BankUnited (BKU) 19 Jan 232022 Q4 Earnings call transcript

Good day and thank you for standing by. Welcome to the BankUnited Fourth Quarter and Fiscal Year 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Greenfield, conference Corporate like speaker to now Susan today, Secretary. would hand over the your I Please, go ahead.

and results Thank you, today quarter us you for year Michelle. Good morning, on and our call. conference thank joining fiscal XXXX fourth

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

of to the XXXX call may Litigation statements within meaning Before current the respect this Reform reflects views we and contain to, things, that that performance. Act start, the company's among remind everyone I'd future Securities of like financial Private with forward-looking events other

and Any forward-looking this forward-looking The should historical its estimates the company that inclusion not statements on information and contemplated a plans, as be future be company during or estimates achieved. made the subsidiaries the or are expectations company's representation by expectations. based of will the the by the call of performance on regarded this plans, company current

to condition, Such financial including, by outside the direct results, forward-looking financial as statements are liquidity, strategy company's operations, including relating the various risks limitation, and circumstances those without control. impacted uncertainties prospects, to growth assumptions, business external and and company's subject

could exhaustive. the review indicated undertake be actual to those any not factors company These result The not results as does statements, from publicly any update to statements. materially by whether new future cause obligation number factors developments important A construed of or information, forward-looking differ of a as forward-looking should or otherwise.

report available www.sec.gov. the the found which and XX, year on or on factors annual XX-K these any on for at report are current XX-Q, XXXX, be X-K, can report company's December website, the Form Form on SEC's Information subsequent quarterly in ended Form

that, like to the turn over With call Raj. I'd to

you Thank us. Welcome, joining you, Susan. everyone. for Thank

So for EPS fiscal came earnings $X.XX; this for the at announced $X.XX. morning. quarter in the year, we

release. find you the me the Let that the get key components, in components will quickly into

at in came Loans. $XXX Loan million. growth

If you it pay grew and commercial look $XXX and [ph] at businesses, our meet CRE, actually million.

the able lending quarter. very about So teams what get done this to -- were happy

pressure environment actually Deposits, though deposits Fed rate of little lot which are and a under the $XXX a is. decline how bit, grew the million, funds system, NIDDA given across did we

decline million. was NIDDA So $XXX

our stands at growth we years deposits. about When now were DDA I XX% at journey of XX%. this think total five, DDA started we ago, six in

Just pandemic, we're DDA. before were at at about XX%. we the XX% Today,

So feel decent in DDA pretty we're good saw still that pretty about this in a reduction Despite year, it. the we place.

at have than in to Margin expanded you. highlighted little quarter. prior we Margin from as previous in came was a again, up less quarters, though X.XX% in X.XX%. the It

margin by XX last So year, this points, year. in grew you which with what for is we I the think right call have basis at guided to line

about let about quality. have the assets a talk many Criticized, me before provision, last Provision, little as they to classified continue I credit quarters. over bit talk come many, down

XX Our portion NPLs a now includes They basis and this points. loans. XX are last were guaranteed of at quarter, SBA actually

down that are points. XX out, If you now basis back NPLs to

to NPLs Leslie were we pandemic the before hit. $XXX me dollars pandemic asked the today at check NPLs call, Just million. And the hit, before $XXX for at I this before And are what million. in were

were. of are NPLs So today half they what

coming, getting are been good we where pretty slowdown from perspective of sort years, the is so portfolio, And two whatever the comes and our and ready we've a feel for credit we quality been way. last consciously in whatever subconsciously about

the more or more cautious Having we said three ago. that, -- pessimistic about about months than were we environment are

from of So XX basis growth XX our basis we reserve. did took our We, to tweak points. portfolio. in assumptions increased We our had up course, and the points reserve

a added $XX million. to that provision just up under of of All

think, I have quarter that promised we bought previous fit. continuing million as this bought back, continue quarter, $XX the to the which $XX in in million to this we're leads we continued the Also, $XX see from the We'd as execute authorization in time. -- we'll had -- fourth to buyback already million. last in We authorization,

about let consensus and environment, we'll of Quickly, for this year year. guidance the and inverted. about The seems next environment, a the there. curve That to me is mild a even slowdown be possibly talk then The is XXXX, talk the recession. out

