Summary of Better Home & Finance FY Conference Company Overview - **Company**: Better Home & Finance (NasdaqGM: BETR) - **Industry**: Home finance and mortgage industry - **Founded**: Approximately 10 years ago by CEO Vishal Garg - **Business Model**: Utilizes a machine learning-driven AI matching engine to connect consumer credit, income, asset, and property data with investor preferences for mortgage and home equity loans Key Financial Metrics - **Growth in Loan Volume**: Increased by approximately 20% in the past year [4] - **Revenue Growth**: Grew by about 50% [4] - **Home Equity Business Growth**: Expanded over 10X, becoming the fastest-growing home equity platform in America [4] - **Revenue per Loan**: Increased from $7,400 to $8,500 [4] - **Contribution Margin**: Improved from $500 to $1,700 per loan [4] - **Labor Cost per Fund**: Reduced from $2,900 to $2,500, significantly lower than the industry average of over $9,000 [5] Product and Technology Developments - **AI Integration**: The company has integrated GenAI into its existing machine learning engine, enhancing efficiency and unit economics [3] - **Tinman Platform**: Represents a comprehensive end-to-end solution for the mortgage industry, consolidating multiple systems into one workflow [9][10] - **AI Loan Processing**: 70% of loans can be processed as one-day mortgages, with 44% going from lock to commitment letter in under a minute [10] - **Future Projections**: Anticipates that over 90% of loans will be processed entirely via AI in the coming years, potentially reducing labor costs to below $1,000 per loan [11] Market Position and Competitive Landscape - **Market Size**: U.S. homes represent a total asset value of approximately $34 trillion, with a mortgage market of about $15 trillion [6] - **Market Share**: At peak in 2021, Better held nearly 2% market share in the overall mortgage market [6] - **Competitors**: Direct competitors include Rocket Mortgage and loanDepot, with a shift towards a platform-based model rather than direct-to-consumer [26] - **Unique Selling Proposition**: Better's platform offers a unique per-funded loan pricing model, which is attractive to mortgage brokers and lenders [29] Strategic Partnerships and Growth Initiatives - **Partnerships**: Collaborations with major financial institutions and mortgage originators to implement the Tinman platform [15][17] - **Market Trends**: The company is positioned to benefit from a potential increase in refinancing as interest rates stabilize [27] - **Consumer Demand**: Over 2 million pre-approved consumers are waiting to purchase homes, indicating significant future demand [33] Challenges and Concerns - **Affordability Issues**: Concerns about housing affordability and the availability of homes to meet demand [33] - **Scaling Operations**: The need to scale operations effectively to handle increased demand when market conditions improve [34] - **Regulatory Changes**: Potential changes in capital gains tax thresholds could incentivize homeowners to sell, impacting market dynamics [34] Conclusion - Better Home & Finance is positioned for significant growth in the home finance sector, leveraging advanced AI technology and strategic partnerships to enhance its competitive edge. The company anticipates a favorable macroeconomic environment that could stimulate demand for its services in the coming years.

