Medallion Financial, a specialty finance company with a leading position servicing the taxicab industry, announced that earnings or net increase in net assets resulting from operations was $4.835 million, up $1.367 million or 39% from $3.468 million in the 2010 third quarter.

The company noted that as it continues to use Medallion Bank as a primary funding source it refers more loans to the Bank for origination to take advantage of current short term borrowing rates. Medallion said for the quarter, the Bank’s cost of funds was 1.07%, compared to 1.68% a year ago, and new deposits are being placed at coupon rates as low as 0.15%.

Medallion’s on-balance sheet taxicab medallion loan portfolio decreased to $304 million from $327 million a year ago, due to the funding of most new loan originations by Medallion Bank, and the company’s sale of loan participations to third party banks. As a result, total managed medallion loans increased 6% to $665 million from $629 million a year ago.

Andrew Murstein, president of Medallion said, “We are extremely pleased with the quarter’s results, continuing a recent string of sequential and year over year profit growth. Profits are rising, and business remains strong in all of our lines of business. Additionally, our loan to value ratio on our entire medallion portfolio is under 50%.”