XX-year see, certainly to As take short-term go closer closer and X%, rates wants Fed to everyone X%. wants the can up to to the

an inverted to year stay well. is next it year, inverted into through it's yield expected So as probably curve all and this

of Fed not on the Fed the the the they the like least only unlikely We pressure take step things and future our they're probably some and and and whatever foot models off year, disagrees market tell that time they'll how have the Last on everything brakes. what sometime pedal. The is pedal getting brakes. they all year, brakes, play on out. it's on will saying but at This slammed slamming this the year, on internal on the curve based still based It us. is looks gas projections eventually build will the

some were last Labor in certain I but weakness that year, they very usual, would than say they are somewhat, costs, higher moderating still based sectors. we're high they while are on seeing

good to not is normal to normal, but be news back costs it's that yet. seems that getting start labor So back

We're XX, is margins, XX from good ago. On -- for just nine the across were taking months better margins points pretty XX, Lending other of spectrum, they risk, pricing any than across news. much safest asset board rational. the to want the to basis very you are in, it kind credit participate XX, loan Margins side, are better than getting seen. paid is the we've

impact bank mission an Fed on have are but success. of controlling the curves is or this economy crazy in was Three pretty inflation. place And its for months most Fed this And a in, will is was important. like importantly, looked margins. That very finally succeeding that the ago, yield inverted good six that eventually, not also having

tightening it's curve yield finishes the the to will which this But environment is side, Fed and tough. a inverted get be rate it better an other right as for banks. So, now,

year, we margins, It loans C& our single-digits. deposits, Last We would CRE, mega X% so bread high XX% and and you I grow guidance and said site in on. categories. for main around grew mid total, loans, to butter gave

January Deposits, year, nobody to did. we what about starting said even don't foresaw think the Fed mid-single-digits, but foresaw of in the eventually last was they Fed do. what I

that. So, we on missed

to stock. did, And we did, basis said also as said X.X% -- growth we it was did, and single-digits came expand, in we $XXX mid and end would expected. Margin, result back Expenses, million we little stock, at points, we worth grow would said high it would expenses. the buy of a in we exactly XX over

provisions so today and and on. total, about, XXXX, I based about things were our year -- of years I year large ask like to where reversing the provision NII said of NPLs -- and XXXX to on metrics grew I NPL with clean they at at often this actually, of because morning And just a asked XXXX versus really I compare also one pretty are. XX% end as sort XXXX is looked the messy

better despite into margin improving I is XXXX, has is in our the hard the of our franchise. gone work which than an of end all asked that margin it environment, -- about the significantly sort difficult has was also result and margin rate

base north at get it XXX XXX deposits, Cost in is of X%. rates an is of points, elevated basis be funds, of X%. Fed it while XXX to funds cost points basis environment of would

down there on portfolio, has I progress is think in time. -- sitting sheet metrics. Yes, But its a the which portfolio, resi you than lot made pandemic. whether better metrics of was a still sort it very the credit large of before balance sheet part of So, securities look overall, wind much the large there, place will a the is lazy it at balance or over way profitability is balance sheet,

This year, expanding, very said last loans same. it still at similar deposits given doing I year. growth. we're as about to much everything And the at -- Margins not did year mid-single-digits, though again, the expenses, growing looking last think environment, I've expense as

continue. will Buyback

We after another all will weeks. will get million few $XX Board And next million the authorize over this the of course that. $XXX done likeliness,

months A our with launched but did extremely the we not did panned now acquire nine out. how on It's commercial in since quick happy that We Atlanta we truly presence. team I'm has been a open Dallas, reminder. a side. banking branch

for are that market We the in now.

ongoing terms a branch. Dallas So opportunities strategy. and I Dallas, having will forward, that. off will think to project capability like the very our Dallas, happy and this Atlanta will this, this continue of be just with full not become like is to look Atlanta races. year for in I'm part And we the grow in going of

I'll I So Tom. can take with points to away leave to pass for the you Leslie. to that, then over Tom, pass talking I'll it want some it you, all don't and here.

Raj. Thanks, Great.

So mentioned, extremely and business $XXX as as for two overall, us. analogy, million C&I to grew $XXX to $XXX by million grew total Raj growth in meeting the for million the quarter. of CRE And loans by for quarter, cadence million we encouraging grew the lines was $XXX by those continue the

it. really components bit little about look it broad. And asset was and I we great classes, felt industry if a it down think We at and break

to in entire a the segments grew data quarter. during generally on continues we in for You really strong number provide, led growth of It supplemental the different in growth $XXX C&I year. million loan essentially the see can That the that we C&I XX side, quarter. the

grew middle So by separately and our it banking of kind the corporate business, for XX% year. market

an just So was outstanding it year.

both it's markets. reflective performed great that the and in of own that's reflective well. think fact has extremely I we're of our efforts, Florida also

be All major well. blessed great have in We're to done very of Florida markets. cities the in

