Welcome to the Newtek Business Services Corp. full year 2021 earnings conference call. My name is Hilda, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. During the question-and-answer session, if you have a question, please press star and then one on your touchtone phone. Now I would like to turn the call over to Mr. Barry Sloane, President, Founder, CEO. You may begin. Good morning, everyone. First and foremost, Newtek would like to send its prayers, thoughts, and feelings out to the country of Ukraine and its citizens. We certainly appreciate the dilemma that they're seeing and witnessing this morning. Welcome everyone to our full year 2021 financial results conference call. My name is Barry Sloane. Joining me today will be Nick Leger, our Chief Accounting Officer. I would also like to thank our accounting staff, legal staff, business leaders, and to all Newtek associates that made 2021 and the results that we're about to talk about today a great year. For those following along on the PowerPoint presentation, it can be found on our website, newtekone.com. In the investor relations section, please go to Events and Presentations, and we are ready to begin. I'd first like to call everyone's attention to slide number one, and please remind everyone to read the note regarding forward-looking statements and comments. Slide number two. We always like to go over our report card, particularly as a public company. On slide number two, you could see that Newtek Business Services Corp has been a very successful organization over the course of 10 years. The data that you see is the end-of-year data, acquired from Bloomberg. Obviously, the returns include capital price improvement as well as dividends. Moving to slide number three. As many of you are aware, approximately August second or third, the company announced our intent to acquire National Bank of New York City, and potentially convert, subject to a proxy vote and regulatory approval, from a business development corporation to a bank holding company and designate a financial holding company status. There's been a lot of activity in the share count. This particular document demonstrates that shareholders that owned stock at the beginning of the period in their name to the end of the period sold out to zero. We ask the market participants to draw their own conclusions from this, but clearly, there's been a significant amount of movement in the share from people that had a position to not having a position. Obviously, the potential transformative change that we're talking about may have caused this. Slide number four. Obviously, we're here today to talk about our 2021 performance, and clearly, we were dealing with tremendous headwinds from the 2020 and 2021 pandemic. You know, we've used the expression, we're firing on all cylinders. You know, simply stated, investment in Newtek Business Services Corp, you're investing in a diversified business model under the Newtek brand. People come to Newtek for loans, payment processing solutions, tech solutions, insurance agency solutions, payroll solutions, and other solutions that will make their business successful. We're real happy with our performance in 2021, but particularly happy with the momentum that we're carrying into 2022. We'll demonstrate that throughout the course of the deck. Since January 21st, 2021, NSBF, which is Newtek Small Business Finance, our non-bank lending SBLC, increased its headcount by 63 individuals to 253 people, a 33% increase. This headcount increase is indicative of the fact that we have geared up, and as you'll see in terms of units and loan volume, we're gearing up with the great operating leverage that we have to do more and more business, obviously, both in 2021 with the records that we've produced as well as going forward into 2022. We're looking forward to further demonstrating not just in lending, but in our other solutions area, whether it's payment processing solutions, tech solutions, payroll solutions, or insurance agency solutions. If you look at every one of these individual areas, there's tremendous change in payments. There's tremendous change in how businesses are looking and seeking assistance for their technology. There's tremendous change in people that are looking for payroll and HR solutions. We are very, very well positioned for these changes going forward with our solutions that we believe very strongly make businesses more successful and make them better. On the fourth bullet on the slide four, we will talk about our NewtekOne dashboard that we unveiled recently. We were really excited about the product. Important to note, we are hopeful that the company will carry forward its objectives with the proxy vote and regulatory approval to become a bank. In the event we're not a bank, the dashboard will still be available, however, without deposits. We've been working on this. We will be rolling this dashboard out in the calendar year 2022. Also to note, obviously during the fourth quarter of 2021, we really put tremendous amounts of resources into closing and funding 7(a) loans, 504 loans. Our non-conforming conventional loan business has taken off really, really well. Obviously, in calendar year 2019, there were no PPP loans and no PPP income. There will be none in calendar year 2022. When you look at the momentum and the performance of the company through 2020 and 2021, we're extremely excited about our future. We have great momentum going into particularly the lending vertical based upon technology changes that we've made, staffing changes, training changes, and we've got plenty of capital to basically be able to fund our loan growth and quality portfolios going forward. On slide number five, some lending highlights. $198 million of 7(a) loans in the fourth quarter, a 74% increase. For the year, $560 million of loans for the full 12 months, an increase of 184% over the prior year. That's the largest amount of SBA-funded loans that Newtek has done. We're the second largest SBA lender in the U.S. after the December 31 quarter. For the SBA, that's their first quarter. For us, it's our fourth quarter. Our Newtek Business Lending facility, which originates and creates SBA 504 loans and non-conforming loans, which go into joint ventures. The 504 portfolio closed $90 million of loans during the 12 months versus $87 million. I would say, from a metric perspective, this was an underperformance. However, we do have a very nice roll forward on some loans that we thought could or should have closed in Q4 that are rolling over into Q1. We feel really good about that. We'll talk about our first quarter 504 closing position in a later slide. Newtek Business Lending is forecasting $150 million of 504 loans for the full calendar year 2022, which would represent a 66.5% increase. Once again, important to note in the 504 business, in addition to us making the loans, we have to get CDC, Certified Development Company approval, SBA approval, and the borrower. Everything's got to get lined up. It's important to understand that, you know, markets change, pandemic issues, staffing, legal, et cetera, and these will necessarily move closing and funding dates around from time to time. Lastly, we say goodbye to PPP. $1.9 billion of PPP loans funded. We've probably forgiven in units about 75% of the total 26,500 portfolio. To remind everyone, we have sold 100% participation certificates in almost all of our PPP financings. On slide number six, we talked about this previously, addition to staff. I think it's important to note that we have brought in some new management in the lending space for all four products, okay? It's important to note, once again, the way we do our business, big funnel up at the top, the referrals come in, and