Metropolitan Bank Holding Corp (MCB) 2022 Q4 法說會逐字稿

Welcome to Metropolitan Commercial Bank's fourth-quarter and full-year 2022 earnings call. Hosting the call today from Metropolitan Commercial Bank are Mark DeFazio, President and Chief Executive Officer; and Greg Sigrist, Executive Vice President and Chief Financial Officer.

歡迎來到大都會商業銀行 2022 年第四季度和全年財報電話會議。今天主持大都會商業銀行電話會議的是總裁兼首席執行官 Mark DeFazio；執行副總裁兼首席財務官 Greg Sigrist。

Today's call is being recorded. (Operator Instructions) During today's presentation, reference will be made to the company's earnings release and investor presentation, copies of which are available at mcbankny.com.

今天的通話正在錄音中。 （操作員說明）在今天的介紹中，將參考公司的收益發布和投資者介紹，其副本可在 mcbankny.com 上獲得。

Today's presentation may include forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially. Please refer to the company's notices regarding forward-looking statements and non-GAAP measures that appear in the earnings release.

今天的演示文稿可能包含前瞻性陳述，這些陳述受風險和不確定因素的影響，可能導致實際結果出現重大差異。請參閱公司關於收益發布中出現的前瞻性陳述和非 GAAP 措施的通知。

It is now my pleasure to turn the floor over to Mark DeFazio, President and Chief Executive Officer. You may begin.

現在我很高興將發言權交給總裁兼首席執行官 Mark DeFazio。你可以開始了。

Thank you, and good morning, and welcome to MCB's fourth-quarter earnings call.

謝謝，早上好，歡迎來到 MCB 的第四季度財報電話會議。

On an operating basis, MCB had a record year with adjusted net income of $94.4 million, up from $38.4 million in 2021, and adjusted efficiency ratio of 44.5% versus 48.2% in 2021. Our fourth-quarter net interest margin of 4.05% versus 2.59% in the prior year quarter.

在運營基礎上，MCB 的調整後淨收入為 9440 萬美元，高於 2021 年的 3840 萬美元，調整後的效率比為 44.5%，而 2021 年為 48.2%。我們第四季度的淨息差為 4.05%，而 2021 年為 2.59%上一季度的百分比。

The commercial bank along with our banking-as-a-service initiatives saw growth along all lines of business contributing to our operating results. While 2022 was a challenging year for our industry, we worked through rising interest rates, increased cost of funds, fierce competition for deposits, a material correction in the digital asset industry, and with that, increased regulatory scrutiny.

商業銀行以及我們的銀行即服務計劃見證了所有業務線的增長，為我們的經營業績做出了貢獻。雖然 2022 年對我們的行業來說是充滿挑戰的一年，但我們經歷了利率上升、資金成本增加、存款競爭激烈、數字資產行業出現實質性調整以及隨之而來的監管審查力度加大。

Our early intuition that we should pivot away from crypto -- the crypto industry has served us well. Our minimum exposure coming into 2022 allowed us to efficiently replace the deposits we have foregone to date, along with generate efficient liquidity to sustain loan growth. As we previously announced, we will fully exit the industry in 2023 with minimal impact to earnings and liquidity.

我們早期的直覺是我們應該遠離加密——加密行業對我們很有幫助。到 2022 年，我們的最低風險敞口使我們能夠有效地替代迄今為止放棄的存款，同時產生有效的流動性以維持貸款增長。正如我們之前宣布的那樣，我們將在 2023 年完全退出該行業，對收益和流動性的影響最小。

We are also very close to bringing closure to ongoing investigation from the DFS and the New York Fed regarding a fintech client MCB banked in 2020. As a result of the investigation, MCB has reserved $35 million toward a joint settlement. MCB's decision to settle was a conscious effort to move forward with the business of MCB and reduce our professional fees to a more normalized run rate. There were lessons learned here throughout the experience, and we have implemented improved oversight of consumer compliance for our banking-as-a-service business. This was an unfortunate situation that occurred during an unprecedented time.

我們也非常接近於結束 DFS 和紐約聯儲正在進行的針對金融科技客戶 MCB 在 2020 年開戶的調查。作為調查的結果，MCB 已預留 3500 萬美元用於聯合和解。 MCB 決定和解是有意識地努力推進 MCB 的業務，並將我們的專業費用降低到更正常的運行率。在整個過程中吸取了教訓，我們已經對我們的銀行即服務業務的消費者合規性實施了改進的監督。這是前所未有的不幸情況。

On balance, we successfully covered tremendous ground in 2022 and are entering 2023 in a strong position to support our clients with enhanced resilience and strong capital levels. Our operating performance in 2022 continues to demonstrate the strength and sustainability of our business along with the dedication and execution of the MCB's employees and clients. We have effectively managed through the challenging environment and are in a good position to support our clients with enhanced resilience and strong capital levels.

