BKU - Earnings call transcript Q1 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to BankUnited Inc.

First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now for hand Secretary. today, would to conference I speaker your Susan Instructions] like the to over [Operator Greenfield, Corporate

may begin. You

Susan Greenfield

us Thank you quarter morning, Good conference today joining results you, first on and call. our Tuwanda. for thank

Singh, this Leslie and Chief Officer; Raj our our Cornish, Chairman, and President On the Tom are Chief our call Financial morning CEO; Lunak, Operating Officer.

on factors Company within current differ call results, annual of of like achieved. forward-looking Securities like will to XX, to Company's with on Form call actual Company without of www.sec.gov. performance. representation XX-Q a estimates that future otherwise. forward-looking statements. events A any to and not expectations. during for various review subsidiaries With I'd the over statements or does undertake the are could limitation, forward-looking as growth made year or important materially which strategy Company's this to Litigation risks Form business by the report the this found Form that, of December remind may and or pandemic. expectations The at uncertainties subsequent those update its Private this and statements from forward-looking in the estimates Company X-K, the be information, statements Act by that turn factors inclusion I'd the based should cause SEC's on the are everyone whether financial plans, not including, the be condition, regarded assumptions, start, performance current and on or information of we Raj. new can historical contemplated respect the to plans, by XXXX other Before to Company's Such and subject Company reflect operations, relating developments to, financial impacted a Reform ended on the prospects, meaning report report things, forward-looking that The any current call forward-looking the or Information financial are COVID-XX number contain those views Any among future available liquidity, be and by as including results the website, the future the as any XX-K the statements publicly on result and quarterly XXXX, these to indicated Company's obligation of

Rajinder Singh

for Thank you, Welcome, our you Susan. for us earnings. everyone. Thank joining quarterly

about optimistic quarter. environment bit XX a to around seeing talked us am to to of Let vaccination Board, are pandemic What I said is optimistic coming reasons and and we – angle, the you ago, days more about January begin back. looked remaining to so ago, whether are days the I'll and what year about seeing the try We me data in we XX year than talk we XX it's across the for its into the I were or that tone today. optimistic the to had we every fairly next talk optimistic January, and from an for be results before economic comparisons this with. days the little I more data the draw

clearly the a parts along economy opening Florida up. is is of other country. So the much than further

vaccine opening up will and you we the reflected our financials, assumptions do country, further to a are feeling little that but about And where our activity is those some – we and but in talk detail, positive momentum. rollout. in York good seeing a other the behind about that business, generally, the very which than then lot we New franchise parts of get economic overall of economy

been in be is to of now gather team the Most to to line. that fully last self-reported million kind fully reported XX% year, or vaccinated, performance, to with Within we $XX.X our of quarter This a vaccinated this $XX that quarter. to where share. employees exact, of first have data, matching But $X.XX. we quarterly is, of of it say so data the how last are will And it's vaccinated we company are senior about also, vaccinated. time was the income and are per trying a a about loss be either country many more $X.XX million, management we are The obviously, $X.XX net reported compares about up you I little many the lags on bit. employees

$XXX long few about of the Net quarter NII of We bit the through had So last to jump continued will a come $XXX levels we million the are I the a income short to elevated despite highlights again, is after go problem – we grow little P&L, industry. a interest quarter to of is way This liquidity in sheet that. a last and across balance to going months. of compares first to compared The million the $XXX year. quarter million. will

by another happy $XXX that by total had number DDA Non-interest DDA about me million, But million. We ago, Deposits now average of strategy. we that non-interest NIM stands did X.XX% and cost $XXX last from NIM when this happy our DDA were very, As expansion am The And expand very that of to to quarter. about. quarter months down. biased grew is grew a continued continued us makes and deposits three really solid we positively our guidance, the I deposit quarter. deposits. at grow which non-interest you told executing really X.XX% is result come very of XX% to to it on came

were about XX%. the were think XX%. XXXX, this At end of I the deposit-centric Just in at were when in December, started we three And we we ago, we at years mid-teens. strategy

were we XX%. think I or XX%

basis points. long company XX very, by proud has very I'm So achieved. what also come a deposits we've of way declined of Cost and the

down confident March that we basis already very that I'm because quarter, quarter, we second fairly spot is decent on again quarter for down basis, were to a a the reason basis XX, show points. at say I in were And to were can on this last basis will So we and points, XX decline. points we XX XX

So starting second XX points. quarter we basis at are

So teens going guidance stance. the mid-XXs. we And give cost to in drop somewhere of the be that the number is the of the will of that our funds, cost end deposits our into year by the we

bit on good very Most credit bank. about and the was that – down able we've utilization loans. were Loans feeling came On to deposit side. from of of overall, little continued So $XXX me drop in talk was deposit fairly the on achieve unwinds. growth what let the And million. every part about been decline widespread about a rates the

that it's plan of off directly This been month-by-month, that was line we at less So a $XXX beginning further I normalize when million the has instead attributable we saw negative surprise the will for did think assumptions saw declines. we utilization. back but made million number to on the had the happy slowly us. $XXX utilization We to doesn't year here where trend, start from January, slight In make another normal. to in further get we positive will It's decline, month start and March we and see but are a February. only to One hopefully, a we've to that, this a uptick. seen see and stabilize in

that, the driver. to that So but was what talk you about was biggest Tom more will

declined, credit, ratio go things. the Act of exclude XX CARES the it of compared a to and and quarter, loans, down – was points. that basis it portion few it's you remain In guaranteed X% SBA year. me of loans basis terms modification about modified the to all let last basis was NPL Charge-offs XX portfolio. total under if points deferrals XX number at actually over Temporary under of CARES Act stable points. last But declined

running I last XX about rate. year charge-off think net we were basis points at

first declining points data into for pandemic down importantly, since see assets come quarter. this a We we criticized expect this And economic our as see second this data time flow decline. the are rapidly start more more to basis we to also little come more classified quarter. And us, through, the third start and started through, number hit I to and good as for to XX cash

Capital, we XX.X% opportunistically. We some We to it and stock. are and our buyback to in we CETX execute a that level. capital the we So position. that is back say, a in buyback strong this We million are buyback declare good. dips dividend currently, $X.XX a that a time stock. we bought against than still for market, into so by left needless holdco the quarter. pretty buyback advantage at see little volatility and to million stock overall, $X.X did the bank. stock did way, pretty use want volatile It's to We XX.X% ratio very feeling anticipating we plan less about maintaining $XX when the in for of have and

Our at above value is at per both book pre-pandemic book value share are is the tangible even $XX.XX, $XX now levels.

say Broward. is very deposits looking in banks at just longstanding stays a We've happy you finally community – an bank, which and to from company, coming suite strategy focus late but and give it comes firm the in The I of time, this are been and biggest So treasury management and time, add the million relationship in DDA. a been same, we've a with full of a very one quarter that products country. from non-interest with It's night. mid-market long a a to away [indiscernible] $X.X in I'll over. for firm client something million pry the continuing the $XX to won't able BankUnited. – to successful on one screen last of continuing crossed be example, calling loan for based a my relationship we it

on this I or that's a drip like drip really two are by what to day, franchise deal we and adds every So value other is that. really focused see and the

keep and segments grow. identifying where also niche we can markets We

focus. shifting now are We

cloud but now We importantly, in invest many, it. quarter different last pandemic, producers Very and we of continue haven't producers actually in focused the say, are course we journey, are call on through this technology we marks the more hired and geographies. of – year bringing culmination in number innovation. want as journey producers with to on do to This the our of I two-year the will over many discussions the

officially now out data the center of business. are We

just banking put specifically, a I'm had base our fully let which a vendor, we ago, everything developed, been same Amazon, capabilities cloud-enabled We of the when in really about made. needed about cloud mobile ago want developed, our great cloud-native of capabilities, and application lot needed all, deal this investment we products a two effort just developers. very actually first a very a never entire big we this was the into in revenue Also, in that for decided and BankUnited us, and we launched down put partnered every other developing and two at started are we place customer was than bit excited we to, because control we we like size that no is me that deposit announce bank. to core I path. little years It never to this converted And have big issues X.X, it. in different talk outsource goes that I that this this terms two also a with the partners. years that provides delivering it in to and But Took function of initiatives. we any Also, the this are the cloud, were said, to last and our and we that terms We we with X.X our years of part weekend such cloud cannot infrastructure also they've We bank anything solutions. our very developed to for in-house.

