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): | Commission File Number: | |
May 2, 2012 | 814-00188 |
MEDALLION FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
Delaware | 04-3291176 | |
(State or other jurisdiction of incorporation) |
(IRS Employer Identification Number) |
437 Madison Avenue
New York, New York 10022
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code:
(212) 328-2100
(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 March 31, 2012.
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. |
99.1 | Press release, dated May 2, 2012. |
2
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.
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By: | /s/ Larry D. Hall | |
Name: | Larry D. Hall | |
Title: | Chief Financial Officer |
Date: May 2, 2012
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Exhibit Index
Exhibit No. |
Description | |
99.1 | Press release, dated May 2, 2012. |
4
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
2012 FIRST QUARTER RESULTS
| First quarter earnings of $5,466,000, or $0.30 per share, increased 28% from the 2011 first quarter |
| NYC TLC approves the sale of 2,000 new taxi medallions |
| Quarterly dividend raised to $0.21 per share, highest in over 10 years |
NEW YORK, NY May 2, 2012 - 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 $5,466,000 or $0.30 per diluted common share in the 2012 first quarter, up $1,186,000 or 28% from $4,280,000 or $0.24 per diluted common share in the 2011 first quarter. Medallion Bank, the Companys unconsolidated wholly-owned portfolio company, had net income of $4,125,000 in the 2012 first quarter, compared to $3,082,000 in the 2011 first quarter, an increase of $1,043,000 or 34%, primarily reflecting improved net interest income and reduced loan losses, partially offset by higher income taxes, compared to 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.
Andrew Murstein, President of Medallion Financial stated, We are extremely pleased with the quarters results, and our increased dividend. This marks the 6th consecutive quarter that we have been able to increase the dividend. It is now at the highest level it has been in over 10 years. We continue to experience zero losses on New York City taxi medallion loans that we originated, said Mr. Murstein. The taxi industry remains resilient in this type of economic environment for several reasons such as corporate and consumer cutbacks on more expensive limousine and town car services, high taxi fleet utilization, and continuing high taxi ridership levels. In addition, the loan to value ratio on our entire medallion portfolio is approximately 40%.
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Medallion Financial Announces 2012 First Quarter Results p. 2
In April, The New York City Taxi and Limousine Commission approved a new taxi auction to sell up to 2,000 new taxi medallions within the next few years. We know there have been objections to the plan, including but not limited to understandable concerns from those who would like to see more wheelchair accessible taxis on the road in conformity with the Americans with Disability Act. We hope that a mutually acceptable plan can be worked out by all parties, said Mr. Murstein.
Larry D. Hall, Chief Financial Officer of Medallion Financial stated, Medallion Financials capital and liquidity levels remained strong, with over $107,000,000 of deposit-raising capacity at Medallion Bank, in addition to over $89,000,000 of availability in our other funding sources.
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, and we see additional opportunities to continue this. For example, our $33,000,000 of Trust Preferred securities, which currently carry a fixed rate of 7.68%, will re-price to 90 day Libor plus 2.125% in September, or 2.59% at todays rates, which should be accretive to subsequent earnings.
Medallion Financials on-balance sheet taxicab medallion loan portfolio was $291,000,000 at quarter end, down from $310,000,000 a year ago, primarily due to the funding of most new medallion loan originations at Medallion Bank, and the Companys sale of loan participations to third party banks. Total managed medallion loans increased $10,000,000 or 2% to $674,000,000 at quarter end, up from $664,000,000 a year ago.
Medallion Financials on-balance sheet commercial loan portfolio was $56,000,000 at quarter end, down from $74,000,000 a year ago. The managed commercial loan portfolio was $120,000,000 at quarter end, down from $134,000,000 last year. In both cases, the declines primarily reflected portfolio repayments. Medallion Banks consumer loan portfolio increased 7% to $198,000,000 at quarter end from $185,000,000 a year ago. Overall, total managed assets increased 1% to $1,134,348,000 at year end, up from $1,118,255,000 a year ago. Asset quality remained very strong, with managed loans 90 days or more past due of only 1.5% at quarter end, down from 1.8% at year end, and up slightly from 1.3% a year ago.
