Medallion Financial Corp.

Greetings and welcome to the Medallion Financial fourth quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ken Cooper, Investor Relations. Thank you, Mr. Cooper. You may begin.

Thank you and good morning, everyone. Welcome to Medallion Financial Corp's fourth quarter and full year earnings call. Joining me today are Andrew Merstein, President and Chief Operating Officer, and Anthony Controne, 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 of the date of this call, and we do not undertake any obligation to update these forward-looking statements. In addition to our earnings press release, you can find our fourth quarter supplement presentation on our website by visiting medallion.com and clicking investor relations. The presentation is near the top of the page. With that, I'll turn it over to Andrew Merstein, President.

Thank you, Ken. Good morning, everyone. Medallion Financial had a great year, highlighted by the continued growth of our consumer lending businesses. Our people have done an exceptional job growing our assets with our long-term success in mind. Also noteworthy is that after more than five years, we were able to reinstate our quarterly dividend in 2022, We were able to purchase over $20 million of our common stock during the year, and we were able to get back to what we had done best for so long, provide a cash return to shareholders. We generated $43.8 million of net income in 2022, as compared to $54.1 million in 2021. I'd like to unpack that for you so you can appreciate how strong both years were for us. In 2022, with the growth of our loan portfolio, we saw an increase of $32.6 million in our net interest income, despite rising interest rates that raised our funding costs. Our loan loss provision trended back towards its normalized level as reflected in our provision for the year of $30.1 million, which was $25.5 million greater than last year's historically low provision of $4.6 million. Additionally, last year, we had 16.3 million of gains, which were not repeated this year. This included sales of investments that resulted in the combined gain of 11 million, the gain on extinguishment of debt of 4.6 million, and the sale of a non-core asset for a $700,000 gain. Taking all of these items into consideration, our 2022 performance was excellent across the board. 2022, home improvement continued to be our fastest-growing segment with 43% loan growth to $626 million. We also saw growth in our marine and RV business, which had 23% loan growth to $1.2 billion of loans, and our commercial segment had 21% loan growth to $93 million. Over the past year, we continued to enhance our business. We maintained our rigorous credit standards and expanded our sales teams, as well as the number of dealers, contractors, and financial service providers who helped us originate loans. And finally, during times of increasing interest rates, one of the levers we use to protect our bottom line is to raise our own loan rates. We have done that to a degree in the past year, which has helped us deliver our results. On capital allocation during the quarter, we declared and paid a dividend of $0.08 per share, and we used $1.8 million of cash to repurchase over 257,000 shares of our common stock. For the year, we had $0.32 per share of dividends, and we repurchased over 2.6 million shares of stock for $20.6 million. We had $20 million remaining under our current share repurchase plan as of December 31, 2022. Delivering shareholder value remains one of our top priorities. In addition, for 2023, we plan to stay focused on prudently growing our loan portfolio. We will continue to focus on quality assets and not chase volume. It's the same thing we did in our last recessionary environment in 2008 and 2009, and we came out of that period stronger. With that, I will now turn the call over to Anthony, who will provide some additional insight about our quarter and year. Thank you, Andrew.