Metropolitan Bank Holding Corp. (MCB) Earnings Call Transcript & Summary

All right. Good morning, and welcome to MCB's first Investor Day. Dan and I meet with investors all the time. We speak to them in non-deal road shows, capital raises just chatting, meeting with them, talking about live and MCB, but this is the first time we've decided to do something like this. And actually, with perfect timing because we just had -- you'll hear a bit more about it and everybody around the table is aware had a very successful capital raise last week. So it actually -- this is coming at the right time. I do a lot of talking with investors all the time, and I did a lot of talking last week, obviously, in discussing the opportunity to me and an opportunity to meet other partners of U.S. The group that you're going to meet today are all experts in their field and also share in MCB. So they're very much aligned with you. They're not only professionals in their own right, but they're also very aligned with you as I am, as you know and have known for a very long time. So I want to thank each and every one of you who came here in New York. We love hosting people here. We built out the space. We specifically built it in a way that we can host clients and our clients love coming here. So I'm happy to see investors here. In addition, you'll get a chance to ask questions. I'm going to try and sit in the background. If you have a question for me here, I'll answer it. But if you're an opportunity to meet with the subject-matter experts, you have the senior management team, there's much more. It says takes a village. Well, this is part of the village, but there's another 300 people in and around this building and in a few other locations throughout the country that help us do what we do. So -- but this is our senior leadership team. And I think you'll enjoy their topics. The format is really simple, very casual they'll present. You saw their slides. And then we'll pause a Q&A behind every presentation because it may be something really top of mind that you want to talk about and dive into. We have a little bit of a time line here, but we have flexibility to go over if we have to. So we're -- hopefully, there will be some Q&A. And then at the end, we'll have lunch and continue the conversation through lunch. And then we have another meeting this afternoon with regulators. So let's enjoy the moment. And they're about 7 feet away from us, so maybe 30 feet away from us. So -- they come like the village... Anyway, so I am going to make the first introduction. It's Dixiana Berrios, he's our Chief Operating Officer. She will come down and give her presentation.

Good morning, and thank you for joining us today. My name is Dixiana Berrios. I am the Chief Operating Officer at Metropolitan. I've been here about 6 years. I've been in commercial banking for 30 years. I oversee several departments at MCB, and that includes IT, loan, deposit, digital banking operations, merchant acquiring operations, project management, facilities, digital marketing, EB-5. So I do just a few things around here on a day-to-day basis. I'm going to focus on how we've executed our modernization program and why it matters to MCB operationally. Modern Banking in Motion represents a multiyear investment to fundamentally upgrade how the bank operates. This includes our systems, our workflows and our ability to scale. Before getting into any details, the key theme I'd like to emphasize is disciplined execution. This was designed to modernize without being disruptive to the franchise. Thank you. First slide. Thank you, David. We started this journey, as you can see, deliberately. The first 2 years were spent on architecture and vendor selection, making sure we chose the right platforms that could support our bank not just today but for long-term growth. We launched the program in 2023 and executed through phased implementations across payments, lending, digital capabilities and warehouse in 2024 and 2025. The final phase, as you can see on the slide, culminates in April 2026 in a couple of weeks right around the corner. This will transition us away from 20-year-plus legacy systems and activates a scalable, real-time API-enabled platform aligned with large bank capabilities. Slide 3. From an operating perspective, our legacy platform increasingly contained our business. Manual onboarding, limited integrations, lack of real-time data and frequent workarounds made it harder to scale efficiently and harder to deliver consistent customer experiences. This wasn't about convenience. It was about removing structural constraints that limited growth, efficiency and reliability. Next slide, please. We intentionally, as you can see, chose a best-in-breed approach rather than a single vendor solution. Each platform was selected for depth in its domain and integrated through an API-first architecture. Operationally, this gives us the flexibility, avoid vendor lock-in and allows us to upgrade components over time without destabilizing the entire platform. Next slide, please. So the benefits. The benefits of modernization show up in day-to-day operations. As you can see from the slide, I've outlined some key benefits. Digitally, we've reduced friction through integrated account opening and servicing. Operationally, we've automated workflows, including in payments and commercial lending that a lot of those work forms previously required manual intervention. The key point across the architecture is scalability. We can continue to support growth without proportionally increasing operational complexity. Next slide, please. So I'll outline some of the business impacts that this modernization program has. From an investor standpoint, the impact falls into 5 key areas. First, revenue and growth. Better onboarding means improved cross-sell and faster product delivery. Second, efficiency and cost discipline. Reduced manual work and improved operating leverage leads to more operational efficiency. Third, a focus on risk and resiliency. That means a stronger data governance program, real-time visibility into our data and more stable systems. Fourth, customer economics. Lower acquisition costs from frictionless account onboarding and improved retention for our customers. And finally, long-term value creation. We've created a stabilized platform that is aligned with large bank capabilities but size for our institution, but with the ability because it's modular to grow over time. These are expected directional benefits that scale as volume continues to migrate to the platform. I want to be clear again, this wasn't about structural improvement -- This is about structural improvement, and it's about short term -- it wasn't about short-term optimization. The value of this platform continues to build over time. Slide 7, please. Talk about our milestones. As COO, my key concern in this modernization program was around execution and risk management. We didn't want to treat this as a single conversion event, as you can see from the phased approach that we took. Payments, lending and digital platforms as well as data warehouse were implemented first and already operating in our environment today. Finzly, AFS, eBankIT, Alloy, Snowflake, they are live today. They aren't pilots. They're operating in our environment as it exists today. The April 2026 phase activates our core infrastructure that includes Finxact, Savana, Antuar and expanding our commercial digital platform. Critically, as you can see, this wasn't one big bang conversion. Each component has been implemented, tested and stabilized independently, significantly reducing our execution risk. If I go to the next slide, please. I'll talk a little bit about our technology infrastructure that we built to support our platform. In parallel, as we were executing on our modernization program with these new vendors, we modernized our underlying infrastructure. We underwent a data center expansion. We did a network redesign. We created new virtual servers to support our platform. We implemented enhanced monitoring, and we also upgraded our branch network to ensure that the technology stack supported the enterprise-grade resiliency and performance. This work that we did on Project Phoenix was foundational. It ensures modernization and improves reliability as we continue to grow. When you step back, modernization strengthens the bank across 3 dimensions. It enables scalable business expansion. It improves operational efficiency through automation and real-time data, and it enhances customer experience through faster, more consistent digital journeys. Collectively, this positions the bank for sustainable growth and long-term shareholder value. So in conclusion, on April 13, 2026, the Modern Banking and Motion platform will be fully activated. From an operating perspective, this is a transition point for us. We're going from implementation now to optimization, where modernization will become how the bank runs and no longer just a project. At that point, my focus will continue to shift from performance, efficiency and scaling the platform to support growth. With that, I'm happy to take any questions that anyone has.

So great explanation. have some milestones that you have achieved. What about financial milestones? Are there any financial markers that we as investors, prospective investors can based on the investments made in this technology and modernization...

Questions are raised. Allow me to step in here. We've made a great deal -- a large investment in the Modern Banking in Motion platform. At the end of the day, the run rate for IT spend is not expected to change. It should be pretty consistent what it was before. It should stay about the same. The key is we can scale it demonstrably, right? Within the guidance that was provided on the last earnings call, the OpEx spend included $3 million of kind of final expenses related to Modern Banking Motion. Once that -- once those invoices have cleared, that drops out of the run rate, about $3 million. So run rate, pretty consistent through time. This isn't about saving money. This is about building a technology stack that is scalable and efficient. And it's from the teller line to the warehouse in the cloud and everything in between. So it's extremely, as Dixiana very nicely laid out, very up to the minute and appropriate for the bank that has growth aspirations such as MCB.

Just when you talked about avoiding vendor lock-in, is the implication there that you've structured the tech stack in a way that if you have a particular vendor massively increase the price, you could easily switch. Is that?

That is absolutely correct. It could be either a financial increase or that vendor can no longer handle the type of work that we want to do. We made it very modular that we can kind of plug and play almost the vendor stack that we need to scale the business.

There's another point there, just to add, and that was what's really exciting about this new platform. Historically, you're stuck with a Fiserv or Jack Henry FIS, good companies, all great companies, but it didn't support a particular line of business, allow you out of the contract to go out and integrate it to somewhere else. With the technology that we're seeing coming into our industry today, these nonbank financial service technology companies, you should never get stale. You always be able to be out in the market, fixing our team looking and talking to other technology companies who are doing something slightly better because I think the speed in which technology is going to change in our business is going to be something that we've never seen before. And that doesn't even include AI. We're talking about just basic support of your tech stack. So the optionality that we have today, we're going to have is extraordinary. You should always be real time in assessing are you with the best-in-class for that particular area of the franchise that needs to support. And you have a question for you. As far as scale and efficiency, we're not being on the door of $10 billion. I've heard people suggest we're clearly ready from a risk management perspective and a governance perspective around hitting 10 and significantly higher than that. How big is this platform and asset size that you think you could support without any reasonable incremental increase in CapEx?

I think we could support a multibillion-dollar institution. We've tested when we went to market with these vendors, we wanted to make sure that they could handle the type of volume that a multibillion-dollar institution has. So that was one of our key requirements in selecting all of these vendors. And they've been able to prove that, and they continue to onboard other companies that have that scale as well and that depth of transaction volume.

So I'll add the investment in Modern Banking in Motion in Project Phoenix was a multiyear project here at MCB to get ready for $10 billion. We feel like we've got the bandwidth people to easily cross the $10 billion mark, and this tech stack can handle a much, much bigger bank than that. So like I said, it's been years on the come here. It's been 3 years plus. Conversion is April [indiscernible] So very -- it's imminent. The conversion is imminent, and we're really looking forward to kind of levering the tech stack in its entirety. As Dixi said, we've got -- a lot of these features are already in place. A lot of these vendors are already plugged into the old architecture. We're going to flip the switch and go to core. So that's exciting for us.

Next question?

You must be seeing these scalability coming through, the ability to kind of plug in the different players. Yes. I think just any insight because peers don't seem to be making this movement. Why is that? Why do we go on this journey type?

Well, I think -- well, for one, we went on the journey because we wanted to be proactive. Mark had a very clear vision of where he wanted the institution to go. We knew that we needed a technology stack that could support that, that could support the type of verticals we may want to bring on in the future. So that's what we decided to be proactive and do. I think a lot of institutions choose not to go down this path because let's be honest, conversions are disruptive. And a lot of people do not want to take the risk or they don't want to spend the time to thoroughly think through how the conversion can be less disruptive to the institution. As you can see, again, we took over a year to really sit down with all the vendors, bring them all to the table, architect out the solution, understand all our integration points, understand all of our API connections, understand how in the future, those API connections would be beneficial to the institution. So we took the time and we had the benefit of having a CEO who was on board with us really thinking through this tech stack and not just saying, it's not worth it. We'll just go with the traditional Fiserv. And we'll maybe get a few extra improvements with the next core, but it is what it is. So we were lucky enough to have that forward-thinking train of thought that knew that in the market we were in, we wanted to compete with those large institutions that had the budget, the chases and the very large institutions that could have the stack of the development team on board to be able to create a customer journey that benefits their institutions. This stack that we built enables us to create those customer journeys to be competitive in the long run.

And ultimately, to support the growth aspirations of the bank.

Absolutely.

You've seen what we did last year and the prior year. And at the end of the show, we're going to give you some updated guidance, which was put out last night, but we really have, we think, a runway to continue growing this bank at a pace that's well above the norm out there. And this tech stack is built to support that type of growth and improve our execution.

Employees. So this is great for the customer, great for the bank, but do you feel like the employees have fully embraced it? And do you feel like they've had the adequate training and skill set in order to execute on this investment that you made?

Yes. Yes. The answer is yes. [indiscernible] No. We were very aware of how disruptive it could be to our employee base as well. So one of the things that we did was we created our own Intranet site. We made it very transparent to the employees of what we were doing, how we were doing it. We continue to update that Intranet site with information on when the rollouts are. We provided for our front-facing employees, lots of communication stacks so that they can thoroughly explain the project to customers as well. And then [Technical Difficulty]

Everyone, please standby. We are experiencing a -- connection from the venue. We'll back online in few moments.