then our business service specialists and management team decides, is it a 7(a) loan? Is it a 504 loan? Is it a non-conforming loan? Is it a secured line of credit? You've got a very big funnel to get the referrals in. The front end decides what is best for the customer and what's suited to their needs and demands, obviously, to make a good credit. On a positive note, the addition of Justin Gavin, Jessye Brem, Scott Shulman, and I'm forgetting somebody at the moment. Oh, to that management team. I'll have to come back to that one. That management team has done a great job, which you'll see as you look at the portfolio growth and the pipeline growth this quarter and time this year, this quarter and time last year. We have had staff turnover. For some companies, staff turnover is bad. In our case, the turnover that we've been involved with in the past, I would say year and a half, has really put a very talented team in place that has similar goals and metrics for both personal and professional growth that the company has. We feel very good about our staff and our training going forward. In the press release, we indicated, I think it was north of 3,200 management training hours for lending staff. We're very proud of that. Slide seven gives you a good idea of what our efforts are doing in what we think is the operationally leverageable and scalable lending business. 57,000 referral units for the quarter in 2021 compared to 92,000 in 2020. For the year, 413,000 in referrals for the 12 months versus 239,000 for the same period in 2020. In unit closes, important to note, we're closing more units. That's a big deal. 282 loan units in the three months ended December 2021 compared to 122 units. For the year, 761 units versus 215 units. Now, this is all based on 7(a) data. Once you get into the non-conforming conventional loan business, you're looking at average loan sizes that could be around $5 million±. I think it's very important to note that in order to get the very significant material volumes, you really don't have to do a lot of units. That big referral funnel that's coming in on the front end is gonna create that type of activity. When you think of the non-conforming business, and we'll talk about that going forward, putting that on to the referral infrastructure, the assembly infrastructure, the underwriting infrastructure, tremendous opportunities for operating leverage. Newtek's database of customer opportunities, which they say is extensive. We have over 1.5 million referrals in the database. We'll talk about the NewtekOne Dashboard and our ability to cross-sell, but more importantly, provide a quality solution to our independent business owners all across the United States. Once again, it's important to note that the dashboard that we're gonna provide is gonna give business owners a tool that is gonna enable them to be more successful in their business, both for data information and transaction. Important to note, we have a 19-year track record of loan assembly, underwriting, and technological expertise. We have materially improved our processes across the board to be much, much better in the lending business, closing out 2021, and clearly going into calendar year 2022. We're excited about the growth potential and all the possibilities. Slide number eight talks about our financial highlights. Total investment income up 17.7% for the year. Net investment income was a decrease of 25.8%. The explanation there is the delta of the PPP income that came in 2020 versus 2021 because the gain on sale is included. On a positive note, clearly, we had significantly greater adjusted ANII or ANII for the calendar year of $3.47 versus the prior year of $2.05. However, the PPP income in calendar year 2020 dwarfed everything else. We did very little bit of our core business. Core business coming online. We're back to basics. We're growing. Very exciting. I do wanna point out the $3.47 was a nickel better than consensus analysts of our four analyst estimates of $3.42, and we had previously forecast $3.40 for the year. Debt-to-equity ratio of 1.19 at December 31. That's one of our lower debt-to-equity numbers in recent quarters and recent years. We feel pretty good about reducing our leverage at this point in time. It is likely that that leverage number will bounce back up. Once again, total investment portfolio increased 13.1%. Important to note that, you know, BDCs have a hard time growing their total asset size because they're constrained when they're trading below NAV. We obviously traded a premium to NAV. Being a BDC, it's important to have a real strong stock price to be able to continue to raise equity and debt to grow the business. Net asset value of $403 million crossed over the $400 million mark, an increase of 8.2% per share on a year-over-year basis. Slide nine, the adjusted NII trend. Obviously, big $3.47 adjusted NII. Look, I would say that we have not given full year guidance as a BDC for the calendar year. There's good reason for that. We may not be a BDC for the full year. We have indicated that we think that the third quarter would be the most likely guess, but that's up to our work, obviously, with the regulatory bodies, which we're gonna work with them and give them as much time as they need to make the appropriate decisions to work with us to make sure that everything goes smoothly and we've got the best plan in place. We have declared from the Board a $0.65 dividend in the first quarter. We have forecasted a $0.65 dividend in the second quarter. That's $1.30 for the first six months, which I think is a good formidable forecast going forward. You know, typically, we've had better second halves than first halves. There is, and maybe this is the understatement of the day, a lot of uncertainty and volatility in the markets today. You know, trying to figure out what the third and fourth quarter of the year look like. Looks like at this point in time, we're gonna, you know, hold that back at this point in time. But once again, when you look at the trends, when you look at the pipelines, when you look at the efficiencies, the areas that we're in, and frankly, the fact that the businesses that we're involved with, you know, these are not international businesses. They're independent business owners, primarily with a U.S. focus. We do think we're in pretty good shape here. We would like the market to obviously look at the company's historical performance over 10 years, how things are trending, the processes and training that we put in place, the technological improvements. We're pretty excited about 2022. Slide number 10, dividends, which we were just talking about. Obviously, $3.15 in 2021 was a 53% increase over 2020. We talked about our first quarter 2022 dividend declared $0.65, forecasted $0.65 in Q2. The declared dividend is a 30% increase. I think you'll look at some metrics that we have going forward for Q1. Very strong. Very strong. We're real excited, obviously about finishing what we're doing here today, but also reporting our first quarter performance as well. You know, going back, you know, 2021, clearly, we put up some great numbers. You could see that, what we talked about. Those numbers were without great challenges. I think that one has to look at the company and say, "This is a company that is flexible, that is nimble, that's forward-thinking, and is able to make these adjustments." These are things that we've done over the course of our 20 years as a public company. Slide number 11 talks about the 1.19 debt-to-equity ratio. As many of you are familiar with our model, we sometimes sell government guaranteed pieces which settle in the first week or second week of the next quarter. I mean, that leverage basically goes away fairly