Recursion Pharmaceuticals FY Conference Summary Company Overview - Recursion Pharmaceuticals operates in the biotechnology sector, focusing on integrating AI and automation into drug discovery and development, differentiating itself from over 1,000 biotech companies by pursuing a balanced business model rather than a binary risk model [4][5] - The company has generated over 45 petabytes of proprietary data, which is a significant differentiator in its operations [5][6] Leadership Transition - A recent leadership transition occurred with Chris stepping down as CEO to become Chairman, succeeded by Najat Khan, who previously led R&D operations [7][10] - The mission and vision of the company remain unchanged, focusing on improving the probability of success in drug development [9][10] Cost Management and Efficiency - The company has implemented a 35% reduction in projected spending for 2024, amounting to over $200 million in cost savings [12] - Emphasis on operational discipline and cash management is a key focus under the new leadership [12][13] Market Dynamics - The biotechnology industry is evolving with a shift towards data-driven strategies, particularly in large pharmaceutical companies [14][15] - Recursion is positioned as a pioneer in utilizing AI to create and analyze data, addressing the vast untapped potential in the remaining 90% of biology [15][16] Data and Modeling Capabilities - Recursion has developed a unique in-house data generation capability, creating a consistent format for data that enhances its modeling systems [21][22] - The company emphasizes the importance of creating drug-like molecules that are manufacturable and cost-effective [24][25] Partnerships and Financials - Recursion has secured over $500 million from partnerships, with significant milestones achieved, particularly with Sanofi and Roche [6][28] - The company has favorable economics in its partnerships, with potential milestones and royalties structured to provide substantial revenue [30][31] Clinical Programs and Pipeline - The company is advancing several clinical programs, including REC-4881 for familial adenomatous polyposis (FAP), which has shown promising results in reducing polyp burden [34][36] - The REC-617 program is also highlighted, with multiple drugs expected to have important data points in the next 12-18 months [39][40] Regulatory Engagement - Positive discussions with the FDA are ongoing, with a focus on leveraging AI and data in regulatory processes [38] Cash Management and Operational Strategy - Recursion expects to end 2025 with $755 million in cash, providing a runway into 2027, with a focus on efficient cash use for program development [41][42] - The company employs an outcomes-based model to measure spending and resource allocation effectively [42][43] M&A Considerations - While Recursion does not need to pursue M&A, it remains open to opportunities that align with its platform and capabilities [49][51] Conclusion - Recursion Pharmaceuticals is at a pivotal point in its development, leveraging AI and data to drive innovation in drug discovery while maintaining a disciplined approach to cost management and operational efficiency [10][12][13]

Summary of McGraw Hill FY Conference Call (January 16, 2026) Company Overview - **Company**: McGraw Hill (NYSE: MH) - **Business Evolution**: Transitioned from traditional textbook publishing to a digital education solutions company, with over 60% of revenue now recurring and a significant focus on digital delivery [5][6][7] Key Points and Arguments Digital Transformation - **Digital Focus**: The company has undergone rapid digital transformation, moving to cloud-based solutions and optimizing infrastructure for scalability and performance [9][10] - **Data Utilization**: Extensive first-party data collected from learning interactions is leveraged for AI applications, enhancing product offerings and operational efficiencies [24][25][26] Leadership Transition - **CEO Transition**: Simon Allen will retire, and Philip Moyer will take over as CEO in February 2026. Moyer's background in technology and education is seen as a strategic advantage for future growth [12][14][16] Generative AI in Education - **AI Positioning**: McGraw Hill's B2B2C model differentiates it from direct-to-consumer companies facing AI disruption. The company views AI as a tool to enhance personalized learning rather than a threat [22][23] - **AI Innovations**: Internal tools like Scribe have improved content creation efficiency by reducing time and costs significantly. AI Reader and Writing Assistant are examples of products aimed at enhancing student learning experiences [28][29] K-12 Market Dynamics - **Market Predictions**: The K-12 buying opportunity is expected to grow in FY 2027, driven by upcoming major state adoption decisions in California and Texas [30][32] - **Product Development**: The company is focused on aligning product development with state standards and leveraging data to enhance personalized learning experiences [38][41] Higher Education Success - **Market Share Growth**: McGraw Hill has increased its market share in higher education from the 19th percentile to nearly 30% due to effective execution and innovative delivery models like Inclusive Access and Evergreen [44][45] - **Retention and Engagement**: High sell-through rates (95%-96%) indicate strong engagement with educational materials, contributing to better student outcomes [52][53] Financial Strategy - **Debt Management**: The company has prioritized debt paydown, having reduced approximately $592 million in debt, with a target of maintaining a debt-to-EBITDA ratio of 2-2.5 times [67][68] - **M&A Strategy**: Future M&A will focus on tuck-in opportunities rather than large acquisitions, with recent acquisitions enhancing product offerings [69][70] Additional Insights - **Long-term Vision**: The company is optimistic about future innovations, particularly in AI and personalized learning, which are expected to drive growth and improve educational outcomes [73][74] - **Market Adaptability**: McGraw Hill is well-positioned to adapt to changing market dynamics, including demographic shifts and the evolving needs of adult learners [61][66] This summary encapsulates the key discussions and insights from the McGraw Hill FY Conference Call, highlighting the company's strategic direction, market positioning, and innovative approaches in the education sector.