[indiscernible] for AI missed -- AI safety consortium, contributing to the national responsible AI standards. And now I had a privilege to work for a leader that really value the AI and the size of MCB help us to be agile and nimble and transferring the compliance and experience that I have with the larger bank, the GSIB bank, we can transfer methodology and be even more agile and flexible in our AI program. So if we go to our Page 17, this is what I'm trying to cover in the next 15 minutes or so. So we're going to cover 6 sections. Why even MCB bother hiring Chief AI Officer and doing this AI program. So we talk about why AI, why now? And then we cover our approach, which is governance first. And then we give you a sneak peak of our priority use cases that you see that these are like real, not just talk on papers. And we walk you through our strategic road map, which shows that this is not just one ad hoc use case. That's a plan that we are thinking about that strategically. And then we talk about the AI enablement and value realization, and we report on some of the progress that we made today. If we go to Slide 18. So why now? Why AI? Over the past 5 years, these are some quick stats that I just did in my early days here at MCB. You see what's the MCB growth and how we can actually leverage AI to augment and take it to the next level. MCB has grown revenue at roughly about 18% CAGR and asset at 14% and headcount at 12%. That growth has been excellent, just exclude AI, this is a great growth story. But it also means -- we are running more complex operations with proportionately more people. That's not scalable forever. AI gives us the lever to continue scaling without adding to our OpEx and headcount. So we can't grow on balance sheet. And it doesn't necessarily that we need to grow on real estate and headcount, leveraging AI. So first, AI gives us lever to continue scaling without linearly adding headcount. We see 3 strategic pillars. First, operational efficiency. We have manual-intensive processes and credit underwriting, document generations, BSA/AML program that are ripe for automation. We have enough repetition, enough documents. It's ready for AI automation. And AI let us free up our people for higher-value work. Second, risk and compliance. Our regulators, which our primary regulators are Feds and NYDFS have flagged AI as an emerging risk area. We are getting ahead of that by strengthening our monitoring detection capabilities through governed AI, not despite it. And third is competitive positioning. Our peer institutions are deploying AI at scale. We need to act now, but our governance-first approach gives us a durable advantage over those who move fast and are now retrofitting controls. So let's move on to Slide 19. So -- our governance first approach, it's very critical. I always tell that story, how you see AI? You're not deploying AI for the sake of AI. We think that whoever that banks with us, our customers, there are 3 reasons. First is trust all the way out there. Given the big banks, there are -- this is a trust business. If everybody goes, for example, to JPMorgan Chase and withdraw their deposit, they go bankrupt next day, right? So this is a trust thing. We have to be careful about that. The second reason is product offering interest rate and what we are offering to our customers. It's a value that we are providing them. And the third reason is convenience and experience. How convenient is to bank with us? What's your experience? You have access all the way to our senior executives. So AI comes in to elevate those reasons. Without AI, we have been doing just great and just shared you our growth story. Now imagine with AI, which we get it right and with our compliance and governance first approach, we're going to get elevated in that area. So on the left, our governance framework, we stood up our AI working group with cross-functional representation from risk, legal, compliance, line of business, IT and every AI use case goes through a formal intake and risk to it. No exceptions. We've adopted trustworthy and responsible AI principles aligned to NIST AI risk framework and banking regulations, and we operate under 3 lines of defense model with clear accountability at every stage. On the right, you see our phased approach. Horizon 1, which is 2026 and 2027 is exclusively internal and assistive AI. Employee-facing tools with no direct client impact. This led us to deploy faster with the standard controls and build our muscles. And Horizon 2, we're going to graduate after rebuilding muscles both operationally and from a risk standpoint. Across the organization, we're going to graduate to customer-facing and consequential use cases, high-risk use cases and also high-value use cases. This phased approach means we are earning the right to scale. We don't skip steps. So let's move on to the next slide. So this is. This is not all just talks and plans on the table. So these are some use cases that are already in use and some of them are in active development. So we have 5 priority use cases spanning from productivities, revenue enablement, compliance and risk management. Microsoft 365 Copilot, a secure governed AI assistant embedded across Word, Excel, Outlook and Teams. We are in pilot now with enterprise rollout targeting Q1 and Q2 this year. This is a high-value use case. Research shows for a bank our size, we can get to a few million dollars in value in annual savings bank-wide. And critically, displays shadow AI with governed alternative. A lot of our employees like other banks, they have the most advanced AI on their personal phone. So we're deploying this enterprise governed and managed tools, we are reducing the risk of potential personal use of AI. Credit demo AI generation, which I was just something I would like to say, unlike my prior bank, which we were at the top of 9 among the 50 global bank, our people here are not just relying on Mark. Mark built a system here, and that's what I like about this bank. If he leaves tomorrow, the bank just go on and run very efficiently and effectively. But just Norman and Scott and our Chief Risk Officers and our legal, they are very aggressive about AI, and that actually makes me excited. And having the CEO that create this role at his leadership level, it shows this is a mandate. This is a strategic enablement. And that was the main reason that I decided to go from the big banks to midsized bank because everything was set up for success and he built a system. So Norman was one of my favorite partners. We work on credit memo automation for our credit team. So it's internally built. It auto generates first track credit memos from annual reviews and term sheets and also tax return forms, freeing underwriting capacity to process more loans. In development now, pilot Q2. This is a revenue enabler. Faster loan processing means more revenue. Enhanced due diligence in our VCA BSA program and anti-money laundering, also internally built comprise account activity reviews for alert cases and enhanced due diligence. As are already live, full scope by Q2 2026, over an hour per day saved per investigator across our financial crimes team. CoCounsel and Moody's anti-money laundering screening are already in use and approved through our governance process. CoCounsel reduced outside counsel spend by roughly [ few ] hundred thousand dollars a year. Moody's also improve our BSA/AML screening in accuracy with AI-powered matching. And this is just top 5. We have 15-plus additional use cases in pipeline across lending, compliance, operations and client services. So let's move on to the next slide. So here's how this unfolds over 3 years. As I said, this is not just ad hoc approach to our AI program. 2026 is our foundation year. Governance framework fully operational. Copilot rollout at enterprise-wide. Credit memo, we talked about the enhanced due diligence ESA pilots live. AI team scaling, enterprise-wide AI training launched, data classification framework complete, and this is about getting the foundation right. 2027 is scaling and execution for our program. We expand to more governed use cases. We introduced our first digital employees, AI agents that operate under the same governance framework as our human employees. We begin Horizon 2 client-facing pilots and every employee at the bank becomes AI fluent through our training program. By 2028, we reached our end state, a full AI team in place, up to 15 digital agents and client-facing AI and productions and end-to-end AI native core workflows and 100% of our employees AI Fluent. So moving on to Page 22. So let me address the economics. This is a multiyear disciplined enablement program, phased, not front-loaded. The primary focus is talent. We are building an in-house AI team, not outsourcing our capabilities. This is very important. We're not going to have a heavy internally built AI use cases. In order for us to know what good vendor and AI solution look like, we have to build in order to know what solution is good. So it's very important for us to have an internal powerhouse of our talent to help line of businesses because as an AI team, we are an enabler. Our department heads, they are in driving seat. And my first observation joining the bank, they are really ahead of what I have seen before in terms of seeing an application of AI, and -- we are just enabling, facilitating the deployment of our AI program. So on the value side, we expect meaningful value creation driven by productivity gain, risk reduction and selective revenue enablement. The ramp follows a natural curve, initial realization in '26 as our first use cases go live, accelerating in '27 as we scale and material sustained contribution by '28, as AI becomes embedded in our core operations. The net economics are positive by design. Value expected to exceed enablement costs as capabilities scale and mature. We are tracking this quarterly through our AI working group and reporting to the Board. So let's move on to the next slide. So let me show you what we already accomplished since standing up this program 6 months ago. On governance side, the AI working group is operational with the operating guideline RACI. RACI Stand for responsible, accountable, consultant and informed. So every stakeholder in our AI program have clear roles and responsibility in terms of monitoring deployment, managing risk and et cetera. And we stand up for specialized task forces. I sit on key enterprise committees, including our Enterprise Risk Management Committee and new product committee. On policies and framework, 9 trustforcing responsible AI principles have been approved by the Board. Our AI acceptable use policy is live across the organization. And our AI vendor oversight framework is embedded and integrated into our PPR and third-party risk program. On recent controls, we've established an AI issue log with accountability, enhanced data classification and tagging and launched an AI attestation process for all business units. On the pipeline, 15-plus use cases identified. It's actually the beauty of that, we didn't identify that. Our department heads, identified that and we consulted with them. So we actually identified more than 25 use cases, but 15 are viable. We vet them have consulted with them to go through for implementation. On the people side, now we have 2 AI scientists. One of them started yesterday. And including myself, we have 3 AI experts in-house helping with building our AI program. And we set our executive leadership through Columbia University Business School AI executive education program in January to ensure AI fluency at the top. It's one of a kind program that no bank our side have seen they have done that. And now our Board and executive leadership, they have a really good understanding of AI risk, governance and execution. Moving on to Slide 24. Let me leave you with 5 takeaways. One, AI is not a concept at our bank. It's an active deployment with governance, staffing and use case underway. Second, our governance-first approach aligned with regulatory expectations, protect the franchise while enabling innovations. It's very important for us to governance first. First is, if you remember those 3 reasons, trust is at the top. So the governance-first approach is very important for a highly regulated industry like banking. And also, it makes us exam ready when it comes to audit and examination. Third, our phased horizon model manages risk deliberately. Internal tools first, client-facing AI only after controls prove out. Fourth, we project multimillion dollar cumulative net value creation over 3 years and we monitor that. So every quarter, we're going to report on our ROI and make sure that every use case meeting the business case target. If we see any deviation, we jump in and course correct and make sure that we prioritize higher value with higher visibility. And five, AI enables MCB to achieve meaningful productivity gains without commensurate workforce growth. We are making our operations more efficient and our people more productive. And I'm going to leave you with these 5 takeaways. So thank you, and I'm happy to take any questions.

Start on the basic last thing you said about employee growth. Talking to some of the bigger banks out there, they obviously think they can kind of have employee shrinkage relative to today, where you think headcount could be by the end of 2028 when both phases are rolled out? Is it similar? Is everyone going to all 300 whatever people going to be fully AI fluent or is going to be smaller than that?

That's a very common question with all the reports and everything is coming up. So MCB has averaged roughly 16% to 19% annual turnover over the past decade. It's on par with the industry. That annual attrition give us the ability to strategically reallocate backfills toward higher value. I don't think that AI really reduce work and intensify work because you have like multiple superpower computers and agents and you were just why I'm not running them all. So our first approach, we're going to be cautious about understanding how this turns out. So we're going to do more with the same. So our plan is not to intentionally have some job reduction or anything like that at the moment. We are monitoring the market. We are monitoring our own performance. What I envision is we're going to do more with the same amount of people because we're going to grow on balance sheet. We are already seeing our $10 billion. We are marching towards $25 billion. So we have ambition. So our AI and our employee, AI fluent employee can help us to do more with that. So I hope I answered your question.

Ali, why don't you describe the partnership we have with our internal recruiting team and your philosophy towards hiring...

Yes. So -- very good point. So we are trying to expedite our AI fluency with different approach. For example, we're going to prioritize hiring people that they are already AI savvy. We're not going to retrain our new hires with AI. So that's one approach to infiltrate AI-savvy employee. And we have a curve. I talked about that AI transformation. So we have a target by '28, our 100% of our staff should be AI fluent. The way that back in 2000s that you talked about digital fluency. So back then, you couldn't just work on paper sheets and an entire organization work on Excel. If you remember the digital fluency, learning, Microsoft Office and everything. So that's going to be the new norm. So we're going to expedite that process by being intentional about our hiring and also upskill and reskill our existing workforce to get to that...

One other one -- just on vendor diligence. Obviously, it sounds like you have the systems in place to handle it. I think a lot of banks don't and they really struggle with AI vendor diligence. Can you talk about the timing of it? I think that's the other issue that I've seen in the marketplace where it's just any bank assessing an AI company, it's like a year. How quickly can you do it comfortably with the regulators and amongst your own committees?

So first we have a central one front door for all AI use cases. So it's already implemented. So any net new vendor, we already have inherent risk questionnaire, IRQ and DDQ. So we already have 10 AI screening questions. And once any of the AI flag, we have a 50 DDQ questions, due diligence questions about the AI to understand because that's also changing a lot. Since my time at TD right now, we are seeing AI in 4 different categories. The first is internal builds. So we understand ins and outs, so we can contain and manage risk more effectively because we are building it in-house. Second is vendors that they provide AI-specific products. Think about like OpenAI or cloud. So their products is AI-driven or any vendors like Gleen or similar to those, they are specifically providing AI products. So we have a very thorough process for that. The third is embedded AI. So you already have a vendor in place like Microsoft, and they just turn on a feature of AI. You have Workday, for example, they turn on the feature. We even govern that and make sure that we capture. We treat every embedded AI feature as a new use case. We don't -- we -- our first approach was turn off all the AI features. And if you're going to enable that, every embedded AI, we're going to treat them as a new AI use case. The fourth, which is emerging and it's more challenging, which we actually think about that and have it in our process is AI and delivery. So think about consultants, think about outside counsel, think about auditors. They have our data. They don't provide AI services or product, but they use AI to provide services for us. We even have control for those. I've never seen such a due diligence and well-thought process even in the G-SIB bank to think about that. And we already not only thought about that, but we also execute on that. So for doing that, we are now going back to our entire vendor and asking all those IRQ questions to identify that. It's going to take us a year or so because we have a few hundred vendors. So we're going to actually go back and check everybody because everybody is starting to use AI.

Are there areas within the bank that you found that you were surprised that AI would be helpful...

Can you clarify -- by surprise?

You think of, let's say, input outputting forms, right? That's a good use case. Is there anything that surprised you where, hey, this is an area where we can use AI to optimize something?

So there was no surprise from that sense because banking overall as an industry is a fast follower to high tech. So most of the use cases that -- because the bank already had a very enhanced risk management process. So we haven't seen any surprises, but what surprises me is the level of eagerness of employees to come and bring up use cases. I've never seen that in prior life, especially in some areas like risk and credit. Now I remember that I had a conversation with our credit officer and Risk Officer and -- come to us the last. Here was exactly different. That actually surprises me and in a good way to kind of the willingness because what I truly believe is your risk team, your legal team, they should be at the forefront of AI adoption because once they understand as the second line and the risk managers of the organization, they can guide organization through the AI adoption program in a compliant and government way.

And I'll say before Ali in the lending role, how is the lender going to use this. You go out to see a customer and you talk about deals, how is that going to happen? But if you really sit down and we discuss it, how can we make us more efficient. So with credit with sizing deals. So these are all things that in a sense, you still have the human interact with the client, but it is going to improve your efficiency. So that's very exciting for us.

And I think the other thing to add to that is the scalability that we talked about earlier from the same -- Officer from the credit opportunity in, Ali, you can see how it can enhance and create efficiencies in credit to support the growth that we're planning without having to hire an army of underwriters. I feel I've got the right team with AI being integrated over time, I think that's going to create...

From a legal perspective, my legal professionals can focus less on document generation. We can use large language models to do the document generation. They can focus on not only just reviewing, revising but then automating processes coming up with standardization and repeatable process to increase efficiency. So with that, I'm going to jump in and leave that whole thing together, right? So when you think about the guidance that I put out there, as Ali mentioned, he's already hired a data scientist and a machine learning expert. That's in the plan. That's in the OpEx forecast. None of the saves that were just kind of mentioned down the road there are in the plan right now. Ali and I have spoken, we've begun the dialogue about how we're going to do the math to come up with those savings, primarily expense savings. So we have a framework. We'll develop it further. But as I mentioned, there's no saves in the guidance for AI. And as you heard from the Chief Lending Officer, the Chief Credit Officer, the legal guy, it's in the works already. So there should be some saves.

Do you have any questions online?

Just you hit on the governance. You're mentioning very aligned with regulators, just the feedback you're hearing, what are they saying?

