Financial Data and Key Metrics Changes - The net portfolio decreased to $121 million, a 53% decrease from Q2 2018 and a 14% decrease from Q1 2019 [6][16] - The net loss for Q2 was $7.5 million or $0.31 per share, compared to a net loss of $14.6 million or $0.60 per share in the prior year [14] - Cash flow from operations increased to $19.3 million in Q2 2019 from $16.1 million in Q1 2019, a 20% increase [14] - The provision for Medallion loan losses was $8.2 million, compared to $5.3 million in Q1 2019 and $24.8 million in the prior year [16] Business Line Data and Key Metrics Changes - Medallion Bank originated $226.5 million in loans for recreational vehicles and home improvement, up from $217.9 million in the same period last year [9] - The net consumer portfolio stood at $863 million, a 9% increase from $792 million in Q1 2019 [10] - The commercial lending segment grew its portfolio by 18% quarter-over-quarter, with net income of $141,000 for Q2 [11][18] Market Data and Key Metrics Changes - The average interest rate on the consumer loan portfolio was 14.82%, slightly down from 14.94% in Q1 2019 [17] - The commercial lending segment's average interest rate was 13.75%, consistent with the previous quarter [18] Company Strategy and Development Direction - The company is focusing on strategic partnerships with financial technology companies to enhance its consumer portfolio [11][22] - The management is optimistic about the growth potential in consumer and commercial lending segments, expecting strong loan demand in the coming quarters [18][28] Management Comments on Operating Environment and Future Outlook - Management expressed confidence that losses from Medallion loans will continue to decrease in the upcoming quarters [24] - There is a positive sentiment in the industry regarding medallion prices, with expectations of recovery due to upcoming congestion pricing in New York [31][32] Other Important Information - The bank recorded a Tier 1 leverage ratio of 15.96% and a 35% efficiency ratio, indicating strong capital and operational efficiency [12][15] - The company is exploring additional products to complement its consumer portfolio [10] Q&A Session Summary Question: Can you expand on the strategic partnerships and expected outcomes? - Management highlighted the advantages of Utah ILCs for FinTech partnerships and expects to finalize a partnership by January [22][23] Question: How can provisioning for Medallion loans be forecasted? - Management noted that forecasting is challenging due to the unpredictable nature of losses but expressed optimism about decreasing losses moving forward [24] Question: What is the outlook on loan demand? - Management indicated strong demand across core business lines, with expectations of continued growth [28] Question: Any updates on medallion recovery? - Management mentioned ongoing settlement discussions with larger customers and a positive outlook for medallion prices [30][31] Question: What is the current status of Medallion valuations? - Management reported significant variability in medallion prices, with cash deals dropping to around $110,000 and finance deals reaching up to $300,000 [36][37]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-37747 MEDALLION FINANCIAL CORP. (Exact Name of Registrant as Specified in Its Charter) DELAWARE 04-3291176 (St ...