Financial Performance - The company reported a strong fourth quarter with EPS growth of 14% year over year, supported by record quarterly fee and total revenue [7][17] - For the full year, EPS was $10.30, up 19% year over year, with total revenue reaching approximately $14 billion, a 7% increase from the prior year [7][18] - Pre-tax margin improved to approximately 31% in Q4 and 29% for the full year, up from 28% in 2024, indicating positive operating leverage [7][19] Business Line Performance - Investment services surpassed $50 trillion in Assets Under Custody and Administration (AUCA) for the first time, with servicing fee revenue growing by 8% year over year [8][20] - Investment management revenue reached a record with management fees increasing 15% year over year, driven by higher average market levels and net inflows of $85 billion [10][22] - State Street Markets saw solid growth in FX trading services and securities finance, with FX trading revenue up 13% year over year [12][22] Market Data - The company achieved record AUCA of $53.8 trillion, a 16% increase year over year, driven by higher market levels and positive client flows [20] - The private markets business demonstrated strong growth of 12% in 2025, now representing approximately 10% of servicing fees [21] Company Strategy and Industry Competition - The company is focused on leveraging AI-enabled capabilities and enhancing client engagement through strategic initiatives in private markets, wealth services, and digital assets [6][15] - A partnership with Apex Fintech Solutions aims to strengthen market position in wealth services, while the digital asset platform is designed to bridge traditional and digital finance [9][10] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism for 2026, highlighting a focus on technology-led innovation and transformation to enhance operations and client service [15][30] - The company anticipates fee revenue growth of 4%-6% in 2026, driven by servicing and management fees, with expectations for net interest income to increase in low single digits [29][30] Other Important Information - The company returned over $2.1 billion in capital to shareholders in 2025, with a total payout ratio of approximately 80% [14][28] - Productivity savings of $500 million were achieved in 2025, enabling reinvestment in strategic growth initiatives [13][27] Q&A Session Summary Question: Insights on operating leverage and AI's impact - Management discussed balancing investments for growth while maintaining operating leverage, emphasizing that AI will play a larger role in enhancing efficiency and margins in the future [32][36] Question: Digital asset strategy and client interest - Management clarified that the focus is on digitalizing transactions rather than cryptocurrencies, with tokenized money market funds being a key area of interest [44][45] Question: Net interest income (NII) expectations - Management indicated that while Q4 NII was strong, some seasonal factors may moderate expectations for 2026, but net interest margin is expected to grow [54][56] Question: Balance sheet optimization and growth - Management confirmed that balance sheet optimization efforts are ongoing, with expectations for stable deposits and a focus on high-quality lending relationships [62][66]

Financial Performance - The company reported a strong fourth quarter with EPS growth of 14% year over year, supported by record quarterly fee and total revenue [7][17] - For the full year, EPS was $10.30, up 19% year over year, with total revenue reaching approximately $14 billion, a 7% increase from the prior year [7][18] - Pre-tax margin improved to approximately 31% in Q4 and 29% for the full year, up from 28% in 2024, indicating positive operating leverage [7][19] Business Line Performance - Investment services surpassed $50 trillion in AUCA for the first time, with servicing fee revenue growing by 8% year over year [8][20] - Investment management revenue reached a record with management fees increasing 15% year over year, driven by higher average market levels and net inflows of $85 billion [10][22] - State Street Markets saw solid growth in FX trading services and securities finance, with FX trading revenue up 13% year over year [12][22] Market Data - The company achieved record AUCA of $53.8 trillion, a 16% increase year over year, driven by higher market levels and positive client flows [20] - The private markets business grew by 12% in 2025, now representing approximately 10% of servicing fees, up from 9% in 2024 [21] Company Strategy and Industry Competition - The company