Ameritrans Capital Corporation Reports First Quarter Fiscal 2010 Results.

NEW YORK -- Ameritrans Capital Corporation (NASDAQ: AMTC, AMTCP) today reported financial results for the quarter ended September 30, 2009.

Highlights for First Quarter 2009:

* Total investment income for the three months ended September 30, 2009 of $253,758.

* Net unrealized depreciation on investments of approximately $1.9 million, or $0.56 per share, for the first quarter of Fiscal 2010.

* Net asset value per share of $2.52 as of September 30, 2009 compared to $3.40 as of June 30, 2009.

* At September 30, 2009, investment assets totaled $22.96 million as compared to $26.41 million at June 30, 2009.

Operating Results

The Company's investment income for the three months ended September 30, 2009 decreased $1,205,703, or 83%, to $253,758, as compared to the three months ended September 30, 2008. The decrease in investment income between the periods can be attributed to lower interest rates charged on the total loan portfolio for the quarter, and an overall decrease in the size of the Company's loan receivable portfolio due to the sale of substantially all of the Company's taxicab medallion portfolio. The recognition of realized loss of interest income of $222,307 which primarily reflected the write off of interest on life settlement investments.

Medallion loans outstanding as of September 30, 2009 decreased by $27,104,846, or approximately 99%, to $318,700, as compared with September 30, 2008. The interest rate earned on medallion loans decreased in 2009 as compared with the prior year, which coupled with the decline in portfolio size, lead to a decrease in medallion income for the quarter September 30, 2009 of approximately $626,000 as compared to the same period September 30, 2008. The Company has substantially exited the medallion loan area and no longer intends to report this as a separate category.

Commercial Loans as of September 30, 2009 decreased by $2,588,322, or 20%, to $10,497,013, as compared with September 30, 2008. This decrease in Commercial Loans outstanding was partially offset by stronger performance in the remaining portfolio, interest rate floors and collection of past due interest.

Corporate Loans outstanding as of September 30, 2009 decreased by $2,589,004, or 19%, to $10,943,000, as compared with the three months ended September 30, 2008. The interest rate earned on Corporate Loans decreased in the quarter ended September 30, 2009, as compared with the prior year, primarily due to decreases in LIBOR. This LIBOR decrease was partially offset by higher rates earned on loans originated in this fiscal year, the use of LIBOR "floors" in loan agreements, and further offset by increases in rates on existing loans due to covenant resets. The decrease in loans outstanding and amortization on other corporate loans was due to a sale of a loan and a fair value adjustment of a loan of approximately $670,000.

Life settlement contracts outstanding decreased by $2,519,296 as of September 30, 2009, or 86%, as compared with the three months ended September 30, 2008. This investment has stopped accruing interest and a fair value adjustment downward of approximately $2,500,000 has been made to reflect the value of the investment. The reduction in interest income for the three months ended September 30, 2009 was approximately $87,000 when compared to the prior year.

Net assets from operations decreased to $2,973,998, for the three months ended September 30, 2009 as compared to $478,606, for the three months ended September 30, 2008. The decrease in net assets from operations between the periods was attributable primarily to decreases in interest income and increased operating expenses discussed above. The decrease in assets from operations was also significantly impacted by a reduction in the fair value of certain investments in the Company's portfolio due to the write down of the Company's life settlement investments of approximately $1,400,000 and write down of the fair value of a corporate loan of approximately $686,000 to reflect the restructuring of this investment. The write off of interest income for $220,000 was related to the life settlement investments. The Company incurred a realized loss on foreclosure and sale of an asset acquired of approximately $212,000. Dividends for Participating Preferred Stock were not declared for the three months ended September 30, 2009. For three months ended September 30, 2008 dividends for Participating Preferred Stock were $84,375.

In October, 2009, Elk received written approval from the SBA that it had been granted a commitment for an additional $9,175,000 in SBA long term guaranteed debentures.

Michael Feinsod, further commented, "During the quarter, we continued to manage our existing portfolio. We now have a loan portfolio that is substantially comprised of commercial and corporate loans. With our recently announced commitment for additional SBA guaranteed debentures, we plan to resume the growth of our loan portfolio. The current credit markets provide us a large number of opportunities to consider for new investment. New loans continue to have terms, structure and pricing in our favor. We plan to continue the prudent and selective growth of our corporate and commercial loan portfolios."

Mr. Feinsod continued, "We continue to pursue methods to expand our loan portfolio. We believe that we can continue to build a portfolio of primarily senior loans that will allow us to capitalize on Ameritrans' unique corporate structure. We will continue to focus on less volatile lower risk senior loans as opposed to second-lien and mezzanine investments which we believe will provide the foundation for steady returns to the Company and its shareholders."

ABOUT AMERITRANS CAPITAL CORPORATION

Ameritrans Capital Corporation is an internally managed, closed-end investment company that has elected to be regulated as a business development company ("BDC") under the Investment Company Act of 1940, as amended. Ameritrans originates, structures and manages a portfolio of secured business loans and selected equity investments. Ameritrans' wholly owned subsidiary Elk Associates Funding Corporation is licensed by the United States Small Business Administration as a Small Business Investment Company (SBIC). The Company maintains its offices at 747 Third Avenue, 4th Floor, New York, NY 10017.

FORWARD-LOOKING STATEMENTS

Statements included herein may constitute "forward-looking statements," which relate to future events or our future performance or financial condition. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results and condition may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in our filings with the Securities and Exchange Commission. Ameritrans Capital undertakes no duty to update any forward-looking statements made herein.

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