Financial Data and Key Metrics Changes - Medallion Financial recorded net interest income of $22.3 million for Q1 2019, with a net interest margin of 8.56%, up from 8.07% in the previous quarter and 6.96% in Q1 2018 [13][14] - Net income for Q1 2019 was $1.2 million or $0.05 per share, compared to a loss of $14.9 million or $0.62 per share in the prior year period [13][14] - The provision for medallion loan losses was $5.3 million in Q1 2019, marking a significant decrease from $62.7 million in Q1 2018 [14][15] Business Line Data and Key Metrics Changes - The medallion portfolio decreased to a net $140 million as of March 31, 2019, a 56% decrease from $319 million a year ago [6][15] - The consumer portfolio stood at $792 million, while the commercial portfolio was $55 million as of March 31, 2019 [11] - Net income before taxes for consumer and commercial segments was $8.8 million for Q1 2019, with consumer loan delinquencies over 90 days at 0.44% [10][15] Market Data and Key Metrics Changes - The medallion loans comprised 14% of net loans, down from 16% in the previous quarter and 28% a year ago [6] - The average interest rate on the consumer loan portfolio was 14.94%, slightly down from 15.06% in the previous quarter [15] - The commercial lending segment recorded net income of $226,000 for Q1 2019, down from $1.6 million in the previous quarter [16] Company Strategy and Development Direction - The company is focusing on consumer and commercial lending segments, exploring growth opportunities in these areas [5][10] - Medallion Financial aims to leverage the recent private placement of $30 million to support growth initiatives and potentially buy back debt at a discount [5][70] - The company is optimistic about the impact of congestion pricing in New York City, which may increase taxi usage and fares [7][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the stability of the medallion business and the potential positive effects of congestion pricing [22] - The company noted a downward trend in loan loss provisions, indicating improved operational performance [14][23] - Management highlighted the importance of personal guarantees and good documentation in their collection efforts, contributing to positive trends in recoveries [31][39] Other Important Information - The bank recorded a Tier 1 leverage ratio of 16.56%, indicating strong capitalization [11] - The efficiency ratio for the bank was reported at 38.65%, reflecting effective asset management [18] - The company is exploring strategic partnerships and new business lines to enhance growth potential [73] Q&A Session Summary Question: Operational trends with medallion and provision outlook - Management noted stability in the medallion business and positive sentiment regarding congestion pricing, with a provision of $5.3 million being the lowest in a long time [22][23] Question: Recovery of larger medallion borrowers - Management indicated that while recoveries are positive, significant recoveries may take 2-3 years to reflect in income due to GAAP accounting rules [24][41] Question: Demand on the consumer lending side - Demand is strong in both home improvement and RV/marine segments, with higher growth noted in RV/marine due to less competition [32] Question: Collection costs and future expectations - Collection costs are expected to be lumpy, but trends are moving positively with successful collection efforts [31] Question: Tax benefits and overall tax rate - A tax benefit of $600,000 was recorded due to charge-offs and a settlement, with a projected tax rate of 25% for the rest of the year [51][52]

Part I [Our Business](index=3&type=section&id=ITEM%201.%20OUR%20BUSINESS) Medallion Financial Corp. strategically transitioned from taxicab medallion lending to consumer finance, consolidating subsidiaries and adopting Bank Holding Company accounting - Effective April 2, 2018, the company withdrew its BDC election, consolidating subsidiaries and adopting **Bank Holding Company Accounting standards**[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) - The company is strategically transitioning from medallion lending to focus on its growing **consumer finance portfolio**[16](index=16&type=chunk)[222](index=222&type=chunk) Net Loans Receivable by Segment (as of Dec 31, 2018) | Segment | Loans (in thousands) | Allowance for Loan Loss (in thousands) | Net Loans Receivable (in thousands) | | :--- | :--- | :--- | :--- | | Recreation | $ 587,038 | $ 6,856 | $ 580,182 | | Home improvement | $ 183,155 | $ 1,796 | $ 181,359 | | Commercial | $ 64,083 | $ — | $ 64,083 | | Medallion | $ 183,606 | $ 27,743 | $ 155,863 | | **Total** | **$1,017,882** | **$ 36,395** | **$ 981,487** | [Our Market](index=4&type=section&id=Our%20Market) The company's lending activities are segmented into consumer, commercial, and medallion loans, with consumer loans being the largest at 77% of net loans receivable - Consumer loans (recreation and home improvement) grew to **77% of net loans receivable**, totaling **$761.5 million** at December 31, 2018[20](index=20&type=chunk) - Medallion loans decreased to **16% of net loans receivable** (**$155.9 million**) at year-end 2018, down from **28%** (**$388.0 million**) of the managed portfolio at year-end 2017[32](index=32&type=chunk) - Commercial loans constituted **7% of net loans receivable** (**$64.1 million**) as of December 31, 2018[29](index=29&type=chunk) [Our Strategy](index=7&type=section&id=Our%20Strategy) The company's core strategy focuses on leading in profitable niche markets through strong broker relationships, specialized financing, and disciplined underwriting - The company's core philosophy, "In niches there are riches," focuses on profitable markets for industry leadership[42](index=42&type=chunk) - In 2018, **100% of consumer loans** were generated through relationships with brokers and dealers[43](index=43&type=chunk) - The company employs disciplined underwriting and rigorous portfolio monitoring, emphasizing credit and risk analysis[45](index=45&type=chunk) [Loan/Investment Activity](index=9&type=section&id=Loan%2FInvestment%20Activity) Net loans receivable decreased to $981.5 million by year-end 2018 due to sales and losses, with funding diversified across bank loans, SBA debentures, and brokered CDs Loan/Investment Portfolio Activity (in thousands) | Activity | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | Net investments at beginning of year | $1,380,054 | $1,517,592 | $1,501,555 | | Loans/investments originated | $428,510 | $475,465 | $738,238 | | Repayments of loans/investments | ($261,383) | ($270,133) | ($655,071) | | Consumer loans sold to third parties | ($100,920) | ($221,447) | ($97,511) | | Net realized losses on loans/investments | ($42,305) | ($79,264) | ($34,888) | | Net loans receivable/investments at end of year | $981,487 | $1,380,054 | $1,517,592 | Sources of Funds (as of Dec 31, 2018) | Source | Amount Outstanding (in thousands) | Average Interest Rate | | :--- | :--- | :--- | | Bank loans | $ 59,615 | 4.55% | | Preferred securities | $ 33,000 | 4.86% | | Retail notes | $ 33,625 | 9.00% | | SBA debentures and borrowings | $ 80,099 | 3.40% | | Brokered CDs & other funds borrowed | $ 848,040 | 2.14% | | Other borrowings | $ 7,649 | 2.00% | | **Total Debt Outstanding** | **$ 1,062,028** | | [Regulation](index=12&type=section&id=REGULATION) The company operates under extensive regulation, including an exception from the 1940 Act, with Medallion Bank subject to FDIC and Utah DFI oversight, and SBIC subsidiaries regulated by the SBA - The company operates under an exception from the **Investment Company Act of 1940** (Section 3(c)(6)) for banking and specific lending activities[68](index=68&type=chunk) - Medallion Bank is subject to **FDIC and Utah DFI regulation**, including **U.S. Basel III capital rules**, requiring a **Tier 1 leverage ratio of not less than 15%**[69](index=69&type=chunk)[72](index=72&type=chunk)[79](index=79&type=chunk) - Three subsidiaries are licensed as **SBICs** and are subject to **SBA regulations**, including limits on interest rates, investment types, and conflicts of interest[84](index=84&type=chunk)[86](index=86&type=chunk)[89](index=89&type=chunk) [Risk Factors](index=18&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant risks from concentrated consumer lending, declining taxicab medallion values, reliance on brokered deposits, and extensive regulatory oversight - The business is heavily concentrated in consumer lending, making it susceptible to **macroeconomic conditions** and increased regulation[99](index=99&type=chunk) - Increased competition from ridesharing apps has materially impacted the taxicab industry, leading to **reduced medallion values** and **increased loan delinquencies**[106](index=106&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) - The company relies on brokered deposits for funding, contingent on Medallion Bank remaining **"well-capitalized"** under FDIC regulations[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) - The company operates in a highly regulated environment, with oversight from the **FDIC, Utah DFI, and SBA**, subject to laws like the Dodd-Frank Act[134](index=134&type=chunk)[144](index=144&type=chunk)[146](index=146&type=chunk) [Properties](index=36&type=section&id=ITEM%202.