|
|
|
|
|
|
$
|
2,000
|
|
|
$
|
2,000
|
|
|
$
|
1,998
|
|
|
|
|
|
J. R. Thompson Company LLC (interest rate includes PIK interest of 2%)
|
|
|
Term Loan
|
|
|
|
05/21/15
|
|
|
|
05/21/22
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
14.00
|
%
|
|
|
|
|
|
$
|
1,642
|
|
|
$
|
1,642
|
|
|
$
|
1,642
|
|
|
|
|
|
(capitalized interest of $30 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portu-Sunberg Marketing LLC
|
|
|
Term Loan
|
|
|
|
10/21/16
|
|
|
|
03/21/22
|
|
|
|
1
|
|
|
|
*
|
|
|
|
12.00
|
%
|
|
|
|
|
|
$
|
1,250
|
|
|
$
|
1,250
|
|
|
$
|
1,244
|
|
Arts, Entertainment, and Recreation (11% of the total)
|
|
|
|
RPAC Racing, LLC (interest rate includes PIK interest of 2%)
|
|
|
Term Loan
|
|
|
|
11/19/10
|
|
|
|
03/30/20
|
|
|
|
1
|
|
|
|
2
|
%
|
|
|
2.00
|
%
|
|
|
|
|
|
$
|
5,611
|
|
|
$
|
5,611
|
|
|
$
|
5,611
|
|
|
|
|
|
(capitalized interest of $2,572 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RPAC Racing LLC (interest rate includes PIK interest of 9.90%)
|
|
|
Term Loan
|
|
|
|
06/22/16
|
|
|
|
03/31/20
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
9.90
|
%
|
|
|
|
|
|
$
|
2,034
|
|
|
$
|
2,034
|
|
|
$
|
2,034
|
|
|
|
|
|
(capitalized interest of $34 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RPAC Racing LLC (interest rate includes PIK interest of 9.90%)
|
|
|
Term Loan
|
|
|
|
09/14/16
|
|
|
|
03/31/20
|
|
|
|
1
|
|
|
|
*
|
|
|
|
9.90
|
%
|
|
|
|
|
|
$
|
1,000
|
|
|
$
|
1,000
|
|
|
$
|
1,000
|
|
Information (10% of the total)
|
|
|
|
US Internet Corp.
|
|
|
Term Loan
|
|
|
|
03/14/17
|
|
|
|
03/14/22
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
14.50
|
%
|
|
$
|
5,650
|
|
|
$
|
4,075
|
|
|
$
|
4,075
|
|
|
$
|
4,069
|
|
|
|
|
|
US Internet Corp. (interest rate includes PIK interest of 17%)
|
|
|
Term Loan
|
|
|
|
03/14/17
|
|
|
|
03/14/22
|
|
|
|
1
|
|
|
|
*
|
|
|
|
19.00
|
%
|
|
$
|
1,500
|
|
|
$
|
1,052
|
|
|
$
|
1,052
|
|
|
$
|
1,052
|
|
|
|
|
|
(capitalized interest of $52 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Centare Holdings, Inc. (interest rate includes PIK interest of 2%)
|
|
|
Term Loan
|
|
|
|
08/30/13
|
|
|
|
08/30/18
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
14.00
|
%
|
|
|
|
|
|
$
|
2,500
|
|
|
$
|
2,500
|
|
|
$
|
2,496
|
|
Transportation and Warehousing (5% of the total)
|
|
|
|
LLL Transport, Inc. & (interest rate includes PIK interest of 18%)
|
|
|
Term Loan
|
|
|
|
10/23/15
|
|
|
|
04/23/21
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
15.00
|
%
|
|
|
|
|
|
$
|
3,641
|
|
|
$
|
3,641
|
|
|
$
|
3,639
|
|
|
|
|
|
(capitalized interest of $141 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative and Support Services (5% of the total)
|
|
|
|
Staff One, Inc.
|
|
|
Term Loan
|
|
|
|
06/30/08
|
|
|
|
03/31/18
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
3.00
|
%
|
|
|
|
|
|
$
|
2,665
|
|
|
$
|
2,665
|
|
|
$
|
2,665
|
|
|
|
|
|
Staff One, Inc. (interest rate includes PIK interest of 7%)
|
|
|
Term Loan
|
|
|
|
12/28/16
|
|
|
|
03/31/18
|
|
|
|
1
|
|
|
|
*
|
|
|
|
19.00
|
%
|
|
|
|
|
|
$
|
577
|
|
|
$
|
577
|
|
|
$
|
577
|
|
|
|
|
|
(capitalized interest of $20 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Staff One, Inc.
|
|
|
Term Loan
|
|
|
|
09/15/11
|
|
|
|
03/31/18
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.00
|
%
|
|
|
|
|
|
$
|
331
|
|
|
$
|
331
|
|
|
$
|
331
|
|
Wholesale Trade (4% of the total)
|
|
+
|
|
Classic Brands, LLC
|
|
|
Term Loan
|
|
|
|
01/08/16
|
|
|
|
04/30/23
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
12.00
|
%
|
|
|
|
|
|
$
|
2,880
|
|
|
$
|
2,880
|
|
|
$
|
2,880
|
|
Construction (2% of the total)
|
|
|
|
Highland
Crossing-M,
LLC
|
|
|
Term Loan
|
|
|
|
01/07/15
|
|
|
|
02/01/25
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
11.50
|
%
|
|
|
|
|
|
$
|
1,447
|
|
|
$
|
1,447
|
|
|
$
|
1,446
|
|
Accommodation and Food Services (1% of the total)
|
|
|
|
Various Other && 9.25% to 10.00%
|
|
|
Term Loan
|
|
|
|
06/30/00
to
11/05/10
|
|
|
|
09/30/17
to
11/05/20
|
|
|
|
3
|
|
|
|
*
|
|
|
|
9.78
|
%
|
|
|
|
|
|
$
|
977
|
|
|
$
|
977
|
|
|
$
|
406
|
|
Retail Trade (0% of the total)
|
|
|
|
Various Other && 10.00%
|
|
|
Term Loan
|
|
|
|
06/30/00
|
|
|
|
09/30/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
10.00
|
%
|
|
|
|
|
|
$
|
43
|
|
|
$
|
43
|
|
|
$
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total secured mezzanine
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37
|
|
|
|
27
|
%
|
|
|
13.31
|
%
|
|
$
|
15,100
|
|
|
$
|
76,478
|
|
|
$
|
76,478
|
|
|
$
|
75,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other secured commercial
(55% New York, 40% New Jersey and 5% all other
states)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 37 of 90
Medallion Financial Corp.
Consolidated Summary Schedule of Investments
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
|
|
Obligor
Name/Interest Rate
Range
|
|
Security
Type (all
restricted
unless
otherwise
noted)
|
|
|
Acquisition
Date
|
|
|
Maturity
Date
|
|
|
No. of
Invest.
|
|
|
% of
Net
Assets
|
|
|
Interest
Rate
(1)
|
|
|
Original
Cost of 2017
Acquisitions
(5)
|
|
|
Principal
Outstanding
|
|
|
Cost
(4)
|
|
|
Fair
Value
|
|
Retail Trade (85% of the total)
|
|
|
|
Medallion Fine Art Inc (interest rate includes PIK interest of 12%)
|
|
|
Term Loan
|
|
|
|
12/17/12
|
|
|
|
12/17/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
12.00
|
%
|
|
|
|
|
|
$
|
1,278
|
|
|
$
|
1,278
|
|
|
$
|
1,278
|
|
|
|
|
|
(capitalized interest of $2,829 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Various Other && 4.75% to 10.50%
|
|
|
Term Loan
|
|
|
|
10/28/08
to
12/23/15
|
|
|
|
05/09/18
to
03/03/20
|
|
|
|
5
|
|
|
|
*
|
|
|
|
7.75
|
%
|
|
|
|
|
|
$
|
967
|
|
|
$
|
934
|
|
|
$
|
768
|
|
Accommodation and Food Services (10% of the total)
|
|
|
|
Various Other && 6.75% to 9.00%
|
|
|
Term Loan
|
|
|
|
11/29/05
to
06/06/14
|
|
|
|
04/18/17
to
09/06/19
|
|
|
|
3
|
|
|
|
*
|
|
|
|
8.28
|
%
|
|
|
|
|
|
$
|
663
|
|
|
$
|
563
|
|
|
$
|
246
|
|
Transportation and Warehousing (3% of the total)
|
|
|
|
Various Other && 4.25%
|
|
|
Term Loan
|
|
|
|
03/17/15
|
|
|
|
09/10/18
|
|
|
|
1
|
|
|
|
*
|
|
|
|
4.25
|
%
|
|
|
|
|
|
$
|
75
|
|
|
$
|
74
|
|
|
$
|
75
|
|
Real Estate and Rental and Leasing (2% of the total)
|
|
|
|
Various Other && 5.00%
|
|
|
Term Loan
|
|
|
|
03/31/15
|
|
|
|
03/31/20
|
|
|
|
1
|
|
|
|
*
|
|
|
|
5.00
|
%
|
|
|
|
|
|
$
|
69
|
|
|
$
|
65
|
|
|
$
|
56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Commercial Loans (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11
|
|
|
|
1
|
%
|
|
|
9.57
|
%
|
|
|
|
|
|
$
|
3,052
|
|
|
$
|
2,914
|
|
|
$
|
2,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial loans
(2)
|
|
|
|
48
|
|
|
|
28
|
%
|
|
|
13.18
|
%
|
|
$
|
15,100
|
|
|
$
|
79,530
|
|
|
$
|
79,392
|
|
|
$
|
78,092
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Medallion Bank and other controlled subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Banking
|
|
|
|
Medallion Bank **
|
|
|
100% of common stock
|
|
|
|
05/16/02
|
|
|
|
None
|
|
|
|
1
|
|
|
|
101
|
%
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
141,034
|
|
|
$
|
286,014
|
|
NASCAR Race Team
|
|
|
|
Medallion MotorSports, LLC
|
|
|
75% of LLC units
|
|
|
|
11/24/10
|
|
|
|
None
|
|
|
|
1
|
|
|
|
3
|
%
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
2,820
|
|
|
$
|
8,018
|
|
Art Dealer
|
|
|
|
Medallion Fine Art, Inc.