總的來說，我們在 2022 年取得了巨大成功，並以強大的實力進入 2023 年，以增強的彈性和強大的資本水平為我們的客戶提供支持。我們在 2022 年的經營業績繼續證明我們業務的實力和可持續性，以及 MCB 員工和客戶的奉獻精神和執行力。我們在充滿挑戰的環境中進行了有效的管理，並能夠以增強的彈性和強大的資本水平為我們的客戶提供支持。

Now, for a few financial highlights for 2022. Loans increased $1.1 billion or 30%. Net interest income of $229.2 million was up 46%. Total revenues were up 42% to $255.8 million. Net interest margin improved to 3.49% from 2.77% in '21. And return on tangible common equity from operations remained very strong at 16.6%. And our efficiency ratio improved to 44.5% from 48.3%.

現在，我們來看看 2022 年的一些財務亮點。貸款增加了 11 億美元或 30%。淨利息收入為 2.292 億美元，增長 46%。總收入增長 42% 至 2.558 億美元。淨息差從 21 年的 2.77% 提高到 3.49%。來自運營的有形普通股回報率仍然非常強勁，達到 16.6%。我們的效率比從 48.3% 提高到 44.5%。

I will now turn the call over to Greg Sigrist.

我現在將把電話轉給 Greg Sigrist。

Thank you, Mark, and good morning, everyone. MCB's core business continued to scale as it reported adjusted fourth-quarter net income of $27.3 million or diluted EPS of $2.44. Reported net income inclusive of the regulatory settlement was a $7.7 million loss with a $0.71 loss per common share.

謝謝馬克，大家早上好。 MCB 的核心業務繼續擴大，因為它報告調整後的第四季度淨收入為 2730 萬美元或攤薄每股收益 2.44 美元。包括監管和解在內的報告淨收入虧損 770 萬美元，每股普通股虧損 0.71 美元。

Turning to key drivers in the quarter, the commercial bank posted a strong quarter with net loan growth of $223.2 million or 4.8% on loan originations of $411 million. We saw growth across all loan verticals. Loan yields increased to 5.98% from 5.3% in the prior linked quarter. The credit environment remains benign with no charge-offs in 2022, and non-performing loans effectively at zero. The provision in the quarter was in line with loan growth.

談到本季度的主要驅動因素，該商業銀行公佈了一個強勁的季度，淨貸款增長 2.232 億美元或 4.8%，貸款發放額為 4.11 億美元。我們看到了所有垂直貸款領域的增長。貸款收益率從上一季度的 5.3% 上升至 5.98%。信貸環境依然良性，2022 年沒有沖銷，不良貸款實際上為零。本季度的準備金與貸款增長一致。

I do want to spend a moment on deposits. We have successfully managed the transition to a leaner, more efficient balance sheet. As certain core deposit clients looking for higher yields have moved into treasuries or other money market investments, we have onboarded efficient, lower-cost deposits. This is evidenced in the fourth quarter with outflows from bankruptcy trustees and property managers being offset by strong inflows from retail deposits, up $178 million in the quarter, and fintech banking-as-a-service deposits, which were up $40 million in the quarter.

我確實想花點時間在存款上。我們已成功過渡到更精簡、更高效的資產負債表。由於某些尋求更高收益的核心存款客戶已轉向國債或其他貨幣市場投資，我們已經推出了高效、低成本的存款。第四季度證明了這一點，破產受託人和物業經理的資金流出被零售存款的強勁流入所抵消，本季度增加了 1.78 億美元，金融科技銀行即服務存款在本季度增加了 4000 萬美元.

As expected, digital asset-related deposits were down in the quarter by $268 million to $494 million at yearend. Of that remaining $494 million deposit balance, $326 million or 6% of total deposits are related to MCB's four active institutional crypto asset-related clients, which are subject to wind down in 2023.

正如預期的那樣，本季度與數字資產相關的存款減少了 2.68 億美元，至年底的 4.94 億美元。在剩餘的 4.94 億美元存款餘額中，3.26 億美元或總存款的 6% 與 MCB 的四個活躍的機構加密資產相關客戶有關，這些客戶將在 2023 年結束。

To support a more efficient balance sheet, particularly as deposits related to these active crypto clients wind down, we may, at times, utilize FHLB advances or other funding sources in advance of executing on strategic core deposit initiatives. We did have $250 million of FHLB advances and Fed funds purchased at year end, which in part reflects the strategy, but it's also reflective of the timing of normal client cash flows around yearend.