Raj in been period more time, be short multi-hundreds in very delighted of relationships. excellent to market, with Dallas. very As And expanding we've about accomplish are able than of into dollars really we that are Atlanta what of in said, we of enthusiastic commitments millions a we couldn't

Atlanta parallel We of we're see the the for the in breadth a segments in looking to that terms of kind profile that of risk of industry terms fit the very MSA, number terms of economy of and diversification. size is Dallas across market of depth in

And that. about so we're excited

quarter to commercial New the growth in in do York throughout well. of the good continues saw Rest We the segments Florida market year. in and the

of the and that combination quarter in the the markets the growth both were very the overall segments year. important parts we're story think that we're the the in efforts, our and health throughout I of in So of

particularly strong, we the parts had segment, We the Last solid business growth the to We we also, fundamental a the commitment and in warehouse quarter, which you in told we I solid bit have more, That's good, did. grow. of think, to had a and is growth a we of want Southeast. really in industrial again, CRE.

a committed need area multifamily most we're which have housing trail multifamily our loan is resources We to in a strong area, and growth a we're pick to the the lending saw in and And we're efforts construction particularly bit. for the portfolio in, units continue construction the areas bit more that multifamily in. of market up every virtually active that construction

those of we to market, it. our that know, that things business. overall for robust. some really environment growth not is for growth we'll pretty story other good housing the – terms the in led what in about you mortgage to right We're really right see now, But challenged We committed now. other remains and So some warehouse, feel year. think quarter areas, There's the as

fairly rates So, that utilization we're in right seeing low now. business

Bridge continued decline and the during Pinnacle year. to

I and improves area pricing the for be in Pinnacle rates an that tax may improve think if growth.

on from not very perspective overall attractive continue both area, and now. franchise asset deemphasize and equipment lending the return We quality just to is right us an finance the to

modestly in Resi grew QX.

to in of So books. looking year, all continue C&I we this and see geographies. We see forward the core it into across CRE growth our

to committed portfolio. and to the mortgage some term growth long we're for see said, that in warehouse I As expect

as Also, EBO Ginnie environment some if there improves, and for growth business well. the there Mae opportunities could be

in on beyond Dallas to this in quarter even we've expansion looking some the continue start new talked as the key market, we hires and and year, the bring build even off sales that at about. also We teams, producers we're

interest-bearing On deposits total deposits. in was the grew the for deposit $XXX by million quarter. side, That growth

We which As XX%, finished tightening rates the NIDDA which for at not ratio rising the liquidity. unexpected loan-to-deposit Raj the flat environment from previous was the quarter, was declined given and essentially said, had quarter. the in

on details Leslie that, into with So will more get the quarter.

Tom. Thanks,

loans of As The we we duration increased this on and the quarter at coupon on rates. instruments yield The purchases securities as saw from on X.XX%. last grew variable X.XX%. from mainly to and XX. NIM quarter increased stands guided to Raj attributable new to and at December X.XX% X.XX% the X.XX% rates quarter. of this portfolio The at X.XX% investment this all said, production rate yield from to That's securities resetting X.XX% higher

was deposits quarter. XXX up of basis deck. the for I'd the of to you cost from refer points quarter, XX points Total X basis slide last

While target out, compared to on this deposits playing grown quite and a you in still of of is funds story to back can is have the spread that illustration quality a that that base. we've in the my that a which is obviously Fed slide between in cost bit, the the made the mind XXXX, improvement testament, deposit the see

we go to going is cycle, don't deposit to going about the our to this was from still XX%. XX%. total XX%, think date to but about it's that beta At get last deposit it's cycle beta Total of XX%. peak up think the We

With and details ACL XX XX $XX.X points. the was provision increased slides about the some to from respect give to points reserve. the this X million. provision, XX The reserve basis quarter basis and The

As reserves And due primarily qualitatively, Raj and of heavily to mentioned, we level an quarter. in favorable reserve NPLs uncertainty our our spite the decline downside of we weighted about credit signs, more a the establishing economy. in quality scenario built increasing this in

quarter saw And charge-offs related a before the contributor to -- to that reserve related this off this was the in loan. reserves taken end you that charged single build majority loan which another that the were did all was We one to quarter. particular specific of substantially increase quarter, the

of we've There's since that X.X%, in really to income the the to loss just XXXX, up comment that non-interest expense. to guiding is quarter much if respect it not we which and expense, fourth for what with reiterate year. you factor the really the non-interest on was the I'll of exactly year, first took hedge been out

there's right to that. this to particularly I we where don't So you anything we telling came been for comment on in think we've respect with would there quarter.

then So, Raj and with it questions. turn over we'll to that, take comments, your I'll closing for

I will other there have open know released. it up I XX that for are questions. banks

take will up we -- the Operator, open line. can So questions. let's you

Ben with Hovde Our comes Instructions] first Gerlinger question [Operator from Group.

line is Your now open.

you taking Good time. morning, Appreciate everyone. the

morning. Good

I to on I given. was guidance the up that curious, just want was follow

Was that said deposit correct? You of the kind mid-single-digit and loan growth growth.

