Good morning, everyone. Thank you for joining us today to discuss Sterling Bancorp's Financial Results for the Fourth Quarter and Full Year ended December 31st, 2022. Joining us today from Sterling's management team are Tom O'Brien, Chairman, CEO, and President, and Karen Knott, Chief Financial Officer and Treasurer. Tom will discuss the fourth quarter results, and then we'll open the call to your questions. Before we begin, I'd like to remind you that this conference call contains forward-looking statements with respect to the future performance and financial condition of Sterling Bancorp that involve risks and uncertainties. These factors are discussed in the company's SEC filings, which are available on the company's website. The company disclaims any obligation to update any forward-looking statements made during the call. Additionally, management may refer to non-GAAP measures, which are intended to supplement but not substitute for the most directly comparable GAAP measures. The press release available on the website contains the financial and other quantitative information to be discussed today, as well as the reconciliation of the GAAP to non-GAAP measures. At this time, I'd like to turn the call over to Tom O'Brien. Tom? Good morning. Thanks, Joe. Welcome again to another quarterly call for Sterling. We're happy to have those of you on the call that could join us. The quarter, you know, not an awful lot of notes going on to spend a lot of time on. We had a small loss in the quarter that came out to zero per share. As I mentioned in the press release, a lot of the issues that have dogged the bank for the last two years continue to be present in a lot of our financial results. We'll kind of go through those highlights a little bit here and then take some questions. You know, as I said, the loss was $200,000 in the quarter. For the year, we made $4 million. You know, the margin at 3.09% in the quarter, obviously better than it was earlier in the year. I think higher rates have helped us on the liquidity return side and with the adjustable rate nature of most of the bank's loans. The subordinated debt at the holding company level is a depressant on the consolidated margin to the tune of probably a drag of 25 or so basis points. We can't do much to address the subordinated debt until we finish with the governmental investigation, we'll unfortunately just have to tolerate that as we go along. We did buy some loans during the quarter, not a huge amount, $31 million. Karen will kind of go through the interest expense breakdown, but, you know, you'll see we still carry a pretty significant expense relative to these investigations. You know, asset quality also continues to be pretty good. I should note too that, you know, we continue to have a low loss ratio on the legacy Advantage Loans, notwithstanding all of their other issues that have been the source of the investigations and the internal control issues that existed at the bank previously. You know, we've tried to keep the balance sheet, you know, fairly stable, maintain a high capital ratio just to protect the company and its shareholders as we deal with these uncertainties. I'm sure the big question on everybody's mind is going to be where we are with the Department of Justice. As I said in the quote there, we don't have a lot of visibility into it. We continue to cooperate. It would appear to us that the investigation focus at their end is heavily on individuals. I think with respect to the bank, we believe they have all the information they need. As I said, we continue to cooperate completely. I was hoping to have a little more to say at this point in time. I don't. I can't say that there's anything, you know, in the way of, you know, hints or direction or, you know, guidance that they might give us that would help, you know, help you understand where it's going. As I said, we have no visibility into that other than that, you know, we'll get an expression of appreciation for the cooperation and the information we continue to provide. We do think collectively that it's going to be resolved, or at least the beginnings of a resolution, sometime this quarter. It's again, it's very hard to predict, and they don't, they don't necessarily hold to my timeline by any stretch of the imagination. Certainly have a strong sense of urgency on pushing that forward and do everything I can to respond, you know, quickly and completely to any questions. As I said, we just, you know, make the case known that we need and would like resolution as quickly as possible. Hopefully we get it. I just can't predict at this point. You know, with that, the, you know, the bank itself, you know, we continue to, you know, just, I guess I'd say, you know, watch the time evaporate here. We're trying to find opportunities where we can to, you know, maintain the margin and control costs. It's, you know, it's obviously a challenge. You know, fortunately, you know, as you know from the last quarter call, we're done with the OCC issues and we've, you know, completed all that, signed the consent order and paid the fine. I would say, you know, in terms of all of the agencies that have taken an interest in the bank, we continue to provide, you know, transparency and cooperation wherever it's