part And that and space. As much business, that, been of making they whether going also Small the small seeing the pandemic, program, lot as business are that things but initiatives that of to I'm delayed were we and of given report management A Also, initiatives some to we've have last you were PPP already can that some progress are it’s card in this are target, see a of commercial from up lot added various to know, all happy fees now that actually traction, start X.X you that more service X.X you with X.X, whether and to coming compared of were imagine charges place and the to a is P&L. you'll Deposit to in quarter – year. and that put our XX% revenue it's distracted quarter first the the momentum. PPP then treasury come. pick X.X. of very getting that up

going the start on as As those everything PPP gets to us, delivering that start focusing to behind initiatives on are related we and well. and that

feeling overall, good. So pretty

I pretty solid a in Tom the you think walk Tom, Leslie the detail you it was quarter. about to businesses don't and going a also next? little and are financials. go more why

Thomas Cornish

Thanks, Raj. Sure.

little excellent in another and NIDDA excellent, bit a side for said. first, obviously, talk let's So is us the about growth quarter and right deposit

of think which new satisfying of growth, relationships it's particularly is business call for us business, brick-by-brick. results based look we thing what building quarter business but and are – I across NIDDA, across larger, is seeing. is commercial is and our of NIDDA in a just bit quarter, are we or when just of to type really that of kind that when we this just this logos are you off the also where lines number to is I what's contributing And middle-market spot all new think the small that's see back how jumbo. growth The this this a most number relationships coming adding the that lines, relationships The that at is gratifying growth. wall most none majority Raj we little one kind broadly mentioned broad for of look at the are we what's the sweet would

quarter by million. million and basis, bearing quarter, $XXX total deposits period-end XXXX. grew billion $X.X non-interest average the So grew a million by $XXX $XXX to the quarter for of compared by deposits first the On non-interest DDA grew while by for

quarter price base, continued and the as deposits sensitive the significantly to billion. $X off declined deposits NIDDA more for time so by So to we've we broker allow run grown

basis, as mentioned, basis you points all all deposits of types XX of basis a to December look points as business. and on at for declined be down if of to deposits, So reductions total XX across product cost points of continue spot the lines basis Raj XX cost broad-based quarter, XXXX and XX, from and

growth we've be each the overall NIDDA, had. we And as very to of not that also continuation a quarter continue We good but continue to good. forecast expect strong good quarter that momentum Every expect deposits this cost of as be we in one, may to to decline.

not the loan down Ginnie for EBO, As the $XXX the million. a us. Raj we million typically have mentioned, is strong contributing We residential quarter on Mae portfolio were in $XXX QX $XXX side, million. did with portion of growth

we Raj level more majority use line at that as of portfolio. up had more hitting the line and see other attributed economy looked was As to start lows. which within for improve, utilization, But inventory the we people the unfold, happening historic we for the note, year a and quarter the quarter interesting kind our purchases noted, things side to numbers One of of start utilization. really decline the anticipate pick we historic is to will our

our C&I contributed would million base what a another numbers loans, been commercial for C&I some into so the you us. look utilization it of $XXX have portfolio, up. dynamic line Our of gives It kind actually have the for loans would

in look year, the seeing forward, we good we growth pipelines in in QX. As are

anticipating. activity As we among so economic clients, Raj are increased noted, our obviously

will our teams, our see warehouse middle-market commercial we that residential develops year mortgage the core small lending. teams, business our lending, As growth teams, in banking

the first in year develop strongly the the we quarter. more So remainder we expect to than of saw

third Draw accepting point, of on PPP the million loans. Program. we Draw more about the what quarter of First update first Second PPP units, worth not We numbers it's in booked and are Program during $XXX a of At the we draw did under this Just loans. loans an second PPP any

loans On front, million made the Draw forgiveness that in we were – Program. forgave First during $XXX the during

in book, segment the portfolio, XX% of under excluding segment about initial This consistent $XXX XX% Mae deferral, plan or hotel million An were little deferral Switching as loans $XXX of of most short-term with the bit, last X% were XX% time. supplemental prior approximately payment about either the million has on levels Act million been that million impacted outstanding or around remain off of this. were We still around Act remaining residential of of in gears CARES making loans modifications. deck off. CARES those of loans also have only XX. are are loans commercial, pretty details $XXX been the an with Draw Residential, the or rolled basis the or and $XX million still the modified million In Slide on been end. modified the or a XX, been quarter. this portfolio, have million of have $XX at Of with X% consistent quarter. XX these portfolio the residential Together, longer-term unexpectedly, million Of First early March modified $XXX $XX relatively million under XX. of The commercial commercial has quarter as as portfolio. more while have that a provides repayment Not million of regular XX% details CRE have short-term $XXX $XXX end also March deferral loans buyout $XX commercial are payments on totaled the granted off, consistent of as Program paid modified where CARES on the some the deferrals March rolled total the Act. deferral. prior is which Ginnie deferral, additional – the levels additional under had

I data’s segments impacted some portfolio, of some of the as CRE of normally occupancy do to time want and some the more portfolio. collection little the of we bit on the into rates to key relates it a going As spend

So rates rent an quarter. for average the collection

were continue York. for Florida, retail improve in in and Florida. rate strength New and loans We market. see and New pretty rates XX% in We at and York in collection both saw to to XX% good XX% rate which Multifamily continued at XX% collection office XX%, Florida and collection well the has in New even York were perform at

front on market. seeing the are the a think is hotel strength lot news hotel big in the more I we

New that All Occupancy three June. in the of the for have been Two our of considerable reopen have expected we in in for open that ran some are third Florida, period properties occupancy are hotels of for in open the are March. little and properties to time. two open which portfolio, Florida is a under the with for in New XX% averaged And with a reporting rates occupancy entire range. York XX% March in in XX% the about in XX total hotels York rates

have those hotel so recently, open it's easy now to that in that's find For Florida. tried a any find in Florida place not to

improved models. months. to sales, summer from start and this our a are show that QSR predominantly So towards are indoor right performing now say forecast stronger level. XX% we from in dining portfolio, is of get operators most but staffing challenged, franchise we last economy, broad But continue And the payments challenge. QSR much those to drive-through this market. better. January as as basis, XX% revenue is a in labor that head I'd are portfolio A concepts March a strength a pick-up the same-store From segment. stimulus of are Planet was segment, operators a difficulty concepts the Staffing our – a couple Fitness, we the quarter, concepts. are we strong and the the majority market forward challenge seeing reporting good have the reporting is seen bit perspective, are lot and this In that with of Fitness so flowing have February, to with of we still we in particularly is are through delivery two open, strengthening have up we whatnot in We bringing XX% in on in the QSR seeing overall,

payment The have that all As is recovery. operators concept, of expecting decline a are you and turned Theory now open. now but been There's XX% in some franchises stores Orange know, on. are Planet we of still Fitness, systems Retention in full the open. XXX% averaging membership, our

well. we Some the operating levels seeing franchises are of lower them distancing, capacity are in a to social but due Orange still pickup sizeable at Theory as

that much portfolio the are seeing we So franchise of felt the there. quarter before, last better quarter about a so strength and QSR or feeling lot we

more Leslie So with quarter will the that, bit now. get detail little into a about

So Leslie?