quickly, and we would have been at about 1.1. We're really putting up some great numbers without a lot of leverage. As many of you know, we redeemed $40 million on slide 12 of the NEWTL outstanding baby bond notes with no prepay penalties. Egan-Jones has recently maintained their BBB+ rating on our notes and debt. There's also the NEWTZ notes, $150 million, 5.5% due 2026 that are callable after Feb. 2022. Then there are make-whole provisions for one year after that. Slide 13. Obviously, the market should be concerned about companies managing their interest rate risk and interest rate risk exposure. Once again, important to remind everybody that our SBA 7(a) portfolio floats quarterly over prime with no cap. Our liabilities in the warehouse line with Capital One also are floating rate. The rate on our securitizations are floating rate. We have a very nice asset liability match on both sides. We also did a recent securitization of the joint venture of our non-conforming conventional loans. This is a very good template going forward for our business that we'd like the analysts and the investment community to begin to focus on in the category of, well, what if? Like, what if Newtek can grow this business, which we intend to do? What if this becomes valuable and important? And what are the margins in this business? Well, we wound up issuing a little over $56 million of notes, I believe, which were rated single A by DBRS, with a fixed coupon of 3.187%. The net coupon on the portfolio was 7.2%. The gross coupon, 8.2%. We keep the servicing spread 100% of that on all the loans, but the joint venture is split between us and our joint venture partner. Really a very good transaction for us and should serve as a template for what we can do going forward, obviously subject to the volume. Important to note, those loans were seasoned, and as of this date, they're all currently performing, which is valuable. All of them, except for two or three, were originated pre-pandemic. In the calendar year of 2021, I believe that's when it began, the board and management decided it was prudent to hedge the interest rate risk in the 504 portfolio and the non-conforming portfolio. I go back to having good foresight and maybe luck and good timing to begin a hedging program. 504 loans are typically fixed for five years, and then they adjust at a spread over a five-year index with a margin, and our non-conforming conventional loans are typically structured the same way. Fixed for five years or a term, then with a full adjustment without a cap and a floor. It's important to note that the hedging is basically for the duration during the time the portfolio is hedged. We successfully hedged our portfolio in calendar 2021 with a realized net gain of $644,000. The non-conforming portfolio, once it got securitized, then it was asset liability matched with a fixed rate coupon, realized a hedging gain of $1 million when the securitization was closed. Slide number 14 is our typical slide that we talk about, you know, in with our SBA pedigree. Important to note, our average loan size is coming down $156,000 per unit. That's the uninsured portion of the loans. The government guaranteed pieces are sold into the market at a gain. That uninsured portfolio is typically in non-recourse securitizations that are prime + 2.75, no caps, which is approximately a 6% cost to the borrower and a 6% earned coupon to ourselves. I would like to point out also that the secondary market pricing, which you can see on slide 15, remains strong. Without getting too much into the weeds, and this is in the past history, there was one of the reasons for the high 13.05 premium was the fact that there was 50 basis points of additional coupon for SBA lenders like ourselves because of the pandemic adjustments in various Biden and Trump programs. That benefit is going away. Prices still remain strong, not quite at that number, but certainly not far from it and significantly above the 10.78. Mind you, the mix between 10-year paper and 25-year paper determines this as well as market conditions. Essentially, it's a full faith and credit government guaranteed floater with a big determinant to price changes is prepayment. Important to note on slide 15, the final bullet, the company had $59.3 million in guaranteed portions of 7(a) loans on its balance sheet that are available for sale. This, if sold in Q1, will produce a gain on sale from that portfolio. Slide number 16. We successfully did our 11th securitization of the uninsured portions of our SBA portfolio, which cleans out our Capital One bank line. Created $79.7 million of Class A notes that were single A-rated and $23.8 million of Class B notes that were BBB rated by Standard & Poor's. Very nice advance rate, and we're proud of the execution. We want to make sure that we thank the great work that Deutsche Bank and Capital One Bank did on this particular transaction. The deal, I think it sold out in a day or two. We had to close the books down. Almost 4.5 to one oversubscribed on the A class. Once again, these are non-recourse financings. Slide number 17, an important new slide to the deck. Newtek Small Business Finance, that's the 7(a) lender that basically has its loans in the Capital One bank line and then into securitizations. Take a look at the net interest income trend, which I think is very, very valuable. This is good quality recurring income that is added. When you look at Q4 2021, and you look at the net interest income, $4.7 million, that's the highest number we've ever had. Obviously, that will reoccur throughout the year next year, up from $3.1 million the prior year and $3.6 million in Q4 2019. Obviously, we didn't do many loans in 2020, and you had attrition on the portfolio. We're very happy and proud about this additional stream of income continuing to grow on a going-forward basis. This type of spread income is valuable to Newtek. We anticipate as we grow the non-conforming business out of the JVs, we'll pick up that type of spread income. We'll talk about that in a slide going forward. Once again, really excited, particularly when we look at our pipeline progress going forward, which you can see on slide number 18. We've got the pipeline on the 7(a), the 504 and the non-conforming conventional. on the 7(a), important to note that as of 2023, 2022, we've already closed $68 million of 7(a) loans. We have an approved pending closing, $155 million. You know, if you go back to, you know, calendar years, 2018, 2019, I'll throw 2020 out for the most part 'cause we kinda dumped the March portfolio, 2021. You know, an $80 million, a $90 million, a $100 million closed year in the first quarter, which is typically light. You could see we're gonna have a heck of a good Q1 for the SBA 7(a) portfolio. As you go down, you could see the growth in pre-qual and the total growth. The total size of the portfolio in 7(a) of 67% over the prior year. In the 504 unit, you've got the same type of of numbers. You've got $15.6 million closed. You've got a lot in approved pending closing. You know, I'm hopeful that we'll get to, you know, a $30 million -$40 million closed number in the first quarter. We're looking to do $150 million of closed or funded loans in calendar year 2022 from 504. In the non-conforming space, we've got a nice pipeline that's building. We're very close to closing our second JV. Our first JV was dormant throughout the pandemic last year. We have a second and third party in close negotiations. We're gonna forecast about $300 million in these loans, which will be funded by 50/50 joint ventures. I think that's a very conservative forecast and one that can be met and is obtainable. On slide number 19, that's the total pipeline growth across all the different