UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
August 3, 2011
Medallion Financial Corp.
(Exact name of registrant as specified in its charter)
Delaware | 814-00188 | 04-3291176 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
437 Madison Avenue, 38th Floor, New York, New York | 10022 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (212) 328-2100
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION. |
Medallion Financial Corp. (the Company) issued a press release to the news media announcing, among other things, the Companys results for the quarter ended June 30, 2011.
A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The information in the press release is being furnished, not filed, pursuant to Item 2.02. Accordingly, the information in the press release will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS. |
Exhibit |
Description | |
99.1 | Press release, dated August 3, 2011. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MEDALLION FINANCIAL CORP. | ||
By: |
/s/ Larry D. Hall | |
Name: Larry D. Hall | ||
Title: Chief Financial Officer |
Date: August 3, 2011
Exhibit Index
Exhibit No. |
Description | |
99.1 | Press release, dated August 3, 2011. |
Exhibit 99.1
FOR FURTHER INFORMATION:
AT THE COMPANY: | AT ZLOKOWER COMPANY | |
Medallion Financial Corp. | Public Relations | |
437 Madison Avenue | Harry Zlokower/Dave Closs | |
New York, New York 10022 | 1-212-447-9292 | |
Andrew M. Murstein, President | ||
Larry D. Hall, CFO | ||
1-212-328-2100 | ||
1-877-MEDALLION |
FOR IMMEDIATE RELEASE
MEDALLION FINANCIAL CORP. REPORTS
2011 SECOND QUARTER RESULTS
| Earnings increased 45% to $0.25 per diluted common share from $0.17 in 2010 |
| EPS is the highest in three years, and managed assets hit an all time high of over $1.1 billion |
| Quarterly dividend raised to $0.18 per share. |
NEW YORK, NY August 3, 2011. 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 $4,416,000 or $0.25 per diluted common share in the 2011 second quarter, up $1,381,000 or 45% from $3,035,000 or $0.17 per diluted common share in the 2010 second quarter.
Medallion Bank, the Companys unconsolidated wholly-owned portfolio company, had net income of $4,132,000 for the 2011 second quarter, compared to $3,204,000 in the 2010 second quarter, an increase of $929,000 or 29%, primarily reflecting improved net interest income and reduced loan losses from the prior year. 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 averaged 0.97% for the quarter, with new borrowing rates as low as 0.40%.
(more)
Medallion Financial Announces 2011 Second Quarter Results p. 2
Andrew Murstein, President of Medallion Financial stated, We are extremely pleased with the quarters results. This was the highest our EPS has been in three years. Profits are rising, and we continued to see strong loan demand in all of our lines of business. Additionally, we continue to experience zero losses on any taxi medallion loan we have originated in the history of the company, and our loan to value ratio on our entire medallion portfolio is under 50%.
Medallion Financials net interest margin was 4.33% for the 2011 second quarter, compared to 4.81% in the 2010 second quarter. On a combined basis with Medallion Bank, the net interest margin was 6.40%, compared to 6.69% a year ago, reflecting the continued low cost of funds at the bank, and the Banks higher-yielding loan portfolio. Net investment income after income taxes was $1,479,000 or $0.08 per diluted common share in the 2011 quarter, down $1,461,000 from $2,940,000 or $0.17 per diluted common share in the 2010 quarter, primarily as a result of the Company referring additional loans for origination to Medallion Bank whose earnings are not consolidated in Net Investment Income, but whose results and fair value are shown through the Companys Net Increase in Net Assets.
Larry D. Hall, Chief Financial Officer of Medallion Financial stated, We remain focused very intently on the credit quality of our loan portfolios. Unlike many other financial institutions, our credit quality has not only remained very good, but has improved, even in these turbulent times. Loans more than 90 days past due, on a combined basis with Medallion Bank, were at 1.2% at June 30, 2011, down from 1.4% at year end and 1.5% a year ago.
Medallion Financials capital and liquidity levels remained strong with over $102,000,000 of availability from our existing cash and funding sources and Medallion Financials leverage continues to be well under the industry norms with a debt to equity ratio of only 2.20 to 1. In addition, Medallion Bank had about $60,000,000 of deposit-raising capacity, and during July received almost $4,000,000 of capital under the U.S. Treasurys Small Business Lending Fund program, which can be further leveraged for another $27,000,000 of deposit growth. The Company and the Bank remain well-positioned for future growth.
Medallion Financials on-balance sheet taxicab medallion loan portfolio decreased to $312,000,000 from $333,000,000 a year ago, due to the funding of most new loan originations by Medallion Bank, and the Companys sale of loan participations to third party banks. As a result, total managed medallion loans increased 8% to $667,000,000 from $616,000,000 a year ago.
Medallion Financials on-balance sheet commercial loan portfolio was $66,000,000 at quarter end, down from $72,000,000 a year ago. The managed commercial loan portfolio decreased 1% to $126,000,000 from $128,000,000 in 2010. Medallion Banks consumer loan portfolio increased 4% to $195,000,000 from $187,000,000 a year ago. Overall, total managed assets increased 6% to $1.126 billion from $1.058 billion a year ago.