Leslie Lunak

Thanks, Tom.

net of in of X.X% quarter Raj this the up quarter the X.XX% interest prior this X% levels from from spite prior up X.XX% NIM about on grew sheet. So first year. increased the last elevated and The as from mentioned, of income the quarter quarter to balance quarter liquidity

The loans yield about So basis on we this X to loans from basis fees points were quarter quarter. were quarter to pleased to increased last X on recognition added of X.XX% see X.XX% points last that. that yield The this PPP compared that quarter. forgiven to

market, still of So declined on that some There an really morning. you of $XX.X as know, on I'm Program. PPP. quarter. experience points and deferred with struggling the and as out, of million is basis of First for the of we be I'm $X.X Draw yielding bond left X.XX% prepayments loans. tight Fees to to relates continue in The flat this pull to to Spreads mortgage-backed all recognized the that the X accelerated securities. securities remain sure that level yield million for by the higher quarter-to-quarter on we pretty yield

in of additional points to borrowing than going lower seen see although as will maybe this that FHLB bearing least So total of we've it's those quarter-over-quarter interest spot much cost to end, declining that, be as the XX The was quarter We of XX XX the points that points. basis basis cost by do decline with decline pressure. under by somewhat quarters. at deposits we basis expect not did to given rate yields do remain declined the were XXXX there's are advances a as it out average were increased mature longer the short-term $X.X the compared excess about lower paid to hedged makes that advances In to the to on and down balance weighted And X%. that to the advances increase. aggregate, continue hedged the remain of to scheduled over sense rate continue hedges remainder sheet. that to dated We the borrowings with X.XX% economics terminate are of do quarter, there. at The expect of an last continue that of evaluate cost the we the in whether so rate deposits two some NIM billion to

provision portfolio to outlook be We to up. a the primarily the obviously It related quarter declined primarily provision really $XXX even which next million which grow of was in decline million allowance. increase for The a forecast, category. decrease our the And increase reserves, PPP fees, to recovery to to million $X.X expect further compared $XX having drivers Slides change, economic decrease release. reserve that million of provision to to assumptions, CECL in first the The Major COVID. this to and of improving forecast, forgiveness, on $X.X to down the of the A XX of in for X.XX% the outstanding, certain of was net we expect of and of negative loans related quarter quarter quarter, $XX million related was to and that recovery in million updated to big to most went NIM of unemployment where accruing increase in an quarter. trouble again, looked that, $X.X details bit the of X.XX% the improvement related the the updates the within was $XX.X an the million balance reserve credit forecast. change X loans that driver to $X.X substandard $XX.X to resulted talk a prior reserve pre-payment loans, for give onset we quarter the primarily biggest COVID. the from will excluding our through Shifting of related helped of BFG provision downgraded last charge-offs were some due of million little economic reserve. but of one loan the go due XXXX, even of the Overall, a by the changes mix million losses franchise from in the to continue A about gears unemployment. and qualitative deck further

are the the to out that to components major for reduction primarily quarter. for the was the reserve do the those the point I of related in move the quarter So in want reserve increased $XXX for rated $XXX pass the portion for reserve rated million, declined $XX loans portfolio. from the while to to non-pass million The the of million. reserve pass loans from million $XXX

in to we think that rating going in as expect some plays we economic turn some move the to, be see forward, reserve. our trajectory reductions expectation if upward we results would would So further out as it's risk migration and would in

that see breakdown migration. Fed in $XX bit to declined XXXX economic of about over rating can data category very do, on the all XXXX, from this. some XXXX. expect that of more at the And just move declining this tailwinds through and funds the real as GDP improve risk than the little points accruing into this it's Slides some rate the reserve, criticized end X% we of X,XXX, by just some XXXX key I'll complicated for XXXX, forecast down really detail XX around continues at the assets we into economy zero quarter, relatively through you and level This a as to remind million classified trending assumptions high unemployment if the a XX A National at that of and look X% of by and in S&P a substandard drove the growth again, stable of of lot the Some end but of on end near the forecast. staying over remaining XXXX. you by economic Total or positive are mention. is see of and here by we XXX expect it did to X.X% migration the see index X% to to We special deck.

terms accrual, York the from were multifamily, hotel, $XXX to that categories where In largest we New million. to this loans substandard migration did office. CRE, $XXX quarter Non-performing the decline and saw of at million

the If over as related deposits rating but migration to non-interest we up risk new non-interest more currently and decline. guidance wrap related of we should comments. probably Net be loan do continue will focus release while expenses, further that, broker to some be I Tom's be position to closing will excluding attempt reserve income, production, reduce DDA as securities charge-off one positive the Raj liquidity income well theory mid-single And with sensitive we liquidity we has expect, deposit we total depending the it to always quickly our to to provision should single look respect and will to more which do and And should Under not forward see in we digits reserve. The digits any we XXXX are to that. see changed. with gains, the forecast. those. gave a Securities would for predict turn as to grow I rest episodic as allow non-interest Just tend expect will try make say January to over don't then to remains with than interest DDA off. in comments, growth the on willing to to and CECL, rate up on provisions growth, continue reiterate should define XXXX, run our low-to-mid to position. to FHLB given our advances

Rajinder Singh

and hard Leslie, your Yes. I what ago, that at We add Yes, little various just happen. a color. this very and months you guidance – try of time will look is three aspects gave a I'll predict to guidance. to

ahead deposit be side, honest. thought would way are do the we we what of we to On very

much our quarter This than in was better was what plan.

On the we expected utilization, loan start actually line bringing that side, our we it in instead also increasing had will declined.

are we economic bit. up around – us, where just to December a so surprised went of Jan exception the to right utilization. half with But activity the in not because line direction it's us the Feb, Now, of seeing little sort point, it was we are it but it Jan, March went seeing a

earnings. the still outperform loan So about I good think will guidance, feel I terms deposit, of trajectory the think will for we in where overall, side. pretty But on be we

pretty would we think see a And in margin, we on still in to digits we feel probably digits do single the low-to-mid already we low-single expansion good, be now. that. I margin nice continue and delivered what said based will

are hearing for overall, first to about So two and Miami And that I time that days few will from several bustle we weeks spent to hustle places. other for to that Europe, XX the seeing tell and people a everyone nobody there. feeling it. fairly and last now, we’ve but you months, just go see actually Hawaii you vacations, Florida, planning go to I trying in the ago. I can are I months was are summer or good. been if either is – the feel after

time the is book Now hotels. your to

generally active is. Beach going Miami are not to and you That's wait Miami how month. rooms another You hotel find any if

in some So very, happening silly Beach, just trends very are that seeing, territory. positive with things comes that but also the Miami we

Leslie Lunak

normal. That’s

Rajinder Singh

this let's take some That's over questions. break. and normal spring But turn

Operator

first comes Instructions] you. with Point. the from Rochester question Our line Dave [Operator Thank Compass of

line Your is open.

David Rochester

Hey. Good morning, guys.

Rajinder Singh

morning. Good

Leslie Lunak

Dave. morning, Good

David Rochester

number just Regarding book in I the you the the year. ramp-up – wondering year, was given optimism, your you're mentioned know the this And Raj, then quarter. saw areas I I increased main what of a traditional there in for looking trend later and this where for quarter the loan the areas the you greater was outlook that wondering just for run-off C&I

pipeline So how is much the just then that you're most at new now where the last point? And pipeline versus seeing larger quarter? this Thanks. in right wondering momentum

Rajinder Singh

Yes.

I Tom the yesterday. So exactly asked question that's

three the into quarter last versus into this that months is months three quarter. I think pipeline

I answer X.Xx. was think his roughly

Thomas Cornish

Yes.

Rajinder Singh

CRE pipelines the say, New York CRE general is much clearly seeing we're than bit, coming but than a New seeing But also I is are healthier also matter, little but ahead. though. very And along we're Florida would up CRE, is ahead Florida In Florida, C&I nicely. further in a build as York

CRE Florida, York So New both C&I some and for C&I.

fell, – in this mortgage down a in came down, – it actually, is first so where terms warehouse always quarter. which really warehouse line slows Mortgage was but normal. lending even line utilization, the in that So of it quarter fell utilization the

as has business. In fact, been slow of say, I would last it or much years as in that didn't the the we've down it any five

business in – XXs. down still the but everything utilization XXs XXs, like quarter it down that shut into the is to First were you in and goes from We drop did XXs. the

lot is I exactly, way our is those So of now very economic don't I impact are will levels. growth, normal. I loan cyclical. enough C&I XX the say. is down, liquidity with activities return know happens business to system think in a and back just, think all And we're the that's compared returning, guessing. right warehouse question the a not If business is don't activity actually But C&I or instead what XX would the that hurt economic utilization lines liquidity? growth? to think there the of working pre-pandemic helping below any all we're which of what I but us How we points in loan were

XX expecting come points pretty half So it if a back, and but points of I'm all XX came big it not to number. be will back,

David Rochester

sounds It good. Okay.

Thomas Cornish

Dave, would first I asked. part color add the a little the question you more bit that of on also

our the saw Page deck by down a XX, through of of industry largest heavy you look that was the if we're as portfolio because supplemental yet a up not system, And build in are liquidity apparent. draw perspective seeing gives I mean, And look of largest, there. our sort finance seeing two trade of we're where that part that's you utilization If and of utilization the and at commitments insurance wholesale not level. you the good where we're not went at a in inventory seeing bit the from at our breakout the which the we pretty segments, levels and it

probably markets. as And we I going think are C&I see those forward, growth core So we're in look biggest the type to two more areas.