businesses. On slide number 20 shows the seasoning of the 7(a) portfolio. We do like the fact the portfolio is getting more and more seasoned. Defaults tend to accelerate, you know, within the first four years of a portfolio, particularly from 18 to 40 months, and then they flatten. We feel pretty good about the seasoning of our portfolio being helpful. Slide number 21, we're proud of. If you take a look at the 12/31/2021 dates, there's nothing greater than 60 in the portfolio. The non-accrual portfolio went down year-over-year. Given a pandemic, COVID-affected, business-affected shutdown, we feel very good about the portfolio that's been originated, you know, in our 18-year, 19-year history at Newtek Small Business Finance. We're really pleased with what's gone on in the portfolio from an origination and from a servicing perspective. On slide number 22, we have 44 full-time employees that service our portfolio. The size of the portfolio is approximately $3.1 billion is 31. It was higher, obviously, 'cause we've gotten forgiveness on a sizable amount of PPP loans. Important to note that we are a Standard & Poor's rated servicer, both for SBL and NSBF. We also service portfolios for two government regulators, the FDIC and the National Credit Union Administration, NCUA, that regulates all credit unions, and 75 other banking entities. We worked very hard through the course of the last two years as the government shut down businesses and industries and really limited the amount of commerce for some of our clients. We helped our clients with PPP financing, EIDL loans, EIDL, as well as Employee Retention Tax Credit program, which is still going on. These programs helped keep our borrowers healthy and very well-positioned for 2022 going forward. Let's go to slide number 25. Portfolio company review. Important to note the key entities in this review, Newtek Merchant Solutions, Newtek Technology Solutions, Newtek Insurance Agency, Newtek Payroll Solutions. Also, Newtek Business Lending that we talked about that does the 504 and participates in originating those loans and selling them into the joint ventures. Newtek Business Credit, which is a DBA for CDS. On slide number 26, here's some of the important data for the 504 loan program. It talks about what we accomplished in calendar year 2021. On a going forward basis, we're looking to close or fund approximately $150 million of 504 loans, which would be a big increase over 2021. That would be the 2022 forecast of $150 million, a 66% increase over the 2021 fundings or closings. We have the capacity to do these loans with a $100 million facility from Deutsche Bank, a $75 million facility with Capital One Bank, a $20 million facility with One Florida Bank, which helps us through construction financing. Also important to note, we sold approximately $64.6 million in 24 units of 7(a) loans to third-party investors for a gain on sale of over $2 million for the 12 months. When you look at a 504 business on slide number 27, you've got a typical structure of a loan in terms of what the first is funded by NBL. You've got the second lien that we fund that gets taken out by government debentures, our injection of 10%. We're left with a 50% first. We don't fund the loan until the government takeout is in place. Slide number 28 talks about the return on investment, where we can see that the 504 business is profitable, like our 7(a) business is profitable, like our non-conforming business is profitable. These are all businesses that are providing high returns on equity, and we are excited about these businesses. The businesses that we're in, that we've successfully managed for over a decade, provide higher returns on equity, which is why our stock price has been a stellar performer over the course of 10 years. Slide number 29, a little bit of a deeper dive into our conventional loan portfolio, what we call non-conforming conventional loans. We're real happy to announce that we successfully securitized our portfolio of $86.6 million, 17 loans. DBRS was the rating agency. For those of you that are interested in more details on that securitization, you can go to DBRS's website, take a look at the presale agreement, which I still believe is up there. Obviously, the pandemic slowed the initiatives down, both with ourselves and joint venture partners. We're up and running, and we're forecasting conservatively $300 million. We'd love to beat that number, but that's where we are in 2022. As said, we're currently negotiating three JV agreements, which would give us tremendous capital power to clearly fund between, say, $500 million-$1 billion worth of these loans in the foreseeable future. We're very, very excited about this business. On slide number 30, we talk about the benefits of non-conforming conventional loans. This is important in the context of looking at NewtekOne and trying to analyze the cash flows from the different areas, whether it's the merchant processing business, whether it's the tech solutions business, whether it's the 7(a) business with its gain on sale, its servicing income, its spread income from its portfolio. Now you've got the non-conforming conventional loan business where we can earn origination fees prior to going into the JV or out of the JV, additional servicing income of 100 basis points for servicing these loans, which goes into SBL. We have the opportunity, obviously, to manage the interest rate risk through a hedging portfolio. Then once the loans go into a securitization, you're pretty much match funded. What the NCL or non-conforming conventional loan business does is it leverages our existing origination platform, which allows for increased revenue off of fixed expenses. When you look at the overall operating plan, once again, big funnel, lots of referrals. When we're in the market, we don't say, "Oh, come to Newtek. We're a 7(a) lender." We're a lender. How do we lend? 10 to 25-year AM loans. No balloons. No covenants. Must personally guarantee the loan. Willingness to give you a high advance rate on the primary collateral. We indicate a single-digit interest rate. That brings businesses to us. They can ultimately wind up in any one of these four buckets that exist today. Down the road, we're hopeful that we're successful with a proxy vote and regulatory authority. The Newtek brand will also be able to make regular bank loans that are more consistent with bank-type lending practices, with lower cost of deposit funding to fund that. That you've got a full menu for independent business owners, and you've got a full menu as businesses mature and graduate through the cycle and get better and better and qualify for different types of financing. Once again, no balloons. Long AM schedule means for the borrower, lower payments. It really is working very well. The additions of non-conforming conventional loans and the ability to use the brand to put assets, qualifying assets into the bank, extremely exciting. On slide number 31, I believe we covered this. I jumped the gun a little bit. We talked about the securitization that we did. Very, very useful and beneficial. One other thing that's important. In all of these loan categories, 7(a), 504, secured line of credit, non-conforming conventional, and bank lending, our referrals encompass a wide swath of women and minority-owned businesses and loans to rural communities because of how we aggregate these opportunities. Branchless, brokerless, BDO-less environment using technology and alliance partners to refer to us gives us these opportunities. We're extremely excited about servicing independent business owner communities and the communities where these people live in all areas, whether they're men, women, transgender, rural, urban. We're very excited about our potential future. Slide number 31 talks about our merchant processing, valuation. We expect our growth to begin to return back to this business coming off of the pandemic. Slide number 33, just a couple of points to consider. 