That's a good question. So I'm going to answer it in two ways. even the regulators that have a staff, skilled staff to have a knowledge of AI, like I'm talking about OCC type of the world, they are still learning and they are catching up with the regulations that, for example, European Unions put in place. They are in learning and semi-enforcing situation right now. What we are hearing from our own regulators, Fed and NYDFS is consistent across agencies. They are not telling banks not to use AI. They are just telling government. And the expectations center on several things. First, a centrally managed AI inventory. And one of the questions we have been asking is how you how do you govern AI differently from your existing process and procedures, which we have a well-developed program underway. Based on my -- I had one meeting with our Feds regulators. It's more about like learning and they were like curious how the banks are building their programs. It was just like more informational. And -- but across our Feds and NYDFS, the 2 specific guidelines is around the differentiation in governance. And also we had NYDFS Part 500 in terms of our cybersecurity deepfake -- AI-generated deepfake is one of the concerns. So we have an actually program in place to mitigate that risk. So overall, it's learning. They are curious. And their expectation is it's come out with the bigger regulators, more sophisticated. Other questions?

First to put a fine point on a couple of things. One, as it relates to the efficiency in credit, there is no plan to outsource credit decisions. So I just want to make sure anybody that doesn't leave here with that. If we were a consumer-oriented bank, I'm sure that would be a different answer, but post to be making our credit decisions. As far as regulators have concerned my experience, I really think that soon, maybe within 12 months, when they come in, they give your first day letter and you get prepared for the exam, I think AI is going to be a placeholder in the first day letter soon. Hopefully, I want to be -- I don't want them to be a daily. I want them to be right alongside of us. And in our introduction or conversations with them already, they'll be more prepared when they really want to engage about performing an audit for safety and sale exam about bank's AI strategy and philosophy and governance. So I'm happy we're having early conversations with them. I'm sure we're going to have it that this next couple of weeks since they're in the bank, but I would imagine it to be a bit more engaging next year, not 5 years or not next year. And the last thing I'll say is, as all of you know, we put up an investment deck that I've been told over and over again, a very transparent and appreciated by analyst investors. I'm hoping we're going to gain back a lot of real estate there. Money banking and motion will fall off and we'll have more real estate to add -- and I think we're going to be able to truly in the second half of this year, start to really quantify a return on investment with AI. And I think we're going to bring you along and show you the results, we need some tape. We need to analyze it. You need to be accurate about the savings and the scale, how scale and efficiency actually can generate a return on investment. I am really confident for the first time in all my years in dealing with technology and banking where I can see it. I can see that we're going to be able to quantify it. On a banking emotion, big investment run rate we'll be seeing, we'll have efficiency with our scale. Same processes, doing a little something different. Yes, maybe employee experience, client experience a little better. It would be really hard for me to try and pencil out a return on investment there, other than a feel-good moment our clients have with their experience. Our employees like doing their same tasks differently. This is different. This is transformative. I really think we're going to be able to show you and I don't know how long we'll keep it in the deck, but hopefully in the second half of the year, [indiscernible] talk to -- present some slides, and it will be a good interesting conversation. The next presenter is Nick Rosenberg. He's Head of our payments. And now we'll talk about [indiscernible], a little bit closer and what we've been doing for a while.

Okay. Good morning everybody. My name is Nick Rosenberg, I'm the Chief Business Development Officer at MCB. I've been with MCB for 25 years, a chartered electrical engineer. I was introduced to MCB for a technology project back in 2000. I served here as the Chief Technology Officer from 2001 until 2018. And prior to that, I was the Technology Director of the design house in the U.K. I was responsible for hardware, software, worldwide manufacturer products for companies like a [indiscernible] company, British Telecom, ASO in Taiwan, [indiscernible] RadioShack and others. So thank you again for coming in. I want to start with -- thank you. I want to start with a brief history of what we've been able to achieve in the past over 2 decades of differentiating and specializing in payments and bringing low-cost deposits are not interesting into the bank via payment settlement services. So we've been integrating with and meeting the specialty needs of nonbank financial service companies to provide digital financial services and how do we acquire our customer base then well, we were able to address unique challenges that they faced. And we can integrate and scale many different payment types. Our past performance positions us well to be competitive in the payments industry in general. Oversight and risk management is important. We're capitalizing the [indiscernible]. We've established robust risk management processes to maintain these relationships at scale and recognizing opportunities it's going up to the right ones. We have the ability to evaluate and provide payment services to foreign entities as well as U.S. center. We see companies that have success in other markets, and they're looking to bring their products to the U.S. They bring experience, capital, management team. So that's where we've had success. We're looking to replicate that performance or what sectors are we going to focus on. Next slide, please. What's on target. So of course, U.S. opportunities, obviously, for the most part, but also, as I said, we'll look to work with international companies that have had demonstrated success abroad they have the appropriate management experience of capital, and they're looking to break into the U.S. market with these services. We're looking for direct relationships, not third parties. We're looking to offer the treasury, corporate account, payment processing delivered directly to these clients. We want to be very selective. We want to focus on established experienced companies regulated industries. We're not looking to become on from all just more focused and specialized but higher value. I'll go to the next slide, please. Thank you. So here's a snapshot of our prior performance. What we were able to achieve by the numbers. We settled up to 107 million transactions a year. This [indiscernible] from prior investor deck from '23. So public numbers, we had $2.5 billion in DDA deposits. We generated over $20 million of fee income annually. And that's what we've been able to accomplish and we go to the next slide. So that's what we did. But now what? So what's our plan going forward. Well, we're entertaining opportunities. We're confident that we can exceed our prior performance. Highly regulated and licensed industries. We're looking at various different opportunities. they require technology and payment solutions. They require some differentiation, understanding innovation, some of the industries, not limited to but including iGaming. So that means the licensed online gambling, Poker, Blackjack or the sports betting, the skill-based games, those have seen explosive growth over the last 5 years. They have unique payment challenges that we feel we can address and there is also online pharma and telehealth again, over the last 5 years, there's been a lot of innovation and growth. We don't need to go into a pharmacy or you don't need to go to the doctor, but then again, you have unique payment requirements, oversight, et cetera. So that presents opportunity for us. And now -- thank you. So how is this going to help us? How is it beneficial? Why is it beneficial. Well, of course, click fees, number one, noninterest income. That drives the -- click fee drives the income. And then those transactions also drive low cost -- sticky low-cost deposits, DDA, which is valuable to us. Thank you. So finally, so I want to talk about what we can offer and why does it give us a competitive advantage? And how does it translate into the product in the [indiscernible]. Well, first of all, all this activity is going to pass through our core banking system, and that is supported by scalable and innovative and efficient payment options powered by MCB, addressing challenges in these industries. Some of them are new. As I said, they have -- we have -- we can bring these efficiencies. We've done it in the past. We have ideas here. We are bringing these to the market. That gives us first-mover advantage. So that gives us early market share gains that helps us build our name, helps us drive low cost [indiscernible] deposits. And it's a large growing payment market, a very large market. We have some things that we're looking to go live with by Q4 of 2026. Thank you very much. I appreciate your time. Thank you coming in. and I'm happy to answer any questions as well.

How should we think about your approach on future opportunities versus sort of how you approach the business with TPG in the past?

Well, in the past, we are looking at third-party relationships where the end customer was a customer of our customer. And in this case, we're looking at direct relationships. So we're still looking to solve problems in the industry, but now with direct relationships with the appropriate companies.

License?

Yes, licensed in our own industry, licensed health care, license gaming right, exactly. Just the top tier being selective.

And I'll open again. I didn't plan this, but again, there are some expenses associated with we're working with a third-party vendor to build a bespoke real-time payment solution for some of these particularly in the gaming industry, there's expenses associated with that. Those are in the run rate for OpEx for 2026. None of the DDA, none of the fees are incorporated in the forecast. So again, we aspired to replace what we did with GPG at the beginning of this journey and Nick went through the numbers. They're really important, a huge driver of fee income as well as low cost deposits. So it could be a very, very positive support for our outlook going forward.

Yes. I mean the gaming industry is over $100 billion a year just in -- loans a year. There's about $3 billion in expenses to the industry, health care industry. I mean we were involved with those industries through GPG. We spend -- the U.S. spends 25% of the GDP on health care. So again, very large opportunities that we're talking about. And they're seeing explosive growth over the last few years. I think the CAGR and I gave you, for example, I think it's 80% over the last 5 years. Tim, did you start the question.

Is it live now and maybe what's embedded in the outlook for fees and gaming, I guess, [indiscernible].

We have already -- we have some clients right now in these industries and that are doing corporate treasury, if you like, and some limited processing, but we are building -- we are building on our payment platform to specifically serve needs that exist in the industry as well. And that ...

Into fourth quarter, '26 go live. Right now, we have onboarded a lot of clients that are going through licensing and they're getting -- going through their life stage licensing in the states that they organizing. So we've opened up corporate accounts and payroll accounts and so on because that's a requirement in the licensing is to have a bank relationship. So we're sort of important to them for a lot of reasons, but it's a gating issue in licensing a bank relationship.

And do you have the sales force in place or do you need to hire more?

We do. I mean we have it in place at the moment and the operations. Obviously, within my group, as in the past, we leverage other departments within the bank have a lag, technology, operations, legal, retail, et cetera. So the sales for is within my group.

We have an interesting history so because we were in the business for 22 years, I mean we're -- I can say this with the authority, we were the go-to bank in the banking as a service business before they gave it a name, banking as a service [indiscernible] right off the clip. So Nick and I decided why we're going to exit GPG was 2 years ago. It took 2 years to unwind some 60 clients. We went out there thinking that, well, this is going to be easy. Everybody knows MCB, so we started talking to these operators, you name them. We talked to everybody, we traveled all over the country, we traveled out of the country, and we didn't have a value proposition. It was like flat. What happened here? Like we wouldn't go to. So you talked about client acquisition. Anybody coming to the U.S., I can name, I can drop names and you'll know them. They came to us. Now they were like tracking okay, like, why you -- why are you here? And we were like, "I don't know." I realized that we have to define what is the value proposition of the MCB because they have treasury services already with their banks, but their banks aren't helping them deal with the challenges that they have. It's an incredibly liquid business, but the profit margins are really, really in for the operations, which is strange if you think about the costs associated with placing effect and the probability of losing. So their gross profit margins are high, but the net profit margins are thin. So we spent the last 1.5 years talking to operators about what is the cost to run your business. What are your pain points? And they would just very interested in having that conversation as opposed to this is just another bank that wants to process by acquiring transactions, I can probably lower my fees and to realize that was not the lead story. So we really understand what it costs to operate a company like that today. We understand the ecosystem from the player who is placing a bet on a Saturday football game in college down to how long it takes for the trappings to actually receive that bet? How difficult it is to push the wins back to the player in the afternoon to place another bet hopefully or take the money off the payment rails and put it back into your primary checking account, daily reconciliation, real-time payments. So we went back to the drawing board. And unfortunately, Dixie, picked one of our payment vendors for mono banking [indiscernible] ocean. And we sat with them and said, "Wait, this is something here." And we are now spending quite a bit of money. It's in our run rate to build it bespoke a payments platform that -- and we'll announce this with a press release, hopefully, in the next -- second quarter to give you a little bit more detail. So we'll have real first-mover advantage for [indiscernible], but we think -- and we tested it. So we know it works. We think we have a limited a substantial part of their cost in real-time pains. Now it's not simply because of the bespoke payments platform. The Federal Reserve here in the United States, finally joining the 21st century with real time payments. So we've been very fortunate to be one of the banks who participated in real-time payments. so originating real-time payments today. They'll be fully enabled in the second quarter to originate debits and credits. That's 24 hours a day, 7 days a week. I placed a bet on a Sunday. The operator will have that money immediately. If I -- if the operator has to push that money back to the player, they can push it back immediately, okay? We'll get into another time. But if you just understand the credit risk, the tranche back risk, ACH chargebacks, we're eliminating chargebacks because if I pull the money from your account and it doesn't go through, they're not placing the bet. Chargebacks a huge issue today. We were shocked that big operators don't do a daily reconciliation. We were reconciling billions and billions of use. We required in GPG. I regulated -- it's a regulative reconcile down to, what we used to call the, car hold account. Now it's a place, it's called the [indiscernible] account. So we have -- we think we have solved some of their real pain points to actually drive free cash flow, and we understand credit really well -- substantial free cash flow. Now those operators can reinvest that in client acquisition, technology odds, I'll leave it to them. But we've already had this conversation. We've shown some demos to some of the biggest operators and they like sign me in. We need to see this. Nick is going to choose three operators hopefully, in the next 60 days on the outside of 60 days, to come in for testing, but we really want to be live in the fourth quarter. We're going to test them. And what -- you attempted to go and get the biggest brand may not be the right client, we'll find out, we'll make the right decision on who we're going to invite in to do testing. But the beauty of payments is I use the word click fees. The one rate is immediate. You've got transactions running through your platform, you're earning fees. If you have transactions running to your platform, you have sticky full-cost deposits. And now it's just -- now it's a function of building the pipe and having to flow taking one-on-one. Fees in flow, right? It's banking one-on-one. So we're really excited about it, and we like the fact that we direct to merchant, no third party, I think over the last several years, I think, the industry lost its way in evaluating regulators lost a way to evaluating third-party risk. They meet the decision they went down that went down a path. They reversed it now. Obviously, they're not sold set about [indiscernible] relationships, but we like the fact that we're going to be direct to merchant, okay? And by the way, the [indiscernible] are considered a merchant in this business is a direct to merchant, and we eliminate payment processes. We limited visas -- they don't have to run over view on ask. You know the interchange fees there. They consider that high risk. Just it's a MoneyGram for Visa Mastercard. They could charge more because they consider high-risk [indiscernible]. People in place a bet Saturday afternoon on calling up later and say, "I didn't really place that bet." So -- but they have the opportunity. So we're excited about it. We're going to talk more about it and then we're going to show results. So really excited about that.

And the value proposition are you competing on price...

The rate acquisition is expanding our gross profit margin -- that's there will be plenty of fees for us. If we can deliver what we say we can deliver by eliminating some of their costs, and talk about not reducing their question, eliminating some of their costs. They never want chargeback risk plus they do have chargeback risk in some cases and still based teams. You don't know some of you have children and adults of playing games online. They put up their card in their wallet and they're playing games, competing with people. It's a relatively friendly business. I don't understand it, but some people really enjoyed doing that. And I'm happy, and we just want to sell the payments.

We already know the regulatory [indiscernible] strength, it's worth noting that it's an acquiring [indiscernible]. It's not an issuing transaction and who our customer.