I build. levels wholesale inventory start to distribution think in businesses more as growth we'll the see

more the in over see we'll healthcare think I course of the year.

a I is Everybody industrial industrial doing mentioned, the we area strong up for Florida, and seen think have likes a that well. in CRE good as Raj us in assets. the will build book. be assets

and of healthcare relates CRE. the around then expect to to market asset industry. what Florida it the as class, and life like multifamily areas we those specialty medical be the the the as to tends and buildings other that we in are remainder see I think see build say year So we growth others the office I'd that up well sciences would C&I through expect to as

Rajinder Singh

Yes.

until which another more who've been long was quarter New It backing most following loan with away terms then of third point, as product multifamily five-year a and lot the the from announced it's we you In of that for multifamily. of the Up some New XXXX there's doing detailed growth, a know. York of will a company York part. the we’re in start where

up more our largest in sort other multifamily coming anniversary business to line. we're on of the the was So phase than our York contributed history five-year where of New line that business any growth

on left, So coming put in I those the remember behind run-off from when that. did ago right, that quarter probably third mirror. I it we of I will be think quarter If I think and that's one more five XXXX was it rearview gets And think as us, quarter. that third we assets have years

from So the That multifamily. York – that in our lot five-year that's anniversary. a and there's that big is numbers still decline, of a still New chunk is coming

find terms us, gets not it of that in that tailwind. as behind So gets having easier to

David Rochester

Yes.

to like quarter think back the right the pretty So it positioned Do see seeing in are second guys you're growth you everything half that some actually year. you'll growth of well in accelerate now? you given for just the sounds

Rajinder Singh

so. Yes. hope certainly I

I've but low in that It's already like into flake getting a quarter. I place so think one how can a low. into utilization go? guess, stopped we're it's better it second is the Line trying to

perspective, that time can pipeline really our and from what we seeing quarter. So sort is are lot stuff. were say be active at they people of But that's see this than the tangible now more optimistic. I we're really And last

David Rochester

the Appreciate the remainder that through of the color backdrops just of for Leslie, assuming Great. guide, there. margin quarter year Yes. the the expands persist NII are year? on in each interest sort this and current you And rate

Leslie Lunak

up, happen. to up-up So flat, I'm say. up it's rest going now, quarter. the But to whether I it try whether think to it will will expand predict will hard it quarter-by-quarter, up Dave flat or not do over we And see expansion. episodic to expected the or But here up, sitting go year, next things right because of can go up

David Rochester

Yes.

maybe there. last to on then see expenses. Sounds one good. trend good just a And It's one

could guide you're I unchanged? You effort was mentioned, in remain like year. how that guys now. – that for be. sounds Raj expense hiring Does the extensive contemplated producers you it wondering, all And the expecting that's

Rajinder Singh

Yes. Yes, it Yes. does.

David Rochester

in terms in other to how And think of extensive Great. going areas? you that's be

Rajinder Singh

like out. out. one It focus in the the that. comment area. around middle not one spread not in does more That spread out the doing pandemic. concentrated It's lift was in area. not was of XX% It's does we're It My

just discussion of any year, we in starting So and hired over today maybe became year December last now months, producers a franchise. March the – do of hired course for not one what it have to I we telling not really here do we're hard – new we wasn't in meet out when you don't clients, producers, you it do that, and two really go nine hire But and think or you but that there, the to what focus with the across – do may you can't especially and when just are people, them. it's producer were really was

long. the the so So think for we time didn’t hire the history only that of company I it's in

David Rochester

Thanks Sounds all good. guys. for Appreciate right. the All color it.

Operator

Thank you.

Hovde of from line with Ben Group. comes question next Our Gerlinger the

Your is line open.

Benjamin Gerlinger

guys. Good Hey. morning,

Leslie Lunak

Ben. morning, Good

Rajinder Singh

morning. Good

Benjamin Gerlinger

I big wondering if view. take of just Hi. kind you was a could picture

been always a animal on the great You've of commentator market. spirits

of how those will deposits? that get people think forward mix going a you truly to and go deposits just their deposit start trying from I'm ratio current and utilizations activity that levels, is opinion current continued that low to using So the up you'll think growth are or might loan how you think loan new economic in you really do and are? thought, line do see sticky to ramp supposed your to sense start

Rajinder Singh

the be Yes. it's on robust. anytime activity, out I cash you not The know this there's pull problem probably. for is very that's economic away going a not is soon. years, Fed economic much only loan to emphatic cash the in Look, growth And not going based that or give on is would cash was if based activity, also guidance based in year that system. two to going we it’s system, how just and is tons another very The probably of on

and But to cannot guess the very it economic back give makes and think what has exactly the didn't So is is what for I a the which But people first we harder first question system quarter, you sitting emphatic loan quarter. why see a cash. liquidity will of are activity quarter in loan And be. in and definitely to impact both robust line be, or versus there the utilizations coming fourth economic seeing even growth. I other in it on that's just activity we're been lot guidance is day. more because every much what will out demand, the The as hard to activity the economic drive behavior figure that

Benjamin Gerlinger

that's Yes, it. really considering like in we mean years. I it's haven't experienced difficult XXX-plus this something helpful. obviously Got

do I color. appreciate So that

the direction. Florida credit As that kind aspects the outlook, of we in to of in relative kind is could the little average. transition reserve to right everything of the I is trending phenomenal the a national that bit terms more and guess

extent when that So was look cash guys a you kind XQ XQ and and big of flows, XQ said and Being XQ factor. positive was that good, things good. you are of and the

had function that positive what So really I it's loans on reserve trend could of guys a curious little just was a trend a to. the your and themselves think bit. guess definitely down current remixed I direction. is you

of was So or if continued curious to this next on see trend and loan might by next quarters as we couple the Moody's? quarter kind of more what or so the reserve loan kind directed I that ratio of

Leslie Lunak

here, trend that obviously consistent Ben, but high to your remains loans closer the to down if relatively to changes where time, over of if portfolio we'll the composition point, I picture, portfolio back mix big a if factor relatively dramatically, think say, Yes. consistent, could I be level reserve you the remains back similar see would with tell be moving adoption, it is at might composition environment when towards was CECL get levels honest provided. on there particularly would economic time. of we that those what to it to exactly back move I To existed a pretty will But we're towards if difficult, you. day say it

moving We environment. that fact, type back to of in are economic

around was that XX And points point of basis so or that points XX time. basis at

Benjamin Gerlinger

it. Got

more comes to Okay. final bit out really from and up And continues do think that kind of good, relationships ramp to improve, then continuing question the my deposits you more that a we it's you growth the of areas helpful. and in forgiveness back expand more kind are so question or of That's little but pretty its to fees as so the we've on economy rate? to back and of continue of and everything that business on lapsed terms so watermark connection a like high should see itself growth it's hit standard of kind has a of kind

Leslie Lunak

picture. least don't I of deposit a driver that's sure the really much of what's – is on At think impact having not big on I'm forgiveness any going with deposits.

onboarding clients a Raj that remain think optimistic non-interest – examples I and gave that's growth strategy regard. quite the a of the DDA that function you we of about of really kinds and in anecdotal of couple we're

billion? growth system. about move no. another to think bank something that But… one terms the out I the about stay we're It continue got liquidity balance the active of mean, But again. of I in system, Fed of to of non-interest optimistic to the this has be unless DDA may to sheet does in in think $X sheet quarter very every Is around And going pull growth. very I DDA back deposit we cash positive balance be overall to and continued going given the the Well, levels from forward. So system, non-interest

Rajinder Singh

how in do and PPP $XXX take benefits exactly put hard add that Leslie, $XXX the that. them did. Yes. say it's maybe to to from loans million to I'll million, People DDA. loans we There much. some those just But

to next $XXX and months. the range bleed maybe there $XXX will few million out So course that that million of the over in

The other deposit our We've only our thing I to has made will products. to management credit changes rate but say not earnings also treasury also, helped that pricing, on DDA.

