Financial Data and Key Metrics Changes - The company reported earnings per share of $1.26, an increase of approximately 18% year-over-year on an adjusted basis [4] - Net interest income increased by 3.3% year-over-year, supported by strong consumer deposit growth [4] - Total net revenue for the fourth quarter was $7.4 billion, a 5.1% increase, while full-year net revenue reached $28.7 billion [4][13] - The return on tangible common equity was 18.4%, and the efficiency ratio improved to 57.4% year-over-year [15] Business Line Data and Key Metrics Changes - Fee income represented 42% of total net revenues and grew by 6.7% year-over-year, with broad-based strength across most fee businesses [7][16] - The Global Fund Services business generated strong fee revenue growth, with total net revenue growing at a healthy 11% CAGR since 2021 [9] - Commercial loans grew by 10.1% year-over-year, while credit card loans increased by 5.7% [15] Market Data and Key Metrics Changes - Total average deposits increased by 0.7% linked quarter to $515 billion, with non-interest-bearing deposits stable at approximately 16% of total average deposits [15] - The company experienced modest growth in commercial real estate loans after 11 quarters of decline [11] Company Strategy and Development Direction - The company is focused on restoring investor confidence and executing on three key priorities, including expense management and strategic investments in technology, sales, and marketing [4][6] - The acquisition of BTIG is expected to capture considerable revenue synergies and enhance the capital markets franchise [7][8] - The company aims to drive organic growth and maintain high returns while managing risks effectively [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the economic backdrop going into 2026, highlighting strong consumer performance and improving credit quality metrics [20][88] - The company anticipates total net revenue growth in the range of 4%-6% for 2026, with positive operating leverage of 200 basis points or more [18][19] Other Important Information - The company has made significant investments in digital capabilities over the past six years, which are expected to drive productivity and support future growth [71] - The company is actively monitoring potential regulatory changes that could impact the banking industry [88] Q&A Session Summary Question: Share repurchase pace and capital ratios - Management plans to gradually increase share repurchases from $100 million to $200 million, focusing on client and loan growth first [24] Question: Impact of credit card rate caps - Management estimates that over 90% of clients would be negatively impacted by a 10% rate cap on credit cards, emphasizing the importance of financial education [25][26] Question: Revenue growth expectations for 2026 - Management expects mid-single-digit growth for both net interest income and fee revenue, driven by strong business momentum [30][31] Question: Balance sheet growth outlook - Management anticipates 3%-4% loan growth in 2026, with a focus on commercial and card loans [40] Question: Digital assets organization and revenue potential - The company is exploring opportunities in digital assets, with a focus on capital markets and custody capabilities [51] Question: BTIG acquisition and capital call - The acquisition is expected to be PPNR neutral initially, with potential for margin expansion post-merger costs [100]

Financial Data and Key Metrics Changes - The company reported earnings per share of $1.26, an increase of approximately 18% year-over-year on an adjusted basis [4] - Net interest income increased by 3.3% year-over-year, supported by strong consumer deposit growth [4] - Total net revenue for the fourth quarter was $7.4 billion, a 5.1% increase, while full-year net revenue reached $28.7 billion [4][13] - The return on tangible common equity was 18.4%, and the efficiency ratio improved to 57.4% year-over-year [15] Business Line Data and Key Metrics Changes - Fee income represented 42% of total net revenues and grew 6.7% year-over-year, with broad-based strength across most fee businesses [7][16] - Average loans totaled $384 billion, up 1.4% from the prior quarter, with commercial and credit card loans growing by 10.1% and 5.7% respectively [15] - Non-interest expense totaled approximately $4.2 billion, up 0.7% linked quarter, influenced by severance charges [17] Market Data and Key Metrics Changes - The company experienced record consumer deposits this quarter, contributing to net interest income growth [10] - The ratio of non-performing assets to loans improved to 0.41%, indicating better asset quality [17] Company Strategy and Development Direction - The company is focused on restoring investor confidence and delivering strong financial results through three key priorities [5] - Strategic investments in technology, sales, and marketing are planned for 2026 to drive growth [6] - The acquisition of BTIG is expected to create considerable revenue synergies and enhance the capital markets franchise [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the economic backdrop for 2026, highlighting strong consumer performance and improving credit quality metrics [20][88] - The company is closely monitoring potential policy changes that could impact the banking industry, particularly regarding capital and digital assets [88] Other Important Information - The company expects total net revenue growth of 4%-6% for 2026, with positive operating leverage of 200 basis points or more [18] - The BTIG acquisition is anticipated to