|
|
|
100% of common stock
|
|
|
|
12/03/12
|
|
|
|
None
|
|
|
|
1
|
|
|
|
2
|
%
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
1,689
|
|
|
$
|
4,455
|
|
Loan Servicing
|
|
|
|
Medallion Servicing Corp.
|
|
|
100% of common stock
|
|
|
|
11/05/10
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
197
|
|
|
$
|
197
|
|
Professional Sports Team
|
|
|
|
LAX Group LLC
|
|
|
44.97% of membership
interests
|
|
|
|
05/23/12
|
|
|
|
None
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
349
|
|
|
$
|
3,099
|
|
Media
|
|
|
|
Medallion Taxi Media, Inc.
|
|
|
100% of common stock
|
|
|
|
01/01/17
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Medallion Bank and other controlled subsidiaries, net
|
|
|
|
6
|
|
|
|
107
|
%
|
|
|
0.00
|
%
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
146,089
|
|
|
$
|
301,819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Finance
|
|
|
|
Convergent Capital, Ltd **
|
|
|
7% of limited partnership
interest
|
|
|
|
07/20/07
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
1,272
|
|
|
$
|
995
|
|
NASCAR Race Team
|
|
|
|
Rpac Racing LLC
|
|
|
1,000 shares of
Series D
|
|
|
|
08/25/15
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
1,822
|
|
Employee Leasing Services
|
|
|
|
Staff One, Inc.
|
|
|
46.4% preferred stock
|
|
|
|
06/30/08
|
|
|
|
None
|
|
|
|
2
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
472
|
|
|
$
|
1,171
|
|
Loan Servicing
|
|
|
|
Upgrade, Inc.
|
|
|
166,667 shares of
Series
A-1
preferred stock
|
|
|
|
09/30/16
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
250
|
|
|
$
|
1,395
|
|
Weather Forecasting Services
|
|
|
|
Weather Decision Technologies, Inc.
|
|
|
2.2% preferred stock
|
|
|
|
12/11/15
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
500
|
|
|
$
|
500
|
|
Hand Tool Manufacturer
|
|
|
|
Stride Tool Holdings, LLC
|
|
|
7.14% of Series A-2
LLC units
|
|
|
|
04/05/16
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
500
|
|
|
$
|
500
|
|
Services related to advertising
|
|
|
|
ADSCO Opco, LLC
|
|
|
7.9% of LLC units of
Class A Series A-2
|
|
|
|
10/25/16
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
400
|
|
|
$
|
400
|
|
Envirnomental Consulting Services
|
|
|
|
Northern Technologies, LLC
|
|
|
7.98% of LLC units
|
|
|
|
01/29/2016
and
12/5/16
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
408
|
|
|
$
|
408
|
|
Paper Tapes Manufacturer
|
|
|
|
Liberty Paper Products Acquisition, LLC
|
|
|
100% of Series A
preferred LLC
units - 12% total
|
|
|
|
06/09/16
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
350
|
|
|
$
|
350
|
|
Stuffed Toy Manufacturer
|
|
|
|
AA Plush Holdings, LLC
|
|
|
1.6% LLC common units
|
|
|
|
08/15/14
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
300
|
|
|
$
|
300
|
|
Investment Castings
|
|
|
|
Tech Cast Holdings LLC
|
|
|
4.14% LLC units
|
|
|
|
12/12/14
|
|
|
|
12/12/19
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
300
|
|
|
$
|
300
|
|
Baby Sleep Products
|
|
|
|
BB Opco, LLC d/b/a BreathableBaby, LLC
|
|
|
3.6% LLC units
|
|
|
|
08/01/14
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
250
|
|
|
$
|
250
|
|
Page 38 of 90
Medallion Financial Corp.
Consolidated Summary Schedule of Investments
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
|
|
Obligor
Name/Interest Rate
Range
|
|
Security
Type (all
restricted
unless
otherwise
noted)
|
|
Acquisition
Date
|
|
|
Maturity
Date
|
|
|
No. of
Invest.
|
|
|
% of
Net
Assets
|
|
|
Interest
Rate
(1)
|
|
|
Original
Cost of 2017
Acquisitions
(5)
|
|
|
Principal
Outstanding
|
|
|
Cost
(4)
|
|
|
Fair
Value
|
|
Manufacture Space Heaters, etc.
|
|
|
|
Pinnacle Products International, Inc.
|
|
0.5% common stock
|
|
|
10/09/15
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
135
|
|
|
$
|
135
|
|
IT Services
|
|
|
|
Centare Holdings, Inc.
|
|
7.23% of common stock, 3.88% of preferred stock
|
|
|
08/30/13
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
104
|
|
|
$
|
104
|
|
Hobbyists Supplies Merch. Wholesale
|
|
|
|
Classic Brand, LLC
|
|
Warrant for 300,000 Class A units
|
|
|
01/08/16
|
|
|
|
01/08/26
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Sheet metal manufacturer
|
|
|
|
SWDP Acquisition Co., LLC
|
|
9.9875% of Common LLC units
|
|
|
04/06/17
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
$
|
400
|
|
|
|
|
|
|
$
|
400
|
|
|
$
|
400
|
|
Manufacturer of industrial filters
|
|
|
|
Filter Holdings, Inc.
|
|
7.14% of Common Stock, 7.14% of Preferred Stock
|
|
|
05/05/17
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
$
|
207
|
|
|
|
|
|
|
$
|
207
|
|
|
$
|
207
|
|
Design, assemble, distribute forensic supplies
|
|
|
|
TTFI Holdings, Inc.
|
|
4.91% of Common Stock; 4.61% of Preferred Stock
|
|
|
06/15/17
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
$
|
192
|
|
|
|
|
|
|
$
|
192
|
|
|
$
|
192
|
|
Various Other #
|
|
+
|
|
**
|
|
* Various
|
|
|
09/10/98
to
10/19/16
|
|
|
|
None to
2/5/23
|
|
|
|
12
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
569
|
|
|
$
|
887
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity investments, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31
|
|
|
|
4
|
%
|
|
|
0.00
|
%
|
|
$
|
799
|
|
|
$
|
0
|
|
|
$
|
6,609
|
|
|
$
|
10,316
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
%
|
|
|
0.00
|
%
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investments ($221,645 pledged as collateral under borrowing arrangements)
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
755
|
|
|
|
221
|
%
|
|
|
4.45
|
%
|
|
$
|
21,656
|
|
|
$
|
363,208
|
|
|
$
|
513,746
|
|
|
$
|
623,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents the actual or weighted average interest or dividend rate of the respective security or portfolio as of the date indicated. Investments without an interest rate or with a rate of 0.00% are considered
non-income
producing.
|
(2)
|
Included in secured mezzanine commercial loans and other commercial loans was $7,366 of interest income capitalized into the outstanding investment balances, and $898 of deferred interest income, in accordance with the
terms of the investment contract.
|
(3)
|
The ratio of restricted securities fair value to net assets is 221%.
|
(4)
|
Gross unrealized appreciation, gross unrealized depreciation and net appreciation for federal income tax purposes totaled $220,587, $50,358 and $170,229, respectively. The tax cost of investments was $453,413.
|
(5)
|
For revolving lines of credit the amount shown is the cost at June 30, 2017.
|
**
|
Not an eligible portfolio company as such term is defined in Section 2(a)(46) of the 1940 Act. The percentage value of all
non-eligible
portfolio companies to totaled assets
of Medallion Financial on an unconsolidated basis was up to 56% and up to 46% on a consolidated basis. Under the 1940 Act, we may not acquire any
non-qualifying
assets, unless at the time such acquisition is
made, qualifying assets, which include securities of eligible portfolio companies, represent at least 70% of our total assets. The status of these assets under the 1940 Act are subject to change. We monitor the status of these assets on an ongoing
basis.
|
&
|
Loan is on nonaccrual status, or past due on contractual payments, and is therefore considered
non-income
producing.
|
&&
|
Some or all of the securities are
non-income
producing as per & above.
|
#
|
Publicly traded but sales subject to applicable Rule 144 limitations.
|
##
|
Pledged as collateral under borrowing arrangements.
|
+
|
Includes various warrants, all of which have a cost and fair value of zero at June 30, 2017.