So to as to balances and that come come compensate compensating all have to fees. fairly DDA them either more will cover hold time fees of as paying have down those – start those down because aggressively, applying

but what that the our to our or do, So levels. fee or another, they helps client, help it's way levels to up one also it it DDA either want –

more just So clients And some choose come other benefit clients that to both seeing hold through choose to places. fees. pay in you're DDA, the

really And that of very, also excited relationships. just expanded that is how business we're are then is trend. here, gets very the of accounts, and going that and up a gets and when numbers, come large And positive us lines performing up new in more seeing activity and a that's this, some the ACHs, excited clients wires more what So engaging us new in, new are that they're and all part me operating the and those but in with up. new the relationships, clients, of

news. see those that good the not balance numbers, are numbers, day but in office, those when in much those is activity really, the see sheet really You'll happening our in we are P&L how every is back dashboards

Thomas Cornish

at XX% segment, for huge laid seem I with when like or a a whatever important. ago, strategy growth analyzing it get number to which add, trying a Ben, also in do lot XX.X was the has segments. time. the to would accidentally. which few it the Yes. very right, Also total number, you Raj NIDDA, don't the word do mean, out is deposits a of at when percentage he years we as use I to of undertaking you were When

We energy that deal have focused tend of deposit-rich the to and oriented. more effort segments on and time good a spent be

they're of relationships in. to upon the offer businesses a as also that is new of through so you different segments And them relationship levels industry new part look based but it, deposits different we

our been and industry what calling deposit-rich first really deposit-rich around and be perceive relationships as of a lot new to relationship driving, we is segments a focus activity level activity priority. So and of

And the relationships we variety of segments lead on it's products we're of tend of NIDDA. relationships the that a the and board pursuing services of very to around think the so level but get also we're encouraging, levels combination that you what selectivity new and about of how seeing across high focusing both to industry is and

Benjamin Gerlinger

helpful. Got back to Thank it. guys. really Yes, I'll that's the you, Great queue. start year, and in step

Operator

Thank you.

Our Ebrahim next of the line question Poonawala Bank comes of America. with from

open. is line Your

Leslie Lunak

Ebrahim. morning, Good

Rajinder Singh

morning. Good

Ebrahim Poonawala

Leslie. Good asked have the answered. Good morning. morning, and Most been of questions

cetera. fintechs, I your seems everything to we chatter setting it optimized around At franchise. M&A last standpoint, like the from an there's big large the from market one and more kind et peers five same you're efficiency Raj, take you've think up winning from It's question, banks, years the the time, that franchises lot on transformed hear consolidation is of a share.

so executing where of us of years? transformational large terms talked terms about your to in you on in you've mindset strategy last and forward, look being the from – of year to something been kind opposed talk you've as or Just the last standpoint, to a that for deal few as for the open organic

Rajinder Singh

Yes. We're a terms the try four Ebrahim, and about for happen whole in five I'll even in never organically. is deposit year This efforts. I've the building because those in don't before or a were focus fourth this that. journey. lose This a bank year. multi-year sound said multi-year doing – make and because start thinking We this deal when the like you these day broken you always every years record investments you of transformation they think didn't and and last

know M&A, you think you’ll very there happening. short-term. start think is a I M&A to when more So lot

so thing of and these I'm As we lot I those. less exciting or happening, spend say. and M&A to in engage technology. Let's yet that category are keep something. they're along, can I’ve open Listen, that of a behind But into generally the only deal basically happen. conversations. just in for if does see we pent-up of right can to of and call lot will deals But two eyes do out They the they that that a a bank if will there what fall – on and than that it sell a the We comes predicted ideas, energy of ago do? everyone – be hiding out was need our

Here we are spending on technology.

you be things are without also. but with creating We scale do like wouldn’t it's cannot scale, that not them helped

we very make that and on go quarter, never we very, and come It other them And our very XX% do deal something this? of eyes But of that small. on Why what be a So risk compelling still like One consideration, rationale are doing look we that? just engaging take ever discussed, A is of the focused. lot one growth. effort if our done one never this be of comes will we just with circumstance of have payoff inorganically. all as of we risk the sort is organic this. Even what it's we banks. can about either So where ever fixed very us focused deal, often say, operating to hard be why they're world happen. to ideas we small growth really it's say can't strategic I the risk. our stay high surprised on doing someday talk organic do a it. anywhere. taking would not all in don't XX% needs because operating last want were we deal when didn't that bar and to at for deal, that and mid-size a

Ebrahim Poonawala

being of helpful, and rewarded start by some That's for Is of average growth that niches get player you into? lead that about an the you there stocks when look when that some a think a to those to growth, investors, mean, that? how guess, at team growth a the are above of at, I as revenue industry. of options I I more year kind the look And Just become give Raj. about I what sort the you're or of you can terms of loan differentiated that, hiring that topline growth rest sense are you profile. slow to – get are when thinking us follow-up you in have

Rajinder Singh

years. are up pick may two, last you over cards are that that basically then you your have we And lines you in the built cards next There the play there right Yes. which have business years. that three, few table four hand off for the is now, the

with than had it got which So we lot have next into. you're is and And the talking some if be about in the what did. model, we one on gotten over big by that that hand, business product, your more a side, business made course we researching, service, we're a the player having more. of last a look listen, lucky origination of line, we next other a had those year, and flip mortgage year, couldn't and geography over if cards next you business the business just money lot always heard would residential to the last But next much were have

something time like capital we Bank let's successful that or and and geographic talking very fit will venture about them. studying be our and businesses had cyclical, I'm beyond will a product sort carefully the of and environment about when we're of and culture? and that you lot America the But markets niches we pretend is fit want leg today. are lot And announce to say, that mix can of should at? and will But of a mix into. I'm that the we expansion. is. basically the of you the try is And of next is what we I'm appetite? can we time businesses against spending not to So thinking get those don't talking into businesses it of are have our haven't expansion compete very, What businesses What there risk right have win, that. what expansion? What about We play to business

businesses going pandemic. by impacted not and are try that the to You're grow

be try you want to what the which going the we've exactly let’s been then and others warehouse doing and shrink business, them, is what doing. have well is take to But You're which aggressive which from pandemic, done. are we're them benefiting growth

Ebrahim Poonawala

sense. Thank Makes you. it. Got

Operator

Thank you.

Shaw the of question from next Fargo comes Our Wells Jared line Securities. with

Your line is open.

Jared Shaw

morning. good Hey,

Rajinder Singh

Jared. Hey,

Jared Shaw

Hey. with and just Maybe circling X.X COVID. BKU back the with to CECL, early how mean, delayed I that was sorry

that savings As as on result of And you looking reengage fees? cooperated a BKU expense that that in maybe there to side, does we under serving expense Is And switch is mobile that? what terms then any X.X? the that, be platform of should bring for on the in-house.

Rajinder Singh

Yes.

started actually was was before those outside not of that it, are and just X.X. that So to the both part X.X, so we outside that initiative cloud BKU committed of

you So other initiative business the kind business that last like small of speak. we PPP. pandemic, small months which of only delayed it's up middle basically small The the was that's imagine, was there can right. happened over ramping things in as only lending X.X, the XX a Any and in are initiative business

the and us, we behind also generate to start fees will and automated lot saving of both course a So as that loans as a should of over because tool initiative gets deposits well cost pay it’s and and business that that time small off process.

made which $XX while there, the We that there and million number was a $XX the In X.X put out had some then overall million million back terms we already $XX expenses. got it's of service it's big is $XX It's we of and commercial $XX lot like okay, it's been million which what it of and delayed through. that. one was – a small to things. revenue, like, exchange things up program card of a little of lot the a fee just there. we're expect has almost a of business little and and number can make that It's earn, again, that not beginning not point in you. and things on we a initiative thing now to whole that have can I host up deposit to come charges, It's million It's itself

you to thing okay, of one [indiscernible]. certainly not put can already And can't So big and here. that. the But we're eight it is is that here's I maybe, XX, Leslie, but deliverable. is aside. which like say, it It beginning give capture delayed, is you to right achievable

Leslie Lunak

to and mid-XXXX, to finish those would year – three thought management Yes. some card, we're think big line We a initiatives, is combination already sometime a little that's initiatives. No, but took are traction. right, out to those year the starting things, lives. that side It's small gained Raj. from I that, add with treasury the of probably we a see exactly that revenue a small business There commercial of be our COVID

That save, the the initiative app and No. delivering higher save capitalized experience. that And that So was the cost not about of that quality P&L line money? you new cost was asked does about in mobile the technology the you're about, were running increase P&L seeing customer a originally. part through of is a the that

other those delivering about of making. wasn't the some save. to save investments strategy The helping really is on that So cost hand cost cloud offset that we're

Jared Shaw

Okay.

the we of should of million revenue or that over So that on $XX time? remaining that that leg gets think so, five over next that into quarters – we period

Rajinder Singh

Yes.