contribute $175-$200 million of fee revenue per quarter [19] Q&A Session Summary Question: Share repurchase pace and capital ratios - Management plans to gradually increase share repurchases from $100 million to $200 million, focusing on client and loan growth first [24] Question: Impact of credit card rate caps - Management estimates that over 90% of clients would be negatively impacted by a 10% rate cap on credit cards, emphasizing the importance of financial education [25][26] Question: Revenue growth expectations for 2026 - Management expects mid-single-digit growth for both net interest income and fee revenue, driven by strong business momentum [30][31] Question: Balance sheet growth outlook - Loan growth is expected to be in the 3%-4% range, with a focus on commercial and card loans [40] Question: NIM expansion timeline - Management maintains a path to achieve a 3% net interest margin by 2027, driven by loan mix and fixed asset repricing [43] Question: Drivers of deposit growth - The company is seeing steady growth in consumer deposits, which are expected to be accretive in the long term [48][49] Question: Digital assets organization - The company is actively exploring opportunities in digital assets, particularly in capital markets and cryptocurrency custody [51] Question: BTIG acquisition impact - The acquisition is expected to be PPNR neutral initially, with potential for margin expansion post-merger costs [100]

Financial Data and Key Metrics Changes - The company reported earnings per share of $1.26, an increase of approximately 18% year-over-year on an adjusted basis [3] - Net interest income increased by 3.3% year-over-year, supported by strong consumer deposit growth [3] - Total net revenue for the fourth quarter was $7.4 billion, a 5.1% increase year-over-year, while full-year net revenue reached $28.7 billion [3][11] - The return on tangible common equity was 18.4%, and the efficiency ratio improved to 57.4% year-over-year [12] Business Line Data and Key Metrics Changes - Fee income represented 42% of total net revenues and grew by 6.7% year-over-year, with broad-based strength across most fee businesses [5][12] - The global fund services business generated strong fee revenue growth, with total net revenue growing at a healthy 11% CAGR since 2021 [8] - Commercial and credit card loans grew by 10.1% and 5.7% year-over-year, respectively, contributing to an overall loan growth of 1.4% from the prior quarter [12] Market Data and Key Metrics Changes - The company experienced record consumer deposits this quarter, with a stable percentage of non-interest-bearing deposits at approximately 16% [12] - The investment portfolio remained at $171 billion as of December 31 [13] - The company expects total net revenue growth in the range of 4%-6% for 2026, excluding the impact of the BTIG acquisition [15] Company Strategy and Development Direction - The company is focused on restoring investor confidence and delivering strong financial results through three key priorities: expense management, organic growth, and strategic investments in technology, sales, and marketing [4][5] - The acquisition of BTIG is expected to capture considerable revenue synergies and enhance the capital markets franchise [5][6] - The company aims to drive organic growth and high returns while maintaining strong risk management practices [17] Management's Comments on Operating Environment and Future Outlook - The economic backdrop going into 2026 is broadly constructive, with expectations of continued consumer spending and improving credit quality metrics [17][86] - Management expressed confidence in the ability to achieve positive operating leverage of 200 basis points or more for the full year of 2026 [15][30] - The company is closely monitoring potential policy changes that could impact the banking industry, particularly regarding capital and digital assets [87] Other Important Information - The company has made significant investments in digital capabilities over the past six years, which are expected to drive productivity and support future growth [30][70] - The company is committed to increasing share repurchases gradually, starting from $100 million to $200 million [20] Q&A Session Summary Question: Share repurchase pace and capital ratios - Management indicated plans to gradually increase share repurchases while focusing on client and loan growth [20] Question: Impact of credit card rate caps - Management estimated that a 10% rate cap on credit cards would negatively impact over 90% of clients, but they are exploring options to assist customers [22] Question: Revenue growth expectations for 2026 - Management expects mid-single-digit growth for both net interest income and fee revenue, driven by strong business momentum [27] Question: Balance sheet growth outlook - Management anticipates loan growth of 3%-4% in 2026, with a focus on commercial and card loans [36] Question: Drivers of deposit growth - Management highlighted steady growth in consumer deposits, particularly through the Bank Smartly product, and a reduction in CDs [46] Question: Digital assets organization and revenue potential - Management is actively exploring opportunities in digital assets, particularly in capital markets and custody services, but noted that the revenue model is still developing [50] Question: BTIG acquisition and capital markets strategy - Management clarified that the BTIG acquisition is expected to enhance their capital markets capabilities and is aligned with client demand [100]