Yes.

really, kind the against at to deposit quantitative And available tightening perspective, what you mean, of, in else down. thinking then, of the terms kind depositors. just I is with year-over-year, are and when fighting of treasury curve, look your deposits

up. you on price be on them I curious, was was action, to curious is you, to or willing or overall in are get market I guys I are to to some deposits aren't peers? go pick only relative I don't you to to mean, strategy just the there the ones. growth any what down. order actions might new but garner mean taking

yes. Yes,

year the that and Fed, gentle to we're saw not we slowdown, monetary of eventually from the I think that that difference of on the be tightening. we brakes year big the of this with slamming that but more last expecting and but difference tightening a this, wrong -- ending big sort could policy is

guidance the to is its or If then all to you, be given what very with guidance give. have the deposits Fed the you, us the aggressive deposit I've digits single margin achieving one whether hard. surprise continues or Of hardest actions, loans, really the will

our ratio let our whack get out to is XXX this And to some past also and XXX. of to desire of get loan-to-deposit not

price. comes It the you So can't down deposits. get to

guess, to at -- up close and and Typically look loan not demand so the and okay, I pipeline where is on. able is, know. we're loans, of here's we’re what pipeline you the this So can kind

it's The there harder XXX will good and and we slowing rate increase worse, much if be it a based mid-single what and if point at But another be think stronger happens, that's to I on to tough deposits, get eventually then tightening is basis harder. chance the single-digits. is end it's up will longer, on hikes, mid digits, if will that there

line is Ben, in, in look we teams. all us gives any And that performance number will very the that that, the at the new one that But trend that you the the in relationships year. we're this relationships it individual segments sales very, by look account. look confidence balances franchise, good I some across as and into year the the created to of impacts all the information the obviously overlying economic of we virtually of have creation history of as we at would at be new also look continue that you relates activity when being might that things add of business

Yes. the from squaring guys And at what expansion thinking that are probably deposits of you. are some that, from triple expecting just So you kind cost. just some then here? of get I'm No, to degree? could you Got margin guys that's conversely kind to really

Yes.

But expenses, question to that level. to just is overall XQ the seven from you I some nuance clear of to historically year, curious, fourth the look but BKU I you year bit relative quarter the But highest QX the I we around that was in be kind for waste pretty guess think side? to quarter-to-quarter? is the as is latter I expectations. quarter-to-quarter, of or the a kind just the has I and kind still of expect kind then say is when quarter-over-quarter of some was for little of about higher probably ballpark, more trying could gone whole had guess, but fallen has late. had should just off seasonality,

bringing particular quarter. the the impact one payroll expense and Sure. higher been quarter have support But just course held teams But as we've be those certain We tend constant. in new focusing don't investing and support benefits to people people may to of and time the and sales the a out of more first little business, seen you not that in growth whatnot. of spend obviously people to may of taxes on typically, a is any because headcount due and on over move trend compensation on the come year, lot

of as smooths figure see trend spend the of with but trying on maybe forecast and course out year. will benefits, new a you over coming year I'm concerned by little energy in more don't the But FTEs what again, evenly spike is. to more the a So a the that out whole. lot quarter-to-quarter the time bit

Got it.

Okay. the That's helpful. Appreciate time, everyone.

done remixing job of the guys have You kind a great sheet. of balance deposit the side

So you. it Thank were up clearly sets few in guys you position we much a a than better ago. years where

Thanks.

Please next for standby our question.

question Jones next Will from KBW. comes Our with

Your line open. now is

Great. Thanks. Good morning guys.

Good morning.

morning. Good

Yes, expenses as the single first. last said is to I you expense correct? would guidance wanted year, clarify, on step which mid the to just to same be so high digits, Raj,

Yes.

about the the think just is Okay. is grow to And base from just there, it annualize think mid -- fourth was way cumulatively? or right with the and high quarter as single-digit we really of, to growth it that about

take and year full apply year. full that the the to Yes, Take full the year.