為了支持更高效的資產負債表，特別是隨著與這些活躍的加密客戶相關的存款逐漸減少，我們有時可能會在執行戰略核心存款計劃之前利用 FHLB 預付款或其他資金來源。我們在年底確實有 2.5 億美元的 FHLB 預付款和聯邦基金購買，這部分反映了該戰略，但也反映了年底前後正常客戶現金流的時間。

While deposit competition has increased, we remain thoughtful and patient both on pricing of existing deposits as well on execution on funding alternatives. Our pricing discipline is evident in the success we have had in moving our new production loan yields up, raising loan floors and in our net interest margin of 4.05% in the fourth quarter, which is up from 3.85% in the prior linked quarter.

儘管存款競爭加劇，但我們對現有存款的定價以及融資替代方案的執行都保持謹慎和耐心。我們在提高新生產貸款收益率、提高貸款底限以及第四季度淨息差為 4.05%（高於上一季度的 3.85%）方面取得的成功體現了我們的定價紀律。

The interest-earning asset yield increased 86 basis points to 5.12% in the quarter. Asset yields benefited from the impact of rising rates on floating rate loans and overnight deposits as well as increasing new production loan yields.

本季度生息資產收益率上升 86 個基點至 5.12%。資產收益率受益於利率上升對浮動利率貸款和隔夜存款的影響以及新生產貸款收益率的增加。

Given the extent of rate increases since late September and as a result of our active management, total cost of funds has increased by 72 basis points but remains at a low 1.17%, which is particularly notable in light of our branch-light model. We have also moved to a much more neutral stance from an NII perspective, which will allow stability to the extent rates do continue to rise this year, but we are also well positioned for eventual rate cuts.

考慮到自 9 月下旬以來的加息幅度以及我們積極管理的結果，總資金成本增加了 72 個基點，但仍保持在 1.17% 的低位，這在我們的分支燈模型中尤為顯著。從 NII 的角度來看，我們也採取了更加中性的立場，這將在今年利率繼續上升的範圍內保持穩定，但我們也為最終的降息做好準備。

For our Global Payments business, revenues were up $244,000 in the quarter to $4.3 million. To give you more color, fintech banking-as-a-service revenues were up $569,000 to $3.1 million, while crypto-related revenues were down $324,000 to $1.2 million in the quarter. We're very pleased to see the continued scaling of our banking-as-a-service revenues.

對於我們的全球支付業務，本季度的收入增長了 244,000 美元，達到 430 萬美元。為了給你更多色彩，本季度金融科技銀行即服務收入增長了 569,000 美元至 310 萬美元，而與加密貨幣相關的收入下降了 324,000 美元至 120 萬美元。我們很高興看到我們的銀行即服務收入持續擴大。

Turning to operating expenses, compensation and benefits were up modestly in the quarter, reflecting our continued investment in human capital, particularly in risk and infrastructure teams. Legal fees remained elevated by approximately $2.4 million in the quarter and $6.2 million for the full year, with outside counsel engagement focused on the regulatory matter as well as carry over on Voyager's bankruptcy proceedings. We do expect legal fees to moderate back to historic levels during the fourth quarter -- sorry, first quarter. Despite the elevated legal fees, our adjusted efficiency ratio remained low at 45.1%.

談到運營費用，薪酬和福利在本季度略有上升，反映出我們對人力資本的持續投資，尤其是在風險和基礎設施團隊方面。本季度的法律費用仍然增加了約 240 萬美元，全年增加了 620 萬美元，外部律師參與的重點是監管事務以及 Voyager 的破產程序。我們確實預計第四季度的法律費用會回落到歷史水平——對不起，第一季度。儘管法律費用增加，但我們調整後的效率比率仍然很低，為 45.1%。

The effective tax rate was impacted by the regulatory settlement reserve as well as discrete tax items that came through in the quarter. This includes the impact of vesting date fair values of employee stock-based compensation and refined state apportionment rates. Going forward, we would expect the effective tax rate to be in the range of 31% to 32% excluding discrete items.

實際稅率受到監管結算準備金以及本季度通過的離散稅項的影響。這包括基於員工股票的薪酬的歸屬日公允價值和細化的國家分配率的影響。展望未來，我們預計有效稅率將在 31% 至 32% 的範圍內，不包括離散項目。

Our capital levels remained very strong, with all capital ratios significantly above well-capitalized levels. I will now turn the call back to our operator for Q&A.

我們的資本水平仍然非常強勁，所有資本比率都明顯高於資本充足水平。我現在將把電話轉回給我們的接線員進行問答。

The floor is now open for questions. Alex Lau, JPMorgan.

現在可以提問了。 Alex Lau，摩根大通。

Hi, good morning.

