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Medallion Financial Corp. Reports 2013 First Quarter Results



  Medallion Financial Corp. Reports 2013 First Quarter Results

  * First quarter earnings of $6,472,000, or $0.30 per diluted common share,
    increased 18% from the 2012 first quarter
  * Managed assets were $1.212 billion, including $732 million at Medallion
    Bank
  * Not a single taxi medallion loan was more than 90 days past due
  * Net interest margin increased to 6.36% on a combined basis
  * Quarterly dividend of $0.22 per share declared

Business Wire

NEW YORK -- May 6, 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, were $6,472,000 or $0.30 per diluted common share in the 2013
first quarter, up $1,006,000 or 18% from $5,466,000 or $0.30 per share in the
2012 first quarter.

Medallion Bank, the Company’s unconsolidated wholly-owned portfolio company,
had net income of $4,650,000 in the 2013 first quarter, compared to $4,125,000
in the 2012 first quarter, an increase of $525,000 or 13%. 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.

Andrew Murstein, President of Medallion Financial stated, “We are extremely
pleased with the 2013 first quarter results, which were among the highest in
the Company’s history. Additionally, we are also pleased that we will be
paying a dividend of $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 approximately 25% per year. We are proud to have performed so
well, and we feel confident in our future.”

Medallion Financial’s net interest margin was 5.51% in the 2013 first quarter,
compared to 4.18% in the comparable 2012 period, primarily reflecting our
reduced cost of funds as funding sources have favorably repriced. On a
combined basis with Medallion Bank, the net interest margin was 6.36% in the
quarter, compared to 6.06% 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, “All the
important indicators of our business continue to demonstrate the quality of
Medallion’s operations, including continued growth and profitability, very
solid credit performance by the portfolio, strong capital levels, abundant
liquidity, and an experienced management team. Loans 90 days or more past due
remain at exceptionally low levels, only 0.3%, compared to 0.4% at year end,
and 1.5% a year ago. Medallion’s capital and liquidity levels remained strong,
with over $53,000,000 of deposit-raising capacity at Medallion Bank, in
addition to over $98,000,000 of availability in our other funding sources.
Medallion’s debt to equity ratio was only 1.45 to 1, providing ample room for
increasing our leverage and growing our businesses down the road.”

Mr. Hall continued, “We have continued to replace higher cost borrowings with
lower cost fixed and floating rate debt, further enhancing our profitability
and lowering our cost of borrowed funds by 108 basis points from the year ago
quarter. We see additional opportunities to continue this as rates remain near
historic lows. Up to $38,000,000 of SBA debentures carries higher than market
rates, and can likely be refinanced to current lower levels, subject to SBA
approval, which if it occurs, should be accretive to subsequent earnings.”

Net investment income after income taxes was $2,463,000 or $0.11 per share in
the 2013 quarter, up $852,000 or 53% from $1,611,000 or $0.09 per share in the
2012 quarter.

Medallion Financial’s on-balance sheet taxicab medallion loan portfolio was
$289,000,000 at quarter end, down $2,000,000 or 1% from $291,000,000 a year
ago, primarily due to the funding of most new medallion loan originations at
Medallion Bank. Total managed medallion loans increased $11,000,000 or 2% to
$685,000,000 at quarter end, up from $674,000,000 a year ago.

Medallion Financial’s on-balance sheet commercial loan portfolio was
$62,000,000 at quarter end, up $6,000,000 or 11% from $56,000,000 a year ago.
The managed commercial loan portfolio was $116,000,000 at quarter end, down
$4,000,000 or 3% from $120,000,000 last year. Medallion Bank’s consumer loan
portfolio increased $71,000,000 or 36% to $269,000,000 at quarter end from
$198,000,000 a year ago. Overall, total managed assets increased $78,000,000
or 7% to $1,212,000,000 at quarter end, up from $1,134,000,000 a year ago.

