Medallion Financial Corp.

Good day, and welcome to the Medallion Financial fourth quarter 2021 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star, then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touchtone phone. And if you'd like to withdraw your question, press star, then two. Please also note this event is being recorded. And I would now like to turn the conference over to Ken Cooper of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Welcome to Medallion Financial's fourth quarter earnings call. During our call, we will refer to our earnings supplement slides. This presentation is available on our website at medallion.com by clicking Investor Relations. The presentation is near the top of the page. Joining me today are Andrew Merstein, President and Chief Operating Officer, and Anthony Catrone, Chief Financial Officer. Certain statements made during the call today constitute forward-looking statements made pursuant to and within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. Those risks and uncertainties are described in our earnings press release issued yesterday and in our filings with the SEC. The forward-looking statements made today are as the date of this call, and we do not undertake any obligation to update these forward-looking statements. With that, let me now turn the call over to Andrew. Andrew?

Thank you, Ken. Good morning, everyone. We are doing things a little differently this earnings call. During our remarks, Anthony and I will walk through a short slide deck to further illustrate our business drivers and trends. This is the first time we have used the slide deck We believe this will help our investor community fully appreciate and visualize the power of our strategy and model. We executed well all year. This was clearly shown as we increased our earnings each quarter. We have now had sequential improvement for five consecutive quarters, and this resulted in a record-breaking year for earnings, as we reported $54.1 million in net income and $2.17 in per share for 2021. The most important component of our strategy and the driver for our performance in 2021 has been our consumer lending segments, which now account for 94% of our loans. We experienced growth in both consumer lending segments all year, and this has continued so far in 2022. Recreation, which is predominantly loans for towable RVs and boats and home improvement, which include loans for home projects like replacement roofs, swimming pools, and windows, both continue to do well. Our commercial lending business is another important part of our strategy and also had a very good year. After 18 months of slow loan origination activity caused primarily by COVID, we started to ramp up our origination volume in 2021. This led to a 17.5% increase year-over-year increase in our loan balances. Because of rigorous underwriting standards, our ability to take equity stakes in some of these early stage companies, and the strong net interest margin of the loans, commercial lending is an attractive business for us. We have a wonderful team managing it. Moving to a few business highlights, one of our focus areas is loan originations, and our consolidated loan origination volume was strong all year. We had a 50.3% increase in loan originations this year, which totaled $747 million. This is a testament to our teams and technology. We have a diligent process of working with qualified contractors and dealers and quickly assessing the credit profile of their customers to determine borrower creditworthiness. We are still operating below our historical averages for loan loss provisions. We continue to work hard to maintain good credit quality while adhering to our defined controls to keep losses at a minimum. Our capital allocation philosophy is to be prudent. First, we look for how we can invest back in our business. With our consumer lending and commercial lending segments well capitalized, our board of directors evaluated how to give capital back to shareholders. As you saw in our earnings release, our board approved the reinstatement of our quarterly dividend, which was suspended in 2016. We are now in a position to resume a quarterly dividend starting in March at $0.08 per share. We are pleased to be able to pay a dividend and potentially expand our shareholder base with dividend-seeking investors. Before turning the call over to Anthony, there are a few other items that do not directly impact our operational performance but are deserving of mention. First, we have litigation with the SEC related to certain alleged actions from late 2014 to 2017. As we said in our statement on December 29th, 2021, we intend to vigorously defend against the SEC's unfounded charges and are confident we will be completely vindicated. Our next step in the process is to file a response to the SEC, which we will do before March 22nd. Since this is an open legal case, we cannot speak further on this matter. Second, we completed the exit of non-core assets in 2021. In December, we divested our RPAC investment, which was a legacy investment from our days as a business development company. With that, I will now turn the call over to Anthony, who will provide additional financial highlights on the quarter and year.