早上好。

Good morning, Alex.

早上好，亞歷克斯。

I wanted to start off with the regulatory settlement reserve. Can you provide some additional color on that reserve? And can you just confirm that it was a fintech client and not a crypto-related client? And how does this change how you approach the business going forward?

我想從監管結算準備金開始。你能在那個儲備上提供一些額外的顏色嗎？你能確認它是金融科技客戶而不是加密相關客戶嗎？這將如何改變您處理未來業務的方式？

And as a follow-up, how do you think about the risk of needing additional regulatory reserves on top of that $35 million? Thanks.

作為後續行動，您如何看待在這 3500 萬美元之外需要額外監管準備金的風險？謝謝。

Okay. So there was a lot there, so if I miss anything, just follow up with that. So working backwards, this is a specific fintech client. It was not a crypto client. We will announce the name of the client at some point. But this particular banking-as-a-service client is no longer and hasn't been a client of the bank since the summer, I believe, of 2020. I think this made us a better bank. I think the regulators are good partners of ours, and I think they pointed out.

好的。所以那裡有很多，所以如果我遺漏了什麼，就跟進。因此，向後工作，這是一個特定的金融科技客戶。它不是加密客戶端。我們會在某個時候公佈客戶的名字。但我相信，自 2020 年夏天以來，這個特定的銀行即服務客戶不再是銀行的客戶。我認為這讓我們成為了更好的銀行。我認為監管機構是我們的好夥伴，我認為他們指出了這一點。

You got to remember when this occurred, this occurred in March of 2020 as I reported. It was an extraordinary time under extraordinary circumstances, and we were trying to manage through an extraordinary initiative from the federal government as part of the CARES Act with unemployment benefits. And this was a small amount of the level of fraud that actually took place regarding the $1 trillion that the government put out there regarding unemployment benefits. This was a virtually rounding error; however, it did occur.

你必須記住這是什麼時候發生的，正如我報導的那樣，這發生在 2020 年 3 月。這是非常情況下的非常時期，我們正試圖通過聯邦政府的一項非常舉措來應對，這是 CARES 法案的一部分，其中包含失業救濟金。這只是政府為失業救濟金提供的 1 萬億美元實際發生的欺詐程度的一小部分。這實際上是一個舍入誤差；然而，它確實發生了。

Working with the regulators over the last several months, actually over the last 2.5 years on and off talking about this, I think they brought some really good insight and gave us some really good suggestions on how to improve our oversight. I think the regulators and MCB clearly realize that banking-as-a-service is going to stay, and the way in which retail banking is being done today is digitized. It is inclusive, and it's very scalable.

在過去的幾個月裡，實際上是在過去的 2.5 年裡，我一直在與監管機構合作，斷斷續續地談論這個問題，我認為他們帶來了一些非常好的見解，並就如何改進我們的監督給了我們一些非常好的建議。我認為監管機構和 MCB 清楚地意識到，銀行即服務將繼續存在，而今天零售銀行業務的運作方式是數字化的。它具有包容性，並且具有很強的可擴展性。

And I think working alongside the regulators going forward would only add to our ability to grow the business efficiently, and in a way that speaks to very safe and sound banking practices. So I don't think it's a headwind at all. I think it's a positive. Although painful, it's a positive.

而且我認為與監管機構一起前進只會增加我們有效發展業務的能力，並且以一種非常安全和健全的銀行業務實踐的方式。所以我認為這根本不是逆風。我認為這是積極的。雖然痛苦，但這是積極的。

Thanks, Mark. And moving on to the crypto business exit, can you talk about the sense of timing of the rundown of the crypto-related deposits for the four accounts? And could that come with potential security sales? Thanks.

謝謝，馬克。接下來是加密業務退出，你能談談四個賬戶的加密相關存款減少的時間感嗎？這會帶來潛在的安全銷售嗎？謝謝。

One, it will not come with any -- we've not planned on any security sales at all. There should be no reason for that. And we are anticipating over the course of 2023 that these four clients will be off our balance sheet.

第一，它不會附帶任何——我們根本沒有計劃進行任何安全銷售。應該沒有理由這樣做。我們預計到 2023 年，這四位客戶將不在我們的資產負債表上。

Now, our -- we'll wind down relationship with them and the agreement we have in place. They seem to be making a lot of progress in talking to other banks. So it could accelerate, but we're planning that it will be a smooth transition over the next 2, 2.5 quarters.

現在，我們的 - 我們將結束與他們的關係以及我們達成的協議。他們似乎在與其他銀行交談方面取得了很大進展。所以它可能會加速，但我們計劃在接下來的 2、2.5 個季度內平穩過渡。

Thanks, Mark. And what about outside of those four relationships in terms of crypto-related clients? I think there's about 3% of total deposits. How do you think about those balances moving forward with those exchange clients moving out?