%20PROPERTIES) The company leases all operational office spaces, including its New York City headquarters and Medallion Bank's Salt Lake City office - The company leases all operational office spaces, including its New York City headquarters (lease expiring April 2027) and Medallion Bank's Salt Lake City office (lease expiring November 2023)[201](index=201&type=chunk) [Legal Proceedings](index=36&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) The company is involved in routine legal proceedings, with a 2017 stockholder derivative action dismissed with prejudice in December 2018 - A stockholder derivative action (Shields v. Murstein, et al.) filed in 2017 was **dismissed with prejudice** on December 17, 2018[203](index=203&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=37&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock trades on NASDAQ under 'MFIN', with no dividends paid since 2016 and no repurchases in Q4 2018 - The company's common stock is traded on **NASDAQ** under the symbol **"MFIN"**[207](index=207&type=chunk) - No dividends have been paid since **2016**, and the company does not anticipate paying them, retaining earnings for growth[208](index=208&type=chunk) [Selected Financial Data](index=38&type=section&id=ITEM%206.%20SELECTED%20FINANCIAL%20DATA) This section presents consolidated financial data, distinguishing between Bank Holding Company accounting for 9M 2018 and Investment Company accounting for prior periods Selected Financial Data (Bank Holding Company Accounting - 9 Months Ended Dec 31, 2018) | Metric (in thousands, except per share) | Value | | :--- | :--- | | Net interest income | $ 71,987 | | Provision for loan losses | $ 59,008 | | Net loss after taxes | $ (10,172) | | Net loss per share | $ (0.42) | | Total assets | $ 1,381,846 | | Net loans receivable | $ 981,487 | | Total borrowings | $ 1,062,028 | | Total equity | $ 290,204 | Selected Financial Data (Investment Company Accounting) | Metric (in thousands, except per share) | 3 Months Ended Mar 31, 2018 | Year Ended Dec 31, 2017 | Year Ended Dec 31, 2016 | | :--- | :--- | :--- | :--- | | Net investment income (loss) after taxes | $ (3,230) | $ (7,121) | $ 119 | | Net increase (decrease) in net assets | $ (14,874) | $ 278 | $ 23,515 | | Per share increase (decrease) in net assets | $ (0.62) | $ 0.01 | $ 0.97 | | Total assets | $ 616,710 | $ 635,522 | $ 689,377 | | Total shareholders' equity | $ 272,437 | $ 287,159 | $ 286,096 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the strategic shift to consumer finance and accounting changes, reporting a $10.2 million net loss for 9M 2018 due to loan loss provisions - The company's strategic focus is on its growing **consumer finance business** through Medallion Bank, with consumer loans representing **77% of the loan portfolio** as of December 31, 2018[222](index=222&type=chunk) - Effective April 2, 2018, the company changed its accounting from Investment Company to **Bank Holding Company standards**, consolidating subsidiaries like Medallion Bank[228](index=228&type=chunk)[230](index=230&type=chunk) - For the nine months ended December 31, 2018, the company reported a **net loss of $10.2 million**, largely due to a **$59.0 million provision for loan losses**[315](index=315&type=chunk)[316](index=316&type=chunk) - In Q4 2018, the company deconsolidated Taxi Medallion Loan Trust III, resulting in a recorded **gain of $25.3 million**[231](index=231&type=chunk)[318](index=318&type=chunk) [Critical Accounting Policies](index=43&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) Critical accounting policies involve significant judgment for Allowance for Loan Losses and Medallion Loan Collateral Valuation, using historical data and discounted cash flow models - The Allowance for Loan Losses is based on historical loss rates and collateral values, with specific allowances required for **medallion loans 90+ days delinquent**[234](index=234&type=chunk)[236](index=236&type=chunk) - Due to low market activity, taxi medallion collateral is valued using recent market transfers and a **discounted cash flow model**[239](index=239&type=chunk) [Segment Results](index=53&type=section&id=SEGMENT%20RESULTS) For 9M 2018, Recreation Lending was the primary profit driver, while Medallion Lending recorded a