Medallion Financial Corp. Reports 2012 Fourth Quarter and Record Full Year Results

  Medallion Financial Corp. Reports 2012 Fourth Quarter and Record Full Year
  Results

  *Full year record earnings of $24,517,000, or $1.21 per diluted common
    share, increased 28% from 2011
  *Fourth quarter earnings of $6,523,000, or $0.30 per diluted common share,
    increased 16% from the 2011 fourth quarter
  *Managed assets hit an all-time high at $1.22 billion, including $723
    million at Medallion Bank
  *Delinquent loans on a managed basis decreased to under 0.5%
  *Quarterly dividend increased to $0.22 per share, highest in twelve years

Business Wire

NEW YORK -- March 5, 2013

Medallion Financial Corp. (Nasdaq: TAXI), a specialty finance company with a
leading position servicing the taxicab industry and other niche markets,
announced that earnings, or net increase in net assets resulting from
operations was $6,523,000 or $0.30 per diluted common share in the 2012 fourth
quarter, up $891,000 or 16% from $5,632,000 or $0.32 per diluted common share
in the 2011 fourth quarter. For the 2012 full year, net increase in net assets
resulting from operations was a record $24,517,000 or $1.21 per diluted common
share, up 28% from $19,163,000 or $1.09 per share in 2011.

Andrew Murstein, President of Medallion Financial stated, “We are extremely
pleased with the fourth quarter and full year results. Total earnings for the
year were the highest since the Company went public 16 years ago. We are also
pleased that we will be increasing our dividend to $0.22 per share, the
highest it’s been in 12 years. Over the last 10 years we have given our
shareholders an annual return including dividends of over 24% per year. We are
proud to have performed so well, and we feel confident in our future.”

Medallion Bank, the Company’s unconsolidated wholly-owned portfolio company,
had net income of $5,282,000 in the 2012 fourth quarter, compared to
$3,980,000 in the 2011 fourth quarter, an increase of $1,302,000 or 33%. For
the 2012 full year, Medallion Bank earned $19,546,000, up 24% from $15,775,000
in 2011. As the Company continues to use Medallion Bank as a primary funding
source, it refers more loans to Medallion Bank for origination to take
advantage of current short term borrowing rates which are at historically low
levels, and which are the Company’s least expensive source of funds.

Medallion Financial’s net interest margin was 6.43% for the 2012 fourth
quarter and 4.89% for the full year, compared to 7.00% and 5.10% for the
comparable 2011 periods. On a combined basis with Medallion Bank, the net
interest margin was 6.48% and 6.31% in the quarter and full year, compared to
7.18% and 6.68% a year ago, reflecting the continued low cost of funds at the
Bank, and the Bank’s higher-yielding loan portfolio. Both measures reflect the
strong portfolio earning power of Medallion, as net interest margins remained
at high levels compared to most other financial institutions.

Larry D. Hall, Chief Financial Officer of Medallion Financial stated, “Even
with our higher share count, we were still able to sustain and grow our per
share earnings due in part to continued strong loan demand, very solid credit
performance by the portfolio, and controlled operating expenses. In addition,
delinquencies remain at exceptionally low levels. Medallion’s capital and
liquidity levels remained strong, with over $61,000,000 of deposit-raising
capacity at Medallion Bank, in addition to over $96,000,000 of availability in
our other funding sources. Medallion’s debt to equity ratio is only 1.49 to 1,
providing ample room for increasing our leverage and growing our businesses
down the road.”

Mr. Hall continued, “In addition, during 2012 we have continued to replace
higher cost borrowings with lower cost fixed and floating rate debt, further
enhancing our profitability, lowering our cost of borrowed funds by 31 basis
points from 2011. We see additional opportunities to continue this as rates
remain near historic lows. For example, much of our $60,000,000 of SBA
debentures carries higher than market rates, and can be refinanced to current
lower levels, subject to SBA approval, which if it occurs, should be accretive
to subsequent earnings.”

Medallion Financial’s on-balance sheet taxicab medallion loan portfolio was
$294,000,000 at year end, down $13,000,000 or 4% from $307,000,000 a year ago,
primarily due to the funding of most new medallion loan originations at
Medallion Bank. Total managed medallion loans increased $12,000,000 or 2% to
$688,000,000 at year end, up from $676,000,000 a year ago.

Medallion Financial’s on-balance sheet commercial loan portfolio was
$57,000,000 at year end, up $3,000,000 or 5% from $54,000,000 a year ago. The
managed commercial loan portfolio was $113,000,000 at year end, down
$2,000,000 or 2% from $115,000,000 last year. Medallion Bank’s consumer loan
portfolio increased $66,000,000 or 34% to $259,000,000 at year end from
$193,000,000 a year ago. Overall, total managed assets increased $77,000,000
or 7% to $1,219,000,000 at year end, up from $1,142,000,000 a year ago.

