Medallion Financial Corp. (Nasdaq: MFIN, “Medallion” or the
“Company”), a finance company that originates and services loans in
various consumer and commercial niche industries, announced today
its 2019 first quarter results. Effective April 2, 2018, Medallion
Financial Corp. withdrew its BDC election, and now operates as a
finance company following the reporting conventions of bank holding
companies, which began with the 2018 second quarter. A major
component of this change is that we now consolidate wholly-owned or
controlled subsidiaries, particularly Medallion Bank, which were
previously treated as unconsolidated portfolio investment
companies.
2019 First Quarter Highlights
- Net income was $1.2 million, or $0.05
per share, compared to a net loss of $14.9 million, or $0.62 per
share, in the prior year period
- Total assets were $1.43 billion as of
March 31, 2019
- Net interest income was $22.3 million,
reflecting primarily the contributions of the consumer lending
segments
- Net income from Medallion’s consumer
and commercial segments totaled $6.6 million in the quarter
- Net interest margin was 8.56% in the
2019 first quarter, the highest in over 10 years, compared to 6.96%
in the prior year period on a combined basis with Medallion
Bank
- 90 day plus medallion loan
delinquencies decreased to $4.0 million or 2.5% of gross medallion
loans, down from $53.2 million or 13.7% in the 2018 first quarter
when combined with Medallion Bank
- The provision for medallion loan losses
was $5.3 million in the 2019 first quarter compared to $62.7
million in the prior year period, recorded as non-cash valuation
adjustments and realized losses/charge-offs when combined with
Medallion Bank
- The net medallion portfolio now stands
at $140 million, down from $319 million one year ago when combined
with Medallion Bank, a decrease of 56%
- Medallion Bank’s Tier 1 leverage ratio
at quarter-end improved to 16.56% compared to 15.85% in the prior
quarter
Andrew Murstein, President of Medallion, stated, “The first
quarter was another successful step in the right direction as we
continue to reduce our medallion exposure and losses while growing
our highly profitable consumer lending segments and exploring
opportunities to expand our profitable commercial portfolio. We
were also successful in raising $30 million in a private placement
of senior unsecured notes that were investment grade rated. This
will give us the capital we need to continue to grow our business
lines and execute on our strategy.”
Mr. Murstein continued: “The consumer and commercial lending
segments will continue to be the drivers in 2019. The Company
recorded $22.3 million of net interest income, reflecting a strong
net interest margin of 8.56%. Medallion Bank’s Tier 1 leverage
ratio is now above 16.5%, demonstrating the Bank is well positioned
for 2019 as their consumer portfolio continues to grow. In
addition, the Bank’s net interest margin was 9.36% for the first
quarter, up from 9.08% recorded in the prior year period and is in
the top tier nationally. The Bank’s low efficiency ratio of 38.6 is
also another impressive figure worth noting when compared to other
banks. We originated $92 million in consumer loans in the quarter.
We currently have over 2,500 dealers in all 50 states referring
business to us and our pipeline looks promising, especially in the
coming months during the spring and summer periods when home
improvements, recreational vehicles and boats are in high
demand.”
Mr. Murstein continued, “In regard to our medallion portfolio,
in April, we came to terms with one of our largest borrowers that
provided for a pay down and the receipt of additional collateral to
secure the obligation. The recoveries typically show up when and if
the loan is paid off in the future. We feel this is yet another
positive sign that medallion owners have the resources and the
commitment to honor their obligations and that they believe in the
future of the taxi industry. A few days ago, we also successfully
sold at auction several Newark medallions for all cash at prices
slightly above what we had been carrying them at. Recently passed
regulations are also expected to have a positive effect on the taxi
industry. Additional congestion pricing is expected to take effect
in New York as passenger cars and commercial vehicles will be
charged a toll to enter Manhattan below 60th street. We hope this
will result in an increase in taxi usage due to a reduction in
traffic, fares turning over more quickly, and more of a desire to
use taxis than to drive into Manhattan. Furthermore, just last week
the two largest ride-hailing companies stopped accepting new
drivers in New York City. Lastly, we recently saw restrictions
imposed on ride-hailing companies at Logan International Airport in
Boston. These restrictions impose an additional fee and limit these
companies from making curbside pickups and drop-offs at terminals,
instead directing them to a garage. We believe cities continue to
support the taxi industry and are taking a stronger approach when
it comes to regulating the companies that cause the increased
congestion and traffic.”
Consumer Lending Segments
Medallion’s net consumer lending portfolio was $792.2 million as
of March 31, 2019 compared to $761.5 million at the end of the
prior quarter. Net interest income for the first quarter was $23.1
million. The average interest rate on the portfolio was 14.94%,
compared to 14.86% in the prior year period. Consumer loan
delinquencies over 90 days past due as of March 31, 2019 were
0.44%, compared to 0.55% in the prior quarter.
Commercial Lending Segment
The Company’s net commercial lending portfolio as of March 31,
2019 was $54.8 million. The average interest rate on the portfolio
was 13.42% compared to 11.76% a year ago on a managed basis. Net
income for the first quarter was $0.23 million. Medallion Capital
remains well capitalized and expects growth in its loan portfolio
for 2019.