is focused on leveraging AI-enabled capabilities and enhancing client engagement through strategic initiatives [6][15] - Partnerships and investments in technology, such as the digital asset platform, are aimed at bridging traditional and digital finance [9][10] - The company is advancing its capabilities in wealth services through strategic partnerships, positioning itself for long-term growth [10][12] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about 2026, highlighting the importance of investing in capabilities and technology to drive future growth [15][39] - The company anticipates continued positive operating leverage in 2026, with a pre-tax margin target of approximately 30% [30] - Management acknowledged the uncertainty in market conditions but emphasized the importance of preparing for future growth in digital finance [44][48] Other Important Information - The company returned over $2.1 billion in capital to shareholders in 2025, with a total payout ratio of roughly 80% [14][28] - Productivity savings of $500 million were achieved in 2025, enabling reinvestment in strategic growth initiatives [13][27] Q&A Session Summary Question: Operating leverage and investment for growth - Analyst inquired about the balance between operating leverage and investments for growth, particularly regarding AI's potential impact [32] - Management responded that significant productivity savings would offset ongoing costs while allowing for investments in strategic initiatives [34][39] Question: Digital assets and client interest - Analyst asked about client interest in digital assets and the expected financial impact [41] - Management clarified that the focus is on digitizing transactions rather than cryptocurrencies, with a medium-term financial impact expected [44][50] Question: Net interest income (NII) sustainability - Analyst questioned the sustainability of strong NII growth observed in Q4 [54] - Management indicated that seasonal factors may moderate NII growth but expects continued improvement in net interest margin [56] Question: Balance sheet optimization - Analyst sought clarification on balance sheet growth and optimization strategies for 2026 [62] - Management confirmed a focus on optimizing the balance sheet while maintaining stable deposits and enhancing net interest margin [64][67] Question: Fee growth expectations - Analyst inquired about organic growth expectations in fee businesses for 2026 [70] - Management confirmed expectations for organic growth in servicing and management fees, with a strong momentum heading into 2026 [72][73]

Nutanix Conference Call Summary Company Overview - **Company**: Nutanix - **Industry**: Infrastructure Software - **Revenue**: Approximately $2.5 billion to $3 billion annually [8] Key Points and Arguments Company Background - Nutanix is an infrastructure software company that provides a hyper-converged infrastructure (HCI) solution, which simplifies IT management by converging compute, networking, and storage into a single architecture [4][5] - The company has maintained a customer net promoter score (NPS) of over 90 for more than a decade, indicating high customer satisfaction [8] Market Dynamics - The HCI market is still growing, with opportunities to modernize legacy three-tier architectures [6] - Nutanix has expanded its portfolio to support applications running on public cloud, bare metal, and edge locations, as well as both virtual machine-based and containerized applications [7] Customer Adoption Challenges - Customer inertia and existing hardware depreciation cycles are significant barriers to adopting HCI solutions [11][13] - Some customers may delay adoption due to recent hardware investments, leading to timing issues in transitioning to Nutanix's solutions [13] External Storage Support - Nutanix has recently begun supporting external storage solutions, such as Dell PowerFlex and Pure Storage, to address customer needs and facilitate quicker migrations from legacy systems [14][18] - This decision was influenced by market changes, particularly Broadcom's acquisition of VMware, which forced customers to consider alternatives [19][20] Financial Performance and Guidance - In the most recent quarter, bookings exceeded expectations, but revenue was impacted by an increase in orders with future start dates, which delays revenue recognition [37][40] - The company has adjusted its full-year guidance to account for ongoing future start date dynamics and potential supply chain issues [41][42] AI and Product Development - Nutanix is in the early stages of deploying its AI