Thank you for joining today. I'm Andrew Murstein, and I'm the President and soon-to-be CEO of Medallion Financial. So I'll take you through this in about 15 minutes, and then we can open it up for questions. The stock symbol is MFIN. We've been in business for about 90 years. Our symbol used to be taxi, hence the name Medallion. But we really did a great job diversifying away from taxis. So today it's only 0.3% of our business. Market cap's over $200 million, very low PE. We're trading at about five, six times our earnings and below book value. The company's motto used to be, "In niches, there are riches." We'd identify niche businesses that banks were not very focused on and try to be the market leader. And we've really doubled our portfolio over the last five years. We're up to about $2.4 billion today. Net interest margin, I think, is extremely impressive, over 800 basis points, which is double or triple what most banks are. And we've got a couple of differentiators that you'll see as I go through this presentation, some business lines that are really starting to catch fire and grow very well for us. So here's a snapshot of the portfolio. There's $1.6 billion of rec loans thrown off 15% interest rates. So over $200 million a year is coming in from that. Average FICO scores are 685, so these are good credits. They're not the best, but they more than compensate for the yield versus the loss factor. The yields are extremely high, getting about 15%. And we get this business through 3,300 dealers around the country. So somebody who walks into a Camping World or a MarineMax, they have stellar credit, maybe they're borrowing at 5.9%. If they have good credit but not the best, again, 685, the business falls to us all the way at those 15% rates. Home improvement lending, we started this business in 2012. So all of our business heads have been focused on their individual lines for 40 years each. So not collectively, each division head, 40 years of experience personally in their particular niche. So they've been through all types of cycles and seen a lot. In the home improvement sector, we're getting yields of about 10%, and these are super prime credits. They're 767 FICO scores. So a contractor's in your home, he's selling you a new pool, HVAC system, new roofing. The customer could probably borrow at much lower rates, maybe 5.9% if they went to their bank, but it's the technology that we have and the ease and convenience that on the spot we could approve a loan. Most people think that they'll pay us off after a year or two. We're shorter, but they don't. These loans stay in our books for about three years on average. Again, a pretty good yield, almost 10% with these great FICO scores. Commercial lending, we bought this group in 1998. So this will give you a sense of our business philosophy. From 1988 to 1998, we participated with a company that used to be called Capital Dimensions. They used to be owned by Control Data. We averaged 15% returns from 1988 to 1998, so 10 years. Back then, we were making maybe $1 a share. The stock was at 30 times earnings versus today, again, it's only five or six times earnings, so we used our stock to buy this company. Since that point, in 1998 up until today, again, they've averaged 15% per year returns for us. Really an exceptional group. I'd like them to be bigger, again, $135 million. Moves the needle for us. They're going to make $10 million or more this year, but they're very talented, and the hope is that these guys double in the next three to five years. The two other lines of businesses that we have, strategic partnerships, so that's a great low credit to zero credit type risk business, meaning a fintech will send us a loan in our bank in Utah. We'll fund it. They'll buy the loan back. Two days later, they'll guarantee that they have to buy it back, and they'll use our banking charter to make the loan, so we're the lender of record, and we'll charge them a fee upfront, and we'll get the float for a couple of days, so this business has been doubling the last couple of years, and then lastly, the taxi Medallion business, again, we're pretty much out of it. It's only 0.3% or so of our portfolio, but we've got the potential for a lot of collections here. A lot of cab owners are very wealthy. They didn't just drive the cab. They owned hundreds of Medallions, many of them, and they're still personally on the hook for these loans, so even though, for example, it's only on our books for $6 million, we wrote it off from a high of maybe $700 million years ago. We collected in the first nine months alone $11 million. So this is very accretive to our earnings as we continue to increase these collections. So this will just give you the overview. Again, the parent company MFIN, which is the holding company, Medallion Bank, which is our largest sub. So this charter is very special. I think it's the best banking charter in the United States. It's called a Utah Industrial Loan Bank Charter. So years ago, when I looked to set this bank up, I noticed Goldman Sachs had one, Morgan Stanley had one. So I knew there had to be something to it. And if you own this type of charter, you're not a bank holding company, and you're not regulated by the Federal Reserve. So there's only about 15 of