When we win [indiscernible], we had 5,000 -- 5 million clients around the country would we have continual and had our name on the back. That was direct to consumer. And it's along a discussion now that regulated a few that relationship after 2 decades and so that's that. But here, it's an acquiring transaction. We have no relationship with the consumer. So the consumer regulators are different than any safety and sound as regulated. If you have a met one, you'll know the difference. So there they're doing God's work and protecting consumers in their mind. So we are not dealing with consumers. We are direct to merchant, which is a big difference big difference. And -- so we define our value proposition. We're executing on it. And again, technology, we don't mind spending -- we're going to spend a fair amount of money here. It's in the run rate. It's an all budget. We're not afraid of spending technology. We're not. So this is to get it where we are right now. We're a young company still, even though we're 27 years old. Average age is company is really young. I can't tell you what it is, but it's much younger than me. And they have a pathway in front of them. So we're excited about this and we're really excited about showing results fighting in the second half and really, really interesting in '27, but hopefully, we'll be live in '26.

But in 20 years, we never completed on price. I will tell you that value innovation, solve your problem. Somebody has an issue, they can't resolve, that's what they want to talk about first. If they're talking about -- well, if you're talking about price, [indiscernible] way to go anyway. But someone talking about price doesn't have an issue that they need help with.

It's actually interesting. You're going to hear from credit in a bit. We do the same thing in credit we bring value proposition to our commercial clients, but the industry but a business representing an industry or it an asset class or commercial real estate. We don't have clients that really challenge us on 50 basis points. on loan yields or deposits. These are clients that we're helping in GPG, we're bringing clients from all over the world into the U.S. We established their presence here and we did, there's some debate about it. We went open tag them. But it was a cost of their doing business and is rounding it, we're considering what their internal rate of return profits on. Same thing with our clients -- our commercial clients. Their entrepreneurs, serial entrepreneurs who have internal rate of return targets what bank is, we work on 3.5% pretax. You know what I mean, these guys are working on levered, unlevered returns that are extraordinary. So when we bring value and help them build and sustain generational wealth, we don't argue any bank that's pending the deposit and you're worried about flight risk. Anybody who can't win a deal on a loan for 50 bps, it's because you don't really have the relationship. You don't have a value proposition, a broker brought you the deal and he's shopping the deal from price and proceeds, it's just not our model, never been professionally. That's not who works here. And it surely isn't a DNA of MCB, never has been, makes for a less exciting business if I can I can tell you that. Any other questions for Nick?

Yes. You mentioned returning to the north of $20 million number on fees eventually here. And I get that this doesn't happen really fully get going into the fourth quarter. But what -- I guess, when could we potentially see fees get back above that level with this fully rolling? And what's the earliest opportunities for that?

I'll be able to answer that number in that water mark by the end of this year. But you'll see meaningful pesos in the first quarter is we'll talk about the clients that we signed up, and then you'll look at their volumes. Their volumes are public. They're out there. And so we think the value proposition is so significant that an operator that chooses to work with us and we choose to work with them. We'll point those transactions in our direction. That's what it is. It's just they just need to point those transactions to MCB's platform as opposed to the payment pipeline today. The big players out there today are like Nova, Worldpay and [indiscernible]. I can't wait to compete with them. And all they have to do is flip the switch and point transactions to us and [indiscernible] not through the piece of NASCAR as well because we use the Federal Reserve with a clearing house for real-time payments. So we think we'll have scale. We'll be able to put some real -- we have our own numbers and we're really, really, really, really modest and conservative when we presented this opportunity to the Board. And we'd be very happy with that. You would all be very happy with just that. So we'll see. We're cautiously optimistic that this will be similar in nature.

So are any bigger banks doing this? And if so, who are they? And is there a risk that because of their larger wallet, they can [indiscernible] from you into this business given the attractive financial metrics.

This industry has been around. Fracking has now been around for 18 to 19 years. So the HSBCs of the world are treating them like an acquiring relationship like any other small business. Whether HSBC has the restaurant in their building or their filing transactions with rating, it's an acquiring transaction. So that's how they view it, that's where it sits. Our view is a little bit different. We'll have first mover advantage with some very long protection in noncompetes. But I don't have source code in a vault, you know what I mean where you're going to have first-mover advantage for years. But again, the value proposition, I think we will bring to the table. We will sign 5-year contracts -- historically 5-year contracts with extensions. And the clients what I found with these technology companies that are in banking over the last 2 decades and our experience right now with the iGaming professionals serial technologists, they want to drive their business. They would love to just retreasury somewhere else and just let it work in payments. The fact that there's friction between the developers, the client acquisition strategy, people to people who set the odds, the people who create the websites, the designs, all the games, this is a real friction among the company because they're not profitable and not profitable. So they need to find profitability. If we can help them find a pathway to profit building sustainable profitability outbid us in providing the service that would give them the reason to stay. But we've chatted with banks. And none of them are having a conversation on how to make the company better. They're all about is my acquiring platform. I try to get x [indiscernible] of transaction and you look like everybody else. That's not widening margins. That's not big. If that was our only proposition, we wouldn't be doing -- we'd be doing something else. So I think we'll have -- I think the whole [indiscernible] business like we hold on to all of our customers. It's making a difference of value proposition in service. But there'll be more people in this with real-time payments. I don't understand what people are in [indiscernible] everything should be thinking about this. It's a good business today, and we at least.

For the regionals, it was for the regionals.

Any other questions, Bernick?

Okay. Just relative to the old GPG business and some of the presentations we heard about technology, AI integration, as we think about the ramp here is the old revenue stream kind of the initial buy in terms of ramping that business, some of the technology initiatives, like does that help and coincide with that ramp? Or is it going to be kind of slow and steady and getting maybe back some of the lost revenue.

Yes. I think monobanking in motion was actually just perfect timing is we were working for real-time payments and the build-out of monobanking in motion with the Fed -- on Fed Now. So we need that without that, if this model isn't as value-added. As far as the bogey -- yes, I would be very happy if we can duplicate GPT's end point, which is sort of what Nick recited as a starting point. I would really be very happy about that. And I'll be able to talk with some level of confidence in '27, which is here. I mean -- I mean, we're working on '27 and '28 now, I mean '26 has baked into the cake. So as far as we're concerned, we're already well into '27 mentally and product set.

Anything online?

No further questions online.

Okay. Thank you.

Thank you very much. All right. Our next up is James Sozomenou and April Feely. And the first question [indiscernible] this morning.

I tried. He's a little busy with some other things that had a pathway, but [indiscernible] call, these 2 professionals run our EB-5 and talk about [indiscernible].

Thanks, Mark. Good morning. My name is April Feely. I'm Senior Vice President and Growth Director of EB-5 division here at MCB. We're actually approaching our 3-year anniversary at the end of this month. Prior to joining MCB, I was with the former Signature Bank for close to 14 years and I was directly involved in creating their EB-5 platform as well.

I'm James Sozomenou. I'm the co-lead with April, same title, semi responsibility, I guess. I was with April at Signature Bank started there in, I think, late 2016 and then that bank had its little demise. We were able to thankfully quickly transition not just April and myself, but our entire team at that time of 7 for back to 7, we'll go through that in a second. But thankfully, Mark and staff had approved the idea of having EB-5 here at MCB. I think maybe without an idea of exactly where to go and then as fate would have it, our team, which was the largest banking team at EB-5 for over a decade, became available about 2 weeks later. So thankfully, as April mentioned, we are able to land here, and we're approaching our 3 years.

And then we'll bring it right into the rest of the background on our team. The same time, we have a team of 7 includes ourselves. We have 5 other support team members that support each other. They support us basic our clients. But for the most part, our team has a long and reputation in the business. I've been in EB-5 since 2011. However, the rest of the team is approaching 10 years in this. And we've basically built a reputation in this space that not only includes here domestically in the U.S., but it also includes a lot of the stakeholders that are outside of the U.S. internationally, including any sort of migration agents, even attorneys, international banks as well and then very various immigration firms. And I'll let James go into our high points of last year.

Sure. I get start, is anyone familiar -- has anyone ever heard of it before have any idea what happened? Yes. I mean it's been the news a little bit more lately over the last year or so with President Trump and his staff talking about it and then the introduction of the Gold Card, but we'll discuss that in a little bit as well. But as I mentioned quickly, when we were at our former home, we were the largest escrow agency in the EV space hands down. I mean without a question, not only was the bank name internationally known, but our names are internationally known. And coming over to MCB, while April and I were known the bank same was not. We're happy to say that, that is certainly not the case anymore. The bank is very, very well known internationally in the EB-5 space. There are plenty of banks that we deal with overseas and investors overseas that when they see the MCB name attached to the project that they're looking to invest into we received for that it does give a level of comfort both with the immigration attorneys and the migration agents that are working overseas in helping these people choose what project, they do like to look at what stakeholders are involved. And when the MCB name is attached to a project, it has given a level of comfort to folks knowing, okay, I'm sending my money to folks that I don't know. I'm sending a large sum of money overseas, but I'm sending it to a name that is known inside of the space. So that's been very helpful. So we look at 2025 as a banner year for MCB within the EB-5 space. Our industry takes in roughly about $5 billion a year in investor inflow of capital. That number comes to us from our leading trade association in the industry is called II USA, Invest in the USA. And they have data folks that just track everything alongside USCIS to get a real good understanding of how many investors are coming into the program on a yearly basis. That kicks off about a $5.4 billion expectation of funds coming into the U.S. We're happy to report it. We took in $1.5 billion of that coming into the United States came into the projects that we are partnered with. That represents about a 28% market share, which growth year, year after year, and we started at 0. So to now holds [ 28 30 ] in the future, growing that market share. That's a pretty big stepping stone for us, we feel that we've been able to do that. We see tremendous amount of transactions on a daily basis, both incoming and outgoing transactions with our our team to the 4,500 incoming transactions alone last year, meaning 4,500 wires came through. Now that doesn't necessarily mean 4,500 individuals. Sometimes there's 3 wires per person, sometimes there's 2, sometimes there's 12. That's why we have a robust team that really understands the ability to intake those funds and kind of go up with something that Mark had mentioned a couple of moments ago about working with a bank that is specialized in their field. So when him and Nick are launching this -- the gaming side of it, working with the bank that understands that, that is absolutely true in the EV space. There are not many of us in the EB-5 space from a banking perspective. There are a couple of others that we know very well, but the Chases, the TD banks, the Well Fargos, they do not get involved in this space. they're get in their own way, for lack of a better way of saying, right? They'll get in their own way. You have to have a specialty and dedication to this space in order to be able to pull off these things successfully. We currently have a little over 100 projects that are currently on platform, raising capital, which is a very large number, 60 or so independent regional centers. So a regional center or the folks that are out there license to actually raise this capital. So lot of projects on platform, a lot of different individual relationships. And yes, I mean, last year, we saw about a growth about $190 million over the time, and we're looking to just continuously grow that.

A couple of projects that we had closed up last year, meaning that the funding is completed. It's still -- some are still open and they're still active, however, the amount of incoming new money that came in were 2 big names, 2 probably that you've heard of. I mean, [indiscernible] Montana, it had the Yellowstone Club, which is a Uber luxury resort. I believe that condo units go for about $30 million a piece. So this is -- it's very, very explicit teaser well heat of the public that are seeking these types of units. I know it was for $400 million. And then right behind that was also a project that we had finished in Miami and 4 seasons at the Surf Club, which is a little far north of South speech itself. That was for $140 million, but core seasons is something that everybody does. But while we were closing those up and the funding was kind of wrapping up on that, it brought us into 2 new projects that we were onboarding at the same time. And basically, these are 2 history makers by the stream. Infrastructure is a huge buzzword in the industry currently right now. Basically, we had the largest 1 so far for $500 million. That 1 will be raising right of the block at the Hyatt Hotel on Park Avenue. It includes a complete redevelopment and construction of that building. It also includes stakeholders like the MTA, if there's going to be some updated access to Grand Central along with that at the base of the tower. That was for $500 million. And then right behind that, we have a CM offering -- can is one of the most well-known EV fibration centers in the space there New York-based, but this is for a data center in Carson, California, the government-owned center, and that is for $180 million.