Okay.

anything in that's Raj, or Now know one-time two there maybe happened know in expenses? third helpful. big I that Thank or quarter. you. quarter? out Was And fourth fairly non-recurring similar there's called that then, the still in a happened one the you pickup I charges maybe

really. Not

in unique there's particularly fourth I the quarter. don't think anything

right. Yes,

Got you.

the just moving quarter great to all appreciate the there. allowance you. the bumped-up Thank then of I And and linked great. -- Okay, commentary

to the relates I looks just that just reserves hoping specific as get Just to maybe It took, your appreciate there color loan, CRE to hoping was but more a charge-off tied were those you on NPAs some I way one charge-off. that. little to based around I color? the guys more like a it little get moved, was

work didn't it loan, that So, out.

to to have company, situation I basically certified a We careful company, the What you in lose loan. I where of be I the write-off we will say. charge-off financial faith the financials So, we tell of what the target. in is intend the the

the we looks is -- going in months we're -- is three is will the little we months really financials of we be than conservative just borrower, chalking more of can't the It's stand, And don't off out three into a only we loan, most a This this. this situation. there -- some there's what which which really regularities found and and we know developing it terms took like just did. some in when

back. that recoveries, be are some hoping knowing just with any often confidence, there have come I'm but quite that about. talk Now, recoveries we there'll not

specific Great. of industry nation? Digging deeper, kind specifics around or is there any the a any in

into It's It's a not situation. Is you that audited come -- situation. one about when the just the about it's one-off question, industry. financials it

expense Understood. single-digit appreciate And mid- I have Got Thanks. year-over-year. then just holistically, it. growth high thinking the guidance. you to

cause still some your do you putting like the you guidance that you margins to the mid still feel together, here? still over XXXX? expansion think So, single-digit of a grow high from Raj, you revenues expense positive little as to maintain and two Just the move leverage could operating

may months. time, what even in. absolutely get or not quarter. and next is to XX every literally the environment a try making for It tough And for agree not Over that we achieve the investments I that it Yes. that's what six we're months that that's we're be But for, Yes. to. next shooting remember, will and

investments multiyear these with are multiyear Some we're payoffs. investments making of

very around possibly view pulled investing. We of recession. -- back time be as this short-term is investments? take you this a cannot of inverted. slowdown, Should had is lot discussion of really a the on to during curve a The budgeting a year season And

You term have view. longer take to a

year. or So, back the in pull quarters put second environment next half be difficult banking because we're into not a the motion, we things of that couple the there might be of going a may recession the to

we year. investments, launching about technology something of investments. last markets year, possibly plant this talk the the are are in so all new some me We're -- launched long-term These Dallas hearing a You're next.

or yoyo sentiment quarter-by-quarter even So, investing can't you year-by-year. your

You really have to stay the course.

low the banks ratio, which asset argue we're investing country. that of not We we're our is not expense from of have best ratios are one an enough, why in I are. -- one as the just to as better, -- they sometimes the

is it So more be. not environment investing little is Revenue, on a probably year, a get bit we're this a steady in, that pace next tough to year unfortunately, does the tied important. but it's and will –

which Absolutely. do over more than but grow you it. why expenses? just said expectation Otherwise, period is a So will of our time, revenue

say And currently, a is a I our forecast will amount, for modest not lot.

Yes.

But as next a modest year. to of margin about Obviously, earlier, hardest that is amount to Raj the environment. part alluded deposit expansion predict the

Yes.

understood. Great that. color, Right. that's Raj. And We appreciate Got all the questions had. I

you. So, thank

Please standby question. next for our

comes Our Fargo. next question from with Timur Wells Braziler

Your open. now line is

Hi, morning. good

morning. Good

Good morning.

Leslie, back it looking circling that average, year. you're using environment Maybe you, seems like margin a guess And last headwind outlook the rates the that to next quarter. just from the that going in the I first the be spot year ending guidance? comment on what's there's rate deposit expansion at to versus or then rate

Yes. Yes.

to Is of offset on loaded that funding… you asset the side kind do of that there's enough some the happening back-end think or comment,

to that what using predict. hard not on we're happens But I'm the focused that's because quarter-by-quarter extremely curve. forward