|
The Summary Schedule of Investments does not reflect the Companys complete portfolio holdings. It includes the Companys 50
largest holdings and each investment of any issuer that exceeds 1% of the Companys net assets. Various Other represents all issues not required to be disclosed under the rules adopted by the U.S. Securities and Exchange Commission
(SEC). Footnotes above may apply to securities that are included in Various Other. For further detail, the complete schedule of portfolio holdings is available (i) without charge, upon request, by calling
(877) MEDALLION; and (ii) on the SECs website at http://www.sec.gov. Filed as Exhibit 99.1 to the Quarterly Report on Form
10-Q
for the fiscal quarter ended June 30, 2017, filed on August 9,
2017 (File
No. 814-00188)
Page 39 of 90
Medallion Financial Corp
CONSOLIDATED SCHEDULE OF INVESTMENTS IN AND ADVANCES TO AFFILIATES
As of and for the six months ended June 30, 2017
|
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|
|
|
|
|
|
|
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|
|
|
|
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|
Name of issuer and title
of issue
(Dollars
in
thousands)
|
|
Number of shares
(all restricted unless otherwise noted)
|
|
Equity in net profit and
(loss) for the quarter
ended 6/30/17
|
|
|
Amount of dividends or
interest
(1)
for the quarter
ended
6/30/17
|
|
|
Equity in net profit
and (loss) for the
six months ended
6/30/17
|
|
|
Amount of dividends or
interest
(1)
for the six
months
ended 6/30/17
|
|
|
Value as of
6/30/17
|
|
Medallion Bank common stock
|
|
1,000,000
shares - 100% of
common stock
|
|
$
|
1,325
|
|
|
$
|
0
|
|
|
$
|
5,625
|
|
|
$
|
0
|
|
|
$
|
286,014
|
|
Medallion Motorsports, LLC membership interest
(2)
|
|
75% of membership interest
|
|
|
(400
|
)
|
|
|
0
|
|
|
|
1,037
|
|
|
|
0
|
|
|
|
8,017
|
|
Medallion Fine Art, Inc. common
stock
(3)
|
|
1,000 shares - 100% of common stock
|
|
|
(42
|
)
|
|
|
0
|
|
|
|
808
|
|
|
|
0
|
|
|
|
4,455
|
|
LAX Group LLC membership interest
|
|
44.97% of membership interest
|
|
|
(147
|
)
|
|
|
0
|
|
|
|
1,309
|
|
|
|
0
|
|
|
|
3,099
|
|
Medallion Servicing Corp. common stock
|
|
1,000 shares - 100% of common stock
|
|
|
177
|
|
|
|
0
|
|
|
|
238
|
|
|
|
0
|
|
|
|
197
|
|
Medallion Taxi Media, Inc. common stock
|
|
1,000 shares - 100% of common stock
|
|
|
17
|
|
|
|
0
|
|
|
|
37
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|
|
|
0
|
|
|
|
37
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments in Medallion Bank and other controlled subsidiaries
|
|
|
|
|
930
|
|
|
|
0
|
|
|
|
9,054
|
|
|
$
|
0
|
|
|
|
301,819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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RPAC Racing LLC
(2)
|
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100% of Series D units
|
|
|
0
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|
|
|
0
|
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|
|
0
|
|
|
|
0
|
|
|
|
1,822
|
|
Stride Tool Holdings LLC
(4)
membership interest
|
|
7.14% of Series A membership interest
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
500
|
|
Northern Technologies LLC membership interest
(5)
|
|
7.7% of membership interest
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
408
|
|
ADSCO Holdco LLC membership interest
(6)
|
|
5.65% of membership interest
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
400
|
|
SWDP Acquisition Co LLC.
(7)
|
|
9.99% of membership interest
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
400
|
|
Appliance Recycling Centers of America Inc. common stock
|
|
8.86% of common stock
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
318
|
|
Filter Holdings INC.
(8)
|
|
7.14% of common & preferred stock
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
207
|
|
Third Century JRT, Inc.
(9)
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|
13% of common stock
|
|
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0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity investments in affiliates
|
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
4,255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Investments with an amount of $0 are considered
non-income
producing.
|
(2)
|
The Company and a controlled subsidiary of the Company have 3 loans due from RPAC Racing LLC, an affiliate of Medallion Motorsports, LLC in the amount of $8,645 as of June 30, 2017, and on which $118 and $208 of
interest income was earned during the quarter and six months ended June 30, 2017.
|
(3)
|
The Company has a loan due from Medallion Fine Art, Inc. in the amount of $1,278 as of June 30, 2017, and on which $44 and $126 of interest income was earned during the quarter and six months ended June 30,
2017.
|
(4)
|
The Company has a loan due from Stride Tool Holding LLC in the amount of $4,153 as of June 30, 2017, and on which $157 and $310 of interest income was earned during the quarter and six months ended June 30,
2017.
|
(5)
|
The Company has a loan due from Northern Technologies LLC in the amount of $3,651 as if June 30, 2017, on which $121 and $235 of interest income was earned during the quarter and six months ended June 30,
2017.
|
(6)
|
The Company has a loan due from ADSCO Holdco LLC in the amount of $3,650 as of June 30, 2017, and on which $118 and $236 of interest income was earned during the quarter and six months ended June 30, 2017.
|
(7)
|
The Company has a loan due from SWDP Acquisition Co LLC in the amount of $5,000 as if June 30, 2017, on which $165 of interest income was earned during the quarter and six months ended June 30, 2017.
|
Page 40 of 90
(8)
|
The Company has a loan due from Filter Holdings INC in the amount of $1,250 as if June 30, 2017, on which $0 of interest income was earned during the quarter and six months ended June 30, 2017.
|
(9)
|
The Company has a loan due from JR Thompson Company LLC, an affiliate of Third Century JRT, Inc., in the amount of $1,642 as of June 30, 2017, on which $55 and $110 of interest income was earned during the quarter
and six months ended June 30, 2017.
|
The table below provides a recap of the changes in the investment in the respective issuers for the 2017
quarters.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
|
|
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|
Name of Issuer
|
|
Medallion
Bank
|
|
|
Medallion
Fine Art,
Inc.
|
|
|
Medallion
Motorsports,
LLC
(2)
|
|
|
Appliance
Recycling
Centers
of
America,
Inc.
|
|
|
Medallion
Servicing
Corp.
|
|
|
LAX
Group, LLC
|
|
|
Medallion
Taxi Media,
Inc.
|
|
|
Third
Century
JRT,
Inc.
(3)
|
|
|
Northern
Technologies,
LLC
(4)
|
|
|
Stride Tool
Holding
LLC
(5)
|
|
|
ADSCO Holdco
LLC
(6)
|
|
|
RPAC Racing
LLC
(2)
|
|
|
Filter
Holdings
Inc.
(7)
|
|
|
SWDP
ACUQSITION
Co LLC
(8)
|
|
Title of Issue
|
|
Common
Stock
|
|
|
Common
Stock
(1)
|
|
|
Membership
Interest
|
|
|
Common
Stock
|
|
|
Common
Stock
|
|
|
Membership
Interest
|
|
|
Common
Stock
|
|
|
Common
Stock
|
|
|
Membership
Interest
|
|
|
Membership
Interest
|
|
|
Membership
Interest
|
|
|
Membership
Interest
|
|
|
Common &
Preferred
Stock
|
|
|
Membership
Interest
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value as of 12/31/16
|
|
$
|
280,589
|
|
|
$
|
3,647
|
|
|
$
|
6,980
|
|
|
$
|
475
|
|
|
$
|
454
|
|
|
$
|
1,690
|
|
|
$
|
|
|
|
$
|
200
|
|
|
$
|
351
|
|
|
$
|
500
|
|
|
$
|
400
|
|
|
$
|
1,351
|
|
|
|
|
|
|
|
|
|
Gross additions / investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross reductions / distributions
|
|
|
(502
|
)
|
|
|
|
|
|
|
|
|
|
|
(28
|
)
|
|
|
(96
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net equity in profit and loss, and unrealized appreciation and (depreciation)
|
|
|
4,300
|
|
|
|
850
|
|
|
|
1,437
|
|
|
|
(13
|
)
|
|
|
61
|
|
|
|
1,456
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
235
|
|
|
|
|
|
|
|
|
|
Other adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value as of 3/31/17
|
|
$
|
284,387
|
|
|
$
|
4,497
|
|
|
$
|
8,417
|
|
|
$
|
434
|
|
|
$
|
419
|
|
|
$
|
3,146
|
|
|
$
|
20
|
|
|
$
|
200
|
|
|
$
|
351
|
|
|
$
|
500
|
|
|
$
|
400
|
|
|
$
|
1,586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross additions / investments
|
|
|
302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
207
|
|
|
|
400
|
|
Gross reductions / distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(399
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net equity in profit and loss, and unrealized appreciation and (depreciation)
|
|
|
1,325
|
|
|
|
(42
|
)
|
|
|
(400
|
)
|
|
|
(116
|
)
|
|
|
177
|
|
|
|
(147
|
)
|
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
236
|
|
|
|
|
|
|
|
|
|
Other adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value as of 6/30/17
|
|
$
|
286,014
|
|
|
$
|
4,455
|
|
|
$
|
8,017
|
|
|
$
|
318
|
|
|
$
|
197
|
|
|
$
|
3,099
|
|
|
$
|
37
|
|
|
$
|
200
|
|
|
$
|
408
|
|
|
$
|
500
|
|
|
$
|
400
|
|
|
$
|
1,822
|
|
|
$
|
207
|
|
|
|
400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The Company has a loan due from Medallion Fine Art, Inc. in the amount of $1,278 as of June 30, 2017, $0 of which was advanced during 2017, and for which $2,015 was repaid.
|
(2)
|
In addition to the equity ownership, the Company and a controlled subsidiary of the Company have three loans due from RPAC Racing LLC, an affiliate of Medallion Motorsports, LLC, in the amount of $8,645, $56 of which
was advanced during 2017.
|
(3)
|
The Company has a loan due from J. R. Thompson Company, LLC, an affiliate of Third Century JRT, Inc in the amount of $1,642 as of June 30, 2017, $17 of which was advanced during 2017.
|
(4)
|
The Company has a loan due from Northern Technologies LLC in the amount of $3,651 as of June 30, 2017, $118 of which was advanced during 2017.
|
Page 42 of 90
|
(5) The Company has a loan due from Stride Tool Holdings LLC in the amount of
$4,153 as of June 30, 2017, $62 of which was advanced during 2017.
(6) The Company has
a loan due from ADSCO Holdco LLC in the amount of $3,650 as of June 30, 2017, $37 of which was advanced during 2017.
(7) The Company has a loan due from Filter Holdings Inc. in the amount of $1,250 as of
June 30, 2017, all of which was advanced during 2017.
