Medallion Financial Corp.

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Good morning and welcome everyone to Medallion Financial's 2020 Third Quarter Earnings Conference Call. By now, everyone should have access to the earnings announcement which was released prior to this call and which may also be found on the company's website at medallion.com. Before we begin formal remarks, we need to remind everyone that the matters discussed on this call include forward-looking statements or projected financial information that involve risk and uncertainties that may cause the company's actual results to differ materially from those projected in such forward-looking statements and projected financial information. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. For further information on factors that could impact the company and the statements and projections contained herein, please refer to the company's filings with the Securities and Exchange Commission Each forward-looking statement and projection of financial information made during this call is based on information available to us as of the date of this call. We disclaim any obligation to update our forward-looking statements unless required by law. I would like to introduce Mr. Andrew Marstein, President of Medallion Financial. Thank you, sir. You may begin.

Good morning, everyone. Thank you for participating in our 2020 Third Quarter Earnings Call. Joining me on today's call is our CEO, Alvin Merstein, our CFO, Larry Hall, and our Director of Investor Relations, Alex Orzano. Let's just jump right into the Medallion portfolio. As a result of the negative impact on the ongoing COVID-19 pandemic on the taxi industry, the company took the necessary steps of impairing our remaining Medallion portfolio. thus placing all Medallion loans on non-accrual status and lowering the New York City Medallion collateral value to $90,300 net at the end of the third quarter, a substantial drop from the net carrying value of $119,500 last quarter. While we remain optimistic about the potential for long-term recoveries and our ability to collect, such recoveries are primarily dependent upon among other things, the overall health of the taxi industry and cab ridership in New York City. For the first nine months of the year, we have managed to collect $8.8 million on the medallion-related assets. At the end of the third quarter, the company's net medallion lending portfolio and loan collateral in the process of foreclosure to total medallion-related assets stood at $85 million, which is just 5% of total assets. In terms of just medallion loans on our books, that figure is now just $33.5 million, or 2.5% of assets. We believe this quarter's write-downs and reserves now puts medallion losses effectively behind us and better allows our core lending segments to become the focus of attention. We're optimistic that we will have a strong fourth quarter and strong 2021. With that being said, Let's now touch upon our consumer and commercial lending segments. Our consumer lending segments had strong growth in application volumes once again this quarter, which led to originations of $136 million for the quarter, up 9% from the 2019 third quarter. Net recreational and home improvement loan portfolios grew 13% and 36% from September 30, 2019. as demand for home improvements and recreational vehicles continues to be present in this economic environment. The Ion Bank stayed the course of tightening credit criteria in pursuit of improving overall asset quality and was able to meet the loan demand in the third quarter. COVID-related payment deferrals in our consumer lending segments were largely resolved during the quarter, while average FICO scores at origination now are slightly below 700 in the recreational segment and just above 750 in the home improvement segment. At the end of the third quarter, Medallion Bank had $207.2 million in capital and a Tier 1 leverage ratio of 15.47%. As previously stated, the bank began originating loans for its first fintech partner this past spring. We remain optimistic we will launch our second partner in the fourth quarter. We continue to develop new leads with companies looking to partner with an industrial bank like Medallion Bank and will look to grow this business. The company's net commercial lending portfolio was $68 million as of September 30, 2020, compared to $66.4 million at the end of 2019-2020. and $64.6 million at the end of the 2019 third quarter. No additional loans were placed on non-accrual in the third quarter, nor were any reserves taken against the loan portfolio, demonstrating the commercial portfolio has remained stable. One loan was put on non-accrual this year, and we took a partial reserve against an equity investment this quarter. Though deal flow is present, Medallion Capital will continue to be selective for the remainder of the year, and still remains well diversified across a broad range of geographies and industries. Net income for Medallion's consumer and commercial lending segments totaled $14.1 million in the third quarter and $27.4 million for the nine months of the year. I'll now turn this call over to Larry, who will provide additional highlights on the third quarter.