Financial Data and Key Metrics Changes - The company reported earnings per share of $1.22, an increase of 18.4% year over year [4] - Net revenue reached $7.3 billion, marking a quarterly record, with a positive operating leverage of 530 basis points [4][10] - Return on average assets was 1.17%, and net interest margin stood at 2.75% [4][11] - Tangible book value per share increased by 12.7% year over year [11] - Non-interest income was approximately $3.08 billion, with total fee revenue increasing by 9.5% year over year [15] Business Line Data and Key Metrics Changes - Fee revenue grew by 9.5% year over year, driven by strength in payments, institutional, and consumer businesses [5][6] - Impact Finance business grew at a 17% CAGR from 2021 to 2024, contributing positively to fee income [7] - Consumer deposits represented over 52% of total average deposits, up nearly two points from the previous year [8] Market Data and Key Metrics Changes - Ending assets totaled $695 billion, supported by elevated deposit flows [10] - Average loans totaled $379 billion, with a year-over-year growth rate of 2.8% [12][13] - The investment portfolio had an average yield of 3.26%, reflecting strategic actions taken [14] Company Strategy and Development Direction - The company is focused on organic growth through interconnected solutions, expense discipline via sustainable process automation, and payments transformation [4][5] - The acquisition of Union Bank has enhanced capabilities in tax credit syndication and access to the California market [7] - The company aims to maintain a diversified balance sheet and strong risk management to navigate uncertain times [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving net interest margin expansion towards 3% by 2027, driven by fixed asset repricing and a favorable loan mix [21][23] - The company anticipates stable net interest income in the fourth quarter, with a bias towards upside opportunities [21][70] - Management highlighted the importance of maintaining expense management disciplines while pursuing organic growth [33][91] Other Important Information - The company expects to deliver positive operating leverage of 200 basis points or more on an adjusted basis [17] - The common equity tier 1 capital ratio was reported at 10.9%, with plans to increase returns to shareholders in the future [16][81] Q&A Session Summary Question: Outlook for net interest margin trend in the fourth quarter - Management indicated a bias to the upside for net interest income and net interest margin, with favorable items still being a tailwind [21][22] Question: Drivers for net interest margin expansion next year - Management sees a path to 3% net interest margin by 2027, driven by fixed asset repricing and a favorable loan mix [23][24] Question: Confidence in positive operating leverage exceeding 200 basis points in 2026 - Management expressed confidence in achieving meaningful positive operating leverage, with net interest income growth expected [32][33] Question: Drivers of growth in the payments space - Management highlighted the interconnectedness of product sets and strong marketing efforts as key drivers of fee growth in payments [35][36] Question: Expectations for corporate payments and credit card dynamics - Management noted challenges in corporate payments but expects improving trends, while credit card dynamics are seasonal [41][70] Question: Client acquisition through Bank Smartly partnerships - Management emphasized the stickiness and favorable pricing of consumer deposits, with a focus on deepening client relationships [51][53] Question: Impact Finance and tax rate implications - Management indicated a stable tax benefit from Impact Finance, with expectations for continued growth in fee revenues [99][100]

Financial Data and Key Metrics Changes - The company reported earnings per share of $1.22, an increase of 18.4% year-over-year [4] - Net revenue reached a record $7.3 billion, reflecting strong momentum across fee businesses and improved spread income [4] - Positive operating leverage of 530 basis points was generated, with a return on average assets of 1.17% and a net interest margin of 2.75% [4][11] Business Line Data and Key Metrics Changes - Fee revenue grew by 9.5% year-over-year, driven by strength in payments, institutional, and consumer businesses [5][15] - Impact Finance, bolstered by the Union Bank acquisition, grew at a 17% CAGR from 2021 to 2024, contributing to fee income [6][7] - Consumer deposits now represent over 52% of total average deposits, up nearly two points from the previous year [8] Market Data and Key Metrics Changes - Total average deposits increased by 1.8% linked quarter to $512 billion, with a stable percentage of non-interest bearing deposits at approximately 16% [12] - Average loans totaled $379 billion, reflecting a 0.2% increase from the prior quarter, with underlying growth rates of 1.0% linked quarter and 2.8% year-over-year [12][13] Company Strategy and Development Direction - The company is focused on organic growth through interconnected solutions, maintaining expense discipline, and executing payments transformation [4][18] - The strategic priority includes enhancing the consumer franchise and long-term deposit strategy, emphasizing growth in relationship-based deposits [8][9] - The company aims to achieve positive operating leverage of 200 basis points or more on an adjusted basis [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving net interest margin expansion towards 3% by 2027, driven by fixed asset repricing and a favorable loan mix [21][24] - The company anticipates