(8) The Company has a loan due
from SWDP Acquisition Co LLC in the amount of $5,000 as of June 30, 2017, all of which was advanced during 2017.
|
Page 43 of 90
Medallion Financial Corp.
Consolidated Summary Schedule of Investments
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
Obligor
Name/Interest Rate
Range
|
|
Security
Type (all
restricted
unless
otherwise
noted)
|
|
|
Acquisition
Date
|
|
|
Maturity
Date
|
|
|
No. of
Invest.
|
|
|
% of
Net
Assets
|
|
|
Interest
Rate
(1)
|
|
|
Original
Cost of 2016
Acquisitions
(5)
|
|
|
Principal
Outstanding
|
|
|
Cost
(4)
|
|
|
Fair
Value
|
|
Medallion Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
380
|
|
|
|
66
|
%
|
|
|
3.67
|
%
|
|
$
|
15,068
|
|
|
$
|
202,845
|
|
|
$
|
202,469
|
|
|
$
|
189,571
|
|
|
|
Sean Cab Corp ##
|
|
|
Term Loan
|
|
|
|
12/09/11
|
|
|
|
11/23/18
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
4.63
|
%
|
|
|
|
|
|
$
|
3,270
|
|
|
$
|
3,270
|
|
|
$
|
3,270
|
|
|
|
Real Cab Corp ##
|
|
|
Term Loan
|
|
|
|
07/20/07
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
2.81
|
%
|
|
|
|
|
|
$
|
2,545
|
|
|
$
|
2,545
|
|
|
$
|
2,545
|
|
|
|
Real Cab Corp ##
|
|
|
Term Loan
|
|
|
|
07/20/07
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
2.81
|
%
|
|
|
|
|
|
$
|
350
|
|
|
$
|
350
|
|
|
$
|
350
|
|
|
|
Real Cab Corp
|
|
|
Term Loan
|
|
|
|
08/19/14
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.31
|
%
|
|
|
|
|
|
$
|
338
|
|
|
$
|
338
|
|
|
$
|
338
|
|
|
|
Slo Cab Corp ##
|
|
|
Term Loan
|
|
|
|
07/20/07
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
2.81
|
%
|
|
|
|
|
|
$
|
1,527
|
|
|
$
|
1,527
|
|
|
$
|
1,527
|
|
|
|
Slo Cab Corp ##
|
|
|
Term Loan
|
|
|
|
07/20/07
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
2.81
|
%
|
|
|
|
|
|
$
|
210
|
|
|
$
|
210
|
|
|
$
|
210
|
|
|
|
Slo Cab Corp ##
|
|
|
Term Loan
|
|
|
|
08/19/14
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.31
|
%
|
|
|
|
|
|
$
|
203
|
|
|
$
|
203
|
|
|
$
|
203
|
|
|
|
Esg Hacking Corp ##
|
|
|
Term Loan
|
|
|
|
03/12/14
|
|
|
|
03/12/17
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
3.50
|
%
|
|
|
|
|
|
$
|
1,713
|
|
|
$
|
1,713
|
|
|
$
|
1,714
|
|
|
|
Whispers Taxi Inc ## &
|
|
|
Term Loan
|
|
|
|
05/28/13
|
|
|
|
05/28/16
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
3.35
|
%
|
|
|
|
|
|
$
|
2,026
|
|
|
$
|
2,014
|
|
|
$
|
1,531
|
|
|
|
Christian Cab Corp &
|
|
|
Term Loan
|
|
|
|
11/27/12
|
|
|
|
11/27/18
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
3.75
|
%
|
|
|
|
|
|
$
|
1,489
|
|
|
$
|
1,489
|
|
|
$
|
1,493
|
|
|
|
Junaid Trans Corp ## {Annually-Prime plus 1.00%}
|
|
|
Term Loan
|
|
|
|
04/30/13
|
|
|
|
04/29/19
|
|
|
|
1
|
|
|
|
*
|
|
|
|
4.50
|
%
|
|
|
|
|
|
$
|
1,409
|
|
|
$
|
1,409
|
|
|
$
|
1,409
|
|
|
|
Ocean Hacking Corp ##
|
|
|
Term Loan
|
|
|
|
12/20/13
|
|
|
|
12/20/16
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.50
|
%
|
|
|
|
|
|
$
|
1,379
|
|
|
$
|
1,379
|
|
|
$
|
1,379
|
|
|
|
Jacal Hacking Corp ##
|
|
|
Term Loan
|
|
|
|
12/20/13
|
|
|
|
12/20/16
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.50
|
%
|
|
|
|
|
|
$
|
1,379
|
|
|
$
|
1,379
|
|
|
$
|
1,379
|
|
|
|
Avi Taxi Corporation ##
|
|
|
Term Loan
|
|
|
|
04/11/14
|
|
|
|
04/11/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.25
|
%
|
|
|
|
|
|
$
|
1,366
|
|
|
$
|
1,366
|
|
|
$
|
1,366
|
|
|
|
Apple Cab Corp ##
|
|
|
Term Loan
|
|
|
|
04/11/14
|
|
|
|
04/11/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.25
|
%
|
|
|
|
|
|
$
|
1,366
|
|
|
$
|
1,366
|
|
|
$
|
1,366
|
|
|
|
Anniversary Taxi Corp ##
|
|
|
Term Loan
|
|
|
|
04/11/14
|
|
|
|
04/11/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.25
|
%
|
|
|
|
|
|
$
|
1,366
|
|
|
$
|
1,366
|
|
|
$
|
1,366
|
|
|
|
Hj Taxi Corp ##
|
|
|
Term Loan
|
|
|
|
04/11/14
|
|
|
|
04/11/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.25
|
%
|
|
|
|
|
|
$
|
1,366
|
|
|
$
|
1,366
|
|
|
$
|
1,366
|
|
|
|
Kby Taxi Inc ##
|
|
|
Term Loan
|
|
|
|
04/11/14
|
|
|
|
04/11/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.25
|
%
|
|
|
|
|
|
$
|
1,366
|
|
|
$
|
1,366
|
|
|
$
|
1,366
|
|
|
|
Bunty & Jyoti Inc ##
|
|
|
Term Loan
|
|
|
|
03/13/13
|
|
|
|
12/13/18
|
|
|
|
1
|
|
|
|
*
|
|
|
|
2.50
|
%
|
|
|
|
|
|
$
|
1,336
|
|
|
$
|
1,336
|
|
|
$
|
1,336
|
|
|
|
Penegali Taxi LLC ##
|
|
|
Term Loan
|
|
|
|
12/11/14
|
|
|
|
12/10/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.75
|
%
|
|
|
|
|
|
$
|
1,331
|
|
|
$
|
1,331
|
|
|
$
|
1,332
|
|
|
|
Sonu-Seema Corp ##
|
|
|
Term Loan
|
|
|
|
12/07/12
|
|
|
|
12/20/18
|
|
|
|
1
|
|
|
|
*
|
|
|
|
2.50
|
%
|
|
|
|
|
|
$
|
1,313
|
|
|
$
|
1,313
|
|
|
$
|
1,313
|
|
|
|
Uddin Taxi Corp ##
|
|
|
Term Loan
|
|
|
|
11/05/15
|
|
|
|
11/05/18
|
|
|
|
1
|
|
|
|
*
|
|
|
|
4.75
|
%
|
|
|
|
|
|
$
|
1,298
|
|
|
$
|
1,297
|
|
|
$
|
1,298
|
|
|
|
Yosi Transit Inc ##
|
|
|
Term Loan
|
|
|
|
07/20/07
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
2.81
|
%
|
|
|
|
|
|
$
|
1,018
|
|
|
$
|
1,017
|
|
|
$
|
1,018
|
|
|
|
Yosi Transit Inc ##
|
|
|
Term Loan
|
|
|
|
07/20/07
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
2.81
|
%
|
|
|
|
|
|
$
|
140
|
|
|
$
|
140
|
|
|
$
|
140
|
|
|
|
Yosi Transit Inc ##
|
|
|
Term Loan
|
|
|
|
08/19/14
|
|
|
|
07/20/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.31
|
%
|
|
|
|
|
|
$
|
135
|
|
|
$
|
135
|
|
|
$
|
135
|
|
Various New York && ##
|
|
0.00% to 8.96%
|
|
|
Term Loan
|
|
|
|
03/23/01
to
12/27/16
|
|
|
|
05/28/16
to
12/21/26
|
|
|
|
355
|
|
|
|
56
|
%
|
|
|
3.71
|
%
|
|
$
|
15,068
|
|
|
$
|
171,606
|
|
|
$
|
171,244
|
|
|
$
|
158,821
|
|
Chicago
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
111
|
|
|
|
10
|
%
|
|
|
4.54
|
%
|
|
$
|
109
|
|
|
$
|
38,320
|
|
|
$
|
38,091
|
|
|
$
|
28,850
|
|
|
|
Sweetgrass Peach &Chadwick Cap ##
|
|
|
Term Loan
|
|
|
|
08/28/12
|
|
|
|
02/24/18
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
5.00
|
%
|
|
|
|
|
|
$
|
1,454
|
|
|
$
|
1,454
|
|
|
$
|
1,454
|
|
|
|
Regal Cab Company Et Al ##
|
|
|
Term Loan
|
|
|
|
08/29/13
|
|
|
|
08/27/18
|
|
|
|
1
|
|
|
|
*
|
|
|
|
5.00
|
%
|
|
|
|
|
|
$
|
1,322
|
|
|
$
|
1,322
|
|
|
$
|
1,322
|
|
Various Chicago && ##
|
|
0.00% to 7.00%
|
|
|
Term Loan
|
|
|
|
01/22/10
to
08/08/16
|
|
|
|
03/12/16
to
12/29/20
|
|
|
|
109
|
|
|
|
9
|
%
|
|
|
4.50
|
%
|
|
$
|
109
|
|
|
$
|
35,544
|
|
|
$
|
35,315
|
|
|
$
|
26,074
|
|
Newark && ##
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
111
|
|
|
|
8
|
%
|
|
|
5.27
|
%
|
|
$
|
314
|
|
|
$
|
23,291
|
|
|
$
|
23,267
|
|
|
$
|
23,157
|
|
|
|
Viergella Inc ##
|
|
|
Term Loan
|
|
|
|
02/20/14
|
|
|
|
02/20/18
|
|
|
|
1
|
|
|
|
*
|
|
|
|
4.75
|
%
|
|
|
|
|
|
$
|
1,312
|
|
|
$
|
1,312
|
|
|
$
|
1,313
|
|
Various Newark && ##
|
|
4.50% to 7.00%
|
|
|
Term Loan