significant net loss due to loan loss provisions Segment Net Income (Loss) (9 Months Ended Dec 31, 2018) | Segment | Net Income (Loss) (in thousands) | | :--- | :--- | | Recreation Lending | $ 23,945 | | Home Improvement Lending | $ 3,644 | | Commercial Lending | $ 2,697 | | Medallion Lending | $ (27,565) | | RPAC | $ (3,242) | | Corporate and Other | $ (7,344) | - The Recreation Lending segment accounted for **71% of the company's interest income** for the nine-month period[277](index=277&type=chunk) - The Medallion Lending segment's significant loss was driven by a **$41.4 million provision for loan losses**[294](index=294&type=chunk) [Consolidated Results of Operations](index=61&type=section&id=Consolidated%20Results%20of%20Operations) Consolidated results show a $10.2 million net loss for 9M 2018 under Bank Holding Company accounting, primarily due to loan loss provisions Net Income (Loss) / Change in Net Assets (in thousands) | Period | Accounting Standard | Net Income (Loss) / Change in Net Assets | | :--- | :--- | :--- | | 9 Months Ended 12/31/18 | Bank Holding Company | $ (10,172) | | 3 Months Ended 03/31/18 | Investment Company | $ (14,874) | | Year Ended 12/31/17 | Investment Company | $ 278 | | Year Ended 12/31/16 | Investment Company | $ 23,515 | [Asset/Liability Management](index=65&type=section&id=ASSET%2FLIABILITY%20MANAGEMENT) The company manages interest rate risk with a negative one-year cumulative interest rate gap of $232.3 million, funding operations through diverse debt sources - The company had a **negative one-year cumulative interest rate gap of ($232.3) million**, or **(21%) of interest rate sensitive assets**, as of December 31, 2018[355](index=355&type=chunk)[357](index=357&type=chunk) - A hypothetical immediate **1% increase in interest rates** would result in an estimated annualized **increase to net income of $549,000**[365](index=365&type=chunk)[379](index=379&type=chunk) Total Debt Outstanding by Source (as of Dec 31, 2018) | Source | Balance (in thousands) | Percentage | | :--- | :--- | :--- | | Deposits | $ 848,040 | 80% | | SBA debentures and borrowings | $ 80,099 | 7% | | Notes payable to banks | $ 59,615 | 6% | | Retail notes | $ 33,625 | 3% | | Preferred securities | $ 33,000 | 3% | | Other borrowings | $ 7,649 | 1% | | **Total** | **$1,062,028** | **100%** | [Quantitative and Qualitative Disclosures About Market Risk](index=70&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Primary market risks include interest rate fluctuations and portfolio valuations, with a hypothetical 1% rate increase estimated to raise annualized net income by $549,000 - The principal types of market risk are identified as **fluctuations in interest rates and portfolio valuations**[377](index=377&type=chunk) - A hypothetical immediate **1% increase in interest rates** would increase annualized **net income by approximately $549,000** as of December 31, 2018[379](index=379&type=chunk) [Controls and Procedures](index=71&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls and internal control over financial reporting were effective as of December 31, 2018, with an unqualified audit opinion - Management concluded that **disclosure controls and procedures were effective** as of December 31, 2018[382](index=382&type=chunk) - Management assessed **internal control over financial reporting as effective** as of December 31, 2018, using the COSO framework[386](index=386&type=chunk) - Mazars USA LLP issued an **unqualified opinion** on the effectiveness of the company's internal control over financial reporting as of December 31, 2018[389](index=389&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=75&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2019 Definitive Proxy Statement - This section is **incorporated by reference** from the company's 2019 Definitive Proxy Statement[397](index=397&type=chunk) [Executive Compensation](index=75&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) Information regarding executive compensation is incorporated by reference from the 2019 Definitive Proxy Statement - This section is **incorporated by reference** from the company's 2019 Definitive Proxy Statement[397](index=397&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=75&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) Information on security ownership and equity compensation plans is incorporated by reference from the 2019 Definitive Proxy Statement - This section is **incorporated by reference** from the company's 2019 Definitive Proxy