謝謝，馬克。在加密相關客戶方面，除了這四種關係之外呢？我認為大約佔總存款的 3%。你如何看待隨著那些交易所客戶搬出而增加的餘額？

They're not exchange. They're corporate funds. They're operating accounts. We just have operating accounts for, let's say, hedge fund who has raised some equity and they're running their business payroll, et cetera. So these are just real operating accounts that they don't touch crypto in any way.

他們不是交換。他們是公司基金。他們在運營賬戶。我們只有運營賬戶，比方說，對沖基金已經籌集了一些股權並且他們正在運行他們的業務工資單，等等。所以這些只是真實的運營賬戶，他們不會以任何方式接觸加密貨幣。

Thanks, Mark. And one more before I step in the queue. On loan growth, when you exclude the crypto-related deposits, your loan-to-deposit ratio is approaching 100%. Can you talk about your expectations for loan growth in 2023? And if we should expect the pullback of growth relative to that historical growth level given a more challenging deposit environment? Thanks.

謝謝，馬克。在我加入隊列之前還有一個。在貸款增長方面，當你排除與加密貨幣相關的存款時，你的貸存比接近 100%。您能談談您對2023年貸款增長的預期嗎？鑑於更具挑戰性的存款環境，我們是否應該預期相對於歷史增長水平的增長會回落？謝謝。

I have probably a much clear line of sight in '24 and beyond. I'm very confident that we will go back to normal -- lower loan-to-deposit ratios. We have a lot of optionality on that side of the balance sheet, and we're bringing in new initiatives, which the market will hear about in the upcoming quarters.

在 24 世紀及以後，我的視線可能更加清晰。我非常有信心我們會恢復正常——較低的貸存比。我們在資產負債表的這一邊有很多選擇，我們正在引入新的舉措，市場將在接下來的幾個季度聽到這些舉措。

So for '23, we could be a bit higher, a bit lower. But I think on balance, we will come into '24 and continue to be a very efficiently funded bank and core funded. So I'm very optimistic that that loan-to-deposit ratio will come back down significantly in '24 and beyond.

所以對於 23 年，我們可能會高一點，低一點。但我認為總的來說，我們將進入 24 世紀，並繼續成為一家資金非常有效的銀行和核心資金。因此，我非常樂觀地認為，貸存比將在 24 世紀及以後顯著回落。

Thank you. I'll step back in the queue.

謝謝。我會退後一步。

Chris O'Connell, KBW.

克里斯·奧康奈爾，KBW。

Hi, good morning.

早上好。

Good morning, Chris.

早上好，克里斯。

I just wanted to circle back quickly to the regulatory settlement reserve. And if you guys could comment on how confident you are that that reserve is adequate, and I guess how close to final settlement you might be?

我只是想快速回到監管結算準備金。如果你們可以評論你們對儲備充足的信心有多大，我想你們可能離最終結算有多近？

Yeah. I think we're -- I'm very, very confident that this is the high watermark on the $35 million (technical difficulty) in settling with both regulatory agencies. Both of us are working and I have to say that the regulators are working in really good faith to finalize this settlement, and I think we're really close.

是的。我認為我們 - 我非常非常有信心這是與兩個監管機構達成和解的 3500 萬美元（技術難度）的高水位線。我們雙方都在努力，我不得不說，監管機構正在真誠地努力完成這項和解，我認為我們真的很接近了。

Again, it's (technical difficulty) contentious situation at all. We're working with them. We always had great relationships with regulators my entire career, never mind the 23 years here at MCB. So we put the fine point on some enhancements and some changes that they would like, which we are in agreement with. And we'll get this behind us, but that's why we fully reserved for this.

同樣，這完全是（技術困難）有爭議的情況。我們正在與他們合作。在我的整個職業生涯中，我們一直與監管機構保持著良好的關係，更不用說在 MCB 工作了 23 年。因此，我們將重點放在他們想要的一些增強功能和一些更改上，我們對此表示同意。我們會把它拋在腦後，但這就是我們對此完全保留的原因。

Is there a chance that it could be slightly lower? Yeah, it's possible. We all are working in good faith as are the regulators. But I wanted to fully reserve for an amount that I think is absolutely the high watermark.

有沒有可能稍微低一點？是的，這是可能的。我們都在真誠地工作，監管機構也是如此。但是我想完全保留一個我認為絕對是高水位線的金額。

Okay, great. As far as the expenses and once this falls out of the expense run rate going forward, how -- and I think the regular professional -- sorry, professional and legal line is also still a bit elevated in this quarter as well relative to where it's been in the past. Can you just talk about where the [Queen] expense run rate might drop down to once this is behind you?