23.2% increase in monthly sales volume for the fourth quarter compared to the fourth quarter of 2021. We're hopeful that increased consumer spending will continue. We also have a significant portfolio of taxi drivers in Newark that's been tremendously affected by the lack of international travel. That business at one point threw up $1.2 million -$1.3 million of cash flow. That has been diminished, I think last year, down to like $300,000. There's a lot of upside in these various different businesses that we're in. I will also state that we had a significant management realignment in 2021, which we believe will bear a lot of fruit this year. David Simon named as President and Chief Operating Officer of Newtek Merchant Solutions, and he's repositioned a very strong management team along with Mike Campbell, who is in charge of all underwriting risk and policies and procedures today, which will be valuable, particularly as we are hopeful that we will morph into a bank at some point in time in the future. Once again, subject to shareholder vote and regulatory approval. When I go to slide number 32, and we look at our Newtek Payment Systems and what is referred to also legally as POS on Cloud, we are very excited about this system. For those of you who want to learn more about it, go to newtekpaymentsystems.com on the website. There's a lot to go over. I don't want to spend too much time on the call today to go over, but here's what I'm very comfortable with. When you look at Square and you look at Clover, our software, our system, it's just better. We are processor agnostic. It's fully integrated into the GL for payroll, for payments. We are able to integrate a full range of benefits into the system. It can be branded for any channel partner like an ISO, a community bank, a credit union, which Square and Clover do not do. This is a winning product for us. We're very excited about this and see it as a future opportunity for growth. Slide number 35, we talk about our technology business. Newtek Technology Solutions, 2021, revenue $41.1 million, EBIT of $5.4 million. That's versus $4.3 million last year. We're real excited. We have a very aggressive growth forecast. I am hopeful that we will deliver that of $7 million. The ability to offer to independent business owners security as a service, advice and consulting for tech solutions, professional services, and to be able to give our facilities out to independent business owners that can't afford a CTO or a CIO or really can't afford to have servers on-prem, nor would they really know how to manage them. We do this business for a three to five-person medical or dental office, and we also do it for larger players as well, with a particular emphasis and focus going forward on financial institutions and clearly commercial enterprises. We're very excited about this business. We believe in it. It's great. Businesses today need to be able to store their data and information technology in a safe and secure place that's current and up-to-date. Particularly when you see all the cyberattacks going on right now, we play a very important role. Not to say that Amazon and Azure don't do this, but they really don't do it for smaller businesses. In Amazon's case, you kind of need to use their development tools and their software. The 30 million SMBs, as the SBA would define it, they're not going to Amazon per se. They can, but it's extremely expensive, and they really don't have the ability to relate to the Amazon cloud. We can help them with that. By the way, if they want to be in the Amazon cloud, we could help them get into the Amazon cloud with our advice and consulting. We can help them get into the Azure cloud. We can help them manage their solution on their on-prem or to use our facilities in Phoenix or New Jersey. Extremely excited about the future of our tech solutions business. I'm gonna fast-forward now to 38. We talked about payroll and benefits. This is a changing environment. I mean, when you look at all the regulatory changes, customers need help. We're there 24/7, and we're very excited about our staff being able to help people in remote locations on video screen and available to our customers. We believe we don't need branches. We don't need brokers. We don't need bankers. We don't need BDOs. We need the current team of people that are currently set up the way they were doing the business in the pandemic to be able to serve independent business owners in all areas 24/7. We're real excited about that. Let's go to slide number 39, the NewtekOne Dashboard, the one dashboard for all your business needs, which will be available if we are hopefully successful in acquiring National Bank of New York City. Even without it, the dashboard will be launched. The dashboard is currently in process, and it is very much of an aggregation tool. That's important to know. With that said, payroll, web traffic data, the storage function, the data information and storage function, the lending tools, the payment processing information, it all exists today. We're gonna drive this up into one single sign-on, one dashboard, and this is gonna be the dashboard that's gonna make businesses more successful. It's gonna make them better. It's gonna make them more informed. There'll be parts of this dashboard that will wind up being transactional. That is our goal. Will that be available in 1.0 or 2.0 or 3.0? Still remains to be seen. We're very excited about our initiative. As we foray into the world of banking software and banking systems, we've gotten a tremendous education. Once again, bank or no bank, the dashboard will be rolled out. We're really excited about it, and we're looking forward to moving forward in this particular area. On slide number 40, this is a screenshot of what the dashboard will look like. I think it's real important. It's the one dashboard for all your business needs. As you go down the left-hand column, extremely important. Number one, your Newtek team. When you go into one of the competing banks, community, big banks, et cetera, who do you talk to? Well, you go to the dashboard, you'll have a relationship manager, and you'll have a payment specialist, you'll have an insurance specialist, you'll have a payroll health and benefits specialist, you'll have a tech specialist, a lending specialist, and if we're a bank, a depository specialist. You'll be able to go on the system and communicate via video with anybody on your team. It's not like you're walking into one of these big banks today that's happy to take your deposits, they're not giving you much for it, and maybe occasionally making you a loan, but really not doing a lot else for you. In the dashboard, you could see, in addition to the things that banks do, here's your deposit information, here's your lending information. Your credit card data will be available to you. Chargebacks, refunds, processing data, how much Visa, how much Mastercard, how much American Express, how much debit, how much credit, looking at all your batches. Our goal is to be able to get into the dashboard and be able to allow you to make your payroll. You can actually see who you're making the payroll to. You could see the money coming out for the workman's comp. You could see the money coming out for the health insurance. You could see the money coming out for the 401(k), all in the dashboard because we are a payroll processor and solutions company for our clients. The data vault, storing data, storing documents for businesses, helping them manage their