The Companys net asset value per share increased to $9.49, up from $9.16 one year ago, in part due to improved profitability in Medallion Bank, which is a taxable C Corp. and is entitled to retain its after tax earnings. The Company also announced an increase in the dividend to $0.18 per share for the 2011 second quarter, up from $0.15 per share for the 2010 second quarter, bringing the total amount to $0.66 over the last four quarters. This equates to a yield of over 7% based on the most recent closing price of the Companys stock. The current dividend will be paid on September 2, 2011, to shareholders of record on August 19, 2011. Since the Companys initial public offering in 1996, the Company has paid in excess of $161,000,000 or $10.21 per share in dividends.
* * *
(more)
Medallion Financial Announces 2011 Second Quarter Results p. 3
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 over $3.9 billion to its taxicab industry, small business, and other customers.
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. Medallions 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 Medallions 2010 Annual Report on Form 10-K.
MEDALLION FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(Dollars in thousands, except per share data) |
2011 | 2010 | 2011 | 2010 | ||||||||||||
Total investment income |
$ | 8,413 | $ | 9,360 | $ | 18,010 | $ | 18,590 | ||||||||
Total interest expense |
3,343 | 3,740 | 6,845 | 7,255 | ||||||||||||
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Net interest income |
5,070 | 5,620 | 11,165 | 11,335 | ||||||||||||
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Total noninterest income |
326 | 1,151 | 735 | 1,947 | ||||||||||||
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Salaries and benefits |
1,752 | 2,750 | 3,959 | 5,807 | ||||||||||||
Professional fees |
193 | 687 | 523 | 1,277 | ||||||||||||
Occupancy expense |
225 | 346 | 452 | 680 | ||||||||||||
Other operating expenses |
1,747 | 48 | 2,646 | 347 | ||||||||||||
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Total operating expenses |
3,917 | 3,831 | 7,580 | 8,111 | ||||||||||||
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Net investment income before income taxes |
1,479 | 2,940 | 4,320 | 5,171 | ||||||||||||
Income tax (provision) benefit |
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Net investment income after income taxes |
1,479 | 2,940 | 4,320 | 5,171 | ||||||||||||
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Net realized gains (losses) on investments |
575 | (668 | ) | 584 | (8,890 | ) | ||||||||||
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Net change in unrealized appreciation (depreciation) on investments |
311 | (945 | ) | 95 | (2,188 | ) | ||||||||||
Net change in unrealized appreciation on Medallion Bank and other controlled subsidiaries |
2,051 | 1,708 | 3,696 | 9,051 | ||||||||||||
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Net unrealized appreciation on investments |
2,362 | 763 | 3,791 | 6,863 | ||||||||||||
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Net realized/unrealized gains (losses) on investments |
2,937 | 95 | 4,375 | (2,027 | ) | |||||||||||
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Net increase in net assets resulting from operations |
$ | 4,416 | $ | 3,035 | $ | 8,695 | $ | 3,144 | ||||||||
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Net investment income after income taxes per common share |
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Basic |
$ | 0.08 | $ | 0.17 | $ | 0.25 | $ | 0.29 | ||||||||
Diluted |
0.08 | 0.17 | 0.25 | 0.29 | ||||||||||||
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Net increase in net assets resulting from operations per common share |
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Basic |
$ | 0.25 | $ | 0.17 | $ | 0.50 | $ | 0.18 | ||||||||
Diluted |
0.25 | 0.17 | 0.49 | 0.18 | ||||||||||||
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Dividends declared per share |
$ | 0.18 | $ | 0.15 | $ | 0.35 | $ | 0.30 | ||||||||
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Weighted average common shares outstanding |
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Basic |
17,404,288 | 17,560,352 | 17,402,272 | 17,568,072 | ||||||||||||
Diluted |
17,609,550 | 17,685,988 | 17,578,804 | 17,700,334 | ||||||||||||
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MEDALLION FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data) |
June 30, 2011 |
December 31, 2010 |
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Assets |
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Medallion loans, at fair value |
$ | 312,139 | $ | 323,126 | ||||
Commercial loans, at fair value |
65,851 | 76,866 | ||||||
Investment in Medallion Bank and other controlled subsidiaries, at fair value |
82,772 | 78,735 | ||||||
Equity investments, at fair value |
4,663 | 4,789 | ||||||
Investment securities, at fair value |
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Net investments |
465,425 | 483,516 | ||||||
Cash and cash equivalents |
22,664 | 17,303 | ||||||
Accrued interest receivable |
1,320 | 1,441 | ||||||
Fixed assets, net |
409 | 419 | ||||||
Goodwill, net |
5,069 | 5,069 | ||||||
Other assets, net |
43,910 | 42,564 | ||||||
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Total assets |
$ | 538,797 | $ | 550,312 | ||||
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Liabilities |
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Accounts payable and accrued expenses |
$ | 5,646 | $ | 5,102 | ||||
Accrued interest payable |
1,849 | 1,913 | ||||||
Funds borrowed |
365,457 | 380,532 | ||||||
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Total liabilities |
372,952 | 387,547 | ||||||
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Commitments and contingencies |
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Total shareholders equity (net assets) |
165,845 | 162,765 | ||||||
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Total liabilities and shareholders equity |
$ | 538,797 | $ | 550,312 | ||||
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Number of common shares outstanding |
17,475,948 | 17,400,233 | ||||||
Net asset value per share |
$ | 9.49 | $ | 9.35 | ||||
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Total managed loans |
$ | 987,496 | $ | 967,690 | ||||
Total managed assets |
1,125,924 | 1,093,379 | ||||||
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