好的，太好了。就費用而言，一旦這超出了未來的費用運行率，我認為常規專業人士 - 對不起，專業和法律界線在本季度相對於它的位置仍然有點高過去。你能談談一旦這一切都過去了，[女王] 的費用運行率可能會下降到哪裡嗎？

Yeah, sure, Chris. I mean, you touched on the professional fees. I really think that we're going to moderate back to the level we saw late in '21 through probably the first half of '22. Maybe split the difference between when you take the legal fees out versus where we were then. We've worked with a lot of initiatives over the last year, 1.5 years. So I do expect that line to moderate a little bit.

是的，當然，克里斯。我的意思是，你談到了專業費用。我真的認為我們將放緩到 21 年底到 22 年上半年的水平。也許可以分攤您何時扣除法律費用與我們當時的情況之間的差異。在過去的 1.5 年裡，我們開展了很多活動。所以我確實希望這條線能緩和一點。

As you know, we're still a growth company though. So comp and benefits, we are -- we will still continue to invest in human capital. I think we've brought on and onboarded a very substantial team over the last year or two. You're going to continue to see expansion in that line. We're going to continue to invest in human capital. I think it might moderate a little bit from the level you saw in 2022 in terms of growth.

如您所知，我們仍然是一家成長型公司。所以補償和福利，我們是 - 我們仍將繼續投資於人力資本。我認為在過去的一兩年裡，我們已經組建並加入了一支非常強大的團隊。您將繼續看到該行的擴展。我們將繼續投資於人力資本。我認為就增長而言，它可能會比您在 2022 年看到的水平有所緩和。

I think the other key thing is it's really just the efficiency ratio, as we always talk about. We are going to be very focused on continuing to work that ratio down from current levels. So it's as much about getting the leverage out of what we're bringing on those investments -- on the investments, the return on the investments we're making, and making sure we keep an eye on overall expense growth.

我認為另一個關鍵是效率比，正如我們經常談論的那樣。我們將非常專注於繼續降低當前水平的比率。因此，這與從我們為這些投資帶來的影響中獲得槓桿作用一樣重要——對投資、我們正在進行的投資的回報，並確保我們關注整體費用增長。

Okay, got it. All right. And then as far as what you guys have been -- you mentioned a few things on the deposit side, some initiatives as you head into the front end of this year. I guess, how are you thinking about deposit growth if you exclude the crypto -- the expected crypto runoff for the next quarter or two?

好，知道了。好的。然後就你們而言——你們提到了存款方面的一些事情，以及你們進入今年前端時的一些舉措。我想，如果您排除加密貨幣，您如何考慮存款增長 - 下一兩個季度的預期加密貨幣徑流？

I think it will be robust. I think if you remove the crypto, we would be very pleased if all the crypto ran off in the first quarter, just so we don't have to talk about it again. And then obviously, I have to fill that bucket up, if you will.

我認為它會很健壯。我認為如果你刪除加密貨幣，如果所有加密貨幣在第一季度都跑掉了，我們會非常高興，這樣我們就不必再談論它了。然後很明顯，如果你願意的話，我必須把那個桶裝滿。

But I'm feeling really comfortable with the initiatives we have. Everybody in the company who's client-facing is working really hard. And as -- I think we will always be a core-funded institution. We always have been. We will continue to be a core-funded institution. And this is the first time in, I think, 15 or 16 years that we dipped into the Federal Home Loan Bank. So this is not something that we tend to want to rely on long term. It's good bridge funding, but it will not be a core strategy of what's going forward.

但我對我們的舉措感到非常滿意。公司中每個面向客戶的人都非常努力地工作。而且——我認為我們將永遠是一個核心資助的機構。我們一直都是。我們將繼續成為核心資助機構。我認為，這是 15 或 16 年來我們首次涉足聯邦住房貸款銀行。所以這不是我們想要長期依賴的東西。這是很好的橋樑資金，但它不會成為未來發展的核心戰略。

Yeah. And just to add to that, Chris, around year end, we have a very active successful client base. We also saw just some normal flows around year end. I think the important takeaway is we've really had business as usual in terms of managing a leaner, more efficient balance sheet. We could always bring on more deposits to manage the loan-to-deposit ratio or other metrics.

是的。除此之外，克里斯，在年底左右，我們擁有非常活躍的成功客戶群。我們還看到年底前後只有一些正常的流量。我認為重要的一點是，我們在管理更精簡、更高效的資產負債表方面確實一切如常。我們總能帶來更多存款來管理貸存比或其他指標。

We're staying focused on our pricing discipline and our margin management. And we have the options to bring funding on. And we have a lot of strategic initiatives that are above and beyond our existing deposit verticals that are actionable. They're in the queue, and I think Mark touched on this that we're going to be executing on over the balance of the year. So I think we're all very confident and comfortable with our ability to continue supporting high-quality, prudent loan growth with low-quality -- or low-cost deposits.