these in the country. Goldman and Morgan, when they got bailed out by the government and took TARP money, had to give these charters back. So we're one of the last remaining ones. The other great charter that we have is Medallion Capital, which again is our commercial group. There's something called the SBIC program, Small Business Investment Companies. So it's part of the SBA. If you get an SBIC license, you have it for 10 years, but these date back, our license, to the 1970s. So it's an evergreen license, meaning it's forever. So it's a big competitive advantage that we have when we can go out and pitch business and convince a borrower that we'll be there for the long haul. Just like we've been in business for 90 years, we could really help them grow through the stages of their fruition. This will show you the rec loan book. Again, this comes through 3,300 dealers and financial service providers. It's 63% of our portfolio, 15%, as I noted before, average rates. 21,000 is the average loan. So these are small loans. Banks don't like to do it. We kind of roll up our sleeves when we're very good at it. That's why we're getting these above-average yields and have below-average losses. And even though we write them for 15 years, the typical payoff, again, is about three, three and a half years or so. But you can see how well we've grown this loan book over the last several years. Home improvements have also grown nicely, and we just hired a great group a couple of weeks ago that we think is going to add significant value here. We're good at, rather than pay big premiums, we always look at buying companies. Most finance companies that I've seen over 40 years or so have traded anywhere from two to five times book value when they come up for sale. And with our stock trading for below book, we can't use our stock for an acquisition. So we do these lift-outs from time to time. So we hired a group from a bank that was a leader in home improvement lending rather than buy their business, not pay any premium that way, just hiring them. They just joined us, and I think they're going to accelerate our growth here. And this will continue to grow anywhere from hopefully 10%-20% a year if we hit this right. The commercial lending is the group that I mentioned before. They're based in Minneapolis with the SBIC license. They're up to $135 million. Average loan sizes here, about $4 million. So also kind of, again, fitting in our motto in niches, there's riches below the radar deals. We're not chasing deals against Apollo or Blackstone or large players. We're going for these small loans where we can get these really good yields. There's about 36 companies in our portfolio. So why is it now a good time to look at Medallion Financial? From the 1930s up until the time Uber came into effect, which is about 2012 or so, we did well. We didn't do great. 2012 to 2020, we had heavy losses because the Uber business crushed the Medallion business, obviously. But since that, since 2020, so from 2021 on, when we rolled off the Medallion business, in the last four years or so, we made more than the first 90 years combined. We made over $350 million before taxes over the last four and a half years. We're continuing to do well. We're growing the book at about 13% a year. We bought back a lot of stock. We bought back about 10% of the company in 2022. We did a $40 million approved buyback. I think we've done about 25 of it so far. We have roughly $15 million left. The hope is to get that done in the coming year or so. Again, the PE is only five or six times earnings, and the price to book is below book. Tangible book is 1164. So we're trading at a pretty significant discount. The snapshot of the portfolio, just to reiterate, $2.5 billion of loans, 63% in rec, 31% or so in home improvement, commercial business 5%, and the strategic partnerships. That's doubling in size every year. That's again when the fintech sends us the loans, we fund it, they buy it back. That's only 0.7%, but really starting to pick up steam. Loan balance. You can see how we've grown this nicely over time. It's over $2.5 billion today. So it's a great thing every morning to wake up and know you got $2.5 billion of loans, throwing off 10%, $250 million a year coming in every year. So here's how profitable the business is. So this is a typical loan. This is a very important slide, I think. So a typical loan. That's $20,000. You can see that the banks only leveraged about 6 to 1, our Utah Bank, which is pretty low. Most banks are leveraged 10 to 1. So we've got a lot of room for growth there. But a typical loan. It's a $20,000 loan. The yield is 15.5%, so you got $3,100 coming in. Our interest costs. We take in all FDIC-insured deposits. This number is going to start coming down, but right now it's about 4%. When the Fed lowers rates soon, it'll come down further. Loan losses, 3.36%. Operating expenses, it's a little cumbersome again, so it's a little high, the operating expenses, because they're all very small loans. But we're making $1,308 on $3,000 of equity. So every new loan that we put on our books today, it's a 44% pre-tax return on equity. You can see quarter by quarter how we've started ramping this up. We also did a public offering in May. Our bank did a public