solutions, including "GPT-in-a-Box," which allows customers to build and run AI applications efficiently [31][34] - The company believes it is well-positioned to support customers transitioning to cloud-native applications as they explore AI opportunities [34] Capital Allocation Strategy - Nutanix has initiated an accelerated share repurchase (ASR) program to take advantage of its strong balance sheet and current stock price dislocation [59][60] - The company is also open to acquisitions that align with its strategic goals, having previously acquired D2IQ to enhance its cloud-native capabilities [63] Renewal and New Logo Strategy - Nutanix has a dedicated renewals team to focus on maintaining existing customer relationships while also pursuing new logo acquisitions [55][56] - The company incentivizes sales teams to convert new logos, recognizing the additional effort required compared to expanding existing accounts [57][58] Additional Important Insights - The company is monitoring supply chain dynamics closely, particularly around memory and server prices, which could impact future operations [42][44] - Nutanix's approach to customer engagement emphasizes flexibility and responsiveness to customer needs, particularly in the context of transitioning from legacy systems to modern architectures [22][23]

Summary of Vicor FY Conference Call - January 16, 2026 Company Overview - **Company**: Vicor (NasdaqGS:VICR) - **Industry**: Semiconductor, specifically focusing on high-performance power components and systems Key Points Licensing Business - In 2025, Vicor achieved several milestones in its licensing business, including: - Secured a license agreement with a large hyperscaler in Q1 - Announced a $45 million settlement in Q2 - Signed a second license agreement with an OEM in Q3 [5][6] - Confidence in expanding the base of licensees is high due to successful ITC actions and a strong IP portfolio [6][16] - The company has initiated a second ITC case early in January 2026, focusing on NBM technology [7][9] - Vicor is actively protecting its IP and plans to enforce rights under its vertical power delivery patents [12][16] Product Development - The second-generation vertical power delivery (VPD) technology is being developed to meet rising current density requirements for advanced AI processes [20][21] - The Gen 5 VPD solution is on track for production launch in Q1 2026, with significant progress reported [22] - Engagements with hyperscalers and OEMs are ongoing, with expectations for product shipments into the second half of 2026 [23][26] Market Opportunities - Vicor is positioning itself for the 800-volt and 400-plus-minus high-voltage DC rack opportunities, with proprietary engines and methodologies already in production [30][31] - The automotive market is seen as a long-term opportunity, with expectations for significant contributions to revenue starting around 2029-2030 [38] - The industrial and aerospace sectors are projected to double in revenue contribution over the next several years, driven by automation and new chipsets [41] Manufacturing and Capacity - The first chip fab in Andover is expected to be filled substantially this year, with plans for a second facility being explored [43] - The second fab may support high-volume AI data center markets, but it is too early to determine if it will require dedicated manufacturing for automotive [44] - Current utilization rates in the Andover fab are under scrutiny, with expectations for margin improvements as capacity utilization increases [49] Financial Outlook - The book-to-bill ratio has improved and is now well above one, indicating a positive trend in order intake [47] - Margins are expected to increase from 65% to 70% as licensing practices strengthen and product gross margins improve with higher utilization [49] Strategic Priorities - Key priorities for 2026 include maximizing capacity in the first fab and laying groundwork for a second fab, potentially by mid to late 2027 [50] Additional Insights - The licensing model has proven effective in increasing demand for Vicor's products, with licensees motivated to use Vicor modules [14] - The company is focused on a logical sequence of protecting its IP while exploring new licensing opportunities [12][16] - Vicor's technology is positioned to address the evolving needs of the AI market, particularly in power delivery systems [20][21] This summary encapsulates the critical insights and developments discussed during the Vicor FY Conference Call, highlighting the company's strategic direction, market opportunities, and financial outlook.