So peaking to funds in this throughout the has inverted X% end by year curve of with the quarter dropping and at the X.X% year. X.XX% to treasury second Fed an the

estimates. forward So that underlies the curve those that's

can we the out. Based the deposits going believe play expressed, the I is grow of But is we we the before, that our confident people environment, core geographic growth that environment Florida very grow producers very deposits on expansion, Raj our to the the given we're we're core said can as economy, think this year. confident adding, that that as business are deposit we wildcard

environment the So could been Fed's pressure. prediction that than the margin harder, come brake more be we will the on think challenging under that,

remain over look the at hiking, or deposit expectation time. least mean, asking just at you deposit maybe what's actually pace stops increase continue I the competitive, the way it environment a assuming on to to tail-off in down you the for geography? your on or once what see similar do up? Fed And I'm it's crystal expect there, Okay. still at kind But ball way to of to to if the did but the going could loan the is demand you it pricing deposit

just very a six But You're there but to environment deposit the hard it's for or not lag. about, months, asking XX like. will me that. the next And in is say beyond be what

what going up, for what you to me would – cycle well. some hard effect. know the for be not I what way I is in is, a gentle have very And I But line even last recession a go be back try happen with going But think the very out. to not? to what the or actually to say, say down was like. that the zero at pull drop, look to back. will and and is weird. of starts will we're a It best don't cycle situation. loan -- me really at year that but when effect will really like. last but going I be economy don't happen to to for slow a predict know It's decline demand Fed it overnight is a kind be slow, happen it on it's what there On way as hard the hard we a the be will – Will would will

portions wish had do I difficult a rate-sensitive the will very the but the up, I for or Yeah. crystal of portfolio think way core either deposit of I more part portfolio, more the But respond deposit the way on down. quickly, up with way way to the down. think more And you. the the it you predict. lag lag I see also you that ball on way is a see on very

real that to doing because our deposit tied purchase business which lot is or business, another more now, a right the even for And the of well. complex refi dead way, remember, in shape right, is not business, it's estate the which us, or even – is one business, the

well. before we felt that space. So, know mini from actually a It's X.XX, that warehouse will the could is that you we and as was year help help refi a the help business, it. the will if boom tenure this the deposit I but title that could with of pain mean, happen have business insurance could lot floating that

Yeah.

that That's in just rates And risk that they're to to talk come recession, what keep could a doing. too very you so It's anyone is the industry back. much. move sensitive. that deep industry. doesn't say, to long-term doing that have But if And

that a but could on that, we're to counting of coil have pickup not very if you say. of activity. You significant in We're were spring, consistent sort

Right.

much wondering, that fourth any? much growth? of deposit actually Okay. new me, year able just of of then board? the is those to if relationships clients all lastly then for client increased being appreciate just you that utilization, growth is How C&I on that that I How new much quarter self-funded? in production And are and And how that. bringing was the I'm is C&I you're impressive. quite with get

little from look we Yeah. C&I say relationship very we I strong was that, saw it entire at new the year, would When production client production. in throughout a production, teams the a year. throughout lift utilization very the new

get relationships. to these, is We opportunities, banking our management strong come with and most depository tend treasury significant are focus out general relationship able to on type of deposits these and

utilization in throughout we But at rates all much the see didn't year. lift

we across of new see XXXX. as Originally, really year we lift. how relationship to It we'd So help But We that would that. plays did thought the pretty basis more if And year were lift. well. see We throughout flat we'll the the year, started that into thought XXX stayed this of all this production that pick of would a when we see out didn't what see up, we year. lot segments. us C&I was maybe points

it. Got it. for Appreciate color. you Thank the

Please question. standby for our next

JPMorgan. question from with Steven comes Alexopoulos next Our

open. line now Your is

This on is Alex morning. Good Hi. Steve. for Lau

morning, Good Alex.

morning. Good

first are your talk the Any in decrease non-interest-bearing deposits. on or moving other about What balances color is competition My Can in regional to? deposits? whether question you banks? or on clients moving T-bills those it's from internal

that quarter, year-to-date. quarter in talking not deposits. because this we We're You're talking didn't this non-interest-bearing experience

Well, we do. Yes.

misunderstood sorry. -- your I I oh, question interest In your question. sorry, misunderstood

Yes.

of laundry a it's So list things.

everything average a real in business title industry. still the We're those there's declined. our accounts estate So in from smallest, the seeing balances largest, the slowdown

That is trend. industry-wide an it's So one.

use say, distributions. up, clients gone fees large was That to need for bank. moved have Also, as ECRs dividends, keep they from buybacks to money needed the our -- down. saw We avoid That or a people fairly balances have I'd balance category. just

go leaves So or money that it happens, into capital bank when and and treasuries. and moves out market frees goes, buy the up

have don't a wealth business. management We

So we seeing typically happening bank we're that. might be the some business buy that that treasuries, don't Corporate do out retail have. small customers with though not take whatever of money and

of a it's those So mix things.

distributions and you. money the with that for probably either or is But what our or people industry largest shortly I'd driver, say estate properties using taking suffering still have buying investments followed just real

there -- more idle is corporate So much more that money is not the aware people -- customers, money. they are left much idle of and customers, commercial cost being are of

Thanks, Raj.