preferred stock offering, which is really going to give us a lot of dry powder to grow. So the bank is an investment-grade rated bank. We issued money, trades under MBNKP. That $75 million public preferred money that we took in, we can leverage that 9% yield that we're paying investors. We leverage it 6 to 1 again with deposits at about a 4% cost of money. The new blended pool of capital that we have is about 5%, and then we're lending it out at 10%-15% rates. It's usually accretive. Net interest income over time will continue to grow again as our loan book grows. These are all public information, obviously, which you guys could look in our public financials, so I'll kind of skip through them a little quickly. The net income, you can see how well we're doing. It's a little choppy. If you look on the right, you can see $43 million, $55 million, $35 million. We're in part of beat last year. We have these gains from our Medallion Capital, our commercial division ever so often. So we'll have a gain. It's really unpredictable. It could be zero one quarter. It could be $5 million in a quarter. We had a lot of gains in 2023, which is why the income jumped to $55 million. But again, they're having a great year this year, so hopefully it'll continue. Net interest income, you can see this is a key chart too. It shows how our spreads are increasing with this very high net interest margin of 800 plus basis points. Our interest expense will be coming down again as we continue to take in our deposits at lower and lower rates. Operating efficiency, that's going to continue to improve. The loan book is at a certain size. Our overhead is pretty much fixed. So as we continue to increase the loan book, most of it trickles down to the bottom line. Over time, this just shows how we're building our book value per share. So the book value per share, the stated book is close to $18 per share. And again, trading at a substantial discount to that. But as we continue to retain earnings, this book value per share should also continue to increase. Very low leverage. That's one of the reasons why we have an investment-grade rating. Again, most banks are significantly higher than us. We're only leveraged on a combined basis of about 5 to 1, which is pretty low by bank and financial company standards. The dividend. Management owns 20% of the stock, so we're very much aligned with shareholders. One of our focuses is to continue to increase our dividend. You can see how we started to do this. When we restarted our dividend after we wrote off the Medallion book, we continued to increase it every six quarters or less or so. So the hope is another dividend increase will be coming very shortly. The yield today, though, is almost 5% on the stock. This just shows the dividend history over time. Again, from $0.08, increased 50% up to $0.12 today. So we think it's a very compelling opportunity. The strategic capital allocation is really threefold. One is dividends. Again, as the largest shareholders, we want those dividends to keep increasing. Two is buying back stock. We think it's a great use of our capital. In my personal portfolio, I have over 30 stocks. Zero of them sell for less than 10 times earnings. Some of them sell for 10 times revenue. Some of them sell for 10 times losses. But no one, I think, at least in my portfolio, is as cheap as this stock is at five or six times earnings. And with 20%, our focus again is to continue to increase the dividend, continue to buy back stock, and continue to invest in our bank for growth. Every dollar of equity we put in our bank, we're leveraging it six to one with low-cost deposits, very accretive. So that three-pronged approach is working extremely well for us today. So the balance sheet, again, this is just from our 10-Qs and 10-Ks. You could see what the book value is and what the assets look like. We're at an all-time high in the last 90 years. We've never been at this level of $2.9 billion. This is one of our best years ever this year, first nine months of the year. You can see the lower right. After taxes, we made $30 million for the first nine months. So earnings are up about 20% this year from 2024. And that's it. So I tried to go through that a little quick to hopefully open up to any questions that anybody has, but I'm happy to go back and revisit slides or jump into anything new that anybody would like. Yes. Could you talk a little bit about the spreads and how those spreads widen or contract when interest rates are falling or increasing? How does that tend to work? And then, I guess in light of that, how do Fed actions and expected actions impact your profitability? For the most part, you try to match fund as best as you can. So we'll do a three-year loan. We'll try to take in a three-year CD. So you try to lock in your spreads. But nobody's perfect, including us. So when you're in an environment like you are today with rates coming down, it's very helpful. The wind's at our back. So because our deposits will reprice faster than our loan yields will. So every day we're taking in deposits. It's a great system that we have. It's all brokered CDs. So our bank is. No, we built this almost as a fintech before there was such a thing as fintechs 20 years ago. The bank is on the fifth floor of an