Asset quality remained very strong, with managed loans 90 days or more past
due of only 0.4% at year end, down from 1.8% a year ago, and 1.4% at the end
of 2010.

Medallion Financial also announced a dividend of $0.22 per share for the 2012
fourth quarter, up from $0.20 per share in the 2011 fourth quarter. This
brings the total dividends declared over the last four quarters to $0.85, up
15% from $0.74 cents in 2011, and equates to a yield of approximately 6.5%
based on the closing price of the Company’s stock on March 4, 2013. The
current dividend will be paid on March 28, 2013, to shareholders of record on
March 21, 2013. Since the Company’s initial public offering in 1996, the
Company has paid or declared in excess of $185,506,000 or $11.45 per share in
dividends.

Medallion Financial Corp. is a specialty finance company with a leading
position in the origination and servicing of loans financing the purchase of
taxicab medallions and related assets. The Company also originates and
services loans in other commercial industries, and its wholly-owned portfolio
company, Medallion Bank, also originates and services consumer loans. The
Company and its subsidiaries have lent approximately $5 billion to the taxicab
industry and other small businesses.

Please note that this press release contains forward-looking statements that
involve risks and uncertainties relating to business performance, cash flow,
costs, sales, net investment income, earnings, and growth. 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 2011 Annual Report on Form 10-K.

MEDALLION FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS
                                                     
                                                       Year Ended December 31,
(Dollars in thousands, except per share data)         2012        2011
Total investment income                                $32,344     $37,227
Total interest expense                                 10,858      13,538
Net interest income                                    21,486      23,689
                                                                   
Total noninterest income                               1,135       1,185
                                                                   
Salaries and benefits                                  8,862       8,480
Professional fees                                      1,381       1,515
Occupancy expense                                      828         911
Other operating expenses                               2,785       3,205
Total operating expenses                               13,856      14,111
                                                                   
Net investment income before income taxes              8,765       10,763
Income tax (provision) benefit                         -           -
Net investment income after income taxes               8,765       10,763
                                                                   
Net realized losses on investments                     (6,731)     (546)
                                                                   
Net change in unrealized appreciation on investments   14,587      1,278
Net change in unrealized appreciation on Medallion     7,896       7,668
Bank and other controlled subsidiaries
Net unrealized appreciation on investments             22,483      8,946
Net realized/unrealized gains on investments           15,752      8,400
                                                                   
Net increase in net assets resulting from operations  $24,517     $19,163
Net investment income after income taxes per common
share
Basic                                                  $0.44       $0.62
Diluted                                               0.43        0.61
Net increase in net assets resulting from operations
per common share
Basic                                                  $1.23       $1.10
Diluted                                               1.21        1.09
Dividends declared per share                          $0.85       $0.74
Weighted average common shares outstanding
Basic                                                  19,912,883  17,426,097
Diluted                                               20,180,694  17,659,831

MEDALLION FINANCIAL CORP.

CONSOLIDATED BALANCE SHEETS
                                                         
(Dollars in thousands, except per    December 31, 2012    December 31, 2011
share data)
Assets
Medallion loans, at fair value       $    294,388            $    307,167
Commercial loans, at fair value           56,919                  54,159
Investment in Medallion Bank and
other controlled subsidiaries, at         99,083                  85,932
fair value
Equity investments, at fair value         4,620                   4,577
Investment securities, at fair value     -                   -
Net investments                           455,010                 451,835
                                                             
Cash and cash equivalents                 26,875                  29,352
Accrued interest receivable               957                     1,120
Fixed assets, net                         601                     466
Goodwill, net                             5,069                   5,069
Other assets, net                        54,953              49,189
Total assets                         $    543,465         $    537,031
                                                             
Liabilities
Accounts payable and accrued         $    3,144              $    6,040
expenses
Accrued interest payable                  1,233                   1,708
Funds borrowed                           322,770             357,779
Total liabilities                        327,147             365,527
                                                             
Commitments and contingencies             -                       -
                                                         
Total shareholders' equity (net          216,318             171,504
assets)
Total liabilities and shareholders'  $    543,465         $    537,031
equity
                                                             
Number of common shares outstanding       21,651,204              17,719,570
Net asset value per share            $    9.99            $    9.68
                                                             
Total managed loans                  $    1,060,693          $    984,576
Total managed assets                     1,219,224           1,141,806

Contact:

AT THE COMPANY:
Medallion Financial Corp.
Andrew M. Murstein, President
Larry D. Hall, CFO
212-328-2100
1-877-MEDALLION
or
AT ZLOKOWER COMPANY
Public Relations
Harry Zlokower/Dave Closs
212-447-9292
 
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