business, insurance policies, buy/sell agreements, operating agreements, secretary certificates, all of that stored safely and securely in the dashboard. Very, very exciting tool. Futuristically, we'd certainly love to maybe be in the tax business, digital bookkeeping business. It's on the drawing board. I don't have a specific time. We have a lot of initiatives, which you could tell by the length of this call today. That is something that we'll get to it. The big differentiator here is our dashboard is gonna make our clients better and more successful. It's not just software. It's software and people. They may not take you out for breakfast, lunch, or dinner, or play golf. They may not bring you into a fancy branch, but they'll be available on screen when you need them on demand. The NewtekOne dashboard, NewtekOne, a technology-enabled bank. We're really excited about what we're doing here. Slide number 41. In conclusion, an investment in Newtek Business Services Corp as a BDC or potentially as a financial holding company, which we are hopeful for. You've got a proven track record. We've outperformed the Russell and the S&P 500 for over a decade. Management's interests aligned. I mean, I've heard people say, "Gee, you know, we're, you know, why are you doing this bank deal?" It's like, what? Management is very much in line with the shareholder base. We love dividends, and we love capital appreciation. I don't try to get the difference between if the stock price goes up for capital and you sell a little piece off and you get your dividend and you make it, what's the difference? It's total return. That's for other people to decide, not me. At the end of the day, we are looking to enhance shareholder value for all shareholders, and we're very excited about what we're doing and the historic returns that we have provided to shareholders. Yes, it includes dividends, but it also includes a significant amount of capital appreciation, which based upon what we're doing in the business, within the business, is very material. We've used technology in our world as a disruptor, okay? We've never been your typical BDC. If we move forward with the bank, we won't be a typical bank either. In the event we're successful in our quest to obtain a proxy vote regulatory approval, we believe it's in the best interest of our clients and stakeholders. We really appreciate the opportunity to present to you today. I'd like to turn the remaining portion of the financial review of our fourth quarter and annual results to Nick Leger, our Chief Accounting Officer. Thank you, Barry. Good morning, everyone. You can find a summary of our fourth quarter 2021 results on slide 43, as well as a reconciliation of our adjusted net investment income or adjusted NII on slide 45. On slide 43, for the fourth quarter of 2021, we had a net investment income of $1.6 million or $0.07 per share, as compared to a net investment income of $850,000 or $0.04 per share in the fourth quarter of 2020. That's a 75% increase on a per-share basis. Adjusted NII, which is defined on slide 44, was $16 million or $0.68 per share in the fourth quarter of 2021, as compared to $9.6 million or $0.44 per share in the fourth quarter of 2020. Focusing on fourth quarter 2021 highlights, we recognized $24.8 million in total investment income, a 67.7% increase over the fourth quarter of 2020 total investment income of $14.8 million. Dividends from portfolio companies, interest income, and other income were the primary drivers for this increase, with interest income increasing by $1.4 million, resulting from a year-over-year increase in the accrual loan portfolio. Other income increased by $3.3 million for the fourth quarter 2021, resulting mainly from a year-over-year increase in SBA 7(a) loan origination volume. Servicing income increased by 7.2% to $3 million in the fourth quarter of 2021 versus $2.8 million in the same quarter in 2020. Distributions from portfolio companies for the fourth quarter 2021 totaled $9.75 million, which included $6 million from NMS, $3.5 million from NBL, our 504 business, and $250,000 from NTS, as compared to $4.175 million in the fourth quarter of 2020. Total expenses for the fourth quarter increased by $9.2 million quarter-over-quarter, mainly driven by an increase in the SBA 7(a) loan referral fees due to high loan origination volume, estimated costs, professional fees, and loan origination and processing costs. Realized gains recognized from the sale of the guaranteed portions of the SBA loans sold during the fourth quarter totaled $18.1 million, as compared to $11.4 million during the same quarter in 2020. In the fourth quarter of 2021, NSBF sold 223 loans for $126.6 million at an average premium of 12.28%, as compared to 123 loans sold during the fourth quarter of 2020 for $85.1 million at an average premium of 11.42%. The increase in realized gains was attributed to higher SBA loan origination volume in the fourth quarter of 2021, combined with higher average premium prices when comparing to the fourth quarter of 2020. Realized losses on SBA non-affiliate investments for the fourth quarter of 2021 was $3.5 million, as compared to $2.7 million for the fourth quarter of 2020. Overall, our operating results for the fourth quarter 2021 resulted in a net increase in net assets of $20 million, or $0.84 per share, and we ended the quarter with NAV per share of $16.72. I'd like to turn the call back over to Barry. Thank you, Nick. Operator, we will now commence the Q&A. Thank you. We will now begin the question-and-answer session. If you have a question, please press star and then one on your touchtone phone. If you wish to be removed from the question queue, please press the pound sign or hash key. If you are using a speakerphone, we recommend that you pick up the handset first before pressing the numbers. Once again, for any questions, please press star one. We have a question from Paul Johnson from KBW. Yeah. Good morning, guys. Thanks for taking my questions. Just have a few for you today. I'm curious as far as what you're seeing with your portfolio in terms of credit trends, just subsequent to the expiration of the CARES Act, last year in September, if that's changed at all, if that's improved or any sort of significant developments there. Yeah. I think that, if you look at the results. The majority of the portfolio stopped receiving the CARES payments in probably the March, April timeframe. I think that people looked at that as, gee, you know, that's. First of all, none of these things are permanent. These businesses took these funds in because in many cases, they were very limited by government action to open up or wearing masks or, you know, a variety of different things they had to do, PPE, et cetera. When you look at our portfolio performance, which we covered in one of the slides, we're very, very pleased. We think that businesses, and Newtek is kind of an example of it, really took the opportunity to pay attention, get rid of unnecessary expenses, and position themselves for how business is to be done in the future. We think the trends are pretty good. Now, today is all of a sudden a new day. Lots changed. Consumer spending has been incredibly strong up until, I would even say yesterday. I mean, I'm seeing that in the payments numbers. If this is not overly punitive, meaning that if, you know, if we have a, you know, oil at $125 a barrel for six months, that'll be a problem, I would presume, to a degree. But I think so far, we're in good shape. I mean, the future is a little bit more uncertain with what's happened yesterday. Right now, we feel pretty good about the quality of the portfolio and where our clients are. I mean, we knocked out everything 60 days and over, and non-accruals went down. We feel pretty good about where we are as well. I will also tell you the value of the collateral is very strong right now. Thanks for that. Yeah, it's great to hear. Secondly, you guys have grown your staff pretty significantly last year. I'm just wondering, do you expect that kind of rate of hiring to continue into this year? Or do you think you've kind of reached a point where you're pretty satisfied with the staff that you have today? It's a great question. Myself, you know, in the lending team, you know, led obviously by Tony Zara and Peter Downs, look at, you know, headcount regularly. We've got the right staff size and the capacity to lean into the business. Now, you know, as we grow the NCL business, we'll probably need to add, you know, a few selected people, but not a lot. 