Dave, let me just go back to that 1 a little quick. Just to kind of stay on topic here. So you can see that the difference in asset class here is great. right? We're talking about luxury hotels, transit authorities, all the way down to like data centers. So probably even capital probably touches more things than we realize, right? Everyone is familiar with Hudson Yards, right, right up the road, Hudson Yards raised $1 billion of anyone's ever used the WiFi that goes through the subway system. That was 5 use that you bid for that. We had 4 seasons on there. They've used it multiple times over. So if you've ever stayed at the Four Seasons, part of the money that used to build that building was EB-5 capital. So it's not what it used to be in years past where it only builds multifamily or residential. It is now branched into this larger area, which is this infrastructure, which April just mentioned, these 2 large projects. So when legislation happened and Congress approved our program in 2022 under what they call the Reform and Integrity Act they carved out as a week, so we were part of the negotiation with Congress is set aside in the Visa category. So every year, just kind of give you a quick one-on-one on EB-5. Every year, EB-5 allows for 10,000 visas to be allocated to investors. So if I'm an investor living in Mainland China or India and I have a family of 3, if I make 1 investment, all 3 of my family members can come over under the EB-5 Visa. Now those 3 counts against the 10,000. That's something we've been fighting for to remove those derivatives for years. I'll get into that in the next legislative slide, but it allows for families to move over under 1 investment. So what happened under 2022's RIA discussions, it's Reform Integrity Act, is there were some folks in Congress that were very for this program, and there are some folks in Congress that were very against this program. So the ones that were against it, their areas of their states never saw EB-5 investment. It always went to New York, California, Florida, Dallas, like the major cities. It really went to there. So what happened in the legislation and we made a compromise which is -- we wanted to drive money because this really is an economic development program more than anything else. So the program wants to drive money into areas that are not just the major cities, but also Middle America. These areas that normally would not see any money. So what happened was we created these what we call them set asides. So these -- there's rural. So you are building a project in what is classified under the EB-5 definition and it's all based on unemployment numbers and economic studies and models. If you're building a project in a rural area, you're allowed 20% of the visa. So it's basically, I always used to think on ever go to Disney or bring your kids to Disney. You have those Disney fast pass lines, a rural project, but do in a Disney fast pass line. If you get into a high unemployment area, that's a 10% fast pass line. And now infrastructure, which has been the hardest 1 to really acquit what is an infrastructure project, that gives you 2% separate set aside. So having these 2 large-scale, very reputable regional centers, bringing infrastructure projects to the market is the first of its kind since this program started again and we got reauthorized in 2022. So if you go to the last slide, I'll touch briefly on a topic that everyone has been asking about over the last 1.5 years or so in that bright gold picture on the bottom right, which is the Trump gold card. So when that was first announced in February of 2025, it was announced of the cut by the Secretary of Commerce, no 1 had any idea that this was coming, it just literally came out of the blue right after I presented to the Board. So literally hours late. So go free. So the Trump Gold card did effectively go live in September of last year. It did not go live by congressional -- any congressional approval, not through legislation. It went live through executive board. And if everyone follows politics executive orders can be overdone by another executive order. So while the Trump Gold Card is in play, there's not a single immigration attorney that I can tell you that's out in the space that is recommending the Trump Gold Card on because there's so much uncertainty around it from a dollars and cents perspective, it's $1 million per person where our program is $800,000 for an entire family. So when we look at -- and there's many more things that we can go through in terms of visa categories and the lines, the EB-5 industry does not see the Gold Card as a major competitor to it whatsoever. If anything, it's just running parallel to it. There may be some investors that decide that, that might be a better path for them and they're okay with putting out $3 million or $4 million and never getting it back versus maybe waiting a little longer depending on their status and where they come from, $800,000, getting it back and all 3 or 4 of their family members can come over. So while it is a thing, it's not really a thing, tough. Advocacy and lobbying efforts. We spend a lot of time in D.C. We spent a lot of time on Capitol Hill, meeting with congressional staff members. Occasionally, we might get a senator or congressmen to sit in the meeting. It's very rare. But we're meeting with staff members just to inform them on what EB-5 is, what it's doing in their areas. Again, economic -- this is an economic development program, right? It's a job, U.S. job creation program, immigration aside, this is the benefit of the United States of America and create jobs here in areas that maybe wouldn't normally see those. So we're in D.C. usually 3 or 4 times a year, actively lobbying members of Congress to help us kind of push this through and get permanent reauthorization because our program is up for reauthorization at the end of September 2027. The industry, I tell you is extremely confident that we'll get at least another 5-year window, if not permanent reauthorization. President Trump just permanently authorized opportunity zones. So the thought is we'll try to piggyback a little bit off of that and get permanent reauthorization for the EB-5 program. I speak a lot. I do a lot of speaking nationally. I haven't sold markets yet, but we are being banked to come internationally and speak at there's road shows constantly in China, India, and different parts of Southeast Asia, Latin America. And because the name has gotten so popular, whereas constantly once you come to the weak road show in China and answer so far has been no, but we're going to talk later. The answer might be yes. We'll see how that goes. But we understand it's a very niche business, but it's a business that we think is very scalable. We have the team to scale it. If we have to, we can certainly hire more folks to handle the daily transactions. We're potentially looking at another business development person to kind of tackle some of the folks that in the space that we don't have yet, but we think we're in a really good space. Happy to take any questions whether about our business directly or about the program in general.

Once -- just one, just with the high market share, the 28%. How have you been able to carve that out and just tour your competitors.

Yes, great question. So I'll start first with the second part of that. Our competitors, there's not really many banks in this space. I'd say our largest competitor is actually a friend and ex-employee of ours when we were at Signature and they're at Customers Bank. They're involved in the space. What we're really seeing now more so than banks being involved, there is I'll say it's 1 company because they were started by the same person over a couple of years' span, but they're not a bank, they're deposit solution, a deposit management solution. And they really came out of the woodwork into EB-5 after Signature failed because of the FDIC insurance. So people started to look into these deposit management third-party companies that will take the deposits in, farm them out to a whole bunch of banks to settle the FDIC insurance requirement and then when called upon, they have to then go back and gather those funds and bring them back. banks like us, we have the ability to do that as well. You don't need a third-party management system to do that. We have that ability inside of MCB with a relationship that the bank has to be able to offer full FDIC insurance to the folks that are out there. As far as how we've been able to gain that market share. There the implement she's been in the business since 2011. I've been in it since 2016. We've developed tremendous relationships with the regional centers, NCE managers, those are new commercial enterprises. Those are the folks that are actively out there raising capital. immigration attorneys, we have great relationships with. They send us a lot of business securities attorneys. These are the folks that are actually writing the offerings, right, in the PPM. So they have direct relationships with the projects themselves. So we really have this -- and fund administrator, I should mention, fund administrators. Under the RIA legislation said that we want third-party eyes watching these funds that are not related to the project whatsoever. So in doing so, we have great relationships with the fund administrators who then introduce us as kind of industry leaders in the space. And thankfully, if we do one project with someone, the likelihood of us doing 2, 3, 4, 5 with them is astronomically high. We get one of the side [indiscernible] synergy, it turned out as a result of being in this business. We do a lending in the markets that we're in. And since now we are the EV team, who were able to go to the developer and say, "hey, what about EB-5, what you consider it?" And there was a crane we tested this to make sure -- it isn't a crane that you see that it is not EB-5 under. EB-5 is a net cap stack. So on a number of occasions, we were able to introduce our developer who have provided a construction loan to this team to say, hey, if you qualify. So let us do the EB-5 for you. So we did the EB-5 business and then we did construction on. So we've done a handful of them. And so we don't lose the opportunity to introduce April and change to the commercial side of the business. Just why not just add more value.

Thank you. Thank you. The next presentation is Laura Capra. She heads our Retail group.

Thank you, Mark. Good morning. As Mark said, my name is Laura Capra, I'm Executive Vice President and Head of Retail Banking; 14 years at MCB, and I made [indiscernible] 40 years in the industry. I'm -- prior to joining MCB, I suppose the bulk of my career at Santander where I was responsible for deposit growth and de novo expansion in the [indiscernible] market. Our team. We have a sales team of 15. So we run extremely efficient -- the team put together has over 300 years of collective experience. So we have a very seasonal team. Okay. Our positive verticals. So our deposit verticals have a proven track record for deposit growth, and we'll continue to be a consistent driver of efficient funding for any day. As you know, as of 12/31/25, these verticals contributed to $1.4 billion in deposit growth. The success of the growth is really elementary. We provide high-quality white glove service. The service has resulted in numerous business referrals throughout many of the deposit verticals. The team is extremely knowledgeable in these industries. Extremely visible, whether it be in front of clients or at events. This has been a key to our success. In addition, we have positioned ourselves to be a trusted partner to our clients. And as Mark said previously, we're not afraid of technology integrations, which has helped these clients with transactional efficiency. And the cost of these deposits for Q4 '25, 2.75%, I think 1 of our competitors today has signed in the window, they just opened a new branch. I think they were offering 4-month CD at 4.10. So these deposits are extremely attractive for pricing. And what's really exciting here is that we have just touched the surface of the potential growth in each 1 of these deposit verticals. Our strategically located banking centers. Our approach has always been to identify key locations where our brand is recognized where we're well established, and we have the ability to expand our banking services to clients who are frankly revising or working in these surrounding areas. We target markets that are surrounded by many of the big money center banks, which is really twofold for us. It allows us the opportunity to recruit and higher from these big money center banks. And it gives us the opportunity to capitalize on their percentage of market share. And I'll share with you a recent example of this. In November of 2025, we successfully converted our Lakewood administration office to a retail bank in that branch. We had service clients in the liquid market for years. prior to us even establishing this office. We were very successful in recruiting a seasoned relationship manager for 1 of the big money center banks. Six years later, this manager relationships have consistently contributed year-over-year to deposit growth in this market. Lakewood itself just to show some statistics. There's over 19 financial institutions with over $3.6 billion in deposits, and that was as of June 30. In addition, [indiscernible] was ranked 1 of the fastest-growing municipalities in the state all tremendous opportunities for us. In addition, that conversion of a retail branch gives us the opportunity to expand our outreach in several positive verticals in the State of New Jersey. Municipal charter schools attorney and escrow accounts, all that we've required a brand to be able to obtain. Florida, which was nice to be here today. Florida is known as our Sixth Borough. During COVID, we supported and followed many of our clients to Florida, and we established a loan production office in Miami. This morning, we successfully converted this office to a retail banking branch. The Florida market is [indiscernible] office is surrounded by 41 financial institutions with just shy of $50 billion in deposits, and we just won a small percentage of that. That opening today allows us the opportunity to capitalize on these deposits and continue our deposit vertical expansion into the state of Florida that allows us to capitalize on the municipal title escrow, Charter, et cetera. In April, we'll move slightly north and open up our second banking center in West Palm Beach. That market, as of June 30 has over 22 financial institutions with $7.7 billion in deposits. And the building that we're taking space in, we have 3 of the big money center banks. All tremendous opportunities for us. Lastly, on Slide 45. You'll see year-over-year of our substantial growth among these deposit verticals. More important, the diversification across the multiple [indiscernible] deferrals. This is and will continue to be a key strategy for us and helps us to reduce risks. We will continue to identify industries that are in possession of or have discretion over funds. We're working on several now that we'll be happy to share coming in the future releases. This strategy has and will continue to make MTV a core-funded institution. I'll open it up to any questions.

I'll just touch on something that Laura has touched on it again, it's something that it really is a takeaway for all of you -- so we've demonstrated that the numbers are in the history books. We've demonstrated to be a co-funded institution for 27 years now. It's June. The question is, okay, can you continue to be a co-funded institution. Can you continue to drive efficient core funding to drive your loan growth, you have ambitions on both sides of the balance sheet. And you see a strong correlation on both sides of balance sheet called diversification and some others call it optionality. When Warren has developed all of these different lines -- only deposit verticals, the probability of execution. If you look at the industry behind each and every one of them dig deep. We haven't scratched the surface year-over-year, $1.5 billion is a rounding error from what the industries represent. So we continue to work on, we continue to provide the service satisfy clients, again, and all roads back to little value proposition that we bring, the probability of each and every 1 of them just contributing enough. So we don't need any 1 of them, but we take your all time in January, people have heard said it's [indiscernible] billion. Every January, we need $1 billion. If every 1 of them just contributed just enough, just a bit we did our price target and we hit our volume. So we don't have to sit back and hope that just 1 of them leave the day, win the day. And when you talk about execution risk and as shareholders, you should appreciate this, what's the probability, what's the execution risk. Our takeaway is very low -- very low. On the asset side, you'll hear about that in a minute. We don't think that for branding, but we're banked at those deals. We do a lot of business. We do a lot of work. The question is can you continue to finance. And there was always -- there's one question that would not asked any longer, but it is our vison a very legitimate question. If you have ambitious goals in deposits and loans, well, which is not a glass half full question, but it's a fair question. Are you going -- in order to reach those goals, are you going to jeopardize credit modeling? Are you going to jeopardize pricing on the loan side? Are you going to pay up for deposits. Well, that's a trifecta of disaster. I mean that's just a disaster that isn't who we are professionally and that's not who we are. And that surely isn't the history of this company, and that would not be a success story. So I think we put the foundation in place that will allow us to continue the proper approach toward managing risk and managing our interest rate and liquidity profile here at the company. And that should optionality and diversification is really, really important for the reason I just said, but it's also a service management tool. On the asset side, it's a service management tools, I will talk about that. And on the deposit side, it says [indiscernible] management tool. I was so concentrated in 1 area. Who knows what could be a disruptor in that -- for that 1 area that could sort of bring down my ability to fund these loans. And then what do you do? Do you do less lending? Do you pay up for deposits. We're not ever positioned to answer that question. So hopefully, that's a takeaway today as well. Any questions? Any more questions, anything online.

No further questions.

Thank you.

Thank you, Laura. All right. So we have a upbeat in the schedule. I'll leave it up to you guys if you want a 15-minute break or do you want to just roll through it? [Break]

Okay. All right. Let's get started. I'm to now to -- the first employees Scott Little, our Chief Lending Officer and Norman Scott, our Chief Credit Officer and Dan Thomas, Head of Corporate Finance, everything lending [indiscernible].