office in downtown Salt Lake City. They order online deposits. So they could take in 30-day deposits for 3% or 10-year deposits for 3%. And there's no brick and mortar. There's no overhead. There's no ATM machines. So very, very efficient and profitable. So when rates start coming down, I think they'll come down at the next Fed meeting. If not, then the next one, but probably the next one. It's going to help us. So the yields, again, will stay at that level that they are today. Eventually, they'll start coming down, but the cost of funds will obviously drop faster. So it'll be accretive to our earnings. Yes. Can you talk to your stress test modeling for the recessions and downturns and kind of the 2008 type scenario? What your model will look like? Sure. So we're one of the most highly regulated companies that there is. So many of them, we do these ourselves, but the regulators also require it. So we're regulated, obviously, by the SEC as a public company. We're regulated by the FDIC. We're regulated by the Utah Banking Department. We're regulated by the Small Business Administration since we have one of their licenses, so many of them, if not all of them, require us to do all types of stress tests, so you do these shock to the systems, like all banks do. What happens if your losses go up to a certain level? What happens if interest rates move back and forth? So it's a very thorough process. The rating agencies also do it, and that's one of the reasons that we were able to get the investment-grade rating is, again, nobody's perfect, but you're match-funding it really well. I think we've done a great job doing it, so under most scenarios, now we've been around through almost every cycle imaginable in 90 years, right? You've seen world wars. You've seen stagflation, inflation, the Great Recession, 9/11, everything, so we've learned through the years. And we run a pretty conservative ship, and we try to project what's happening, and you can never do that. But no matter what, it's great to me that our bank that started in 2003, every single year they've been in business, which is very rare for any company, a startup or any company. Every year they've been in business, they've made money. Regardless of what happened, losses obviously spiked up 2008, 2009 during the Great Recession, but even then, our losses went from 3% in the bank to 6%. So even in those years, the bank was very profitable. Thank you. Yes. You mentioned briefly about your technology for companies. Would you like to maybe go a little deeper into that so we can understand how this is going to be much more sustainable in the future? You said it's going to be more accessible to consumers or whatever they need. Is there a way to prevent that from saying another bigger bank just stepping in and replacing technology or something like that? I don't want to say sustainable, but future-proof. Right. Yeah, it is. And technology is a good part of it. By being in your lines of business like we have for 30 years or more, you develop great relationships with dealers. So Camping World, Marcus Lemonis, who's the CEO, flies in if we're not doing enough business with him to meet me because that's how important we are to his business. So you have these. He's the CEO of Camping World. So you have these relationships with dealers that are very important. And we're here for the long haul. So banks will look at our market. They'll put their toe in the water. They'll have a problem with their commercial real estate portfolio. They'll run to fix it, and they'll stop lending in where we are in our business lines. On the technology front, you've developed algorithms, and we're starting to obviously implement, like many people, our AI into our technology. So it looks for certain factors, and it's all self-built ourselves. We're not outsourcing this. But we've got data from 30 years that we input into this system and show certain trigger marks. If a certain Camping World dealership spikes up delinquency-wise, we know what to do, which might mean, that's why it's a nice mix, I think, of technology and just old-school knowledge. Certain dealers sell products to their customers at inflated prices, and therefore, we shouldn't lend at that high a loan to value to them. Other dealers have different products that don't have the resale value that certain products do. So maybe a Boston Whaler will have a different sale price than another manufacturer. So it's all of that information that gets gathered into our system, and it knows not perfectly, but pretty much when to approve a loan and when not to. With more than 6,000 small and micro-cap companies listed, if you're looking for the next Apple, then Channel Check truly is the orchard. It's an investor community where you can access independent Wall Street research, advanced market data, balanced news, corporate videos, and podcasts. You can even register to attend in-person Meet the Management Series lunches and to be part of the preeminent annual small and micro-cap investor conference, NobleCon. And here's the best news. Since Channel Check is sponsored by the featured companies, premium membership requires no investment. It's absolutely free. So check it out. Log in today. 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