Financial Performance - The company reported a strong fourth quarter with EPS growth of 14% year over year, supported by record quarterly fee and total revenue [6][16] - For the full year, EPS was $10.30, up 19% year over year, with total revenue reaching approximately $14 billion, a 7% increase from the prior year [6][17] - Pre-tax margin improved to approximately 31% in Q4 and 29% for the full year, up from 28% in 2024, indicating positive operating leverage [6][17] Business Line Performance - Investment services surpassed $50 trillion in assets under custody and administration (AUCA) for the first time, with servicing fee revenue growing by 8% year over year [7][18] - Investment management revenue reached a record, with management fees increasing 15% year over year to $662 million, and assets under management (AUM) grew to an all-time high of $5.7 trillion [9][21] - State Street Markets saw double-digit growth in both FX trading services and securities finance, with FX trading revenue up 13% year over year [12][21] Market Performance - The company experienced strong client engagement and onboarding, particularly in private markets, which grew by 12% in 2025 [19] - The digital assets ecosystem was highlighted, with the launch of a digital asset platform aimed at tokenizing assets for institutional investors [8][40] Company Strategy and Industry Competition - The company is focused on leveraging AI-enabled capabilities and technology-led transformation to enhance efficiency and client service [5][14] - Strategic partnerships and investments, such as in Apex Fintech Solutions, are aimed at expanding capabilities in wealth services and private markets [9][11] - The company aims to bridge traditional and digital finance, positioning itself as a leader in the evolving financial landscape [8][40] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about 2026, emphasizing the importance of investing in growth opportunities while maintaining strong financial performance [15][29] - The outlook for 2026 includes expectations for fee revenue growth of 4%-6% and net interest income (NII) growth in low single digits, with a focus on maintaining positive operating leverage [28][29] Other Important Information - The company achieved productivity savings of $500 million in 2025, enabling reinvestment in strategic initiatives [12][25] - A total of $2.1 billion was returned to shareholders in 2025 through share repurchases and dividends, with a payout ratio of approximately 80% [14][26] Q&A Session Summary Question: Insights on operating leverage and AI's impact - Management discussed the balance between investing for growth and delivering operating leverage, indicating that AI will play a significant role in enhancing efficiency and margins in the future [31][35] Question: Digital assets strategy - Management clarified that the focus is on digitizing transactions and enabling the transition from traditional to digital finance, rather than solely on cryptocurrencies [39][40] Question: NII expectations and loan growth - Management noted that while NII showed strong performance in Q4, seasonal factors may moderate growth in 2026, with expectations for stable loan growth [48][50]

Financial Data and Key Metrics Changes - WaFd Inc. reported net income available to common shareholders of $60.5 million or $0.79 per diluted share for the quarter ended December 31, 2025, compared to $0.54 per share for the first quarter of fiscal 2025 and $0.72 per share for the September 2025 quarter, reflecting a 10% linked quarter EPS growth and a 40% year-over-year growth [6][7][20] - Total non-interest income increased by $1.9 million compared to the prior quarter, reaching $20.3 million, while total non-interest expense decreased by $1.3 million or 1.2% from the prior quarter [11][12] - The net interest margin was 2.7% in the December quarter, slightly down from 2.71% in the September quarter, with a yield on interest-earning assets at 5.05% and the cost of interest-bearing liabilities at 2.76% [10][12] Business Line Data and Key Metrics Changes - Loan originations for active loan types were $1.1 billion, outpacing repayments and payoffs of $1 billion, with active loan types including multifamily, commercial real estate, and construction [8][14] - Loans receivable decreased by $240 million during the quarter, primarily due to a decrease in inactive loan types [7] - The allowance for credit losses provides coverage of 1.05% of gross loans, compared to 1% in December 2024, indicating a slight increase in credit quality management [18] Market Data and Key Metrics Changes - Total deposits decreased by $21 million during the quarter, with non-interest-bearing deposits increasing by 4.9% and interest-bearing deposits increasing by 4.5%, while time deposits decreased by 6.4% [9] - Core deposits ended the quarter at 79.7% of total deposits, up from 77.9% in the September quarter [9] Company Strategy and Development Direction - The strategic plan, BUILD 2030, aims to increase non-interest-bearing deposits from 11% last year to 20% by 2030, currently sitting at 12.6% [20][21] - The company is focusing on serving small businesses to achieve a lower cost of funds, with a goal of growing active loan portfolios by 8%-12% over the next one to two years [20][24] - WaFd Wealth Management was launched with a goal to grow assets under management to $1 billion in the first two years, with early indications showing over $400 million as of December 31 [25] Management's Comments on Operating Environment and Future Outlook - Management noted that the elevated interest rate environment and economic uncertainty are impacting credit quality, but