|
|
|
|
04/09/10
to
04/14/16
|
|
|
|
12/12/16
to
05/14/25
|
|
|
|
110
|
|
|
|
8
|
%
|
|
|
5.30
|
%
|
|
$
|
314
|
|
|
$
|
21,979
|
|
|
$
|
21,955
|
|
|
$
|
21,844
|
|
Boston && ##
|
|
0.00% to 6.15%
|
|
|
Term Loan
|
|
|
|
06/12/07
to
12/09/16
|
|
|
|
12/07/15
to
11/06/25
|
|
|
|
60
|
|
|
|
8
|
%
|
|
|
4.52
|
%
|
|
$
|
1,214
|
|
|
$
|
26,061
|
|
|
$
|
25,857
|
|
|
$
|
21,818
|
|
Cambridge && ##
|
|
3.75% to 5.50%
|
|
|
Term Loan
|
|
|
|
05/06/11
to
12/15/15
|
|
|
|
03/29/16
to
01/26/20
|
|
|
|
13
|
|
|
|
1
|
%
|
|
|
4.47
|
%
|
|
|
|
|
|
$
|
4,441
|
|
|
$
|
4,401
|
|
|
$
|
2,649
|
|
Various Other && ##
|
|
4.75% to 9.00%
|
|
|
Term Loan
|
|
|
|
04/28/08
to
07/30/15
|
|
|
|
01/03/17
to
09/01/23
|
|
|
|
9
|
|
|
|
0
|
%
|
|
|
7.26
|
%
|
|
|
|
|
|
$
|
978
|
|
|
$
|
965
|
|
|
$
|
771
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total medallion loans ($231,494 pledged as collateral under borrowing
arrangements)
|
|
|
|
|
|
|
|
|
|
|
|
684
|
|
|
|
93
|
%
|
|
|
4.01
|
%
|
|
$
|
16,705
|
|
|
$
|
295,936
|
|
|
$
|
295,050
|
|
|
$
|
266,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured mezzanine
(22% Minnesota, 12% Ohio, 10% Oklahoma, 8% Texas, 7%
Delaware, 7% Pennsylvania, 7% North Carolina, 5% Kansas, 5% North Dakota, 4% Massachusetts, 4% Colorado, and 9% all other states)
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing (44% of the total)
|
|
Stride Tool Holdings, LLC (interest rate includes PIK interest of 3.00%)
|
|
|
Term Loan
|
|
|
|
04/05/16
|
|
|
|
04/05/21
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
15.00
|
%
|
|
$
|
4,000
|
|
|
$
|
4,091
|
|
|
$
|
4,091
|
|
|
$
|
4,041
|
|
|
|
(capitalized interest of $91 per footnote 2)
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
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|
|
|
MicroGroup, Inc.
|
|
|
Term Loan
|
|
|
|
06/29/15
|
|
|
|
06/29/21
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
12.00
|
%
|
|
|
|
|
|
$
|
3,244
|
|
|
$
|
3,244
|
|
|
$
|
3,244
|
|
|
|
(capitalized interest of $44 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Page 44 of 90
Medallion Financial Corp.
Consolidated Summary Schedule of Investments
December 31, 2016
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(Dollars in
thousands)
|
|
|
|
Obligor
Name/Interest Rate
Range
|
|
Security
Type (all
restricted
unless
otherwise
noted)
|
|
|
Acquisition
Date
|
|
|
Maturity
Date
|
|
|
No. of
Invest.
|
|
|
% of
Net
Assets
|
|
|
Interest
Rate
(1)
|
|
|
Original
Cost of 2016
Acquisitions
(5)
|
|
|
Principal
Outstanding
|
|
|
Cost
(4)
|
|
|
Fair
Value
|
|
|
|
|
|
AA Plush Holdings, LLC (interest rate includes PIK interest of 6.00%)
|
|
|
Term Loan
|
|
|
|
08/15/14
|
|
|
|
08/15/19
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
14.00
|
%
|
|
|
|
|
|
$
|
3,197
|
|
|
$
|
3,197
|
|
|
$
|
3,190
|
|
|
|
|
|
(capitalized interest of $197 per footnote 2)
|
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|
|
|
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|
|
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|
|
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|
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|
|
|
|
Liberty Paper Products Acquisition LLC (interest rate includes PIK interest of 2.00%)
|
|
|
Term Loan
|
|
|
|
06/09/16
|
|
|
|
06/09/21
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
14.00
|
%
|
|
$
|
3,000
|
|
|
$
|
3,034
|
|
|
$
|
3,034
|
|
|
$
|
3,034
|
|
|
|
|
|
(capitalized interest of $34 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
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|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
Pinnacle Products International, Inc. (interest rate includes PIK interest of 3.00%)
|
|
|
Term Loan
|
|
|
|
10/09/15
|
|
|
|
10/09/20
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
15.00
|
%
|
|
|
|
|
|
$
|
2,907
|
|
|
$
|
2,907
|
|
|
$
|
2,907
|
|
|
|
|
|
(capitalized interest of $107 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WRWP, LLC (interest rate includes PIK interest of 5.00%)
|
|
|
Term Loan
|
|
|
|
12/30/14
|
|
|
|
12/30/19
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
17.00
|
%
|
|
|
|
|
|
$
|
2,407
|
|
|
$
|
2,407
|
|
|
$
|
2,413
|
|
|
|
|
|
(capitalized interest of $165 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WRWP, LLC (interest rate includes PIK interest of 6.00%)
|
|
|
Term Loan
|
|
|
|
01/01/15
|
|
|
|
01/01/24
|
|
|
|
1
|
|
|
|
*
|
|
|
|
6.00
|
%
|
|
|
|
|
|
$
|
252
|
|
|
$
|
252
|
|
|
$
|
252
|
|
|
|
|
|
(capitalized interest of $28 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BB Opco, LLC d/b/a BreathableBaby, LLC (interest rate includes PIK interest of 3.00%)
|
|
|
Term Loan
|
|
|
|
08/01/14
|
|
|
|
08/01/19
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
14.00
|
%
|
|
|
|
|
|
$
|
2,637
|
|
|
$
|
2,637
|
|
|
$
|
2,640
|
|
|
|
|
|
(capitalized interest of $137 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tech Cast Holdings, LLC
|
|
|
Term Loan
|
|
|
|
12/12/14
|
|
|
|
12/12/19
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
15.00
|
%
|
|
|
|
|
|
$
|
2,635
|
|
|
$
|
2,635
|
|
|
$
|
2,613
|
|
|
|
|
|
EGC Operating Company, LLC (interest rate includes PIK interest of 3.00%)
|
|
|
Term Loan
|
|
|
|
09/30/14
|
|
|
|
09/30/19
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
15.00
|
%
|
|
|
|
|
|
$
|
2,424
|
|
|
$
|
2,424
|
|
|
$
|
2,430
|
|
|
|
|
|
(capitalized interest of $14 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Cylinder, Inc. d/b/a All Safe (interest rate includes PIK interest of 7.00%)
|
|
|
Term Loan
|
|
|
|
07/03/13
|
|
|
|
01/03/18
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
19.00
|
%
|
|
|
|
|
|
$
|
1,693
|
|
|
$
|
1,693
|
|
|
$
|
1,692
|
|
|
|
|
|
(capitalized interest of $193 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
+
|
|
Respiratory Technologies, Inc.
|
|
|
Term Loan
|
|
|
|
04/25/12
|
|
|
|
04/25/17
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
12.00
|
%
|
|
|
|
|
|
$
|
1,500
|
|
|
$
|
1,500
|
|
|
$
|
1,501
|
|
|
|
|
|
Orchard Holdings, Inc. &
|
|
|
Term Loan
|
|
|
|
03/10/99
|
|
|
|
03/31/10
|
|
|
|
1
|
|
|
|
*
|
|
|
|
13.00
|
%
|
|
|
|
|
|
$
|
1,390
|
|
|
$
|
1,390
|
|
|
$
|
1,390
|
|
|
|
|
|
Quaker Bakery Brands, Inc.
|
|
|
Term Loan
|
|
|
|
03/28/12
|
|
|
|
03/28/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
17.00
|
%
|
|
|
|
|
|
$
|
1,300
|
|
|
$
|
1,300
|
|
|
$
|
1,299
|
|
|
|
+
|
|
Various Other && 12.00% to 14.00%
|
|
|
Term Loan
|
|
|
|
03/31/06
to
03/06/14
|
|
|
|
03/31/18
to
03/06/19
|
|
|
|
2
|
|
|
|
*
|
|
|
|
13.56
|
%
|
|
|
|
|
|
$
|
369
|
|
|
$
|
369
|
|
|
$
|
245
|
|
Professional, Scientific, and Technical Services (21% of the total)
|
|
|
|
Weather Decision Technologies, Inc.