stable net interest income in the fourth quarter, with a bias to the upside due to favorable items [22][72] - Management highlighted strong credit quality metrics, with improvements in non-performing assets and net charge-offs [15][16] Other Important Information - The company is preparing for stablecoin activities in both capital markets and payment rails, with plans to pilot transactions [81][83] - The Impact Finance business is expected to continue growing, contributing positively to the company's fee revenue [75][76] Q&A Session Summary Question: What are the expectations for net interest margin trends in the fourth quarter? - Management indicated a bias to the upside for net interest income and net interest margin, citing favorable items and seasonal dynamics [21][22] Question: What are the drivers for net interest margin expansion next year? - Management sees a clear path to 3% net interest margin by 2027, driven by fixed asset repricing and a favorable loan mix [23][24] Question: Can you elaborate on the positive operating leverage and its sustainability? - Management expressed confidence in achieving over 200 basis points of operating leverage, supported by strong revenue growth and prudent expense management [31][32] Question: What are the dynamics affecting the payments business? - Management noted challenges in corporate payments but highlighted strong growth in merchant and card issuing businesses, with expectations for improvement [42][44] Question: How is the company preparing for stablecoin activities? - The company is working on stablecoin services for both capital markets and payment rails, with plans to pilot transactions soon [81][83] Question: What is the outlook for returning capital to shareholders? - Management indicated a commitment to returning 75%-80% of earnings to shareholders as capital levels improve [84][85]

Financial Data and Key Metrics Changes - The company reported earnings per share of $1.22, an increase of 18.4% year over year [3] - Net revenue reached a record $7.3 billion, reflecting strong momentum across fee businesses and improved spread income [3][9] - Positive operating leverage of 530 basis points was generated, with a return on average assets of 1.17% and a net interest margin of 2.75% [3][10] - Tangible book value per share increased by 12.7% year over year [10] - Non-interest income totaled approximately $3.08 billion, with total fee revenue increasing by 9.5% year over year [13] Business Line Data and Key Metrics Changes - Fee revenue grew by 9.5% year over year, driven by strength across payments, institutional, and consumer businesses [4] - Impact Finance business grew at a 17% CAGR from 2021 to 2024, contributing positively to fee income [5] - Consumer deposits represented over 52% of total average deposits, up nearly two points from the third quarter of 2023 [6] Market Data and Key Metrics Changes - Ending assets reached $695 billion, supported by elevated deposit flows and robust client activity [9] - Average loans totaled $379 billion, with an underlying growth rate of 1.0% linked quarter and 2.8% year over year [11] - The investment portfolio had an ending balance of $171 billion with an average yield of 3.26% [12] Company Strategy and Development Direction - The company is focused on organic growth through interconnected solutions, maintaining expense discipline, and executing payments transformation [3][4] - The acquisition of Union Bank has enhanced capabilities in tax credit syndication and access to the California market [5] - The company aims to increase its share of consumer deposits through various strategies, including product interconnectivity and enhanced marketing [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving net interest margin expansion towards 3% by 2027, driven by fixed asset repricing and a favorable loan mix [19][20] - The company anticipates stable net interest income in the fourth quarter, with a bias to the upside due to favorable items [18][59] - Management highlighted strong credit quality metrics, with improvements in non-performing assets and net charge-offs [15] Other Important Information - The company expects to deliver positive operating leverage of 200 basis points or more on an adjusted basis in the upcoming quarters [15] - The Impact Finance business is expected to continue growing, supported by favorable legislative trends [62][64] Q&A Session Summary Question: Outlook for net interest margin trend in the fourth quarter - Management sees more opportunities than risks for net interest income and margin, with a potential upside bias [18][19] Question: Confidence in positive operating leverage exceeding 200 basis points in 2026 - Management is optimistic about achieving meaningful positive operating leverage, driven by net interest income growth and prudent expense management [24][25] Question: Drivers of growth in the payments space - Management noted strong progress in creating an interconnected operating model that enhances fee performance across product sets [26][27] Question: Expectations for corporate payments and credit card dynamics - Management expects improving trends in corporate payments and noted seasonal dynamics affecting credit card yields [31][60] Question: Impact of stablecoins on the payments business - The company is preparing for stablecoin activity in both capital markets and payment rails, with ongoing pilot transactions planned [67] Question: Return of capital to shareholders - Management is committed to returning 75% of earnings to shareholders as capital levels stabilize [70]