Medallion Financial Corp. Reports 2007 Second Quarter Results

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, increased 5% to $4,272,000, or $0.24 per diluted common share for the 2007 second quarter, up from $4,076,000 or $0.23 per share for the 2006 second quarter. Net increase in net assets resulting from operations increased 37% to $8,052,000, or $0.45 per share for the 2007 six months, up from $5,862,000, or $0.33 per share for the 2006 six months. Medallion’s on-balance sheet taxicab medallion loan portfolio increased 20% to $468,399,000, up from $390,061,000 a year ago. The on balance sheet commercial loan portfolio increased 6% to $93,018,000, up from $87,519,000. Including Medallion Bank, the Company’s unconsolidated wholly-owned portfolio investment, the managed medallion loan portfolio increased 19% to $556,139,000, up from $468,146,000 one year ago. The managed commercial loan portfolio increased 7% to $156,159,000, up from $146,523,000 one year ago. In addition, Medallion Bank’s consumer loan portfolio increased 24% to $129,395,000, up from $103,938,000 one year ago. Total assets under management increased 16% to $965,070,000, up from $834,546,000 a year ago. The managed portfolio amounts were all record highs for the Company. The total yield in the quarter across the entire portfolio, including assets managed by Medallion Bank, increased to 9.37%, up from 8.35% one year ago. The net interest margin increased to 4.38%, up from 3.99% one year ago. Andrew Murstein, President of Medallion, stated, "We are very pleased with our second quarter results, as the bottom line number is one of the highest it has been in several years. We were able to increase our margins while also growing our portfolio to an all time high. We also experienced strong unrealized gains relating to the approximately 175 taxicab medallions that we own in Chicago. New York City corporate medallion prices increased during the quarter to roughly $600,000, a record high, up from $485,000 last year. We anticipate similar gains in our medallion loans where we have upside appreciation benefits.” Larry Hall, Medallion’s Chief Financial Officer, stated, "During the quarter, before the market turned, we were fortunate to borrow $35,000,000 of unsecured debt for 30 years at an initial fixed rate of 7.68% for the next five years. That money can now be leveraged and productively deployed to fuel TAXI’s growth for the foreseeable future. "In addition, Medallion Bank is now permitted to pay dividends since its de novo period recently ended,” said Mr. Hall. "The Bank thus declared and paid a $1.5 million dividend to Medallion Financial which we, in turn, will dividend to our shareholders. As Medallion Bank is a taxable entity, that dividend will be taxed at just a 15% rate. "Credit quality also remains outstanding,” said Mr. Hall. "On a managed basis, including Medallion Bank, delinquent loans 90 days or more past due decreased across the board during the year on our three major portfolios: to 0.4% from 0.9% on our medallion portfolio, to 0.7% from 0.9% on our commercial portfolio and to 0.09% from 0.1% on our consumer portfolio. These are the lowest levels they have been in the history of the Company.” The Company also announced that its Board of Directors declared a dividend of $0.19 per share on its common stock for the 2007 second quarter, an increase of 12% from $0.17 a year ago. The dividend is payable on August 31, 2007 to shareholders of record on August 17, 2007. Since the Company’s initial public offering in 1996, the Company has paid out over $111,000,000 in dividends, or $7.39 per share. About Medallion Financial 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 $2.6 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 2006 Annual Report on Form 10-K. MEDALLION FINANCIAL CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)   Three Months ended June 30, Six Months ended June 30,   2007   2006 (As adjusted) 2007   2006 (As adjusted) Total investment income $13,157,101 $9,337,643 $23,596,385 $19,352,079 Total interest expense 7,535,234   6,123,626   14,284,852   11,497,263     Net interest income 5,621,867   3,214,017   9,311,533   7,854,816     Total noninterest income 558,355   1,000,504   1,048,788   1,616,182     Salaries and benefits 2,534,487 2,396,365 5,267,760 4,317,517 Professional fees 609,981 463,967 1,214,974 1,020,019 Rent expense 319,786 288,458 653,076 587,145 Other operating expenses 1,098,241   736,676   2,001,748   1,490,422   Total operating expenses 4,562,495   3,885,466   9,137,558   7,415,103     Net investment income before income taxes 1,617,727 329,055 1,222,763 2,055,895 Income tax (provision) benefit -   -   -   -   Net investment income after income taxes 1,617,727   329,055   1,222,763   2,055,895     Net realized gains on investments 1,840,822   2,519,079   11,852,412   662,843     Net change in unrealized depreciation on investments (127,295 ) (1,650,065 ) (8,165,815 ) (1,081,436 ) Net change in unrealized appreciation on Medallion Bank and other controlled subsidiaries 940,746   2,877,997   3,142,856   4,224,936   Net unrealized gains (losses) on investments 813,451   1,227,932   (5,022,959 ) 3,143,500           Net realized/unrealized gains on investments 2,654,273   3,747,011   6,829,453   3,806,343     Net increase in net assets resulting from operations $ 4,272,000   $4,076,066   $ 8,052,216   $ 5,862,238   Net increase in net assets resulting from operations per common share Basic $0.24 $0.24 $0.46 $0.34 Diluted 0.24   0.23   0.45   0.33   Net investment income after income taxes per common share Basic $0.16 $0.14 $0.29 $0.36 Diluted 0.16   0.14   0.28   0.35   Dividends declared per share $0.19   $0.17   $0.38   $0.33   Weighted average common shares outstanding Basic 17,485,785 17,283,907 17,456,748 17,248,007 Diluted 17,809,258   17,799,377   17,787,122   17,760,920   MEDALLION FINANCIAL CORP. CONSOLIDATED BALANCE SHEETS   UNAUDITED AUDITED   June 30, 2007 December 31, 2006 Assets Medallion loans, at fair value $468,398,516 $428,248,589 Commercial loans, at fair value 93,018,370 88,206,661 Investment in Medallion Bank and other controlled subsidiaries, at fair value 52,872,580 50,448,032 Investment securities, at fair value 14,999,412 9,961,111 Equity investments, at fair value 2,999,167 16,068,243 Net investments 632,288,045 592,932,636   Cash 19,412,865 15,398,740 Accrued interest receivable 2,366,983 2,177,694 Fixed assets, net 640,856 525,472 Goodwill, net 5,007,583 5,007,583 Other assets, net 20,208,788 15,562,763 Total assets $679,925,122 $631,604,888   Liabilities Accounts payable and accrued expenses $ 3,783,228 $ 5,057,204 Accrued interest payable 2,043,433 1,783,258 Funds borrowed 502,494,098 455,136,424 Total liabilities 508,320,759 461,976,886   Commitments and contingencies - -     Total shareholders' equity (net assets) 171,604,363 169,628,002 Total liabilities and shareholders' equity $679,925,122 $631,604,888   Number of common shares outstanding 17,502,515 17,426,415 Net asset value per share $9.80 $9.73   Total managed loans $854,413,070 $795,980,453 Total managed assets 965,070,459 907,132,484