Medallion Financial Corp.

Good morning, and welcome to the Medallion Financial Court Fourth 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. For today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. 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. 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 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 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.

Thank you, Ken, and good morning, everyone. We appreciate you spending some time with us to hear our business update. We ended the year well, with nice contributions coming from each business. Our fourth quarter net income was our highest quarter of net income in 2024, which topped off another successful year for our company. For the fourth quarter, we delivered 10.1 million of net income and 43 cents of earnings per share for our shareholders. For the full year, we delivered 35.9 million of net income and $1.52 of earnings per share. Helping drive these results were several important achievements. Towards the top of the list was generating over $1 billion of loan originations for the year for the first time in our history. What was especially pleasing about this milestone is that we accomplished this while continuing with our high credit standards and the related credit quality of our borrowers. The vast majority of our total loan portfolio is to super prime, prime, and near prime borrowers, which we believe insulates us from significant volatility and strengthens our risk profile. We continue to target an enhanced borrower base and to improve the credit quality of our portfolio. We are now originating loans to borrowers with an average FICO score of 686 for recreational and an even stronger 781 for home improvement. We have done a wonderful job further improving the overall credit of this segment in just a few short years. Another achievement in the fourth quarter was the exit of our portfolio investment within our Medallion Capital segment, which resulted in net gains of $3.8 million. For the year, we had $6.9 million of net gains driven by two highly successful exits. This transaction is reflective of the type of equity kicker we get within our commercial lending group. We have proved time and time again that this is a very accretive part of our business model. As a reminder, we currently hold around $9 million of other equity investments on our balance sheet. Although the timing of exits is not predictable, this division has generated nearly $15 million of net gains over the past three years. Over the past 10 years on a pre-tax basis, this division has returned on average in excess of 17% annually. Moving to our segments, REC lending had a good quarter, which included $72 million of new loan originations as compared to $63 million in the 2023 fourth quarter. Just four short years ago, our REC loans were just under $800 million, which shows the great growth we have had recently. Total outstanding REC loans of $1.5 billion were down 1%. 11 million from the prior quarter, and up 207 million from a year ago. The drop in total outstandings from Q3 is a function of seasonality for our business, with the fourth quarter typically being our slowest of the year. Importantly, these loans carry our highest interest rate across our loan books. Our average interest rate as of the end of the year was 15.07%, of 28 basis points from a year ago, and of 15 basis points from just one quarter ago. Our home improvement lending segment originated 83 million of loans during the quarter, which led to our loan book being up 9% from a year ago to 827 million. The growth of this segment has been even more robust than REC over the last four years. This growth rate comes with good interest rates. The current average interest rate of 9.81% is 30 basis points higher than a year ago and 5 basis points above the most recent prior quarter. Our commercial lending segment ended the year with $111 million of loans, which was just below the loan balance of the portfolio at the beginning of the year. The average interest rate was up 10 basis points to 12.97%. We like this segment because of the strong yields we earn, and as I mentioned earlier, we have a long track record of realizing gains on the equity investments we typically make as part of these loans. Our taxi medallion business continues to be in a normal run rate zone. We collected $2.6 million of cash in the fourth quarter and $12.1 million of cash for the full year of 2024. We believe this level of performance is sustainable in the near term. One quick update on our strategic partnership program. You likely saw the significant growth in our loan volumes for this segment of the fourth quarter. We went from $40 million in the third quarter to $124 million in the fourth quarter. This is mostly attributed to the addition of our most recent partner, which started in the fourth quarter. These trends have continued so far in 2025. As of now, we only hold these loans for a few days, therefore right now it is not as impactful to net interest income or EPS as it is to our loan origination levels, but we certainly took a nice step this year on that business line. As to capital allocation, our board recently approved an increase of our quarterly dividend by 10% to 11 cents beginning with the dividend that was paid in the fourth quarter. As has always been the case, our goal with every dollar of our capital is to provide a tangible return to our shareholders that is sustainable long-term. We have increased our dividend for a second time since its reinstatement back in 2022, which underscores our confidence in the company's future and commitment to shareholder value. During the year, we repurchased over 570,000 shares of our common stock at an average per share price of $8.07. We still have over $15 million remaining on our current authorized $40 million share buyback plan and will continue to be opportunistic when it makes sense. With that, I will now turn the call over to Anthony, who will provide some additional insight into our quarter.