我們一直專注於我們的定價紀律和利潤率管理。我們可以選擇提供資金。我們有很多戰略舉措，這些舉措超出了我們現有的可操作的存款垂直領域。他們在排隊，我認為 Mark 談到了我們將在今年餘下時間執行的這一點。因此，我認為我們都對我們有能力繼續以低質量或低成本存款支持高質量、審慎的貸款增長充滿信心和自在。

And Chris, I should -- I really should point down and then it should not go unnoticed, two deposit verticals that we developed internally and the property management business, which is a nationwide business, and the US Trustee business. And there's only a handful of banks that actually could hold US Trustee's deposits on balance sheet.

克里斯，我應該 - 我真的應該指出然後它不應該被忽視，我們在內部開發的兩個垂直存款和財產管理業務，這是一個全國性的業務，以及美國受託人業務。而且只有少數幾家銀行實際上可以在資產負債表上持有美國受託人的存款。

You got to keep in mind, we chose to let those deposits run off. We replaced them. We decided to be a much leaner, operate as a much leaner balance sheet. We can dial that up anytime we want. We can bring those deposits back. We have wonderful relationships with these companies.

你必須記住，我們選擇讓這些存款流失。我們取代了他們。我們決定變得更精簡，以更精簡的資產負債表運作。我們可以隨時撥通它。我們可以把這些押金拿回來。我們與這些公司有著良好的關係。

When we find that that's an efficient source of liquidity for us to maintain the discipline we have toward knowledge and management, we'll bring it back. So it's not like it's an investment. There's no capital investment to bring on and replace those deposits. And we're working really hard to add to our supply of deposit verticals.

當我們發現這是我們保持對知識和管理的紀律的有效流動性來源時，我們會把它帶回來。所以這不像是一項投資。沒有資本投資來產生和替代這些存款。我們正在非常努力地增加我們的垂直存款供應。

And by the way, this rate cycle will pass. Those rates will (technical difficulty) and they'll find their sweet spot. We have a significant advantage of being one of the few banks in the country that actually can hold US Trustee deposits on balance sheet, based on the investment (technical difficulty).

順便說一句，這個利率週期將會過去。這些利率會（技術難度）並且他們會找到他們的最佳點。根據投資（技術難度），我們是該國少數幾家實際上可以在資產負債表上持有美國受託人存款的銀行之一，具有顯著優勢。

So those are just deposit verticals we can fill up anytime we want, so we can bring that loan-to-deposit ratio down anytime we want. But we are a bank that likes mid-teens and higher return on tangible common equity. We think that's our mandate and that's where we've been historically and that's where we're going to stay.

因此，這些只是我們可以隨時填補的垂直存款，因此我們可以隨時降低貸存比。但我們是一家喜歡中等和更高有形普通股回報率的銀行。我們認為這是我們的任務，這是我們歷史上一直在的地方，也是我們要留下來的地方。

Got it. Circling back to one of the earlier questions on the crypto runoff over -- in the next couple of quarters, and whether the offset of that is coming from cash or securities. Can you just walk me through what the decision-making process is, and how you guys landed on the decision to do solely cash, given where the securities yields are on the AFS book?

知道了。回到之前關於加密貨幣徑流的一個問題——在接下來的幾個季度裡，以及它的抵消是來自現金還是證券。考慮到 AFS 賬簿上的證券收益率，你能告訴我決策過程是什麼嗎？你們是如何做出只做現金的決定的？

Yeah. We -- I think in part, Chris, it goes back to just the opportunity we see in the deposit side. I mean, we obviously have $7 million or $8 million a month of principal cash flows coming off the securities portfolio that's available to us. We're still generating a tremendous level of cash just on an operating basis. It will be part of the mix.

是的。我們 - 我認為部分，克里斯，這可以追溯到我們在存款方面看到的機會。我的意思是，我們顯然每月有 700 萬或 800 萬美元的本金現金流來自我們可用的證券投資組合。僅在運營基礎上，我們仍在產生大量現金。它將成為混合的一部分。

GPG, if you're looking at the banking-as-a-service deposits, those have continued to tick up quarter on quarter. And we still see a lot of runway for growth in that vertical. And we feel that we don't have to rush out to fill the bucket, right? We are targeting between $200 million and $250 million of on-balance sheet cash at any moment in time, such part of using the FHLB advances, as an example, to fill that bucket. But we are thinking over the balance of the year that we're going to be able to continue to support loan growth and replace the crypto deposits with existing verticals and the initiatives we've touched on.