Statement[398](index=398&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=75&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) Information on related party transactions and director independence is incorporated by reference from the 2019 Definitive Proxy Statement - This section is **incorporated by reference** from the company's 2019 Definitive Proxy Statement[398](index=398&type=chunk) [Principal Accountant Fees and Services](index=75&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) Information regarding principal accountant fees and services is incorporated by reference from the 2019 Definitive Proxy Statement - This section is **incorporated by reference** from the company's 2019 Definitive Proxy Statement[399](index=399&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=75&type=section&id=ITEM%2015.%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists the consolidated financial statements, schedules, and various exhibits filed as part of the Form 10-K report - This section contains the **index to the financial statements (F-1)** and a list of all exhibits filed with the Form 10-K[399](index=399&type=chunk)[400](index=400&type=chunk)[401](index=401&type=chunk)

Financial Data and Key Metrics Changes - Medallion Financial recorded net interest income of $23 million for Q4 2018, with a full-year net interest income of $98.2 million [16] - Net income for Q4 was $9.2 million or $0.38 per share, compared to a net loss of $4.7 million or $0.19 per share in Q3 [17] - The provision for medallion loan losses was $3.4 million in Q4, reflecting a reversal of $8.2 million of reserves due to the deconsolidation of Trust III [17][18] Business Line Data and Key Metrics Changes - The net medallion portfolio decreased to $156 million as of December 31, 2018, a 60% decrease from $388 million at the end of 2017 [9][19] - The consumer and commercial lending segments generated net income before taxes of $41 million for the nine months ending December 31, 2018, and $11.2 million for Q4 [12] - The average interest rate for the consumer loans portfolio was 15.06% in Q4, slightly down from 15.18% in Q3 [20] Market Data and Key Metrics Changes - Taxi medallion loans comprised 16% of net loans at year-end 2018, down from 28% at the end of 2017 [8] - The TLC reported 810 total medallion transfers for 2018, compared to 117 in 2017, indicating greater liquidity and confidence in the market [10] Company Strategy and Development Direction - The company is transitioning away from medallion lending to focus on more profitable consumer and commercial segments [7] - Medallion Bank is expected to continue growing at over 20% per year, with a focus on maintaining high ROEs [38] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the medallion market, citing increased medallion transfers and potential regulatory support from New York City [28][30] - The company anticipates continued recoveries from delinquent loans, although the amounts may vary [31][32] Other Important Information - The bank's Tier 1 capital leverage ratio was 15.85% at the end of 2018, up from 14.50% at the end of 2017, indicating strong capitalization [15] - The company has reduced its medallion-related debt from $252 million at the end of 2015 to $60 million at year-end 2018 [22] Q&A Session Summary Question: Utilization rate in the medallion portfolio and NYC regulations - Management noted solid business with over 90% occupancy rates for fleet operators and increased medallion transfers from 100 in 2017 to 800 in 2018 [26][27] Question: Recovery outlook - Management indicated that while recoveries may not be as high next quarter, many delinquent customers are making payments to avoid losing their medallions [31][32] Question: Seasonality in sponsorship and race winnings - The racing season typically runs from February to November, with revenues peaking in Q2 and Q3, but operating at breakeven [34] Question: Capital uses in Medallion Bank - The focus is on retaining capital at the bank level due to high ROEs and growth potential [38] Question: Reserve for the medallion portfolio - The reserve for medallion loans at year-end was approximately $27.7 million, with no specific reserves [43] Question: Opportunities for deconsolidation - Management mentioned potential opportunities for deconsolidation with FreshStart Trust, estimated at about $30 million [68] Question: Credit quality in consumer lending - Management attributed robust credit quality to good management and underwriting practices, with low delinquencies [77][78]