Medical Financial (NASDAQ: MFIN) reported Q1 EPS of ($0.62), versus $0.01 reported last year.

Medallion Financial and Non-Bank Subsidiaries

• For the 2018 first quarter, net decrease in net assets resulting from operations was $14.9 million, or a loss of $0.62 per common share, compared to a net increase in net assets resulting from operations of $1.1 million, or $0.05 per diluted common share in the prior-year period.
• Net investment loss before taxes for the 2018 first quarter was $3.6 million, compared to net investment loss before income taxes of $1.3 million in the prior-year period.
• Medallion Financial’s net interest margin was 0.32% for the quarter, compared to 0.58% in the prior year.
• On a pro-forma combined basis with Medallion Bank, the 2018 first quarter net interest margin was 6.96%, compared to 6.59% in the prior year, reflecting the low cost of funds at Medallion Bank and its higher-yielding loan portfolio.

“Our first quarter was characterized by continued strong performance from our consumer and mezzanine lending segments,” stated Andrew Murstein, President of Medallion Financial. “Our consumer segment at Medallion Bank continues to be the main driver for our Company, generating over $16 million in net investment income before income taxes. We also took substantial additional write-downs on our non-performing medallion loans and foreclosed medallion assets, and wrote medallion values down to $183,500 for New York medallions, and $156,000 for wheelchair accessible New York medallions. Despite the significant reduction we took in terms of medallion values, the Tier 1 capital to average assets leverage ratio of Medallion Bank is over 15% as of April 30, 2018. While we continue to reduce our medallion exposure, we remain hopeful that medallion prices have bottomed out as the average New York City medallion transfer price in April as reported by the TLC was over $230,000 per medallion. In addition the New York City Council is currently discussing and evaluating substantial changes to the taxi and e-hail industry. While there are no guarantees that legislation will pass, the changes could substantially help prices. Furthermore, we believe another large medallion lender sold their portfolio to a private investment firm. That is a big positive on many fronts as it represents new capital coming into the industry and a sign that the buyer presumably feels that prices may have bottomed out. We are also in discussions to service medallion portfolios for third parties, which would entail receiving substantial fee income without balance sheet risk.”

“Notably, we were pleased that we have now completed the de-BDC process and beginning in the 2018 second quarter will report as a traditional finance company,” added Mr. Murstein. “We will begin consolidating all of our non-investment company subsidiaries, including Medallion Bank, and can report as one entity. Our long-term strategy remains unchanged as we continue to focus squarely on our consumer and mezzanine divisions while steadily reducing our medallion lending exposure as we work to unlock value for our shareholders.”

For earnings history and earnings-related data on Medical Financial (MFIN) click here.