Yes.

balances just substantial a in industry that there XXXX, buildup has coming in utilized. segments the Alex, Just, out pretty across corporate was been all deposit really pandemic of

Yes.

before excess they per a deposits And as follow-up level? operating your of is like how core customers considered a DDA any get DDA to much Thanks. buildup, to that sense

very us hard to do. No, that's for

We still think spend analyze we the lot don't trying the of answer I but to don't I that, -- to question. know a time

expect the Fair margin expansion higher? a enough. for end And in on you trajectory? net year interest Do color of point, expect the XXXX, still guidance that, you or at quarter, do some reversal terms of any expansion the every in but

going very -- happens many just predict. quarter-by-quarter. to factors, it's that's difficult think what to too There's impact I respect to with funding that particularly external are

little get we can at pinpoint be I idea, quarter-by-quarter. whole, but to NIM think, going to better is looking the try to a reluctant the as bit what I'm year a

And the on other quarter the the you was on little year. compared elevated Thanks. rest there's to of a last in bit line Can It $X million. anything income Got of question there? touch one-time what one And this fee nature this? just it. drove if

Alex. a puts There's really just thing. in and one It's a cats and There's takes there. of no dogs, lot

puts really of or of One so in but There's that, of the know and that's lot thing. kind I BOLI item. a one that how line has don't over to no things predict volatile revenue. been last it's the been just takes year

think there's necessarily don't to either I out as regard that call specifically. So anything would I something

and there. income, call the I steady increase, see terms in don't episodic volatile. little items in there's non-interest enough out we'll to anything that be takes but think of do are a can and I think in core all puts material the

my question. for taking Thanks Okay.

question. Please standby our for next

Scouten Our next with question Piper comes from Stephen Sandler.

Your now open. line is

I pretty Appreciate full that level, year X.XX% morning is from for Good is guidance pace the Can you. from everyone. level? fourth Thank for NIM next The year the we're the or seeing the for you one, expansion. industry time. to of what guess, encouraging more that is tell relative quarter of most X.XX% me, the potential

guidance, gave to I would to I'm you it expect from X.XX% I also full from see. when mean, the referring to I expand year. look now I a if the the year X.XX%. I it it level. expand would can expect I full just find taking right to really, was was the

Okay.

with to And a doesn't it's you way if put that be challenging caveat, going again, environment. said on the that out that. Having to very we're have play those, deposit pressure forecasting, some

Yes. Sure.

this expecting And pressure as as year. we're a did of not we much

it's… So

No, very no. It will be modest.

Yes, modest.

I'd point, Understood. probably getting it to you're you earlier encouraging, risk growth, for feel said getting Understood. say and like that, you Raj, an the still paid maybe taking. your paid plays you're for that's

seeing I'm talk on what expansion So light seeing even new Because you're loan of maybe there to presuming pressures. you funding good you're can the some in yields?

loans the loans did the the and we new I on the quarter. for came C&I average. higher and think the CRE at That's new end the commercial but commercial in for on for quarter, space than quarter, mid-Xs the averaged in everything commercial together at beginning, so

Great. Okay.

sure, year-over-year, into so looks if expenses just make at XX% up sure really then to digging quarter-over-quarter, we're… to quickly. they're want it want just X.X% make Okay. expenses, I back like if And like I maybe look

for yes, debt X.X% my once total of get is had year, possible, -- termination right I an increase is math expenses which I take hedge for about this last on out, when year back wrong, and we and I last I'd out When loss year, expenses back total year-over-year.

Yes. But I revenue quarters quarter, with Yes. way, gone I'm doing last about growth. of guess, each the same thing and have either two the up million line in getting kind XX%. of expenses a $XX the like

size that outpace growth? XXXX, think you the growth do of So expense revenue of in kind can that,

every comment, for. a shooting that year to couple a what achieve My doesn't But questions actually it. that's to of quarter, is long-term. and long-term, achieve going we're happen tough always certainly XXXX ago, is It -- we're

forecast revenue happening control and it's a challenging lot in will growth our no of mean, year, that have environment, we next the expense things environment would exceed I revenue a very over. there's that show growth but

Definitely.

what And this get Okay. is a X thing the I then points investors lower reserves got, still basis for loss loan XX the XX basis margin basis for of year, last is then me if error and this lot question points, points. we've big from ROA was BankUnited, at where is quarter at the XX

that margin So, that to concerns given speak reserves? and wage we I worsening there's lower of that have just would how a you for if and lower that profitability enter do guess kind a folks environment might the a less

the function have. levels are I think reserve our our we that a of portfolio margin as well as

resi do have resi a level -- typical a government being higher We we that compared of on have to bank, much guarantees.