The Company also announced an increase in the dividend of 24% to $0.21 per share for the 2012 first quarter, up from $0.17 per share in the 2011 first quarter. This brings the total dividends paid over the last four quarters to $0.78, and equates to a yield of over 7% based on the closing price of the Companys stock on May 1, 2012. The current dividend will be paid on May 25, 2012, to shareholders of record on May 15, 2012. Since the Companys initial public offering in 1996, the Company has paid in excess of $171,714,000 or $10.81 per share in dividends.
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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 its 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. 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 2011 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) | 2012 | 2011 | ||||||
Total investment income |
$ | 7,863 | $ | 9,597 | ||||
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Total interest expense |
3,247 | 3,502 | ||||||
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Net interest income |
4,616 | 6,095 | ||||||
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Total noninterest income |
335 | 409 | ||||||
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Salaries and benefits |
2,050 | 2,207 | ||||||
Professional fees |
313 | 331 | ||||||
Occupancy expense |
211 | 227 | ||||||
Other operating expenses |
766 | 898 | ||||||
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Total operating expenses |
3,340 | 3,663 | ||||||
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Net investment income before income taxes |
1,611 | 2,841 | ||||||
Income tax (provision) benefit |
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Net investment income after income taxes |
1,611 | 2,841 | ||||||
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Net realized gains (losses) on investments |
(58 | ) | 9 | |||||
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Net change in unrealized appreciation (depreciation) on investments |
2,013 | (216 | ) | |||||
Net change in unrealized appreciation on Medallion Bank and other controlled subsidiaries |
1,900 | 1,646 | ||||||
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Net unrealized appreciation on investments |
3,913 | 1,430 | ||||||
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Net realized/unrealized gains on investments |
3,855 | 1,439 | ||||||
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Net increase in net assets resulting from operations |
$ | 5,466 | $ | 4,280 | ||||
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Net investment income after income taxes per common share |
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Basic |
$ | 0.09 | $ | 0.16 | ||||
Diluted |
0.09 | 0.16 | ||||||
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Net increase in net assets resulting from operations per common share |
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Basic |
$ | 0.31 | $ | 0.25 | ||||
Diluted |
0.30 | 0.24 | ||||||
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Dividends declared per share |
$ | 0.21 | $ | 0.17 | ||||
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Weighted average common shares outstanding |
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Basic |
17,657,222 | 17,400,233 | ||||||
Diluted |
17,936,958 | 17,548,036 | ||||||
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MEDALLION FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data) | March 31, 2012 | December 31, 2011 | ||||||
Assets |
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Medallion loans, at fair value |
$ | 291,025 | $ | 307,167 | ||||
Commercial loans, at fair value |
56,111 | 54,159 | ||||||
Investment in Medallion Bank and other controlled subsidiaries, at fair value |
88,207 | 85,932 | ||||||
Equity investments, at fair value |
5,524 | 4,577 | ||||||
Investment securities, at fair value |
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Net investments |
440,867 | 451,835 | ||||||
Cash and cash equivalents |
24,566 | 29,352 | ||||||
Accrued interest receivable |
1,089 | 1,120 | ||||||
Fixed assets, net |
527 | 466 | ||||||
Goodwill, net |
5,069 | 5,069 | ||||||
Other assets, net |
50,529 | 49,189 | ||||||
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Total assets |
$ | 522,647 | $ | 537,031 | ||||
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Liabilities |
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Accounts payable and accrued expenses |
$ | 4,104 | $ | 6,040 | ||||
Accrued interest payable |
764 | 1,708 | ||||||
Funds borrowed |
343,520 | 357,779 | ||||||
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Total liabilities |
348,388 | 365,527 | ||||||
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Commitments and contingencies |
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Total shareholders equity (net assets) |
174,259 | 171,504 | ||||||
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Total liabilities and shareholders equity |
$ | 522,647 | $ | 537,031 | ||||
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Number of common shares outstanding |
17,942,510 | 17,719,570 | ||||||
Net asset value per share |
$ | 9.71 | $ | 9.68 | ||||
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Total managed loans |
$ | 991,391 | $ | 984,576 | ||||
Total managed assets |
1,134,348 | 1,141,806 | ||||||
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