needed. That part you should have no concerns with respect to that. You know, I guess, you know, just going back to the DOJ issues too. Try to understand too, that this was a multi-year problem. You know, as the frauds were uncovered early in 2020 and continuing, it was a multi-year. It wasn't an incident. It wasn't, you know, a single person who misbehaved. It was, you know, much more substantial than that, as you, as you all know. there's just an awful lot of records to look at and understand and ask questions about. I'm gonna ask Karen to just go through a couple of highlights on the financial condition, and then I'll get back on. Karen, if you would. Sure. I guess, you know, I was just gonna talk a little bit about the non-interest expense for the quarter. We did see a reduction of 13%, even though we still continue to see elevated professional fees. That professional fee number, $5.9 million, you know, consists both of legal expenses and other professional fees to help us become compliant with all the stuff that's going on, you know. I guess, you know, if we look at that number and try to normalize it, you know, probably 2/3 of it is due to these investigations. You know, the other 1/3 is more normal stuff of being a public company and just general operations. Same thing in the salary and benefits line. You know, $8.9 million. You know, that's not a bad run rate for the bank, although again, we have a lot of people there for, you know, BSA work, other work that a bank of our size might not normally have. In terms of the allowance, we didn't have a big recapture this month. There wasn't a huge reduction in the loan book as it had been in prior quarters. As Tom noted, we did purchase a pool of high balance conforming or jumbo residential loans. In terms of CECL, which I'm sure is on everyone's mind, you know, we've worked through most of that process, and really now that we need these thoughts controls, you know, validated by our internal and external auditors, and then we'll be prepared to implement that and, you know, as required. Tom noted the non-performing assets. You know, they were down slightly quarter over quarter, you know, at $38.3 million. Just, you know, to remind everyone similar to prior quarters, you know, over half of that are loans that are paying. A lot of them are current even, we just wanna see, you know, six months of consistent payments before we go ahead and upgrade those and put them back on accrual status. The balance sheet was relatively stable, month over month or quarter over quarter, just a $3 million reduction. We were able to stabilize deposits, as you can see in the NIM, it came at a little bit of a price, as the deposit book increased. Tom? Okay. I'll probably just add a couple of comments here in terms of more general industry commentary. With the increase in rates and the flow of deposits, you know, I think we're back to a period where deposits and liquidity have a relatively high value where, you know. Not so long ago, in 2022, the industry was flush with deposits and, you know, higher rates we've seen, you know, more and more institutions experience price pressures. You know, as I noted in my quote in the press release, consumers had suppression in their interest rates earned with the ultra low rates for a couple of years. That obviously some pent-up demand for yield. You know, certainly several banks that I follow had significant increases in their cost of funds. I think we've held, you know, reasonably well, as I said that, you know, the subordinated debt is a real thorn in our side in terms of the cost structure there. It's something we have to deal with. I guess speaking of dealing with things, I think, you know, the benefits of the de-risking that we did during the course of 22 will continue to show its wisdom as we get into 23. You know, the pressure on commercial real estate and, you know, anything in the way of, you know, construction, income producing property type credit. We had, you know, a very significant exposure in... at the time I joined the bank in some, you know, what I would characterize as, as pretty high risk, credit. We tackled that pretty aggressively. For the last several quarters, in terms of the commercial book, there have been no delinquencies, no foreclosures. Really a very clean credit book there and, you know, and a handful of criticized loans, but nothing too serious there. I think we get out of those at really very attractive prices. Our credit department worked with several on the especially on the construction side, and got our exposure there down to much more manageable levels and much better properties than were there at the beginning. If you recall the, you know, the total bank criticized and classified portfolio not so long ago was over $200 million. I think, as I said, I feel when I initially arrived at the bank, I was very concerned from the credit perspective on the commercial exposure that we had. I think the improving market earlier in late 2021 and early 2022 lifted some boats and we took advantage of that and got out. The concerns I expressed back then are, I think pretty well satisfied at this point. We'll take some questions now and happy to hear what's on your mind. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw a question, please press star then two. At this time, we will pause just momentarily to assemble our roster. Our first question here is gonna come from Ben Gerlinger from Hovde Group. Please go ahead. Hey, good morning, everyone. Hi, Ben. Just had a quick question more so for Karen on the expense, kind of the breakdown. Professional fees, like you said, was about two-thirds was the ongoing investigation, and then there was some in the regular salaries for BSA. I was wondering if you could kind of clarify a little more. The professional fees seems like that will fall off rather precipitously once the DOJ is completed. Now that the BSA is also done, I was curious, can that wane down? And then... Go ahead. Yeah. I mean, I think, you know, for a bank of our size, right, we have a pretty hefty, BSA department. However, we still do have, you know, a large book of those, Advantage loans on our system. While I think eventually that will wane down, you know, it's gonna take some time for that to happen, right? As long as we still have, that book of business on our balance sheet. Can you quantify or are you not you don't want to, like, at the level? Does it say, like, how much is the BSA where it could potentially run off to get, like, a true core number? Yeah. I'd be hesitant to say at this time. I haven't prepared an answer for that. You know, I can tell you there's, you know, 40 or roughly people in our, you know, BSA department currently. It gives you a sense, you know, on a $2.5 billion bank, what that looks like. Sure. Yeah, no, it's quite a bit. Whoever wants to field this, Tom or Karen. When you think about just the liquidity today, I know, Tom, you referenced deposits of more value. I think this fourth quarter earnings really proved that. When you think about it, a lot of the banks in the industry have been struggling because they need to find or fund the loan growth. Whereas you guys are kind of shrinking a bit still. I was just kind of curious on your appetite for the CD and money market type, the expensive deposits relative to your you're still in shrink mode on the balance sheet. I was just kind of curious on are you kind of studying the market? Are you giving what the market takes you so you don't lose clients? Just your approach to the overall funding cost? Yeah, I can handle that, Ben. We're last, I think the last two quarters, I'd say we pretty much, you know, kept the balance sheet flat, and that's pretty much our goal here. We had to run off a large group of higher than market rate CDs that the bank had utilized historically, and, you know, to fund the Advantage Loan growth that the bank had. The goal right now is pretty much status quo and, you know, in and around the market. We're not chasing anything, but I would say pretty much in and around the market rates that are out there. The, you know, the challenge is that the, you know, the bank historically operated as an old line thrift and so didn't really have a demand deposit book. You know, obviously, you know, no corporate accounts or, you know, business DBAs, things like that. You know, the bank was pretty much a money market or CD deposit gatherer. We have, over the last, I'd say six months, you know, been developed, and then we started marketing a demand product. You know, on a relative basis, starting with zero, we've had some, you know, pretty good success with that. There's a long way to go. As I said, I do think we're at a period where liquidity certainly has more value. Wholesale funding is very expensive. I guess the other thing you've seen in the industry is pretty significant TCE ammunition from the higher rates on what were in some cases, you know, relatively long duration securities at lower rates. Those are the things that I've noticed. I don't think a huge issue here, but, you know, we've obviously experienced some of that. Our duration is a little over two years. Gotcha. That's good. Lastly, it was more of a clarification. You have $9 million still reserved for legal or the investigations. Odds are it's not going to be exactly nine because that's just not how life works. It's, it's assuming that it's under, it's a balance sheet adjustment or over or under, i.e., I'm asking if that won't flow through the income statement, correct? It won't close the bank? No, no. It won't flow, it won't flow through. Whether you over-reserved or under-reserved, the net change will not have a tax adjustment, is what I'm really getting at. No, there's no tax adjustment because fines and penalties are not deductible. That's just gross and net are the same. Got it. Okay. Whatever it comes to be. I mean, nine is the most I can get in there. That's why it's nine. I don't know more than that. Gotcha. Okay. I appreciate the call. I'll follow up later this afternoon if I have anything else. Thanks. Yeah, sure. Again, if you have a question, please press star then one. Our next question here will come from Ross Haberman with RLH Investments. Please go ahead. Morning, Tom. Tom, how are you? I am fine. I want to follow up with that last question about the reserve. How do you work your CECL, given you have this possible pending liability with the government to sort of make that CECL adjustment as of the first quarter? I guess the CECL looks at like historical