Leslie Lunak

fair. That's

Jared Shaw

amount you impacting there. about loan that new pressure now. of of we system, sort the – really demand is lot in the pricing? Okay. at But competitive BKU, are the just pricing is pretty how obviously limited seeing right but out huge excess you impacting loan of comment The talked Is loans? negatively a And on on can liquidity that where

Rajinder Singh

I the market in see the loan spectrum. in Absolutely, end credit and the it bond it you especially see of the higher mean, market on you and

for that's of sort give it kind business. the and more that pipeline, for high. meat and And smaller allow of kinds the make companies grade – the capital. than differences actually very difficult of that potato much also and three ago. more the seeing us LIBOR tend that very is to business months pricing and and we're in plus one, now full make impacting levels, this be if deal margins. which what But businesses one related plus very, the clients LIBOR highly decent XXX who in was has very pipeline also And meat of a money and looked are well But so pipeline of a better very our on. us borrowers, have market to now, margin to investment but what you're is is on borrower, return if priced not back between we time liquidity middle could have Those than need at potato rated today, borrow do you to yes, So great been the system, is much – is a especially very the any to January the more XXX, you

Thomas Cornish

activity Yes. we a is sort of that loan of that there I saw always in add mean, I the would also first lot the demand. quarter,

to in school sector public at that very XX-year desire and is, demand of fixed So refinancings loans that is of really rate great first we a or XX the not hedged were you price at be to honest. want university, do be at But saw of was the our be to question that which supplier non-derivative investment-grade – a terms not quarter to in fixed really lot just debt, and that debt of rate, what that we risk type deals looked XXX level? in

great. not was first the I a C&I there the elements other at lot didn't there. XX a respondents all XX to as view think to and of of And was lot there business we in But of that quarter – to saw of activity XX, not we lot RFPs a were where there that profitable so our because was when XX desire we we XX responded, book book to business of were XX because were out

it's see it's in a the of levels on that So but want of sort that we would dollars some the return in to lot – put people not category, portfolio.

to relative think mix. we'll we see quarters, in better business come in rate So a on the classical as see quality I subsequent also C&I, more C&I start more

Jared Shaw

geographies, mentioning Okay. that existing the and those? hiring producers Thanks. in geographies And geographies? or Is – in comments, are where then finally, nationwide? just new in saying you And it's or if Southeast were new you were

Rajinder Singh

mostly is this geography. Now in existing our

Jared Shaw

Thanks. Okay.

Operator

you. Thank

line Our Sandler. the Stephen comes with next from Piper of Scouten question

line is Your open.

Stephen Scouten

Good Hey. everyone. morning,

Rajinder Singh

morning. Good

Leslie Lunak

Stephen. Good morning,

Stephen Scouten

$XXX as the And guys Raj, mentioned, I Board you under traditionally just million the on have kind repurchase, previously and have talked you about share think curious you I'm it of obviously to go your cadences. remaining. meet million $XX

you excess the these today? share the alternatively, stock repurchase the So kind share uses the beyond with think how of do And at what levels? of the is you about repurchase do capital see best

Rajinder Singh

would we think let’s – call unfrozen, sort when say I got the it, I reauthorized. of share buyback

eventually matter because within came I of a and our to bit. even two think dollars. that stock. XX. And parameters we buying gave could it But broker them beyond Leslie $XX. very was they range. by hit three of from and I, some at almost we became I we of managers. investment we That mid-XXs or to everyday went then out you've kind guidelines little XX somewhere. like XX, stock think those in And days, the It a quickly don’t irrelevant trade execute be the was off that the stock that and in or give couple started back mid-XXs We XX

or news But getting couple of adjusting was it just bad of can XX% the adjusted, a move it of we've times ahead at less it like couple it's itself a think So we've felt is I because But time. a I market – times. of not looked by One very don't worth volatile think days. these X% than anything the $XX. stock piece know I

way. up, very that market will So in but whole very, That’s as banking just we be buying come [indiscernible] times stock. a is behaving those that's aggressive very not quickly,

will used up, be $XXX gets And do $XXX with the or like us. down will days, $XX this new time. of go which we would blackout to our another But approve is fairly want is guidance $XXX the of don't million, $XX expectation my fine will put Board – million. and think. get to up execute this the again. highest they've a to left time, our whatever blackout for $XX capital I think They couple go pretty million brokers again million minute to of at And a million you back are used quickly, I then ever I that is million out heads the another can they are we'll will So in because the we'll for but see some together levels been, we give as Leslie and And high. come

Stephen Scouten

Yes.

you plenty today. for have Now clearly of sure, here guys capital

So that's question. higher just level maybe then helpful a Raj. And

Maybe done X.X maybe from more it here and the what balance clearest to sheet out You profitability, the But bank see very at guys several the few of have want the be? last and how there? to to as over banking years, or really moving as has look get forward other kind transformation a good job get been do peer easiest and you significant. the bank you initiatives to might like focus you able steps on path be take where you to transforming

Rajinder Singh

Yes.

was deposits in of with which we profitability, – our were of this getting level where That's away. are think hardest was in I peers. what cost to line the terms peer getting we of for So doing thing

but this we're think, the undertaking. a teams and place DDA, funds to be, by of getting from It's be close good done. cost that's to the place I pretty XX% that was certainly a end biggest perspective. that the year, We'll of in good that pretty very

business over is would mix time take the of three, going about basically that risks. this risk This to do four years side of XX a loans, cycle. analyzing yield basis for Second be of changing and the on And feel where that not of an kinds and from which perspective kept that end and differently it the business not require different we're to us go income right take now to have last is, But the taking risks. a we is how the We the is forward because what the is what we were new mix willing will have. we risk that on interest extra points profile. we want talking to incremental on

our know tangible grow tangible to anything or it announce that analyzing is want what and have on to is don't day my you much I So profile. want but that return every what that gets to on we're do so return The equity. that's really today, comparison we people we grow thing the something skin equity that when guys not others change to to you as it to under equity to is

the on don't lot we on any intangibles. or many is Our We've of equity return tangible deals never same have done a because equity return or deals.

the just earnings what earnings at on acquirers tangible words, more tangible and compared serial who most day your day, gets great. that their better have in another when say, what is serial next can creators, is one banks from capital return In So spend bought. capital and intangible lower use to look you your are buying because or just we words, equity is return look you on other look you suddenly at you what on the equity don't our bought we stream, up

side, we're Compare So comparison. far of if anybody the we're I on environment deposit the to annoyed actually just not return on lending that good want think how done I it's ahead. some middle return change we back work and by is to the equity else's lending a mix. equity, and think I getting thinking about, to be going margin, the on half, pretty of get But our to

Stephen Scouten

did answer. pandemic. Great. are up indeed into sure helpful on that’s Okay. guys risk additional that glad super And hold I'm Raj, the you taking you

that well. on congrats as So

Rajinder Singh

Yes. Thank you.

Operator

Thank you.

from of Steven the Alexopoulos JPMorgan. with Our line next comes question

Your is line open.

Steven Alexopoulos

everyone. Hey. Good morning,

Rajinder Singh

you? are How Hey.

Steven Alexopoulos

start to on transformation. want I the deposit

makes for it is So outsiders in if on where businesses a are and impressive. tough customers, the which consumers But liquidity, very pretty DDA we at it's sitting at happening time look all any you to increase more new other share from these progressing or of maybe you're come in metrics of how new gauge much terms of how commercial Are this accounts there DDA opened number initiatives? improvement accounts? has could

Leslie Lunak

about want too. accounts if meaningful. be don't we a of could sharing have most metrics me meaningful some good And giving together I Are those know along I what's customers haven't – is new in want brought. internal more right whether sort Obviously, that really we thought. that we lines? now. to we've logos, that we to to yet. we're made sure we don't an metric of it’s that's there front pulling number it thought number thought of some some of of but maybe have start something Steve, number meaningful, all we that of that, we're be actually think, is business talk I given And sharing we've which new public number that

to got comfortable the So I that point making. we're

Rajinder Singh

do will Yes. that We basic even going with like what going lot as something talked some data. trying that, a operating how bank, many But with so look sharing on also, awesome as about front up come the… there But the forward, I through trend that we're are are just wires know over that. issues sharing then wires of to

Leslie Lunak

Something else. Yes, with south. that number going

Rajinder Singh

south and anything are shareholders, published. eventually lot discussion showed non-financial that and discussion up. technology to we so way to for on is that, yet relevant platform. going haven't been our taking as if we That we really number go some there's data. useful we And you to some an that especially landed changes make having we a but it's show be of But But will accurate that if

from on calls two your think I ago. earnings question

Leslie Lunak

Yes.