Medallion Financial also announced a dividend of $0.22 per share for the 2013
first quarter, up from $0.21 per share in the 2012 first quarter. This brings
the total dividends declared over the last four quarters to $0.86, up 10% from
$0.78 cents in the prior four quarters, and equates to a yield of
approximately 6% based on the closing price of the Company’s stock on May 1,
2013. The current dividend will be paid on May 24, 2013, to shareholders of
record on May 17, 2013. Since the Company’s initial public offering in 1996,
the Company has paid or declared in excess of $190,000,000 or $11.67 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 2012 Annual Report on Form 10-K.

MEDALLION FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS
 
                                                 Three Months Ended March 31,
(Dollars in thousands, except per share data)      2013           2012        
Total investment income                          $ 8,245        $ 7,863
Total interest expense                             2,065          3,247       
Net interest income                                6,180          4,616       
                                                                 
Total noninterest income                           296            335         
                                                                 
Salaries and benefits                              2,551          2,050
Professional fees                                  500            313
Occupancy expense                                  201            211
Other operating expenses                           761            766         
Total operating expenses                           4,013          3,340       
                                                                 
Net investment income before income taxes          2,463          1,611
Income tax (provision) benefit                     -              -           
Net investment income after income taxes           2,463          1,611       
                                                                 
Net realized gains (losses) on investments         77             (58        )
                                                                 
Net change in unrealized appreciation on           2,965          2,013
investments
Net change in unrealized appreciation on
Medallion Bank                                     967            1,900       

and other controlled subsidiaries
Net unrealized appreciation on investments         3,932          3,913       
Net realized/unrealized gains on investments       4,009          3,855       
                                                                 
Net increase in net assets resulting from        $ 6,472        $ 5,466       
operations
Net investment income after income taxes per
common share
Basic                                            $ 0.11         $ 0.09
Diluted                                            0.11           0.09        
Net increase in net assets resulting from
operations per common share
Basic                                            $ 0.30         $ 0.31
Diluted                                            0.30           0.30        
Dividends declared per share                     $ 0.22         $ 0.21        
Weighted average common shares outstanding
Basic                                              21,423,311     17,657,222
Diluted                                            21,748,381     17,936,958  

MEDALLION FINANCIAL CORP.

CONSOLIDATED BALANCE SHEETS
 
(Dollars in thousands, except per share     March 31, 2013   December 31, 2012
data)
Assets
Medallion loans, at fair value              $  288,873       $    294,388
Commercial loans, at fair value                62,096             56,919
Investment in Medallion Bank and other         98,973             99,083
controlled subsidiaries, at fair value
Equity investments, at fair value              4,623              4,620
Investment securities, at fair value           -                  -
Net investments                                454,565            455,010
                                                              
Cash and cash equivalents                      21,406             26,875
Accrued interest receivable                    1,089              957
Fixed assets, net                              614                601
Goodwill, net                                  5,069              5,069
Other assets, net                              61,331             54,953
Total assets                                $  544,074       $    543,465
                                                              
Liabilities
Accounts payable and accrued expenses       $  3,842         $    3,144
Accrued interest payable                       507                1,233
Funds borrowed                                 319,644            322,770
Total liabilities                              323,993            327,147
                                                              
Commitments and contingencies                  -                  -
                                                              
Total shareholders' equity (net assets)        220,081            216,318
Total liabilities and shareholders'         $  544,074       $    543,465
equity
                                                              
Number of common shares outstanding            21,827,600         21,651,204
Net asset value per share                   $  10.08         $    9.99
                                                              
Total managed loans                         $  1,069,972     $    1,060,693
Total managed assets                           1,212,404          1,219,224

Contact:

Medallion Financial Corp.
437 Madison Avenue
New York, New York 10022
Andrew M. Murstein, President
Larry D. Hall, CFO
1-212-328-2100
1-877-MEDALLION
or
Public Relations
Harry Zlokower/Dave Closs
1-212-447-9292
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