{One-time
on 1/1/18 to 15%} (interest rate includes PIK interest of 9.00%)
|
|
|
Term Loan
|
|
|
|
12/11/15
|
|
|
|
12/11/20
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
18.00
|
%
|
|
|
|
|
|
$
|
3,854
|
|
|
$
|
3,854
|
|
|
$
|
3,844
|
|
|
|
|
|
(capitalized interest of $354 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADSCO Opco, LLC (interest rate includes PIK interest of 2.00%)
|
|
|
Term Loan
|
|
|
|
10/25/16
|
|
|
|
10/25/21
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
13.00
|
%
|
|
$
|
3,600
|
|
|
$
|
3,613
|
|
|
$
|
3,613
|
|
|
$
|
3,601
|
|
|
|
|
|
(capitalized interest of $13 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northern Technologies, LLC (interest rate includes PIK interest of 1.00%)
|
|
|
Term Loan
|
|
|
|
01/29/16
|
|
|
|
01/29/23
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
13.00
|
%
|
|
$
|
3,500
|
|
|
$
|
3,533
|
|
|
$
|
3,533
|
|
|
$
|
3,532
|
|
|
|
|
|
(capitalized interest of $33 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
+
|
|
DPIS Engineering, LLC
|
|
|
Term Loan
|
|
|
|
12/01/14
|
|
|
|
06/30/20
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
12.00
|
%
|
|
|
|
|
|
$
|
2,000
|
|
|
$
|
2,000
|
|
|
$
|
1,998
|
|
|
|
|
|
J. R. Thompson Company LLC (interest rate includes PIK interest of 2.00%)
|
|
|
Term Loan
|
|
|
|
05/21/15
|
|
|
|
05/21/22
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
14.00
|
%
|
|
|
|
|
|
$
|
1,625
|
|
|
$
|
1,625
|
|
|
$
|
1,625
|
|
|
|
|
|
(capitalized interest of $14 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portu-Sunberg Marketing LLC
|
|
|
Term Loan
|
|
|
|
10/21/16
|
|
|
|
03/21/22
|
|
|
|
1
|
|
|
|
*
|
|
|
|
12.00
|
%
|
|
$
|
1,250
|
|
|
$
|
1,250
|
|
|
$
|
1,250
|
|
|
$
|
1,244
|
|
Information (12% of the total)
|
|
|
|
US Internet Corp.
|
|
|
Term Loan
|
|
|
|
06/12/13
|
|
|
|
09/18/20
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
14.50
|
%
|
|
|
|
|
|
$
|
3,000
|
|
|
$
|
3,000
|
|
|
$
|
3,010
|
|
|
|
|
|
US Internet Corp.
|
|
|
Term Loan
|
|
|
|
02/05/16
|
|
|
|
02/11/23
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
14.50
|
%
|
|
$
|
1,900
|
|
|
$
|
1,900
|
|
|
$
|
1,900
|
|
|
$
|
1,890
|
|
|
|
|
|
US Internet Corp.
|
|
|
Term Loan
|
|
|
|
03/18/15
|
|
|
|
09/18/20
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
14.50
|
%
|
|
|
|
|
|
$
|
1,750
|
|
|
$
|
1,750
|
|
|
$
|
1,743
|
|
|
|
|
|
Centare Holdings, Inc. (interest rate includes PIK interest of 2.00%)
|
|
|
Term Loan
|
|
|
|
08/30/13
|
|
|
|
08/30/18
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
14.00
|
%
|
|
|
|
|
|
$
|
2,500
|
|
|
$
|
2,500
|
|
|
$
|
2,494
|
|
Arts, Entertainment, and Recreation (7% of the total)
|
|
|
|
RPAC Racing, LLC (interest rate includes PIK interest of 10.00%)
|
|
|
Term Loan
|
|
|
|
11/19/10
|
|
|
|
01/15/17
|
|
|
|
1
|
|
|
|
2
|
%
|
|
|
10.00
|
%
|
|
|
|
|
|
$
|
5,555
|
|
|
$
|
5,555
|
|
|
$
|
5,555
|
|
|
|
|
|
(capitalized interest of $2,516 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative and Support Services (5% of the total)
|
|
|
|
Staff One, Inc.
|
|
|
Term Loan
|
|
|
|
06/30/08
|
|
|
|
03/31/18
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
3.00
|
%
|
|
|
|
|
|
$
|
2,776
|
|
|
$
|
2,776
|
|
|
$
|
2,776
|
|
|
|
|
|
Staff One, Inc. (interest rate includes PIK interest of 7.00%)
|
|
|
Term Loan
|
|
|
|
12/28/16
|
|
|
|
03/31/18
|
|
|
|
1
|
|
|
|
*
|
|
|
|
19.00
|
%
|
|
$
|
643
|
|
|
$
|
557
|
|
|
$
|
557
|
|
|
$
|
557
|
|
|
|
|
|
Staff One, Inc.
|
|
|
Term Loan
|
|
|
|
09/15/11
|
|
|
|
03/31/18
|
|
|
|
1
|
|
|
|
*
|
|
|
|
3.00
|
%
|
|
|
|
|
|
$
|
347
|
|
|
$
|
347
|
|
|
$
|
347
|
|
Page 45 of 90
Medallion Financial Corp.
Consolidated Summary Schedule of Investments
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
|
|
Obligor
Name/Interest Rate
Range
|
|
Security
Type (all
restricted
unless
otherwise
noted)
|
|
|
Acquisition
Date
|
|
|
Maturity
Date
|
|
|
No. of
Invest.
|
|
|
% of
Net
Assets
|
|
|
Interest
Rate
(1)
|
|
|
Original
Cost of 2016
Acquisitions
(5)
|
|
|
Principal
Outstanding
|
|
|
Cost
(4)
|
|
|
Fair
Value
|
|
Transportation and Warehousing (5% of the total)
|
|
|
|
LLL Transport, Inc. (interest rate includes PIK interest of 3.00%)
|
|
|
Term Loan
|
|
|
|
10/23/15
|
|
|
|
04/23/21
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
15.00
|
%
|
|
|
|
|
|
$
|
3,622
|
|
|
$
|
3,622
|
|
|
$
|
3,620
|
|
|
|
|
|
(capitalized interest of $122 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale Trade (4% of the total)
|
|
+
|
|
Classic Brands, LLC
|
|
|
Term Loan
|
|
|
|
01/08/16
|
|
|
|
04/30/23
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
12.00
|
%
|
|
$
|
2,880
|
|
|
$
|
2,880
|
|
|
$
|
2,880
|
|
|
$
|
2,880
|
|
Construction (2% of the total)
|
|
|
|
Highland
Crossing-M,
LLC
|
|
|
Term Loan
|
|
|
|
01/07/15
|
|
|
|
02/01/25
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
11.50
|
%
|
|
|
|
|
|
$
|
1,450
|
|
|
$
|
1,450
|
|
|
$
|
1,450
|
|
Accommodation and Food Services (0% of the total)
|
|
|
|
Various Other && 9.25% to 10.00%
|
|
|
Term Loan
|
|
|
|
06/30/00
to
11/05/10
|
|
|
|
09/30/17
to
11/05/20
|
|
|
|
3
|
|
|
|
*
|
|
|
|
9.77
|
%
|
|
$
|
0
|
|
|
$
|
1,108
|
|
|
$
|
1,108
|
|
|
$
|
455
|
|
Retail Trade (0% of the total)
|
|
|
|
Various Other && 10.00%
|
|
|
Term Loan
|
|
|
|
06/30/00
|
|
|
|
09/30/17
|
|
|
|
1
|
|
|
|
*
|
|
|
|
10.00
|
%
|
|
$
|
0
|
|
|
$
|
69
|
|
|
$
|
69
|
|
|
$
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total secured mezzanine
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37
|
|
|
|
26
|
%
|
|
|
13.47
|
%
|
|
$
|
20,773
|
|
|
$
|
76,469
|
|
|
$
|
76,469
|
|
|
$
|
75,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other secured commercial
(46% New York, 38% North Carolina, 14% New Jersey
and 2% all other states)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail Trade (54% of the total)
|
|
|
|
Medallion Fine Art Inc (interest rate includes PIK interest of 12%)
|
|
|
Term Loan
|
|
|
|
12/17/12
|
|
|
|
12/17/17
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
12.00
|
%
|
|
|
|
|
|
$
|
3,159
|
|
|
$
|
3,159
|
|
|
$
|
3,159
|
|
|
|
|
|
(capitalized interest of $2,695 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Various Other && 4.75% to 10.50%
|
|
|
Term Loan
|
|
|
|
10/28/08
to
05/03/16
|
|
|
|
05/09/18
to
05/03/21
|
|
|
|
7
|
|
|
|
*
|
|
|
|
7.92
|
%
|
|
$
|
175
|
|
|
$
|
1,570
|
|
|
$
|
1,546
|
|
|
$
|
1,254
|
|
Arts, Entertainment, and Recreation (38% of the total)
|
|
|
|
RPAC Racing LLC (interest rate includes PIK interest of 8%)
|
|
|
Term Loan
|
|
|
|
06/22/16
|
|
|
|
12/31/16
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
8.00
|
%
|
|
$
|
2,000
|
|
|
$
|
2,034
|
|
|
$
|
2,034
|
|
|
$
|
2,034
|
|
|
|
|
|
(capitalized interest of $34 per footnote 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RPAC Racing LLC (interest rate includes PIK interest of 8%)
|
|
|
Term Loan
|
|
|
|
09/14/16
|
|
|
|
12/31/16
|
|
|
|
1
|
|
|
|
*
|
|
|
|
8.00
|
%
|
|
$
|
1,000
|
|
|
$
|
1,000
|
|
|
$
|
1,000
|
|
|
$
|
1,000
|
|
Accommodation and Food Services (6% of the total)
|
|
|
|
Various Other && 6.75% to 9.00%
|
|
|
Term Loan
|
|
|
|
11/29/05
06/06/14
|
|
|
|
04/18/17
09/06/19
|
|
|
|
3
|
|
|
|
*
|
|
|
|
8.29
|
%
|
|
$
|
0
|
|
|
$
|
690
|
|
|
$
|
597
|
|
|
$
|
459
|
|
Transportation and Warehousing (1% of the total)
|
|
|
|
Various Other && 4.00% to 4.25%
|
|
|
Term Loan
|
|
|
|
09/19/14
03/17/15
|
|
|
|
03/31/17
09/10/18
|
|
|
|
2
|
|
|
|
*
|
|
|
|
4.08
|
%
|
|
$
|
0
|
|
|
$
|
260
|
|
|
$
|
252
|
|
|
$
|
120
|
|
Real Estate and Rental and Leasing (1% of the total)
|
|
|
|
Various Other && 5.00%
|
|
|
Term Loan
|
|
|
|
03/31/15
|
|
|
|
03/31/20
|
|
|
|
1
|
|
|
|
*
|
|
|
|
5.00
|
%
|
|
$
|
0
|
|
|
$
|
72
|
|
|
$
|
69
|
|
|
$
|
60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Commercial Loans
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16
|
|
|
|
3
|
%
|
|
|
9.33
|
%
|
|
$
|
3,175
|
|
|
$
|
8,785
|
|
|
$
|
8,657
|
|
|
$
|
8,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial loans
(2)
|
|
|
|
53
|
|
|
|
29
|
%
|
|
|
13.05
|
%
|
|
$
|
23,948
|
|
|
$
|
85,254
|
|
|
$
|
85,126
|
|
|
$
|
83,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Medallion Bank and other controlled subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Banking
|
|
|
|
Medallion Bank **
|
|
|
100% of common stock
|
|
|
|
05/16/02
|
|
|
|
None
|
|
|
|
1
|
|
|
|
98
|
%
|
|
|
2.20
|
%
|
|
|
|
|
|
|
|
|
|
$
|
136,171
|
|
|
$
|
280,590
|
|
NASCAR Race Team
|
|
|
|
Medallion MotorSports, LLC
|
|
|
75% of LLC units
|
|
|
|
11/24/10
|
|
|
|
None
|
|
|
|
1
|
|
|
|
2
|
%
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
2,820
|
|
|
$
|
6,980
|
|
Art Dealer
|
|
|
|
Medallion Fine Art, Inc.