Thank you very much. This is Scott Lublin, I've been at the banks in 2018 in his role was actually at the months before of driving the real estate group in 2008 to 2013, can be at 30 days before [indiscernible] went down [indiscernible] time banking and then I was also at 2 [indiscernible], regional banks, $20 billion, $50 billion, that was $200 billion bank. And then that's actually a little bit of a theme, a lot of my colleagues from larger banks. And while we're a $10 billion bank, we're really punch above our weight class in our competition because you [indiscernible] ourselves banks and a [indiscernible] complicated deals. As you can see on this chart, we grew about 13% last year. And that's really pretty consistent, but really the time the bank started over public. So it ebbs and flows based upon market conditions, we've always been a growth bank in the past couple of years has been more heavy on the health care side, and that's various reasons when we love the space and we'll go into that. And also, obviously, know the real estate market has been a slowdown with the acquisition market slow down and that sort of spur activity and a lot less. So we'll go into the numbers. But really, before we go in the numbers, [indiscernible] me is how do we get this growth? How are we successful? How could we grow simply. That's really the bottom line. And the philosophy is the same between the real estate group, investor real estate group and the C&I group, which Danny runs, which health care rolls into. Our group has about 5, 6 lenders in it and then they support staff, analyst portfolio, managers work for them, and then we have a credit part of [indiscernible] runs up. And it's really we have very seasonal lenders. So that we realized really need on our lenders. And the first role of defense that the bank has. And I view myself and I do all of them is really his credit people. They're looking at deals for us when they cover and negotiate with the client or start our negotiation before credit has filed. And that's really a key point to understand the risk of a company or a risk of a deal. In a certain sense, every building deserves alone, we have to figure out how much that loan should be and how the file to our parameters. I see on to success is our relationships. So we really see ourselves as advisers to our clients. Now they'll often on a daily basis. They're calling us, they're thinking about buying the company. They're thinking about buying our retail building thinking about buying a nursing home. So what do we think about? And where do you think that, that will size when you know about the marketplace. We're constantly helping our clients. Obviously, we have thousands of appraisal reports. We have contacts with sales reps. We had contacts with the [indiscernible]. So we're constantly trying to give ourselves our clients and even if we had not doing the deal, but we want them to call us and be one of the first calls and we want to add value to them. I mean that's the theme of the bag. How could we add value to the bank and Mark mentioned that before. And that's what we try to do. And the reality is our clients if they're going to buy a building for $40 million, and they have to put a $4 million deposit down and they have to close in 60 days, they have to know what we get delivering. We are going back to somebody in 45 days and say, I can't get a deal approved. That's not a good phone call at the end of that relationship. So really surety of execution is really key to our business model. And that's why I think we can get a little bit extra yield, Ms [indiscernible] constantly [indiscernible] about getting the extra yield. And I don't think it's riskiness. I think it's getting that quickly for our clients. That's a key thing, knowing that they can sleep the night before, and we can be at the closing table. And that's sort of the extra value that we bring to our clients, and it's very, very important. The other main ingredient is our client base. And that's really, as Mark has said before, very successful as our clients has been. And we have seen in the past decade in the past 2 decades, the amount of wealth that has been created by our clients and very entrepreneurial has been substantial, really unbelievable. But we really focus on family-owned businesses. And what I mean family-owned businesses, I don't mean a mom and pop shop. These are very sophisticated people who own 5 pursing homes, who own 20 retail properties, [indiscernible] 14 Street, who own thousands of apartment buildings in the North east, who own 1 million square feet of retail at Long Island, whatever it is, we believe our clients are really experts in the field. And also that they are now there first, second, sometimes third generational families. And that's really part of so and they have patient capital. They are not -- we have any like private equity firm to our really clients of the bank, who will look at [indiscernible] they're patient capital, they work with them. They appreciate the relationship. So that's really the background, which I think is very important. We can go through next slide. This is the total portfolio, and you've seen this in the past, it's about 50-50 between nursing home/C&I to investor CRE. And you can see in here, the investor CRE is very spread out. It's very spread out. And it really goes 2 things. It goes about our diversity and market fluctuations that you don't want to be exposed too much on the investor [indiscernible]. But we really think I've seen too many times at other banks where they say, we're not doing retail. We'll do 0. It doesn't matter if it's a long-term client. It doesn't matter if it's a low LTV. We think that's a bad business follow. We think you can pick your spots. We'll constantly look at the market, what's the riskier asset class today and yesterday, what do we think is going to be riskier tomorrow. But we really believe that there's good deals in all asset classes. It's very important. And that's another point to the pricing. Sometimes when there's scarcity in an asset class, we think we can get a little bit extra pricing. Again, is it riskier? I'd say it's not riskier. It's just people are very segmented in their thoughts, and they really have yes, no answers. And we don't believe that's the right way to go about it. The next one is rather continue. This is just real estate. It really goes to how we're diversified all across the board. This is real estate owned. And then geographically, we started as a New York-centric bank, but that's evolved over time as our clients have evolved. So we followed our clients more so on the health side. So right now, about exactly 1/3 is at a market. That's predominantly in the health care space. We do follow our real estate clients, but less so. It's very -- real estate is very specific, right? A shopping center on the Northeast corner could be different than on the Southwest corner. Nursing homes is a little bit different than that, that specifically different local in a specific town, but we do follow our clients. And then as Laura mentioned, we have our 2 offices in Florida. We've always been down there with our New York clients in Southern Florida. But 4 years ago now, we opened the office down there, and we hired a local real estate lender and a local C&I lender, and they have introduced us to new clients, Florida-based clients. That's been very successful. We've opened the same thing in West Palm. But we have a walk before we run mentality, just like in technology and everything else we do. So we have a fair amount of book down there, but Florida has had ups and downs in the past. We're constantly talking about it with our credit partners with our Board of Directors. But we think that's a growing market. We think it's a growing market. So we're excited about that. The next slide, really, if I had a drum or do a drum roll, I would take a little bit of thumb from Danny, but very exciting news. We've been working on this a while, literally got the letter from them on Friday last week that we became officially a HUD originator. So HUD does the multifamily potential and health care. We think we're going to be leading with health care, just like we lead with health care in the portfolio. So we have lots -- as you know, we do a lot of health care lending. So a good chunk of that is acquisition and they do a bridge and they go to HUD. Traditionally, we would get paid off. We got paid off a few hundred million dollars. It's $150 million to $160 million a year. Yes. So we think we want to capture this business. So this is a fee income generational business plus a deposit play. We hired a chief underwriter that will be announced in a few weeks. We have to have a chief underwriter on staff. We got approval. So again, we think this is really filling that last part that we haven't had. And we think it's potentially another contribution to just fee income. And I'll repeat what Danny is going to say it's not in his guidance for this year. But -- and so HUD takes -- if I signed up a HUD deal today and all the stars aligned, it takes 6 months. So this is really a latter part of the year and then '27 going forward. But we were at a health care conference last week, and we knew this was coming and we were talking about people and a lot of our customers who we have very, very deep relationships with are very excited. They've been talking about this for years with us. We decided to get this on our own. Some people try to sell licenses. We got approved on our own by just being a bank and our experience in the health care space. That's another thing. Most banks, you can't go to 232 directly. You go to multifamily first. We sort of got an exception, and we can do 232 right away. So we're just very, very excited about it. We think it's going to be a multimillion dollar fee income a year starting at the end of the year. But yes, so that's really -- that really real estate and lending overall. But I want to hand it over to Danny, who really runs our C&I and is really known as a leader in the space in the health care space.

Thank you, Scott. Good morning. My name is Danny Tommasino, SVP of C&I, which also includes health care. I've been with MCB now for 6 years. I have over 20 years of banking experience. Previously, I was at Citibank and PNC, where I led their health care initiatives. This chart here is just kind of an overall picture of C&I lending. As of December 31, 2025, our C&I portfolio stands at $872 million, focused squarely on middle market businesses with revenues up to $400 million. This segment is where we see strong relationship-driven lending opportunities and attractive risk-adjusted returns. As you've been hearing throughout the day, our C&I strategy is the same as everything else where we're really -- we really have industry specialization and diversification. Rather than concentrating risk, we've constructed a well-balanced portfolio, as you can see from this -- from the slide across multiple verticals. The diversification reduces volatility and allows us to pivot capital towards sectors with strongest fundamentals. We've really had a strong history of credit performance. And it's primarily driven by what -- again, what Scott has said, by the strong sponsors that we have. I mean our collateral is strong. We have very strong personal guarantees with individuals that are high net worth individuals and strong sponsors. Our borrowers have durable cash flows and strong asset coverage. And again, we have deep underwriting expertise in our chosen verticals. Again, what we've said, the same thing as the deposit vertical. We're not competing purely on price. We're competing on structure, relationship strength and credit quality. The portfolio has demonstrated consistent growth while maintaining discipline. Even as balances fluctuate quarter-to-quarter, the underlying composition reflects a deliberate shift towards sectors with favorable long-term dynamics, particularly the health care-related segments. What I want to illustrate here is the reason why we're really focusing on the health care side of things. As you can see, the health care really dominates GDP. It consistently represents anywhere between 17% to 20% of the GDP. Spending grew 7.2% in 2024 to $5.3 trillion. Skilled nursing facilities accounted for more than $220 billion of that. Primarily, what's driving this growth in health care is a few factors. One is the aging population. Another one is the advanced medical technologies, administrative complexity and drug costs. Looking forward, CMS projects health care spending could reach approximately 20% of GDP by 2031. Importantly, the recent federal budget discussions have had limited impact on skilled nursing operators as policy focus is largely targeted on other sectors. This slide here is an indication of the aging population and why we're so bullish on the health care space, especially in the senior living side of things. The long-term demographic story strongly supports the strategy that we have. The U.S. population grew approximately 10% from 2010 to 2024, but the most important shift in composition. In 2010, the 65-plus population represented about 13% of the population. By 2024, it's roughly 3%. So there's definitely a shift in the aging of population. It's projected by 2050, Americans aged 65 and older are projected to increase from 61 million to 82 million, a 47% increase, representing approximately 23% of the total population. This aging demographic directly drives demand for skilled nursing and residential care. There's definitely a lack of supply in the market out there and predominantly it's due to the certificate of needs, right, states where you need certain licenses in order to operate in certain states, which is predominantly the states that we're financing, right? So there's a very limited supply. It's extremely expensive to build new senior living facilities. So that's where we're really seeing the strength in this space in this sector. And again, this is not a cyclical trend. It's a structural demographic shift that supports long-term occupancy and revenue visibility. This is our portfolio in health care kind of just a high level. This is not something that we've just started. We've been in this space since 2002. What's really amazing is the fact that we have no realized losses or deferrals, which is incredible even during the pandemic where there was so much gloom and doom in the industry and negative press, and this sector has really held up extremely strong. We never had a deferral or anything even during the pandemic, which is just a testament to the strength of this industry. But more importantly, the strength of our sponsors. We really deal with the top-notch best-in-class sponsors in this space that have over 500 beds that are operating over 500 beds, 1,000 beds. I mean they keep growing on a daily basis, but they really are the best-in-class in the industry. And we take a very conservative approach. I mean from our portfolio in general, average LTV is 70%, which illustrates that we have a tremendous amount of equity in our loans. We're extremely highly selective regarding the quality of SNF operators, like I mentioned, that we finance. We really deal with operators that have a proven track record, not only of success in their facilities, but success in their market and really the market leaders in their geographic locations. Today, we have $2.8 billion in total health care loans with $2.5 billion concentrated in the skilled nursing facilities. We focus on this niche again because it combines essential services, strong demand fundamentals and really strong reimbursement support. What we've seen also is the Medicare and Medicaid has really increased their reimbursements to a lot of these facilities. The states have now started supporting the skilled nursing facilities because the alternative is much more expensive. By not having skilled nursing facilities or not supporting skilled nursing facilities, the alternative going into a hospital, which you're now -- it's going to cost the taxpayers to cost the insurance companies that much more. So what we're seeing is a lot of the reimbursements in the states have really increased, particularly in New York and Florida has seen a tremendous amount of increase throughout the last 3 years. So we're seeing a lot of support from the government agencies. And again, like I mentioned before, we lent to certificate of need states, which limits the supply and stabilize the occupancy and the pricing dynamics. The next slide is really just a summary of what I've been discussing, why we've been successful, why we're in this space. We have tremendous industry depth. Myself, like I mentioned, I have over 15 years in health care experience, but my entire team is really well versed in the space, over 45 years in totality of experience. Norman on the credit side has really hired really strong underwriters in the health care space that have a background and have been doing it for many years. So we're really well positioned as far as not only knowledge, but overhead. We have a very diverse base facilities. We have over 285 facilities now in our portfolio that consists of throughout the entire country. We're now financing in over 22 different states. So we have great geographic diversification as well as operators. Again, we have a proven track record with no losses, no delinquencies. And as I mentioned, Medicare and Medicaid continues to be supportive of the space. One of the thing that we're also doing and this is where we're implementing more on the technology and things of that nature, where we also have third-party servicers where we're monitoring all the nursing homes that we have in our portfolio on a daily basis, quite honestly, and the performance that they're doing. So we're tracking everything that's happening. So our due diligence throughout the last 3 or 4 years has just been astronomically getting improving every day. And we also have, which I guess Norman would talk about more is the third-party sites, if you want to segue to Norman now.