'Cause you gotta remember, the NCL business, you got bigger loans and fewer units. The other thing I would tell you know, on the servicing side, you know, hopefully loan forgiveness and PPP will diminish, so we'll be able to shift resources around. I think we're in pretty good shape. I think the most important story to tell is we significantly increased what I think was, you know, our SG&A last year, and we were able to cover it. I think that based upon what we're looking at for Q1 and Q2, we're able to handle it. We think we get a tremendous amount of leverage through the NCL opportunity, as well as we get leverage in the event we're successful in the acquisition of National Bank of New York City. Thanks for that, Barry. Appreciate that. I just have a few more, and I'll hop back in the queue. Let a few others ask questions. I'm curious on the JVs that you talked about with new partners, and potentially forming those and growing those over time. How do you plan funding the JVs? Is that going to be essentially cash on your balance sheet or potentially assets from the portfolio? Or what's the plan in terms of just getting those JVs started? Sure. It's a great question, Paul. I appreciate you asking, 'cause I think that a lot of people don't fully understand the value and capability of the JVs. The way we currently do it today, which is what we would continue to do as a BDC, and frankly, be not much different than if we had that assets at a bank holding company, would be by a combination of debt and equity. They're typically 50/50 equity pieces, and we have leverage financing from different partners. You know, we've got term sheets and offers on that now. You know, the loan growth would basically be funded on balance sheet by the equity investment of Newtek Business Services Corp. into the joint venture. Got it. Lastly, I was hoping maybe you could just kind of maybe talk about the effect of inflation and, you know, how you've seen that kind of flow through your portfolio companies, or maybe even, you know, how you expect that to kind of flow through, this year. Any sort of effect that that's had on, your portfolio or maybe even your underwriting process, just, any kind of color there would be helpful. Yeah. I think that inflation is a good thing for the payments business. I hate to say that 'cause it's just dastardly, but it increases the volume, and you've got a lot of fixed expense there. For the payments business, it's good. For the insurance agency, it's good. For the payroll business, it's good. For the business services business, it's great. Now, in the lending business, it can be problematic if in fact it drives rates up a material amount. I say that driving up rates a material amount does put pressure on businesses that don't have the price elasticity. You know, where we begin to see certain strains from borrowers typically is when you have a very material rate shock. It's nothing that, I mean, we've been doing this since, you know, in the SBA space since 2003. It's nothing that we haven't seen before. It's stuff that we model in all of our models. Not overly concerned about inflation as being problematic for our overall business, which is why it's great to have all these diversified streams. Yep. Appreciate that. Actually, one more question, and it's just a housekeeping thing for Nick. He mentioned it. I think I just missed it. Could you just verify the realized losses on the SBA loans in the fourth quarter? Nick, can you rephrase that, please? It was $3.5 million for the fourth quarter. $3.5 million. Okay. Appreciate that. All right. That's all for me. Congratulations on a, you know, really active quarter and a really active 2021. Hopefully, we see more this year. Thank you very much. Thank you. The next question comes from Mickey Schleien from Ladenburg. Hey, Mickey. Good morning, everyone. Hey, Barry. How you doing? Okay. Thank you. Barry, most of my questions were already asked, but just a couple more. You mentioned that SBA 7(a) prices weakened in the fourth quarter as the government's fee waiver ended. Following that, how do you view pricing developing this year? And what do you expect for demand as interest rates rise? Yeah. The prices, Mickey, on the bonds have actually been not as good, you know, as, you know, quote, unquote, you know, 113 and change, but not too far from that. You know, without putting a number on it, the need and appetite for government full faith and credit government guaranteed floater in the current environment is desirous. Prices have held up pretty well. To be frank with you, I don't have a forecast or a number for a Q1, but we'll probably be there in about five weeks with the way things are going. I don't see major changes. You know, if you wanna do some modeling, you know, anywhere between 111 and maybe 112.5. I'm just giving you a very wide range. I don't have any further information relative to the mix of the portfolio. I wanted to emphasize, the change in the pricing was based upon the fact that there's 50 basis points less than coupon that we're selling. The flip side of it is the demand for the full faith and credit government guaranteed floater is pretty high, and that's what's keeping prices stellar. How about demand for the loans in terms of originations, Barry? In other words, when you look at your long history, you know, let's say interest rates climb. You know, they could climb 200 basis points in the relatively near future. How does that impact demand by your borrowers for debt? It's a great question, Mickey. It's still because of the fact that we are a 10- to 25-year amortized lender, we are a better alternative than a conventional bank loan. You know, obviously, we're higher rate than they are, but it's the stretching out of the payments that's immeasurably invaluable. Higher rate environments don't tend to dissuade the universe of opportunity. You could see that from our pipeline, which has been growing throughout very material significant rate increases over the last. It's not declining. We're closing, and the credits are good, and the economy is good. No, we do not see a problem with loan demand, I would say, on a Newtek specific basis. I understand. Thanks, Barry. Just to follow up on the credit quality questions, could you give us a sense of how your borrowers' revenues and margins trended in 2021? You know, do you expect those to be sustainable in 2022? That's a good one. I think that too early to tell. To date, there's been a lot of pricing elasticity. I guess that, you know, people are going into a restaurant with a higher bill, and they're paying it. So far, we see people, you know, you know, from a rent standpoint, being able to afford rent hikes, and other expenses. I do believe that we're still dealing with supply chain issues, that will wind up having some effect on business and business credit. I think if I was to tell you anything else, I don't think I'd be telling you what's truthful