Steve. the out I meaningful the to in to around those data things before to be will make it using reliable We forthcoming, metric think we want needs both we're is metrics put non-financial we want realm. the most sure as some be sure just and be as it public

those So of of the both things are in half… kind

Thomas Cornish

you would every tell I Steve new tangible the that we being by day. focusing is segments level right I the in key results that we – that seeing. What the would of is that on results target see relationships we're NIDDA of the primary driver And say, driven see you're results

Leslie Lunak

not I is the I I And a will This lot amount liquidity There's unprecedented anybody a Steve. it's system. statement. think of of the think the don't there. of both it's isolated I in terms reason in And BankUnited knows, don't it think agree with that. and –

prediction what period this a that in great long So has about point happens I time. don't think of anyone to at their over confidence

Steven Alexopoulos

outlier that with far metrics you've trying just right, had really the deposit guess would I would Yes. help it would to like agree to on assess gone us I outside costs, share fixing we're you how if helpful. some be that. as with

Leslie Lunak

it's spending we're on some it think something time I internally. fair is a point and

most some like think meaningful point to a) at that So I be that that. start b) really and But the number is to the I want indicator, sure, see right we you'll be is the said, to honest. metric

it so And we have that reliably. to repeatedly the ability produce

Steven Alexopoulos

Yes.

Thomas Cornish

level you coming management stratification that see relates from one base, a oriented account, relationships. gives six five, where and any it you When treasury that are large growth relationships it's it's have not a of of relationships, long-term sold products confidence you number the those duration our that to as into individual client XX% more relationships it huge where

Steven Alexopoulos

country that's view, To you That's in the commercial indicator. more be Yes. end, than economic to just pandemic the more? in being parts mentality open to more investing, from I'm is time in are down? still curious, we're actually helpful. just now hearing expanding, the from that leading an customers of what to regards Florida in look Florida? starting hiring a they Or Are actively hunkered it's other

Rajinder Singh

but uptick mentality just Florida Yes. in now investing, M&A Not an hiring, We're seeing expanding, acquiring. fronts. commercial also and The is right very all positive activity. on

Steven Alexopoulos

Okay.

versus second where expect single-digit half less degree is a than do a up low end, at assumed now of you that So really you low-to-mid, that see starting at lower are just we now in the what you Or the loan to before? function point? say the growth bounce of the

Leslie Lunak

hoped Steve, a first point and – I that's quarter had from in disappointing the lower think a at starting to first time. this that yes, it's obviously the be growth it's than perspective where primarily point we was

Steven Alexopoulos

Yes.

Okay, for all the great. Thanks color.

Rajinder Singh

Thank you.

Operator

Thank you.

question from next with the Our of line Gailey Brady KBW. comes

line Your is open.

Brady Gailey

guys. morning, Good you. Thank Yes.

Leslie Lunak

Brady. morning, Good

Brady Gailey

a say C&I as that a percentage? I that is where what the line or points, sets heard you utilization down utilization was percentage line XX XX wondered Like I now. as

Leslie Lunak

I disclosed. that very meaningful, it, without the of lot – never at think Yes. historic wouldn't just gave made of but lows. we if it something really Brady, I context public be never think that's a I And we've history,

Thomas Cornish

clear, The Yes. points now, just levels just not it's XX from XX points, that not quarter. to pre-pandemic make this

Leslie Lunak

this was down quarter. It about X% Right.

Brady Gailey

and your BankUnited look wondering to that going start be inflation the period we asset at sensitive base people rates, just deposit next see as is higher rates, is then And through Okay. if higher more to I'm better.

to You've be multifamily remixed loan the XX%. like used number portfolio, the

Now think you'll it's you asset around down we higher go when to to Do start with rates? next the more X%. sensitive be see

Leslie Lunak

whose I mean, it more is strategy will bet on interest than sheet our sensitive Brady never to risk, rate tell make for make been rates. one is to balance you, asset risk But we've to a now money the was. appetite I

probably So continue. we will

Our And has mandate that to interest risk rate given us a I changing. foresee Board don't low manage levels. to relatively

other. So will I or big the don't make one think bet a we way

sensitive went us extraordinarily either sheet a making a is I asset or see balance was us than last sensitive. the through on or we cycle Although more rates asset bet today extraordinarily liability to big positioning it time, be sensitive But rate and pre-pandemic. don't

Brady Gailey

guys. Okay. Great. Thanks

Operator

Thank you.

Our next D.A. of from line question the Davidson. Christopher with Keith comes

open. is line Your

Christopher Keith

everyone. Thanks. Good morning,

Rajinder Singh

morning. Good

Leslie Lunak

Chris. morning, Good

Christopher Keith

Hey.

of you So wanted point think XX basis to get the pretty could just that it And quarter cost do that I low ask, on. said to to, deposits been I to last early like you've you able range. looks

curious I'm any three outlook would the there or change there's two So or update next if that if quarters. over

Rajinder Singh

so But and get ago. I'm what this that think basis will months to It more teens – you continue of to up the it's even drop, that's confident I The XX there's to. slow making as three a in will I because about you cost end just this on only quarter into points which deposits not the going be to be time much [indiscernible] by next until I quarter. drop was teens it saw start can this into than of would I is we the down said, base can year, far year, see. as of

Christopher Keith

was the deliberate over we've quarters? little in Got find should next a think ability was the it. at decline book, couple we new to and is prepayments the the just I paper that of expect Thanks. then this first least overpowering that or And security time average while, seen just looking what a at

Leslie Lunak

Yes.

it's difficult yes, a and former, market. the Just

quarter to lives me Investment buy. guy a is who I just find Chief Our Officer, – this the at came some anything said, buy to last can't to I point bonds. during and during And want

difficult market. things. tight very a to just it's to the Spreads find very So – find right something are

at We grow securities. you're portfolio But do right, clip. purchasing to near-term. continued in a the the are bond prepayments rapid have I expect

a can Some as some do that. much to I the to so. on quarter well. going of of rather balance are we lot on would grow that's at deploy how of end, But sheet to had – we going attempting now the cash production to loans depend we right loan portfolio that's make bond

Christopher Keith

all got. I've All right. it. Got Thanks. That's

Operator

Thank you.

Our with Capital Markets. of question the line next Steven from RBC Duong Tu comes

Your line is open.

Steven Tu Duong

Good Hi. guys. morning,

Rajinder Singh

Good morning.

Steven Tu Duong

earlier to question – per a how back on get DDA your do Steve's sense increased has pre-pandemic? average balance just just say maybe much So account you versus of today deposits,

Leslie Lunak

in that's – I something never publicly, don't that's disclosed we've and that me. And have those numbers front of

Steven Tu Duong

Okay.

Rajinder Singh

statement corporate mind because find a from and sensitivity to fare in environment. been rather rate a push smaller perspective, relationship, make smaller the than small go rising larger and will price that I the clients Generally, business has the clients you'll middle-market the then versus lower better

incentive generally way the and plans such So loaners ones. to a are marching depositors midsize even designed really incent smaller rather big than in

Steven Tu Duong

done have a Raj. phenomenal Thanks, job And guys you with it. deposit side. Got really the

basis cost for mid-teens funding I Now But last coming deposits. that's it down funding, to just look quarter. XX around we down at maybe you're the points, is, cost have your at total if from of looking

to given time where off, think $X.X fall in end costs by of rolling off you rolling total could advances funding year? the do billion either hedge too, the deposits So growth here your DDA

Leslie Lunak

me. aggregate don't left higher there'll what's the smaller because in not the obviously, front down be going that the the of I is be to to a be But mix. FHLB rate in come going of advances of going have those cost is probably But part ones.