|
|
|
100% of common stock
|
|
|
|
12/03/12
|
|
|
|
None
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
724
|
|
|
$
|
3,646
|
|
Loan Servicing
|
|
|
|
Medallion Servicing Corp.
|
|
|
100% of common stock
|
|
|
|
11/05/10
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
455
|
|
|
$
|
454
|
|
Professional Sports Team
|
|
|
|
LAX Group LLC
|
|
|
45.74% of
membership
interests
|
|
|
|
05/23/12
|
|
|
|
None
|
|
|
|
1
|
|
|
|
1
|
%
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
440
|
|
|
$
|
1,690
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Medallion Bank and other controlled subsidiaries, net
|
|
|
|
|
|
|
|
5
|
|
|
|
103
|
%
|
|
|
2.13
|
%
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
140,610
|
|
|
$
|
293,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Finance
|
|
|
|
Convergent Capital, Ltd **
|
|
|
7% of limited partnership interest
|
|
|
|
07/20/07
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
(794
|
)
|
|
$
|
1,100
|
|
NASCAR Race Team
|
|
|
|
RPAC Racing LLC
|
|
|
1,000
shares of
Series D
|
|
|
|
08/25/15
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
1,351
|
|
Employee Leasing Services
|
|
|
|
Staff One, Inc.
|
|
|
46.4%
preferred
stock
|
|
|
|
06/30/08
|
|
|
|
None
|
|
|
|
2
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
472
|
|
|
$
|
1,172
|
|
Page 46 of 90
Medallion Financial Corp.
Consolidated Summary Schedule of Investments
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
thousands)
|
|
|
|
Obligor
Name/Interest Rate
Range
|
|
Security
Type (all
restricted
unless
otherwise
noted)
|
|
Acquisition
Date
|
|
|
Maturity
Date
|
|
|
No. of
Invest.
|
|
|
% of
Net
Assets
|
|
|
Interest
Rate
(1)
|
|
|
Original
Cost of 2016
Acquisitions
(5)
|
|
|
Principal
Outstanding
|
|
|
Cost
(4)
|
|
|
Fair
Value
|
|
Weather Forecasting Services
|
|
|
|
Weather Decision Technologies, Inc.
|
|
2.2% preferred stock
|
|
|
12/11/15
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
500
|
|
|
$
|
500
|
|
Hand Tool Manufacturer
|
|
|
|
Stride Tool Holdings, LLC
|
|
7.14% of Series
A-2
LLC units
|
|
|
04/05/16
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
$
|
500
|
|
|
|
|
|
|
$
|
500
|
|
|
$
|
500
|
|
Services related to advertising
|
|
|
|
ADSCO Opco, LLC
|
|
7.9% of LLC units of Class A Series
A-2
|
|
|
10/25/16
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
$
|
400
|
|
|
|
|
|
|
$
|
400
|
|
|
$
|
400
|
|
Envirnomental Consulting Services
|
|
|
|
Northern Technologies, LLC
|
|
7.98% of LLC units
|
|
|
01/29/2016
and
12/5/16
|
|
|
|
None
|
|
|
|
2
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
$
|
350
|
|
|
|
|
|
|
$
|
350
|
|
|
$
|
351
|
|
Paper Tapes Manufacturer
|
|
|
|
Liberty Paper Products Acquisition, LLC
|
|
100% of Series A preferred LLC units - 12% total
|
|
|
06/09/16
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
$
|
350
|
|
|
|
|
|
|
$
|
350
|
|
|
$
|
350
|
|
Stuffed Toy Manufacturer
|
|
|
|
AA Plush Holdings, LLC
|
|
1.6% LLC common units
|
|
|
08/15/14
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
300
|
|
|
$
|
300
|
|
Investment Castings
|
|
|
|
Tech Cast Holdings LLC
|
|
4.14% LLC units
|
|
|
12/12/14
|
|
|
|
12/12/19
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
300
|
|
|
$
|
300
|
|
Machine Shop
|
|
|
|
MicroGroup, Inc.
|
|
5.5% common stock
|
|
|
06/29/15
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
300
|
|
|
$
|
300
|
|
Baby Sleep Products
|
|
|
|
BB Opco, LLC d/b/a BreathableBaby, LLC
|
|
3.6% LLC units
|
|
|
08/01/14
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
250
|
|
|
$
|
250
|
|
Manufacture Space Heaters, etc.
|
|
|
|
Pinnacle Products International, Inc.
|
|
0.5% common stock
|
|
|
10/09/15
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
135
|
|
|
$
|
135
|
|
IT Services
|
|
|
|
Centare Holdings, Inc.
|
|
7.23% of common stock, 3.88% of preferred stock
|
|
|
08/30/13
|
|
|
|
None
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
|
|
|
|
|
|
|
|
$
|
104
|
|
|
$
|
104
|
|
Hobbyists Supplies Merch. Wholesale
|
|
|
|
Classic Brand, LLC
|
|
Warrant for 300,000 Class A units
|
|
|
01/08/16
|
|
|
|
01/08/26
|
|
|
|
1
|
|
|
|
*
|
|
|
|
0.00
|
%
|
|
$
|
0
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Various Other #
|
|
+
|
|
**
|
|
* Various
|
|
|
09/10/98
to 7/24/15
|
|
|
|
None to
2/5/23
|
|
|
|
15
|
|
|
|
*
|
|
|
|
2.27
|
%
|
|
$
|
300
|
|
|
|
|
|
|
$
|
1,366
|
|
|
$
|
1,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity investments, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32
|
|
|
|
3
|
%
|
|
|
0.00
|
%
|
|
$
|
1,900
|
|
|
$
|
0
|
|
|
$
|
4,533
|
|
|
$
|
8,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investments ($231,494 pledged as collateral under borrowing arrangements)
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
774
|
|
|
|
228
|
%
|
|
|
4.94
|
%
|
|
$
|
42,553
|
|
|
$
|
381,190
|
|
|
$
|
525,319
|
|
|
$
|
652,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents the actual or weighted average interest or dividend rate of the respective security or portfolio as of the date indicated. Investments without an interest rate or with a rate of 0.00% are considered
non-income
producing.
|
(2)
|
Included in secured mezzanine commercial loans and other commercial loans was $6,791 of interest income capitalized into the outstanding investment balances, in accordance with the terms of the investment contract.
|
(3)
|
The ratio of restricted securities fair value to net assets is 228%.
|
(4)
|
Gross unrealized appreciation, gross unrealized depreciation and net appreciation for federal income tax purposes totaled $210,510, $31,028 and $179,482, respectively. The tax cost of investments was $472,796.
|
(5)
|
For revolving lines of credit the amount shown is the cost at December 31, 2016.
|
**
|
Not an eligible portfolio company as such term is defined in Section 2(a)(46) of the 1940 Act. The percentage value of all
non-eligible
portfolio companies to totaled assets
of Medallion Financial on an unconsolidated basis was up to 52% and up to 43% on a consolidated basis. Under the 1940 Act, we may not acquire any
non-qualifying
assets, unless at the time such acquisition is
made, qualifying assets, which include securities of eligible portfolio companies, represent at least 70% of our total assets. The status of these assets under the 1940 Act are subject to change. We monitor the status of these assets on an ongoing
basis.
|
&
|
Loan is on nonaccrual status, or past due on contractual payments, and is therefore considered
non-income
producing.
|
&&
|
Some or all of the securities are
non-income
producing as per & above.
|
#
|
Publicly traded but sales subject to applicable Rule 144 limitations.
|
##
|
Pledged as collateral under borrowing arrangements.
|
+
|
Includes various warrants, all of which have a cost and fair value of zero at December 31, 2016.