here. You've got an environment that is really volatile. It's changing rapidly. Businesses that are smart and nimble do well, which frankly, you know, we have 44 people in our servicing department. We are all over our clients right now with the Employee Retention Tax Credit thing, of which I would say a lot of our businesses don't know that they're eligible for. We work very hard, not just in giving people money, but giving them these other solutions that make their business better. That's why we've been able to lend money for 18 or 19 years in a space that typically people, they get in, they get their fingers blown off, and they get out. We've really put a mark in working with our client base to make them more successful, not just in giving them money, but in helping them grow and develop their business with the best solutions. I appreciate that. I understand. Thank you. Barry, my last question. Thinking about, you know, sort of secular trends, are you seeing opportunities developing among small and medium-sized businesses to, you know, service the alternative energy market? You know, I'm just thinking about companies that may go out to houses to service solar panels or, you know, wall chargers for electric cars, things of that nature. Can that displace, you know, historically, loans that you used to make to gas stations, for example? Yeah, it's a good question. Look, that is going to happen. Right now, you know, we typically do not. We're not a venture lender. I think it's important to note that. There is no question we've seen an unbelievable amount of entrepreneurship. We talk about charging stations, solar panels, CBD, cannabis. We're seeing a lot of economic changes going on, industry changes. Yeah, we think these are burgeoning markets. It's not typically what we have any interest in lending to. I understand. Maybe down the road. That's it for me this morning. Yes. Thanks for your time. Thank you, Mickey. Appreciate it. Thank you. Our next question comes from Matt Tjaden from Raymond James. Hey, all. Morning, appreciate you taking my questions. First one maybe for you, Nick. Apologies if I missed it during the prepared remarks. Can you give the breakdown of dividend income in the quarter? Then as a follow-up, maybe for you, Barry, kind of expectations for the dividend income line in 2022? Yeah. I'll take the latter, and I'll let Nick do the former. I'll do the latter first. The expectation for dividend income is we have declared a $0.65 dividend for Q1. We have forecasted a $0.65 dividend for Q2. You know, if you look at the momentum that we've got in the business with respect to 7(a) loans rolling over, you know, the projections of the portfolio companies, we think we're in pretty good shape. Now, we've been reluctant, and we did say this earlier in the call to forecast Q3, Q4. We don't know whether we'll be a bank. We don't know whether we'll be a BDC. But I do think, you know, the company has historically trended to be higher in earnings in the second half than the first. I also cautioned that we have a lot of volatility just looking at what's going on in the market today with rates, gas, stuff like that. We're, you know, a little conservative on that. What I will say is we don't think the bank transaction is a second quarter transaction. It may be a third quarter transaction. If it's a third quarter transaction, we probably would pay a dividend consistent with what we normally do as a BDC. Now, that's a guess. That might change. I might retract that. I, you know, knowing our customer base, our investor base, we wanna reward our investors with that. Going beyond that, I couldn't. I think you're gonna have to do your own projections. I appreciate the work that our four analysts have done because you guys do have adjusted NII projections for the calendar year, all four of you. After this call, hopefully maybe you'll look at them a little bit closer. Yeah, I keep an eye on that pretty well. Nick, well, can you answer Matt's questions on the dividends from last year? Sure. Yep. There was $6 million in dividends from NMS, $3.5 million from NBL, and $250,000 from NTS. Got it. Appreciate that. Barry, maybe as a follow-up to you on the bank holding company conversion timing, any sense you can give us as to when we might expect to see a proxy statement? I should have been prepared for that question actually. The answer is I can't really give you a timeframe. I think from our perspective, the most important thing that we can do here is make sure when that proxy goes out, that people are just really well informed with everything that we know. So that's kind of what we're studying right now. I'd prefer it to be sooner than later, but I think the deeper that we get into the transaction, we're in it pretty deep at this point. I can say that we have not encompassed any road bump at all that's caused us to say no. Now, I say that with all humility because until the regulators sign off on a final plan, you don't have a final plan. We're in discussions with them, and we've made certain adjustments to date and things of that nature. Nothing that's changed the company or the board's position that we like the deal that we did and are hopeful that shareholders will follow through with our belief that this makes sense. They'll have to do that evaluation based upon what's in the proxy, which is basically a vote on being a BDC or not being a BDC. I know I didn't answer your question, Matt, but hopefully I gave you a little bit of color that's useful. Yeah. Fair enough. Last one for me kind of continuing on that theme. Barry, maybe at a high level, you know, now that both of the baby bonds are fully callable, how are you thinking about, you know, a refi or a call of those heading into the conversion? I think that it makes most sense for us to get a little bit further along. I think that one way to think about it would be that if you speculate that the third quarter is likely, then in all likelihood, that would be less callable and more callable. I don't really wanna box myself in here and say that we won't call tomorrow or we will call tomorrow, but I think you know, as you try to analyze this and make your own guesses, you know, what are you gonna refinance into and refinance out of? I will say, if you look at the way that baby bond debt and bank holding company debt is evaluated by the rating agencies, they're actually not too dissimilar. I think that, as you try to figure out that, I think the, you know, the likelihood obviously of callability, with the bank deal being definitive at some point in time or not being definitive, will be the real determinant as to when those bonds go. Now, we did pay off $40 million of an issue that was callable because we had excess cash. We believe the coupon was high. We wanted to reduce our leverage. I think that's indicative of the fact that this company is confident of what its forecasted beliefs are going forward, if that's helpful at all. That's it for me, Barry. I appreciate the time this morning. Thank you for the questions. Very good questions. I should have been prepared for the other one, but anyway. Thank you, Matt. Thank you. At this moment, we show no further questions. I would like to turn the call back to Mr. Sloane for any other remarks. Great. I wanna thank everybody for attending the call today. I know this is a tough day. A lot of activity in the market. We had a great 2021, and we are very, very optimistic about 2022. I look forward to working with each and every one of you on whatever your needs or objectives are. Thank you very much for your time and attention today. Thank you, operator. Thank you. Ladies and gentlemen, this concludes today's conference. We thank you for participating. You may now disconnect.