Medallion Lending Segment
The Company’s net medallion lending portfolio as of March 31,
2019 was $140.4 million, compared to $318.9 million at March 31,
2018 on a combined basis with Medallion Bank, a 56% decrease. The
average interest rate on the medallion portfolio was 4.40% compared
to 4.42% a year ago on a combined basis with Medallion Bank. Total
medallion delinquencies over 90 days were $4.0 million as of March
31, 2019, compared to $15.7 million in the preceding quarter, and
$53.2 million in the prior year period when combined with Medallion
Bank. Medallion provision for loan losses was $5.3 million in the
quarter, compared to $3.4 million in the 2018 fourth quarter, which
reflects the reversal of $8.2 million of reserves as a result of
the deconsolidation of Trust III, and $62.7 million in the prior
year period, recorded as non-cash valuation adjustments and
realized losses/charge-offs when combined with Medallion Bank. Taxi
medallion loans comprised 14% of our net loans receivable as of
March 31, 2019, compared to 16% at year end and 28% of our managed
net loan portfolio as of March 31, 2018.
Conference Call Information
The Company will be hosting a conference call to discuss the
first quarter financial results on Tuesday, May 7, at 9:00 a.m.
Eastern time.
The dial-in number for the conference call is (877) 407-0789
(toll-free) or (201) 689-8562 (direct). Please dial the number 10
minutes prior to the scheduled start time. A live webcast of the
conference call will also be available on Medallion Financial’s
website at http://www.medallion.com/investors.html.
A replay will be available following the end of the call through
Tuesday, May 14, 2019, by telephone at (844) 512-2921 (toll-free)
or (412) 317-6671 (direct), passcode 13690086. A webcast replay of
the call will be available at
http://www.medallion.com/investors.html until the next quarter is
announced.
About Medallion Financial Corp.
Medallion Financial Corp. is a finance company that originates
and services loans in various industries, and its wholly-owned
subsidiary, Medallion Bank, also originates and services consumer
loans. Medallion Financial Corp. has lent more than $8 billion
since its initial public offering in 1996.
Please note that this press release contains forward-looking
statements that involve risks and uncertainties relating to
business performance, cash flow, costs, sales, net investment
income, earnings, and growth. Medallion’s actual results may differ
significantly from the results discussed in such forward-looking
statements. Factors that might cause such a difference include, but
are not limited to, those factors discussed under the heading “Risk
Factors,” in Medallion’s 2018 Annual Report on Form 10-K.
MEDALLION FINANCIAL CORP. CONSOLIDATED STATEMENT
OF OPERATIONS (UNAUDITED) (Dollars in thousands,
except per share data)
For the Three Months Ended March 31,
2019 Total interest income 30,043 Total
interest expense $ 7,722 Net interest
income 22,321 Provision for loan losses
13,343 Net interest income after provision for
loan losses 8,978 Other income
(loss) Gain on the extinguishment of debt
4,145
Sponsorship and race winnings
3,179 Change in collateral on
loans in process of foreclosure
(2,119 ) Other income
1,658 Total other income
6,863 Other expenses Salaries and
employee benefits
5,341 Race team related expenses
1,998 Professional fees
1,636 Loan servicing fees
1,194 Collection costs
638 Rent expense
600
Regulatory fees
447 Amortization of intangible assets
361 Travel, meals and entertainment
265 Other
expenses
2,222 Total other expenses
14,702 Income before income
taxes 1,139 Income tax benefit
256 Net
income after taxes 1,395 Less: income attributable to
the non-controlling interest
167 Total net
income (loss) attributable to Medallion Financial Corp.
$ 1,228 Basic net income per share
$
0.05 Diluted net income per share
$ 0.05
Weighted average common shares outstanding Basic
24,288,263 Diluted
24,616,890
MEDALLION FINANCIAL CORP. CONSOLIDATED BALANCE
SHEET (UNAUDITED) (Dollars in thousands,
except share and per share data)
March 31, 2019
Assets Cash, restricted cash and federal funds sold
$
86,121
Equity investments and investment
securities
53,381 Loans
1,024,200 Allowance for losses
(36,862 ) Net loans receivable
987,338
Loan collateral in process of foreclosure
49,808
Goodwill and intangible assets
204,423 Other assets
47,657 Total assets
$
1,428,728
Liabilities Accounts payable, accrued
expenses, and accrued interest payable
$
19,410
Deposits
864,131 Short-term borrowings
81,872
Deferred tax liabilities and other tax payables
7,037
Operating lease liabilities
11,724 Long-term debt
152,713 Total liabilities
1,136,887 Commitments and contingencies.
- Total stockholders’ equity
264,670 Non-controlling interest in
consolidated subsidiaries
27,171 Total
equity 291,841 Total liabilities
and equity
$
1,428,728
Number of shares outstanding
24,595,756
Book value per share
$
10.76
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190506005660/en/
Company Contact:
Alex E. ArzenoInvestor
Relations212-328-2176InvestorRelations@medallion.com
Medallion Financial (NASDAQ:MFIN)
Historical Stock Chart
From Feb 2024 to Mar 2024
Medallion Financial (NASDAQ:MFIN)
Historical Stock Chart
From Mar 2023 to Mar 2024