they remain optimistic about future growth as the interest rate environment appears to be easing [18][19] - The company expects further margin pressure in the near term but anticipates growth in net interest income dollars [40][66] Other Important Information - The company repurchased 1.95 million shares of common stock at a weighted average price of $29.75, impacting earnings per share positively by $0.02 for the quarter [12][26] - WaFd is appealing its CRA rating to improve its standing, which could unlock opportunities for branching and mergers in the future [27][63] Q&A Session Summary Question: Margin outlook and plans for borrowings - Management plans to replace $800 million of borrowings due within the next three months with current borrowings, expecting rates to decrease if the Fed cuts rates [29][30] Question: Interest income reversals - Non-accrual interest for the quarter amounted to just over $5 million [32] Question: Details on new C&I non-accruals - One non-accrual is in manufacturing affected by tariffs and labor costs, while the other is a real estate-related entity [34] Question: Expense growth and SBA platform build-out - Management indicated no significant plans for large team increases but will continue strategic investments in technology [36] Question: Further margin pressure and growth expectations - Management expects further margin pressure but is optimistic about reaching a 3% margin in the near term [41][66]

Financial Data and Key Metrics Changes - The company reported full-year earnings of $2.1 billion, with earnings per share (EPS) of $2.30, or $2.33 on an adjusted basis, and a return on tangible common equity of just over 18% [6][9] - Fourth-quarter earnings were $514 million, resulting in EPS of $0.58 and $0.57 on an adjusted basis, with certain items negatively impacting earnings by an additional $0.04 [7][11] - Adjusted non-interest income grew by 5% in 2025, while net interest income increased by 2% linked quarter [9][18] Business Line Data and Key Metrics Changes - Wealth Management and Corporate Bank businesses achieved record fee income, with Treasury management products also reaching a second consecutive record [9][18] - Loan growth was challenged in 2025, with large corporate customers refinancing into Capital Markets, leading to a strategic runoff of over $2 billion [12][19] - Adjusted non-interest expense increased by 2% in 2025, with salaries and benefits rising by 3% due to higher health insurance costs and hiring [19][20] Market Data and Key Metrics Changes - Deposits increased by approximately $800 million, supported by strong customer acquisition and retention, while average deposits were roughly flat [13][14] - The non-interest-bearing mix remained in the low 30% range, consistent with targets [14] - The company expects average loans to be up below single digits versus 2025, with a return to more normal loan growth anticipated in 2026 [12][21] Company Strategy and Development Direction - The company is focused on modernizing its core systems, which is expected to strengthen its competitive position [8][22] - A commitment to hiring approximately 120 bankers over two years is in place to support growth initiatives, with 50 hired in 2025 [30][90] - The company aims to deliver consistent, sustainable long-term performance while managing capital and expense discipline [22][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in improving client sentiment and strengthening loan pipelines, anticipating a return to normal loan growth levels in 2026 [12][29] - The company expects net interest income to grow between 2.5% and 4% in 2026, with a net interest margin projected to be around 3.7% in the first quarter [17][19] - Management noted that many headwinds from 2025 are behind them, with positive trends in loan pipelines, deposit strength, and fee income growth [22][23] Other Important Information - The effective tax rate for the full year was 21.4%, with expectations to return to the 20.5%-21.5% range in 2026 [11] - The allowance for credit losses decreased by $27 million, with the allowance as a percentage of non-performing loans increasing to 242% [21][22] - The company executed $430 million in share repurchases and paid $231 million in common dividends during the quarter [22] Q&A Session Summary Question: Loan growth guidance and pipeline activity - Management indicated positive customer sentiment and increased pipeline activity, expecting lower single-digit loan growth primarily driven by Commercial Banking activities [29][31] Question: Trade-off between growth and returns - Management emphasized a focus on capital allocation and risk-adjusted returns, stating that there is no trade-off between growth and returns [34][36] Question: Capital Markets performance and outlook - Management acknowledged a slower start in Capital Markets for 2026 but expressed confidence in a rebound and growth throughout the year [42][43] Question: Deposit pricing trends and competitive landscape - Management highlighted the importance of remaining competitive while acknowledging the need to adapt to market conditions [44][45] Question: Credit quality trends and expectations - Management reported improvements in credit quality metrics and expressed optimism for continued improvement in 2026 [58][60] Question: Systems conversion and M&A flexibility - Management stated that while the systems conversion is ongoing, it does not technically restrict M&A activities, though it would be challenging [97] Question: Expense outlook and headcount management - Management reiterated a commitment to positive operating leverage while managing expenses and headcount growth [84][86]