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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 $6,611,000 or $0.31 per diluted common share in the 2012 third quarter, up $1,776,000 or 37% from $4,835,000 or $0.27 per diluted common share in the 2011 third quarter.
Medallion Bank, the Company’s unconsolidated wholly-owned portfolio company, had net income of $5,311,000 in the 2012 third quarter, compared to $4,581,000 in the 2011 third quarter, an increase of $730,000 or 16%. 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 our least expensive source of funds.
Medallion Financial’s net interest margin was 4.21% for the 2012 third quarter, compared to 3.97% in the 2011 third quarter. On a combined basis with Medallion Bank, the net interest margin was 6.39%, compared to 6.47% a year ago, reflecting the continued low cost of funds at the Bank, and the Bank’s higher-yielding loan portfolio. Net investment income after income taxes was $1,337,000 or $0.06 per diluted common share in the 2012 quarter, down$39,000 or 3% from $1,376,000 or $0.08 per share in the 2011 quarter, primarily as a result of the Company originating more loans at its unconsolidated subsidiary Medallion Bank.
Andrew Murstein, President of Medallion Financial, stated, “We are extremely pleased with the quarter’s results. Even with our higher share count we still were able to increase our per share earnings due in part to continued strong loan demand and near record low delinquencies and losses. Over the last 10 years we have given our shareholders an average return of 18% per year including dividends. We are proud to have performed so well and we feel confident in our future.