So Norman Scott, Chief Credit Officer, been here 4.5 years. I'm the Chief Credit Officer role. Previously, I was at the U.K. Global Bank Lloyd's and the North American operations. I was the Head of Corporate Credit there for a number of years, over 35 years in banking, over 20 in the U.S. and over 20 in credit, specifically in credit. So I think it aligned Mark's vision to take the bank to the next level. And as Danny alluded to, there was 15 in my credit team when I came in. We're now 30 and 50% of the original team really have been recycled into the model of MCB of where we want to be. I really targeted underwriters with big bank experience that really were -- had the desire and the motivation to really take MCB to the next level. And as Danny said, targeting health care specifically. So bringing in some real seasoned underwriters. We've got a very experienced team. There's no key man risk there. We've got good coverage across the investor CRE, traditional C&I, which we pulled back deliberately on and on health care, where we've grown, have really built out that health care expertise. And I think some of the transactions, as Scott and Danny said, I think the culture here, the lenders are very experienced and seasoned, it's not about throwing a deal against the wall to see stick. We know what the appetite is. We know what the Board mandate supporting the management strategy and our credit risk appetite statement. And that really starts at Scott, Danny and the team, and it's very aligned with credit. So I always say we have a healthy tension. There's not conflict -- it's a healthy tension that I'm going to be looking at it from the credit perspective. But again, we want to get involved early in the process, so we can help identify risks, credit risks, challenges, which should smooth the process so that to Scott's point, you don't want to get to day 45 and underwriting are saying here's a huge risk that we don't like there. We would have those conversations very early in the process. We're all based here. The underwriters are beside the lenders, the portfolio managers. So there's good interaction. You can ask questions, you can jump in a room and have a call with the client, you don't see the property. Again, a lot of it is obviously in New York. The underwriters will go out and actually see the property so they can really assess it there. So I think we're very much aligned on the strategy. And then on our approval process, I think the -- it's a disciplined approval process. We've got a lending signature, a credit signature. We've got credit committee. Anything over 12.5 million will go to our credit committee. As I say there, we've got Mark, myself, my deputy and Scott and Dan as well is on the credit committee. And we have some Board observers that evolved as well as we transition from a Board level committee. So I think that's been very smooth. It's working very well. We have a committee tomorrow for a couple of Danish deals actually that are going to committee. So I think that part is working well. It really is discipline. I think our portfolio oversight, again, the growth that we've seen in the 4.5 years I've been here, I think we've really strengthened the overall risk framework. nonfinancial risk has absolutely been built out to position us as a platform for the large bank on the credit infrastructure, as I say, I've doubled the team in size. And I think I've brought in real expertise that's helped the oversight of the portfolio. We have a monthly portfolio review meeting. The idea of that is we look at it on a regular basis, early warning signs. Anything we need to know about, Scott, Danny and myself are on that with others in the team. We'll go through are there any late payments that are coming in? Are there any risk rating concerns that we have? So really, it's a frequent we talk to each other pretty much every day, but this just gives us a formal forum committee for doing that. We have a quarterly asset recovery group, which is on Thursday, and that's predominantly looking at the special mention and substandard. And also, we'll look at our 5 watches. Is there anything we do me quarterly for our 5 watches? So we've got good visibility into any early warning signs that are there. We have a very comprehensive quarterly commercial portfolio presentation to the Board. Scott, Danny and I were there last week doing the fourth quarter presentation. And again, a lot of really good data information trends that the Board can see. And we'll take segment presentations to the Board as well. And we'll be directed by the Board, are there any areas that they would like us to look at. It's very kind of interactive in that way. And then monthly management reporting, we're getting that all of the time, whether it's the segment limits, making sure we're constantly in compliance with policy with our RBC levels, our industry limits, all of that, we're getting monthly reporting that we flag anything there. What my credit team will do an annual review. So again, independent from lending, credit, we will do an annual review, make sure we're on track. There are loans with below $2 million, if it's following certain indicators, it would be a very light touch. But anything above that, we're going to look at it and re-risk rate it, how is performance since it was underwritten, very interactive between credit and lending at that point. And I think that gives us a good assurance that we've got an independent internal verification. We also do, as Danny alluded to, an independent loan reviews. We've got a third party who will come in to a very large percentage of our portfolio. I'm -- we're members of the midsized banking consortium. I go with other chief credit officers. You hear what's going on in other banks. This independent assessment is larger than most of the banks that gives us heightened oversight, which again, just gives us the comfort that we like. They'll do this on a quarterly basis. It will be across our CRE and our C&I. And then once per year, they will do the skilled nursing facility. So that was actually done last quarter. So in the fourth quarter, I just presented the report to Audit Committee 2 weeks ago. And the good news is it was a very positive endorsement of everything that Danny has said on the portfolio. So it's good that we have the independent credit and then we have a third-party endorsement or identifying any issues that could come out. We then have clear action plans. If there's anything identified from there, we'll follow through with the action plans and take that through to the end. We also have stress testing. We have third-party that will do every 6 monthly stress testing. We multi-scenarios. I'm told that this is the most conservative of all the stress tests for the banks and the third-party services, which is comforting. We have multi scenarios, and we're stressing the capital. And in all of the stress tests that we have done, the bank has remained well capitalized. The third party will come in and present with myself the stress test output on a 6-monthly basis to the Board. So that's April is the next one for the second half of stress test. And as I said, we'll also do industry segment reviews. So Scott and I will talk about this and what's topical office, obviously, is one that we've taken a couple of times in the last 24 months. But as Scott said, interestingly, for office, as you'll see on our public slide that's in the investor deck, all of our Manhattan exposure is 2022 and beyond because we saw there being opportunities where we could get the right structure for the right sponsor and the right pricing. So again, when others were pulling back, we actually office transactions in Manhattan. And again, everything is going well and the office market is actually proving very robust in Manhattan. So when we look at all of our other segments, health care for Danny, we take that about every 12 to 18 months to the Board. We have a view when the one big beautiful bill came out. Again, we didn't overreact. There was not a knee-jerk but headlines the first day. So we stressed stressed NOI. Okay, if Medicaid was to be cut, let's stress NOI. The headlines 2 days later where we're really not focusing on skilled nursing facilities. We're going after the fraud in Medicaid. So again, we didn't panic but we did a methodical review. We brought in a third party to do an independent assessment of the one big beautiful bill. They came with the conclusions, which were aligned with us that skilled nursing facilities, in particular, weren't materially impacted by the bill. And I think over the last 6 months or so, it's kind of proven that way. So I think that's a kind of whistlestop run through of credit. I think we've got a very pleased with my team, very pleased with the portfolio performance and the oversight that we've got. And with that, I think we maybe -- we're doing a combined Q&A, just any questions on the portfolio or credit.

You guys have done a good job of locking Dan out from jumping up to the table. But for all of you, I guess, maybe any update on the credit that drove the NPAs up in the third quarter. An updated resolution there?

So I would say that, that is a credit that we've been working with for about 2 years, working through the process, working with the sponsor, working through the different strategies. And in that relationship, there were 5 loans. We're now down to 3 loans. Now again, we're looking at every avenue. We're very patient. We have recourse, which is in all of these scenarios. And the assets have a value as well. So working through each of these selective strategies for each of the properties, but all of the properties were linked together by recourse as well. So I think that's allowed us to be thoughtful and not rush into a particular strategy. We decided in the third quarter, Scott, Mark and myself and Dan sat down, and we felt we should reserve to be prudent. We have, again, recourse reserve for the element that we have the recourse on, and we will assess it as we go through each of these strategies. So I think Mark, you spoke to in the earnings that we expect some resolution in the first half of this year. But they are moving -- for each of these properties, there are moving time frames, but we're progressing.

And then you brought the reserve to loan ratio went from [ 1 12 ] or something up to [ 1 40 ], almost [ 1 50 ]. I guess it's a little bit hypothetical. But as we look through back half of '26, '27, you're growing at 15%. What do you think -- what's your target reserve to loan ratio if there is what should we think about longer term?

So I'll take that one. Though there's no room. Yes, we popped up to 42%, I think, in the third quarter. Prior to that, we were running in the low 100s right? So low 100s kind of feels about right to us, but we really do aspire to add a little bit to that through time. So in my budget model, I think we gravitate towards [ 1 15 ] over the course of 2026. And as Scott, Norman spoke to about the 5 out-of-state multifamily loans, we really think we're fully reserved for those things. So that -- it's just a matter of time. It's just the legal process grinds very slowly. We feel like we're going to get the other side of this thing first half of this year without any significant loss beyond the reserves.

You talk about the competitive environment? I know you don't sacrifice on terms and structure, but are you seeing other folks start to do that? Do you think it's going to impact certain categories more than others?

I mean there's more banks in the market now than 2 years ago, certainly. So you're seeing some margin compression. And even on the nonbank side, so we found ourselves sometimes I use the example where bank might do $8 million. We might do $9 million with structure at a little bit higher rate and a nonbank is going to do $10 million at a higher rate. So those margins are compressing a little bit. And then I touch, we do some AB notes with pieces behind us. So we're seeing some margin compression, but we still think we pick our spots, and we're able to get that extra yield. But we're only so good looking. I can't be a point outside the competition as you go with somebody else, but we have to be in that zone. So they'll pay us a little bit. The pay us more for execution, marks at 50 basis points. And so you have to be in the realm, but there's more banks in there. There's more banks in the market, 100%. And Danny on the health care side.

I am. The only thing is that we've been consistent in this space, right, for the last 25 years. What we see is we see a lot of banks going in and out. So that's one thing that our sponsors are really cognizant of. We're there for the long run, right? Execution is there. We've been supporting their growth for 20-plus years. That's not going anywhere. But you are starting to see because health care is a big buzzword right now, right? I mean I think that's probably the strongest industry out there. And so you're seeing some more banks entering, but that's what they're doing. They're entering. We've been in the space. So East West is one of them that keeps coming in and out. So -- but yes, so I think you are seeing a little bit more, but it's not the consistency that we have.

Thoughts around broader concentrations. Clearly, you guys are doing something right in the health care vertical. As we think about growth going forward, the existing concentration that's on the book, is that -- how we should be thinking about the growth rate going forward kind of bifurcated into those same buckets? Or over time, is there a plan or a strategy to maybe level out some of the concentration that you currently have in the health care vertical?

I think we're going to continue as long as we see a performance, we don't see any big flags that we'll see that. Obviously, the infusion of new capital decrease our ratios. So we have more runway now. But I think you'll continue to see a lot of health care growth.

And how about just on general C&I, kind of the modest decline over the last year and what you're seeing there from a growth glide path from a competitive landscape and just how we should think about broader C&I growth as part of the...

Yes. I mean I think it's been strategic, right? And we're picking our industries and we're picking our verticals. We still feel like there's a lot of opportunities within the C&I space, but we're being very selective. We're looking at health care outside of just senior living to really also diversify our C&I portfolio. So we're looking at some of the ancillary services that are being done through our -- some of our sponsors with our senior living facilities. We're looking at different verticals within health care as well to diversify that space, but we're being selective. It was strategic on the kind of the decrease a little bit on the C&I space. But I think if you talk to other banks out there, C&I could be somewhat more challenging, a little bit riskier, whereas we're taking a much more conservative approach on the health care side. We have the industry specialization of it. And we still think that there's a lot of runway to grow with that space.

Yes. I mean -- it's Scott. We do see rate compression on that. We see some deals we see, we don't think the reward is worth the risk. So we're seeing some other smaller and midsized loans in the DSOs, dental practice, medical practice. We're seeing a couple of big banks getting there at very low rates, things that we would never consider. So I think we've lost 1 or 2 loans like that. So it's very selective, but we're constantly meeting with our clients.

I think there's a lot of banks were pulling out of commercial real estate a couple of years ago, we're moving in to focus on C&I. That's certainly I heard from other chief credit officers and that made it much more competitive in C&I and I think structures as Scott just more appetite. So we just back.

Might be skipping ahead a little bit. But as you look to leverage the capital that you just issued, I mean, is the additional loan growth, is that a combination of existing customers, new customers doing more or doing bigger deals? I mean, how should we think about the source of that new loan growth?

Yes. No. I mean we probably -- our growth every year is probably 75% existing customers and then we get that 25% new. So that's going to continue. Yes, we have limits based on RBC, so that naturally goes up. But I tell my lenders, I have to be in love for these large deals. So naturally, that goes up a little bit. But it's more of the same. It's more with our existing operators, it's more capacity. So we have 2 deals going to committee tomorrow. One is a new relationship on the SNF side. One is an existing one that we've had probably one of our first health care clients 20-plus years ago. So it's a combination, but it gives us more runway, and we really think the HUD is going to give us another way to get more business on the bridge if we want, and you have that big takeout. We look forward to...

It was mentioned earlier just with the offices down in Florida. What do you see as the growth potential down there?

Yes. So we probably -- this year, we probably originated $100 million down there. So we're going to get new lenders in West Palm. They got to get their feet wet a little bit. But it's probably in that couple of hundred million. That's a little bit because we do Florida SNF business sort of out of the New York office, too. So it's even larger than that. But from our originators down there, our originators do between which originate $100 million and $300 million a year, so originate. So there will be a couple of hundred million, but we are very -- we're cautious. Again, we want to be very careful down there. We're definitely seeing some softness in the market down there on the residential side, which we don't really have too much, but we'll work around.

One more for me. If you could just walk through a little bit of the time line of how everything works with the new HUD designation like loans on the books to the bridge to whenever it comes off, how does that play out?

What do you mean by what is...

I guess what's the time frame of when it comes off typically?

Well, so typically, we've done a lot of research on this, and the typical HUD loan is around 7 years.

Once you close it.

Once you close. it. It stays about 7 years and then what ends up happening is there's usually -- they'll usually look to refi cash out because they -- obviously, they increased the value of the facility. So what we've noticed is about 7-year time frame.

Once you're in there, cautious to get there. So on acquisitions, it's usually 2 to 3 years for them to get to stabilized value. And you have to have trailing 12 -- trailing 12.

[ 1 45 ] debt service coverage. There's a whole on how to get to...

So we look through our book, for instance, and when this person starts day 1, we have a list of loans that qualify. We're already speaking to those clients. And then we have new loans coming on that in our term sheets will say prepay is waived if you go to [ 100 ] [indiscernible], which is very common in the marketplace. So that gives us more exit fees if they don't go to us or obviously, we want -- you make more money going to HUD...

And this is another differentiator for us from our competitors. This just illustrates the commitment that we have in this space.

The other -- we've seen a couple of other banks and a lot of them have been unsuccessful. And our differentiation is that we're a major player in health care today. So a lot of people have trouble getting business. We have our existing portfolio. We have our existing client base who owns hundreds of nursing homes. So we're very optimistic.

The press release came out was yesterday, and I must have had at least 30 or 40 e-mails from my clients already that they've realized that we're now becoming a lender. So there's a lot of excitement out there [indiscernible].

Scott, why don't you talk about not only supplying enough of our bridge loans that go into HUD your expectations of -- so we don't do every bridge loan. We have some banks that do bridge loans. We expect those banks that they don't have HUD license, we expect those clients to bring the HUD application. So that's on top of a volume of what we get...

Might not get pay us from us. They could be at another bank who doesn't have a HUD license. So because we have these deep relationships with them, we're not the only HUD lender. We're not going to get every deal, but we have very deep relationships. So they know we want a piece of the pie.

And that's where we'll compete with gray stone [indiscernible] or so, right? So that to me is really even more so exciting than just...

Taking our pipeline or existing bridge loans because there's no reason why would they go to a HUD lender if they're ready with us in the bridge loan for 3 to 4 years, why not -- you're signing up day 1 anyway in the term sheet. So why not stay with us to go to HUD. But the key to the outside business is those deposits come to us, which we don't have today. So when you go to HUD, when one of our bridge loans go to HUD to grace them, the deposits stay. That's great. The economics are great. But when we bring a HUD loan today, that's already not on our balance sheet. that's new deposits that are going to come to us and leave those other banks who don't have a HUD. And of course, you have the fees when you sell the HUD loan. I mean that's the whole play. You sell the hold on. You sell the loans at 103, 104, whatever that number is, then you get the deposits as well. So the economics here is extraordinary, especially since it's not a capital intensive. This is off balance sheet. The HUD side is off balance sheet, and you don't need a lot of people to underwrite the HUD loan. So the operating leverage is extraordinary.

And our operating accounts are very strong. This is the strongest aspect in our lending is our deposits relating to investment loans especially once they get stabilized, these things trade at like 12 caps and they're borrowing and the rate is 6%. So the cash on cash is massive. And we have operating accounts and our -- we have relationships. We have 30%, 40% deposit ratio, which is sort of unheard of on some of the C&I loans.

And the other thing that's out there, and I won't stress Dixie too much until after April 13, but the servicing side of this. So we're going to enter into a servicing agreement with a third party, but we will be bringing servicing into this portfolio for HUD. I mean that's just a fee business, and we service $6 billion, $6.5 billion of loans now. So we can service HUD loans. So we will bring servicing in. We think it's a really great business.

Stage 2.

We have such conviction and we have some experience with this and we have -- clearly, we have a lot of modeling internally and you keep hearing Dan say nothing is in the model, the model because we like to over deliver and underpromise and there's no reason to until it shows up. So -- but trust me, we do a lot of modeling internally. We don't spend the money and time and effort to bring something to the market unless we're going to see a return on investment fly.