defaults or delinquencies, and you have sort of this, who the hell knows what the number is going to end up being. How do you do it? How do you realistically make a CECL adjustment as of the first quarter? Well, CECL, when fully implemented, as you know, just a debit or credit to the. The equity ... equity accounts. I think it's probably safe to say we have no significant concerns with effect to the impact. I mean, obviously it has nothing to do with the reserve we have for the remaining reserve we have for penalties. The allowance that we have is, you know, we think appropriate and probably, you know, I think I can say plus or minus fairly insignificant amounts. I don't think we expect anything significant out of the CECL full implementation. Okay. Just a follow-up question about the margin. Every bank is sort of coming in and saying, "Hey, you know, deposits are ratcheting up much quicker than we ever expected." If we do see another 50 or 75 basis points over the next six to nine months, how do you see that affecting your margin and your spread, given how quickly everything else, all the deposits have jumped up, you know, in the last couple quarters? Yeah. Well, you know, it's funny because you probably watch a lot of the same banks that I do, but, you know, for all of us, obviously the increases were fast and furious. There was, you know, the typical lag and liability repricing, but, you know, the magnitude was greater. You know, a lot of, a lot of institutions felt it more than others. I honestly, I think, you know, in our case, Ross, we had been building liquidity as painful as it was in 2021 and 2022, for obviously a variety of reasons that are unique to Sterling. In any case, liquidity did build. We reduced credit risk. I think there's at least, you know, some dividend for us being proactive at this point in time. The, you know, another couple of increases, our liability costs will gallop along the way everybody else's do, I guess. We have a very heavily arm-weighted loan portfolio. You know, between primary and secondary liquidity on the balance sheet, it's. I don't know, Karen, you can correct me if I'm off here, but it's about $1.5 billion out of $2.5 billion. The Advantage Loan Portfolio, I think when I joined the bank, was about, oh God, I think a little over $2 billion. It's around $800 million now. That's, you know, at different speeds, but it continues to pay down. You know, the bulk of those have been originated as adjustables. We haven't. We have looked at two, Ross. I should also mention we've, you know, we've done some. We continue to do some analysis with respect to, you know, payment shocks. To date, we haven't seen any significant credit issues on the especially on the residential side with, you know, higher rates as the loans adjust. We haven't written an Advantage Loan since, I'm gonna say around the third quarter of 2019. They're, you know, they're all pretty well seasoned. Obviously the equity levels, even if the markets give back some are, you know, very, very significant so that, you know, they continue to, from a credit perspective, you know, behave the same way. You know, every one that pays off is one less we have to deal with. Long answer. Sorry. Okay. No, no, I appreciate that. just specifically, how are you dealing with I don't know if you've got a couple of large multi-million dollar depositors, when they come in, I don't know what you're paying them on a money market today, I don't know, 1.10%, 1.20%-ish. They come in and they say, "I can get 4%+ in markets or 4% something on a two-year. What are you gonna do for me? Yes. Are you adjusting those guys immediately, and to what, and to what level? Well, fortunately, we had several of those when I joined the bank. you know, I've, you know, viewed those as, I guess, you know, higher maintenance costs for us. Right. I mean, it's, in several cases we've nurtured those down to, you know, more modest levels. Okay. I don't even have. I can't tell you the largest that we have now, but, you know, they're all, you know, pretty manageable. There's no one that is would be noticeable to anybody just looking at margins were it to reprice. I mean, they're all pretty much what you'd expect in a California-based, you know, retail deposit gathering system. There were several before. Okay. I think that's about it. Okay, thank you very much. Oh, great. Let's see how things develop over the next months and quarters, I suppose. Okay. Hopefully months and quarters. That's great. Thank Thank you. Thank you. Bye now. Okay. To join the queue, press star then one if you have a question. With no remaining questions, this will conclude our question and answer session. I would like to turn the conference back over to Tom O'Brien for any closing remarks. Okay. Just quickly, obviously, happy 2023 to everybody, and thank you for joining us. As I mentioned earlier, I can assure you we spend, you know, significant time, energy, and resources to bring all of the issues with respect to the bank to a close as quickly as possible. We will continue to do that, and look forward to our first quarter 2023 earnings call in April. Have a good day. Thank you. The conference has now concluded. Thank you very much for attending today's presentation. You may now disconnect.