Medallion Financial Corp.

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

Thank you and good morning, everyone. Welcome to Medallion Financial Corp's third quarter earnings call. Joining me today are Andrew Merstein, President and Chief Operating Officer, and Anthony Catrone, Executive Vice President and 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 third quarter supplement presentation on our website by visiting medallion.com in Clicking Investor Relations. The presentation is near the top of the page. With that, I'll turn it over to Andrew.

Thank you, Ken, and good morning. We executed well again in the third quarter. We delivered 8.6 million of net income and 37 cents of earnings per share for our shareholders. This was driven by good loan origination activity, stability in our loan portfolio metrics, and continued strengthening of the credit quality of our borrowers. Year to date, we have delivered over $25 million of net income and $1.09 per share of earnings. We are extremely pleased with these results. The hard work we have done over the past few years is helping drive our performance. This centers around targeting an enhanced borrower base with continued small movements to improve credit quality. We believe this lowers our risk profile and results in better financial performance since payment patterns stay more predictable and stable. Our current loan portfolio skews more prime to super prime borrowers while we have been decreasing the level of subprime credit in the portfolio. In addition, we were pleased to see the Fed's initial move of dropping its rate. We believe that with this drop, we could be at the beginning of a longer-term declining rate trend over time. This is good for Medallion as our business reacts well in a declining rate environment. We believe our cost of funds will eventually drop from current levels, which would further enhance our already strong net interest margin. Moving to our segments, REC lending and another strong quarter, which included $139 million of new loan originations. Originations were up 50% from the third quarter of last year, and down sequentially from the second quarter as expected. The second quarter is typically the most active quarter for RV and boat sales, as it is the beginning of the season. This dips down in the third quarter, as there is still two months of summer in the quarter, but past peak selling season. Importantly, most of these loans have high but competitive interest rates. Our average interest rate as of September 30th was 14.92% up 19 basis points from a year ago and 12 basis points from just one quarter ago. Our home improvement lending segment grew 8% over the prior year quarter and now sits at $814 million. Our current average rate of 9.76% is 38 basis points higher than a year ago and five basis points above the most recent prior quarter. Our commercial lending segment was stable with the loan portfolio staying the same as the second quarter at $110 million and delivering a comparable average interest rate of nearly 13%. We like this segment since repayment history is strong and we have a long track record of over 25 years of realizing gains on the equity investments we typically receive as part of these transactions. As a reminder, this entire portfolio has virtually zero exposure to commercial real estate. Finally, I'd like to touch on capital allocation. We continue to be intensely focused on deploying capital for shareholders with the goal of maximizing overall returns. During the quarter, we repurchased $1 million of our common stock at an average share price of $7.89. and still have over $15 million remaining on our current authorized $40 million share buyback plan. In addition, we are pleased to announce that our board has increased our quarterly dividend 10% to 11 cents, beginning with the dividend payable in November. As has always been the case with our dividend, and particularly since it was reinstated in the first quarter of 2022, Our goal continues to be providing a tangible return to our shareholders that is sustainable long-term. We have now increased our dividend for a second time since its reinstatement, which underscores our confidence in the company's future and commitment to shareholder value. With that, I will now turn the call over to Anthony, who will provide some additional insight into our quarter.