X.X aggregate, – the So in the impact positive on of will hedges aggregate a have the in positive that billion funds. have cost a roll-off will that of

vacuum to Although costs. be considered a rates. on left do I will are what have FHLB down still position. be expect cost that deposits our advances roll-off to do given current not higher higher And because amount the balance the are little in liquidity will going that necessarily time We come of at

then We priced still as few are maybe much additional amounts to in billion that’s that above a are months going to over at And our still as X%. grade. offer have the going that some gap but of nearly roll-off next at that, $X.X roll-down, that's not current priced

So we down. right will as to me DDA will grow, continues front have mix see in and number don't I overall But the come now. exact an of forecasted

Steven Tu Duong

it. Got

basically not cash your loan balance, your and borrowings Is deposits if your essentially is there. with let So you in time a fair roll-off the growth all could that assessment? liquidity

Leslie Lunak

is I optimistic we're there growth mean, growth loan absolutely. being about there. Sure. not Loan

Steven Tu Duong

Right.

one is level? last kind Okay, with great. not of this you'll it just GNMA supply Or do on the one then there? may think you be purchases, on And just the continue just

Rajinder Singh

actually out. and existing market our fairly But I'm hard find to plan we'll where exactly business. optimistic But servicers about It’s is grow be, and the grow actually will to add to that list. it other

Steven Tu Duong

appreciate I you. color. Great. Okay. the Thank

Operator

Thank you.

with from next David the Seaport of line comes Bishop Our Global. question

open. line Your is

David Bishop

you? Good Hey. morning, are How guys.

Thomas Cornish

Good morning.

Rajinder Singh

doing? are you How Good.

David Bishop

Good. the Hey, Chris the there's securities. period added you there. of there. end like on appetite there Keith’s piggybacking It averages looks Leslie, It add on sort like sounds about obviously based of to question versus

modeled sort yield your better we here. – in had than curious held of Just

overall yields with investment Just spreads? bonds tighter securities here the trending of the curious where these see in at you on the near-term portfolio addition

Leslie Lunak

XXX. we what quarter mean, on XXX put in and I came the between Yes. in first

However, still I we’re keeping short. very say, duration will

the way course quarter. bonds into the because over deploy now. of portfolio second that improve could said, we some appetite for an as loan pipeline have how to we picks do try I cash to some bit duration little we're expect right I able bond by would move some the that it know much a that. But really of of point excess and the and discussion. loans is of So a those for it that Unless, But adding up of I don't

David Bishop

the I quarters the charge-offs well of XXXX so. trending right three term? depending net intermediate so. see situation But to quarter in where those level Any you obviously Right. it. direction, of first economy the fluid direction or Got flux forward know obviously, move credit very near on a here the trends over And as it's sense below the versus overall loss past can XXXX content or you and look

Leslie Lunak

because They've But seeing are to predict, seeing we quarter to-date. nature. are haven't They charge-offs in this systemic you That's the broad a don’t we can't I difficult are yield. charge-off. current not of loan episodic, confidence the been I I'm of struggling they we that be valuable the on think is Charge-offs they're know obviously particularly forecast have that’s timing see pandemic said. very how pre-pandemic, in a timing the I past back portfolio. that's company our really as high it can that on think or do says, what It the one to spitting our what certainly that been continue difficult XX is, do does improve the was materialized – basis I episodic And don't really up we but model back been been the as that model sure out high criticized, economic of based some predict. will model of the I and out. And level but can have and economies predict didn't them. continue suggests, points think the migration improve. trajectory – loan don't it those I help. categories to classified into to if a I tell of

David Bishop

mind a at where they're the fees. at Do of the in revenue X.X, the follow-up out like revenues you sort of Raj, much your Then color. million, have point? to just on BKU side, $XX curious of of one it. see Got back in pencil the impacting this you'd least the Appreciate the the percent of as sort rate is fee how run income and on

Rajinder Singh

you are there. us of it time, to answer, – to want which make trying happy that this businesses, give especially banks it number us at higher and to is do would what not what to get I income a very target the fee have a in for terms you revenue. benchmark don't I'll that. very different I'm is. banks generic I of higher. I lot than larger that same know we be will like total say But in to is

on to didn't got bank at. For often either they in be issue the know be have scale generated to business, than but be, just not business, enough That's returns. it where chose generated use that with out with example, a lot that a through mortgage that find you level chosen which in origination but we businesses, need the of we fee we very a if we And have because income. retail flows gain at we different will which revenue, fee business we're sale as revenue, it to it's

servicing. fall we level ended So needed bottom the that wealth residential businesses at business debt, management, into category capital again, revenue, one in markets was kind or because line, very which generate business let's say, it the mortgage of that or servicing a exit is different just were not us, that to up for but – least well. being it's we chose fee origination But time, At of as scale. mortgage

there can we're But we yet talk little good around We're to in we'll disclosed about So officially six next XX next million. that to pressuring targets, are is to often – our I nothing also detail through are primary I lot we haven't of and and that fee. source go said, middle of this million we fees the did maybe where or There's what earnings loan card sharing like a trying I expect we that next of $XX – is Leslie mean you'll in us, have not going deposit there. get not. we that those with But time $XX achieved don't of for think or to exactly is the Leslie But – year. X.X fees terms is commercial behind probably see hitting that the months more and is start and product. release. fee and qualitative The a year increase. for business

David Bishop

tax forward? Got to Good it. Then rate one you, for Leslie. housekeeping moving question assume

Leslie Lunak

I in items that in might happen. excluding unusual of anything way XX%, the would discrete the neighborhood of say

David Bishop

it. the Appreciate color. Got

Operator

you. Thank

with Montgomery. next Christopher of the comes line Our question Marinac Janney from

open. is line Your

Christopher Marinac

for Thanks this questions morning. taking everyone's

points? the Just pertains basis the know you about sure a see bigger company balance PPNR as XXX ratio kind this year? it has I of Do sheet. of which is changed pre-pandemic. to lot next the points, a lot. the comparable kind relative a that not outlook is I I'm Do to question basis you mean, getting that ratio, see how XXX

So curious…

Leslie Lunak

honest of front you, good – because it's be be your tracked but will takeaway. that's have a we've don't is not me hope a that's but Maybe ever been would not it not I something a of measured. that I'll ever takeaway, focused in I ratio on, be answer that but question that That that It struggling to that's a will ratio my measured really not idea. with really projection to. I've that a it we have diligently. and speak can I that grow, would a very ratio

Christopher Marinac

one, circle Sure. like see I'll markets a road you've a expect Understood. is that. component on Great. deposit then as here? Atlanta, there to quick entered Raj, the new down that you just And back

Rajinder Singh

Absolutely.

announced So our has eventually their it's The when up always Atlanta, were combination give relationship deposit. It's efforts relationship another eventually loan one the start deposits. or never to if just but a may the because get of market, office us we a accounts. we're operating loans loan, in it business into people and the with with we end as defining production

part obviously be So deposits would of it.

Christopher Marinac

Great. this the appreciate it. morning. information We Thanks all for

Rajinder Singh

Thanks.

Operator

line of we And the question a from Dave follow-up have Rochester. you. Thank

open. is line Your

David Rochester

call But M&A the just on make quick longer had to sorry follow-up I bank a Hey, earlier. even questioning a here. long

loud all any partner I on just there the you up in larger announcements some up You're scale at pickup guys to just and seeing do was looking and recently, messaging Florida deal banks, on that. inbounds in given your to clear interest your from or to if pick all curious Thanks. were approach, noticeable but looking

Rajinder Singh

to you back generic and focused storm this bank up feel is kind [indiscernible] there this is now of getting than I'll be dialogues the there year, in more is talk and on year, the everyone was is a higher just food Yes. Last and year give last year. down will the M&A and which everyone certainly chain answer, world. activity so more

David Rochester

again, Thanks Great. guys. Okay.

Operator

questions Thank Singh will remarks. now for Mr. call over I to turn you. further in no showing the queue. I'm closing back the

Rajinder Singh

Well, has certainly call. long a this been

say very for us our story. spending much and with So to just listening thank time I'll you

know you speak otherwise, to Thank you. You Leslie you'd in like, again how reach XX anytime to we'll me and Bye. days.

Operator

conference this gentlemen, and Ladies concludes today's for you call. Thank your participation.

You may now disconnect.

BankUnited (BKU) 22 Apr 212021 Q1 Earnings call transcript