Great. First of all, I want to say thanks to everybody, all of our guests for coming. I think the question and answer was really good, and I hope that you got all the answers you were looking for. I want to take an opportunity. There's 2 folks in the room. I'm looking at them right now that I want to introduce that haven't been introduced my Chief Accounting Officer, David Bonner; and my General Counsel, Fred Erickson. So take a minute and just say hello to explain your role here and how long [indiscernible] if you don't mind.

Sure. So I've been here just 5 years. Most of my time, like it sounds like many of the people have been spent at larger institutions before this about 13 years at Morgan Stanley. I spent some time at JPMorgan and the CIT Group, which is no longer at this point, handle the accounting and reporting. And additionally, as I just referenced earlier, my group partners with credit that they're responsible for the CECL allowance reserve analysis, the monthly close, all the SEC press releases, Ks, Qs as well as supporting Dan and Mark from the strategic initiatives from the finance side.

Thanks, Dave. Fred?

Fred Erickson, General Counsel, been here 2.5 years. Before that, about 21 years at Webster. My role here focuses on governance and litigation risk management as well as third-party risk management, overseeing all the supplier contracts that come through the bank and day-to-day answering questions, anything that comes up. I mean the wildest thing you can do sometimes is pick up the phone and deal with what's on the other side. But focusing on delivering legal services and getting the right answer at the right time with the right tenor is my objective all day, every day.

Thanks, Fred. And so further, not in the room, we have a new Head of HR. He's out of TD Bank and other big bank person on the team here. And then finally, and really importantly, my Chief Risk Officer is not here. He's getting ready for the regulators in about an hour. So he runs that show, and he doesn't have time, unfortunately, but he's outstanding out of Flagstar, another bigger bank kind of guy. So my takeaway is we've got an outstanding team here, an outstanding bench. We are built to cross the $10 billion mark without stress, without adding any additional expense to headcount here. And I just hope you kind of come to the same conclusion. And with that, I'll go into the deck. I'm on page -- but anyway, you may have heard, we did a follow-on offering the other day. The issue has not been exercised. We took it about $170 million, $85 a share. Obviously, our book value per share, that's actually tangible book value per share goes to $74.06, up from $72.69 at December '25. As well, capital ratios increased likewise, CET1 increases from 10.7% to 13.1% and TCE/TA increases 8.9% to 10.7%. So our capital stack, obviously much thicker. The question is, what are we going to do with it, right? That's what's on everybody's mind here. You've heard the story from all the contributors this morning. I think on the next page, we talk about 26-year history of MCB. We are led by Mark DeFazio, who most of you know, who is a very dynamic leader of this commercial bank franchise that is very unique -- is a unique animal here in the metropolitan area. Our capital raise is intended purely to support organic growth. There is no plans for M&A. There is no plans for share buybacks in particular or no balance sheet restructuring. We're not going to do a restructuring of our securities portfolio, for instance. So organic growth is the deal. That's all I've got on that page. We've talked about everything else. The next page, which I believe is 63, is kind of a little bit backward looking, but it's important. This kind of speaks to how we've performed in the past since the IPO. You look at every one of these bar charts, and you can see the outperformance of MCB versus the broad index as well as a peer group. And it's significant. Our ability to grow book value and earnings per share is demonstrated very, very clearly on this page. Part and parcel of that is the next page, and it's the management of our net interest margin, the biggest driver of our earnings. We've been through thick and thin over the last couple of years here. We've been through the many crisis of '23. We've been through the exit of GPG. We've been through the crypto noise that's been out there. And you look at that, we came off the 0 interest rate bound, and we have done nothing but grow the margin throughout that horizon. And so I'll get to the guidance in a moment, but our ability to manage both sides of the balance sheet price-wise is part and parcel of our ability to support and grow the margin [indiscernible]. Moving forward to the fourth quarter of last year is what this slide speaks to. We exit 2025 with tremendous momentum. We -- our net interest income was up 20% versus '24. Return on average assets 15-plus percent, ROTCE 15-plus percent. NIM in the fourth quarter was 4.10%. And so again, we really closed out the year on -- year 2025 on a very strong note, and we entered 2026 just kind of with that tailwind that takes us to where we are today and what everyone wants to talk about, which is updated guidance, right? So on Page 66, we've got that guidance. The original guidance for 2026 was $800 million or 12% loan growth. We are increasing that loan growth to $1 billion or about 15%. As has always been the case, we plan to fund all future loan growth with deposits. No change in that assumption. Net interest income growth. In 2026, we expect to print about $365 million, which is up 20% versus 2025. As I spoke to a moment ago, the NIM forecast that we spoke to on the earnings call last -- in January was 4.10% for the full year of '26. We think we can increase that from 4.10% to 4.15% as a range for the full year of '26. As I've chimed in a couple of times, the noninterest income forecast is unchanged. We have not included anything related to HUD. We do not include anything related to AI. So the guidance is unchanged, $189 million to $191 million on the OpEx line. I just -- sorry, I just jumped over noninterest expense, 5% to 10% growth, no change there for noninterest income growth. noninterest expense, unchanged, $189 million to $191 million for the full year. And it's important to realize that, that range includes $3 million for Modern Banking and Motion. That drops off once that project is completed in April. We are taking an additional floor in this building. And we are -- we have the new space in West Palm. So those things contribute $1 million to the run rate for the '26 forecast. And there will be another $1 million on top of that once that's all in for the year 2027. And then finally, it's very important that in the OpEx line, we do have a line item for deposit fee growth. And so our EB-5 deposits have some fees associated with them. Our trustee deposits have some fees associated with them. There's a big piece of growth, $6 million in OpEx for 2026 related to growing those deposit verticals. And we'll continue to grow those deposit verticals as long as they are generating appropriately priced funding for the bank. Efficiency ratio, 50% for the full year. That's down almost 6% versus the 2025 actual. And then finally, the original guidance for ROTCE was 15-plus percent by the fourth quarter of 2026. Obviously, with the new capital, that's going to be a headwind to getting there. So 13-plus percent by the fourth quarter of 2026 and back to that 15-plus percent by late '27 as the capital is more fully leveraged. If you extrapolate that further, we fully expect that we can reach the 16% threshold through time as we do fully leverage the capital. The goal or the assumption set that we are using for the -- for what we expect to be $200 million of capital is about 6 turns, so about $1.2 billion. We'll expect to cross the $10 billion mark organically back half of 2027 with the loan growth that I've just described. And with that, I will open it up for questions.

That deposit fee line a little bit more. Are those actual fees paid to depositors? Or is that the cost of the OpEx of operating in those?

Well, it's interesting. Let's think about EB-5, right? So EB-5 comes in as DDA, right? Back in the day when rates were at 0 bound, no one cared. Now there are administrators that are kind of delivering the money, if you will, and they want to get paid. So there's a fee associated with that. I believe that the cost of funds for EB-5, the vertical it's a high 2s or maybe a 3 -- very low 3 handle on that. So it's still very -- that's with the fees, right? So that's that one. The other vertical that's in there is trustee deposits. Again, it comes in as DDA, but the trustees are collecting a fee for the use of the technology platform that we invested in to be an eligible trustee deposit gathering firm, right? So we pay for that technology. But ultimately, it's going to a third-party vendor that's providing the technology. That's what that is. And so if you just look -- one of the goals of MCB is to flatten out that OpEx line, right, to really deliver operating leverage, significant operating leverage as we grow the top line and flatten out the OpEx. One of the wildcards there is how much do I grow these deposit verticals that have fees attached to them. And I'll obviously bring that kind of color to the table as we go through the exercise. But for 2026, no change to the OpEx forecast. It does include investments related to AI. It does include other investments related to modern banking motion, but no assumptions made about noninterest income growth. And yes -- so again, if any other questions from the group? David, anything online?

Just with the guidance on the NIM, what are you assuming for cuts and how much during '26?

Yes. So that's an interesting one. As the global situation evolves and the yield curve resets here, things are kind of changing. But within the current forecast, we have 2 rate -- 25 basis point rate cuts penciled in, one in June and one in September. Prior to the missiles flying in the Middle East, that seemed like very much aligned with the evolution of the outlook for monetary policy. However, that's really changed a lot now that the kind of concerns about inflation have resurfaced related to oil prices, et cetera. So for now, we leave those placeholders there, but to the extent monetary policy -- the outlook for monetary policy changes, we'll keep that in mind. And the other thing there, obviously, is we get a new Chair of the FMC in May and his aspirations were certainly to lower interest rates one presumes. But given what's happening in the treasury market and inflation markets, if you will, we'll see how that goes. Yes?

On the fee income, no change in the 5% to 10% 26. But since you introduced the '27 RTC, would we expect these products coming on in the back half that, that growth rate would accelerate in '27?

Yes. Absolutely. Absolutely. The gaming initiative, the aspiration there is the replacement, if you will, of our former business, GPG. So thinking about that NIM slide and how we have maintained that NIM. During the course of that horizon, we offloaded $2-plus billion of DDA related to GPG and replaced it with interest-bearing deposits. And yet because we're able -- we have such pricing power on the asset side, we're able to grow the NIM. So again, we aspire to replace that GPG business -- through time, of course, it's going to bring in DDA. And hopefully, it becomes a new -- with enough velocity that it becomes a new vertical in our DDA stack and starts to change the mix and the cost of funds while also generating significant fee income as well. And HUD, same thing. As we get -- as we bring on HUD business from other banks, that's going to bring lower cost deposits to us as well as fee income. This is contemplated in the forecast right now. But we're moving forward on this stuff, and it really looks -- we're very optimistic. Yes?

Again, just going back to trying to frame the fee income opportunity is the sense that you guys want to be kind of peer-like from fee income contribution to revenue, fee income as a percentage of revenue? Or are some of these opportunity sets large enough that you can actually be outsized that kind of 80-20 split that the broader peers kind of have in your size?

No, I haven't really done that analysis, to be honest with you, but I do observe that, look, when we exited GPG, we left a hole in the income statement of about 20 -- a little more than $20 million. So as we contemplate and execute on that business, that's kind of where we hope to reset toward, okay? I haven't really thought of it in terms of compared to peers, but it puts us back where we were. And if you think about prior to the mean crisis in '23 and prior to the crypto episode, this bank was trading at a multiple of the book that was north of [ 1 50 ]. That's our aspiration. That's where we should be trading.

And maybe just again on the payment space. I think it was said earlier that a couple of years ago, there was, I think, 5 million clients that have the debit card. How do the economics work in this new model? Do you need as many relationships? Are those relationships bringing in more revenue versus the old way of doing business? Just how big does it need to scale in order to generate [indiscernible]?

So really an important question that I'll do my best to clarify we're on the other side of the transaction now. It's not going to be 5,000 consumers. It's going to be 5 merchants that we do business with. We're going to be on the acquiring side, not the issuing side. And that puts us on the right side of the trade with the regulators. We're not dealing with 5 million consumers anymore. We're dealing with 5 merchants that do gaming in some shape or form or other on the acquiring side of every transaction, again, driving click fee income as well as flow of low-cost deposits, low no-cost deposits.

I'll just say one other thing there. It's actually an interesting question. I'm not sure if we'll be able to go back and correlate, but we used to understand the behavior of those 5 million consumers who are actually ultimately clients of MCB. But they were point-of-sale transactions, ATM, gas station, restaurant that were using their debit card. So the average transaction amount is significantly lower than your average. if you're wagering against a sports game or something like that. So it's going to be hard to correlate. We will not need 5 million. I don't think DraftKings has 5 million clients. But if you look at their revenue streams, we'll be able to correlate once we have some tape on this. We knew almost down to the penny every time one of our clients, our third-party clients signed up a new consumer, what the average deposit would be and when and the average number of transactions and the average price per transaction. And why they're meaningful is the average volume of transactions -- average load, I should say, average load, average number of transactions because the transaction calculated to a fee and the average load, we knew the retention of -- people used to say it as a savings account for them. So we knew it as a percentage of every load that would just stay on the balance sheet. we had so many users we studied it. So we'll be able to do the same thing. Some of the guiding factors will be every time I use Tings just as an example, it's easy because everybody knows them. Every time they sign on a new client, what's the average bet? How often does that person place a bet? And it's very seasonal, although we have a lot more sports today. And we're not looking at, although the prediction markets are chasing us because they need our economic efficiency here. Nick and I are entertaining those meetings because it's fascinating to talk to these people who are behind the prediction markets, but it's unregulated. There's too much uncertainty. There's too much opportunity in the lane of being regulated. So we'll be able to draw and I'm excited about adding those kind of charts to our investor deck in '27 because there will be a correlation to the behavior, the client acquisition, the timing of it, the cost of it. Remember, these costs are on the operator side and the behavior of a player as opposed to someone who's a consumer and using this Revolute account as an effective digital savings account. So it's hard to compare, but we will build a model so we can see because then we can do some forecasting that you need it for liquidity risk. If you really want to put -- we knew the behavior of these deposits so well. We knew when we can invest it and when we shouldn't, okay? Same thing we need to get there. We can't get extremely excited about having a loan-to-deposit ratio down to 50% again then just lever up the balance sheet. We won't know the behavior yet of those clients for some time. But we'll get a return on those deposits. But over time, we'll be able to look in a mirror and understand the behavior of a player now as opposed to a consumer and what that looks like. We have a lot of experience in wallets. We're one of the first banks that supported a wallet, and we brought the first Venmo card to the U.S. We know when you put money in a wallet, it sits there. So we know that, that money is more available to Dan to invest to lend, and we don't have to worry. You don't want to build liquidity risk. You blow off a very good thing by putting yourself against a headwind of liquidity or interest rate risk, which is what you saw with a lot of these threats where they borrowed short and long and ended up with interest rate risk. So we'll build out that deck and talk about it because we're excited about learning the behavior of -- I don't even gamble, but it would be interesting to understand the behavior of someone who does digitally.

Anything else?

Okay. That's it, nothing online. All right. I'm told that we had over 60 participants today. So very excited about that. And I appreciate everybody online listening in. I wish you were here, but maybe we'll perhaps we'll do that next time. I appreciate everybody coming into New York City today and hearing our story. We'll break for lunch. Lunch is in the board is in the central park, and you can grab a plate in there or bring it back into here and continue the conversation. Thank you.