|
Page 47 of 90
|
The Summary Schedule of Investments does not reflect the Companys complete portfolio holdings. It includes the Companys 50 largest holdings and each investment of any issuer that exceeds 1% of the Companys net
assets. Various Other represents all issues not required to be disclosed under the rules adopted by the U.S. Securities and Exchange Commission (SEC). Footnotes above may apply to securities that are included in Various
Other. For further detail, the complete schedule of portfolio holdings is available (i) without charge, upon request, by calling (877) MEDALLION; and (ii) on the SECs website at http://www.sec.gov. Filed as Exhibit 99.1 to
the Annual Report on Form
10-K
for the fiscal year ended December 31, 2016, filed on March 14, 2017 (File
No. 814-00188)
|
Page 48 of 90
Medallion Financial Corp
CONSOLIDATED SCHEDULE OF INVESTMENTS IN AND ADVANCES TO AFFIILIATES
As of and for the year ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of issuer and title of issue
(Dollars
in
thousands)
|
|
Number of shares (all restricted unless
otherwise noted)
|
|
Equity in
net profit
and (loss)
|
|
|
Amount of
dividends
or interest
(1)
|
|
|
Value as of
12/31/16
|
|
Medallion Bank common stock
|
|
1,000,000 shares - 100% of common stock
|
|
$
|
128,385
|
|
|
$
|
3,000
|
|
|
$
|
280,589
|
|
Medallion Motorsports, LLC membership interest
(3)
|
|
75% of membership interest
|
|
|
4,465
|
|
|
|
0
|
|
|
|
6,980
|
|
Medallion Fine Art, Inc. common
stock
(2)
|
|
1,000 shares - 100% of common stock
|
|
|
(587
|
)
|
|
|
0
|
|
|
|
3,647
|
|
LAX Group LLC membership interest
|
|
45.1% of membership interest
|
|
|
700
|
|
|
|
0
|
|
|
|
1,690
|
|
Medallion Servicing Corp. common stock
|
|
1,000 shares - 100% of common stock
|
|
|
158
|
|
|
|
0
|
|
|
|
454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments in Medallion Bank and other controlled subsidiaries
|
|
|
|
|
133,121
|
|
|
|
3,000
|
|
|
|
293,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RPAC Racing LLC
(3)
|
|
100% of Series D units
|
|
|
0
|
|
|
|
0
|
|
|
|
1,351
|
|
Stride Tool Holdings LLC
(4)
membership interest
|
|
7.14% of Series A membership interest
|
|
|
0
|
|
|
|
0
|
|
|
|
500
|
|
Appliance Recycling Centers of America Inc. common stock
|
|
8.86% of common stock
|
|
|
0
|
|
|
|
0
|
|
|
|
475
|
|
ADSCO Holdco LLC
(5)
|
|
7.9% of membership interest
|
|
|
0
|
|
|
|
0
|
|
|
|
400
|
|
Northern Technologies LLC membership interest
(6)
|
|
7.7% of membership interest
|
|
|
0
|
|
|
|
0
|
|
|
|
351
|
|
Micro Group, Inc.
(7)
|
|
5.50% of common stock
|
|
|
0
|
|
|
|
0
|
|
|
|
300
|
|
Third Century JRT, Inc.
(8)
|
|
13% of common stock
|
|
|
0
|
|
|
|
0
|
|
|
|
200
|
|
WRWP, LLC membership interest
(9)
|
|
0.00% of membership interest
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Production Services Associates LLC
(10)
|
|
5.65% of membership interest
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity investments in afiliates
|
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3,577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Investments with an amount of $0 are considered
non-income
producing.
|
(2)
|
The Company also has a loan due from Medallion Fine Art, Inc. in the amount of $3,159 as of December 31, 2016, on which $596 of interest income was earned during 2016.
|
(3)
|
The Company and a controlled subsidiary of the Company have 3 loans due from RPAC Racing LLC, an affiliate of Medallion Motorsports, LLC in the amount of $8,589 as of December 31, 2016, on which $626 of interest
income was earned during 2016.
|
(4)
|
The Company had a loan due from Production Services Associates LLC during 2016, $0 of which was outstanding at December 31, 2016, on which $356 of interest income was earned during 2016.
|
(5)
|
The Company has a loan due from Micro Group, Inc. in the amount of $3,244 as of December 31, 2016, on which $410 of interest income was earned during 2016.
|
(6)
|
The Company has loans due from WRWP, LLC in the amount of $2,659 as of December 31, 2016, on which $404 of interest income was earned during 2016.
|
(7)
|
The Company has a loan due from JR Thompson Company LLC, or affiliate of Third Century JRT, Inc., in the amount of $1,625 as of December 31, 2016, on which $255 of interest income was earned during 2016.
|
(8)
|
The Company has loan from Northern Technologies LLC in the amount of $3,533 as of December 31, 2016, on which $426 of interest income was earned during 2016.
|
Page 49 of 90
(9)
|
The Company has a loan from Stride Tool Holding LLC in the amount of $4,091 as of December 31, 2016, on which $455 of interest income was earned during 2016.
|
(10)
|
The Company has a loan to ADSCO Holdco LLC in the amount of $3,613 as of December 31, 2016, on which $87 of interest income was earned during 2016.
|
Page 50 of 90
The table below provides a recap of the changes in the investment in the respective issuers for the year ended
December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Issuer
|
|
Medallion
Bank
|
|
|
Medallion
Fine Art,
Inc.
|
|
|
Medallion
Motorsports,
LLC
(2)
|
|
|
Appliance
Recycling
Centers
of
America,
Inc.
|
|
|
Medallion
Servicing
Corp.
|
|
|
LAX
Group, LLC
|
|
|
Production
Services
Associates,
LLC
(3)
|
|
|
Micro
Group,
Inc.
(4)
|
|
|
WRWP,
LLC
|
|
|
Third
Century
JRT,
Inc.
(6)
|
|
|
Northern
Technologies,
LLC
(7)
|
|
|
Stride Tool
Holding
LLC
(8)
|
|
|
ADSCO Holdco
LLC
(9)
|
|
|
RPAC Racing
LLC
(2)
|
|
Title of Issue
|
|
Common
Stock
|
|
|
Common
Stock
(1)
|
|
|
Membership
Interest
|
|
|
Common
Stock
|
|
|
Common
Stock
|
|
|
Membership
Interest
|
|
|
Membership
Interest
|
|
|
Common
Stock
|
|
|
Membership
Interest
(5)
|
|
|
Common
Stock
|
|
|
Membership
Interest
|
|
|
Membership
Interest
|
|
|
Membership
Interest
|
|
|
Membership
Interest
|
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value as of 12/31/15
|
|
$
|
152,166
|
|
|
$
|
4,234
|
|
|
$
|
2,527
|
|
|
$
|
509
|
|
|
$
|
631
|
|
|
$
|
355
|
|
|
$
|
1,179
|
|
|
$
|
300
|
|
|
$
|
224
|
|
|
$
|
200
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Gross additions / investments
|
|
|
4,265
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
160
|
|
|
|
635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
351
|
|
|
|
500
|
|
|
|
400
|
|
|
|
|
|
Gross reductions / distributions
|
|
|
(4,227
|
)
|
|
|
|
|
|
|
(13
|
)
|
|
|
|
|
|
|
(495
|
)
|
|
|
|
|
|
|
(1,082
|
)
|
|
|
|
|
|
|
(224
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net equity in profit and loss, and unrealized appreciation and (depreciation)
|
|
|
128,385
|
|
|
|
(587
|
)
|
|
|
4,465
|
|
|
|
(34
|
)
|
|
|
158
|
|
|
|
700
|
|
|
|
(97
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,351
|
|
Other adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value as of 12/31/16
|
|
$
|
280,589
|
|
|
$
|
3,647
|
|
|
$
|
6,980
|
|
|
$
|
475
|
|
|
$
|
454
|
|
|
$
|
1,690
|
|
|
$
|
|
|
|
$
|
300
|
|
|
$
|
|
|
|
$
|
200
|
|
|
$
|
351
|
|
|
$
|
500
|
|
|
$
|
400
|
|
|
$
|
1,351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The Company has a loan due from Medallion Fine Art, Inc. in the amount of $3,159 as of December 31, 2016, $300 of which was advanced during 2016, and for which $6,111 was repaid.
|
(2)
|
In addition to the equity ownership, the Company and a controlled subsidiary of the Company have three loans due from RPAC Racing LLC, an affiliate of Medallion Motorsports, LLC in the amount of $8,589 as of
December 31, 2016, $3,626 of which was advanced during 2016.
|
(3)
|
The Company had a loan due from Production Services Associates LLC, during 2016, $0 of which of outstanding at December 31, 2016.
|
(4)
|
The Company has a loan due from Micro Group, Inc. in the amount of $3,244 as of December 31, 2016, $11 of which was advanced during 2016.
|
(5)
|
The Company has a loan due from WRWP LLC in the amount of $2,659 as of December 31, 2016, $348 of which was advanced during 2016, $224 of which was an exchange of the equity interest.
|
(6)
|
The Company has a loan due from J. R. Thompson Company, LLC, an affiliate of Third Century JRT, INC in the amount of $1,625 as of December 31, 2016, $29 of which was advanced during 2016, and for which $677 was
repaid.
|
(7)
|
The Company has a loan due from Northern Technologies LLC in the amount of $3,533 as of December 31, 2016, all of which was advanced during 2016.
|
(8)
|
The Company has a loan due from Stride Tool Holdings LLC in the amount of $4,091 as of December 31, 2016, all of which was advanced during 2016.
|
(9)
|
The Company has a loan due from ADSCO Holdco LLC in the amount of $3,613 as of December 31, 2016, all of which was advanced during 2016.
|
Page 51 of 90