GPG，如果您正在查看銀行即服務存款，這些存款將繼續逐季上升。而且我們仍然看到該垂直領域有很多增長空間。而且我們覺得不用急著去往桶裡灌水，對吧？我們的目標是隨時在資產負債表上持有 2 億至 2.5 億美元的現金，例如使用 FHLB 預付款來填補這一桶。但我們正在考慮今年餘下的時間，我們將能夠繼續支持貸款增長，並用現有的垂直行業和我們已經觸及的舉措取代加密貨幣存款。

Okay, understood. Thank you. And then last two quick ones from me. One, is there any discussion internally, or have you guys thought about the potential for a buyback authorization?

好的，明白了。謝謝。然後是我的最後兩個快速的。第一，內部有沒有討論，或者你們有沒有考慮過回購授權的可能性？

And then two, I believe that the office book for you guys is around 8% of total CRE. But maybe if you could just walk us through some of the characteristics of that book and where it's located, et cetera, that'd be great.

其次，我相信你們的辦公用書約佔總 CRE 的 8%。但也許如果你能向我們介紹一下那本書的一些特點以及它所在的位置等等，那就太好了。

All right. I'll start with the buyback, and then Mark, I think, can pick up the composition on the CRE side.

好的。我將從回購開始，然後馬克，我認為，可以在 CRE 方面挑選組合。

Obviously, we evaluate a lot of capital alternatives, including dividends and a lot of things. I think anytime you trade close to book value -- your tangible book value in this market, you really have to think hard about it. All I can say is, yeah, we're absolutely having the conversations. And if anything becomes actionable or reportable, we'll let you know about it. But it's certainly been on our mind.

顯然，我們評估了很多資本選擇，包括股息和很多東西。我認為任何時候你交易接近賬面價值——你在這個市場上的有形賬面價值，你真的必須認真考慮一下。我只能說，是的，我們絕對在進行對話。如果有任何事情變得可操作或可報告，我們會通知您。但這肯定在我們的腦海中。

As far as the office building market, as you said, we have small exposure, but most of it is the suburban office building market in different geographies, strong sponsorships, strong cash flows, low LTVs. We're not in those Class A office building markets -- office building assets here in New York City with low occupancies.

至於寫字樓市場，正如你所說，我們的風險敞口很小，但大部分是不同地區的郊區寫字樓市場，強大的讚助，強勁的現金流，低LTV。我們不在那些甲級寫字樓市場——紐約市這裡的寫字樓資產，入住率很低。

But keep in mind, the occupancy level, the actual people coming into the buildings is rising every single month. It's around 50% or so, but the default rate is still very low in the industry. However, we don't really play in that space. So we're very comfortable with the ownership, the sponsorship, and the position of our office building portfolio.

但請記住，入住率，即實際進入建築物的人數每個月都在上升。大概在50%左右，但是違約率在業內還是很低的。然而，我們並沒有真正在那個領域發揮作用。因此，我們對我們辦公樓組合的所有權、贊助和地位感到非常滿意。

Great. That's all I had. Appreciate the color. Thanks, guys.

偉大的。這就是我的全部。欣賞顏色。多謝你們。

Okay, Chris. Thank you.

好的，克里斯。謝謝。

This concludes the allotted time for questions. I would like to turn the call over to Mark DeFazio for any additional or closing remarks.

分配的提問時間到此結束。我想將電話轉給 Mark DeFazio 以獲得任何補充或結束語。

Just really quickly, I know a lot of people were a bit taken back by the regulatory settlement, but looking forward, I do want to stress that this is behind us. We're a better bank today, and we're positioned well to continue doing what we've done in the past. And I look forward to a continued good working relationship with the regulators as we move forward, become best in practice when it comes to banking-as-a-service.

很快，我知道很多人對監管和解有點退縮，但展望未來，我確實想強調這已經過去了。今天，我們是一家更好的銀行，我們已準備好繼續做我們過去做過的事情。我期待著在我們前進的過程中與監管機構保持良好的工作關係，在銀行即服務方面成為最佳實踐。

And thank you very much for joining us today, and we look forward to continuing the conversation.

非常感謝您今天加入我們，我們期待繼續對話。

This does conclude today's conference and webcast. A webcast archive of this call can be found at www.mcbankny.com. Please disconnect your line at this time, and have a wonderful (technical difficulty).

今天的會議和網絡廣播到此結束。可在 www.mcbankny.com 上找到此次電話會議的網絡廣播檔案。請此時斷開您的線路，祝您玩得愉快（技術難度）。