1000209--3/15/2006--MEDALLION_FINANCIAL

related topics

{loan, real, estate}

{tax, income, asset}

{investment, property, distribution}

{competitive, industry, competition}

{debt, indebtedness, cash}

{acquisition, growth, future}

{condition, economic, financial}

{stock, price, share}

{interest, director, officer}

{personnel, key, retain}

{cost, operation, labor}

Interest rate fluctuations may adversely affect the interest rate spread we receive on our taxicab medallion and commercial loans A decrease in prevailing interest rates may lead to more loan prepayments, which could adversely affect our business. We have traditionally qualified to be a RIC, and in order to be taxed as a RIC we must distribute our income. Therefore, we may have a continuing need for capital if we continue to be taxed as a RIC in the future. We may have difficulty raising capital to finance our planned level of lending operations. Lending to small businesses involves a high degree of risk and is highly speculative. Our borrowers may default on their loans. We borrow money, which may increase the risk of investing in our common stock. If we are unable to continue to diversify geographically, our business may be adversely affected if the New York City taxicab industry experiences a sustained economic downturn. The loss of certain key members of our senior management could adversely affect us. Acquisitions may lead to difficulties that could adversely affect our operations. Competition from entities with greater resources and less regulatory restrictions may decrease our profitability. The valuation of our loan portfolio is subjective and we may not be able to recover our estimated value in the event of a foreclosure or sale of a substantial portion of portfolio loans. Changes in taxicab industry regulations that result in the issuance of additional medallions could lead to a decrease in the value of our medallion loan collateral. Our failure to re-establish our RIC status in 2004 and beyond could lead to a substantial reduction in the amount of income distributed to our shareholders. Our SBIC subsidiaries may be unable to meet the investment company requirements, which could result in the imposition of an entity-level tax. The Internal Revenue Code s diversification requirements may limit our ability to expand our business. Our past use of Arthur Andersen LLP as our independent auditors may pose risks to us and also limit your ability to seek potential recoveries from them related to their work. We depend on cash flow from our subsidiaries to make dividend payments and other distributions to our shareholders. We operate in a highly regulated environment. Our use of brokered deposit sources for MB s deposit-gathering activities may not be available when needed. Consumer lending is a new product line for us that carries a higher risk of loss and could be adversely affected by an economic downturn.

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1000209--3/15/2006--MEDALLION_FINANCIAL_CORP