portfolio. investment-grade have municipal We

lot and reserve. a and have these that losses have loan margin we lower lower portfolios So, lower of

look portfolio that made you at think excluding guaranteed to the also of we the if early our basis at SBA the XX are alluded I kind point level absolute sort is at on, that of where that points, NPLs have. I loans,

basis NPLs on our If December where NPLs half. are XXXX a were, we you look are our today, relative where at to

the So, the grow safer, really risk, we improved our not but course has even because of more pandemic because but deposit become to base. we've we're taking margin, the over been portfolio able

from So, XXXX. Deposits NPLs have significantly improved XXXX. from margin has come XXXX. significantly from down have improved significantly

different. at without is, is is get looking number a up. behind the bit or make that why have time, sheet what make And top good people of color the answers of number at sense the balance is at little Every bank look sense. the it where to really a why over So, sometimes just composition you to on often numbers get the house really don't tripped

I Raj. time That’s the everyone. very great. Okay, appreciate helpful.

with question comes Arfstrom next RBC Our from Jon Capital.

Your now open. is line

Thanks. Good morning everyone.

morning. Good

Good morning Jon.

different a -- ask question, caution, is What in just you I'll Steven but this what step-up my kind it of Raj. pessimistic, And is-- provision of way, cautious nature? more took are out your or

I would we're cautious. more say

that. Yes, driven going guess? what's lower Because obviously, by provision I Yes. the the ROA message was forward,

by heavily think yes. pretty Moody's SX the the We provision -- downside this influenced scenario. was quarter

mild of event a we're think reserve a I So, recession. well-positioned from in perspective the

not happen. recession, economy severe off bets expecting the rails have all to off whole But a for the if goes Obviously, totally well, we I'm that the industry. and are

be I function So, I I expect XXXX for really of provisioning today, think well-positioned. And very sitting provisioning mostly here -- we're production. to a expect

charge-offs Yes, growth I'm what plus thinking. is

Yes. Yes.

guys all? Okay. seeing your in any Are at you the changes quality of pipelines

little pipeline. Not the in robustness we a have in the but quantity, the seen in quality, some -- less

lot the at wait to stuff. investment, it basically over make of probably spilled the next next some build little and But next pretty is good also a a into is And or of January. because want Nothing we bit factory I closed payoffs. a suspect, environment the really looking it, customers to saying, some had of I we maybe quarter, and the

happening that wanted actually intended to are Fed So some plans can I it's to in talk little and economy. on People more are being, of that, when thinking a the have, People clients, real cautious. see the we about their effect cautious. the hard margin, more the expansion

in we're is level also would which responsible. a growth of outsized some loan that be expecting year, everyone recession, our giving So It to is you're mild influencing see about guidance in not growth. you that next going

Yes.

Okay.

on like the there's by amount the add, in estate would business driven But where if what of a they real people sidelines that the -- particularly substantial in into estate latter it or look today, investment is of of today. cost of be markets. that like -- I the capital people and less curve are pipelines towards real the part at see looks read to thinking today the rate you Yes, the is kind going fixed the think than be will debt is what debt curve will least year,

markets. bit, being paused So in CRE are the investment strategies particularly a

Yes.

outlook a that changes that, think bit? pause do probably guys you Okay. And a

I we that outlook encompassed think you. the gave is No, that in

Okay.

just then $XX more And million one quarter. commercial real estate, last Okay. number on the

at. we're number So maybe the that's looking

You real categorize guys you the commercial way single don't a non-performer have estate?

Correct.

It's Talk any but in clean. seeing bit you're it Are on quality the mind, portfolio every you obviously portfolio. your symbolic Are of very, all little seeing That's roading? like do you investor's or what being is very more more you going of this I had. a about bit is feel worse? Thanks. the is to maybe like portfolio the little get and industry cautious, a your looks

Yes.

lot I a it's think very up that sub add portfolios it's because detailed of a it. not answer portfolio, to a

the much central the district industry is over attention cautious again, obviously probably class That deal business think really be to. asset is, not the as next a that's where in I of to months, to XX the office. but XX needs So next to pay XX months,

an And focused have. evolving spending And of on whatever story. be will we lot time that it a little we're of

of outside for want getting us the absorbed it in in helps Florida, the for country, class pay other the York, that's asset example, other that you But to attention to where Now Florida. and of is at medium-term. New tremendously in us, everything the in part being banks markets Florida, for

in short-term, has not issue. of it's the a outside -- banks. really but an retail been And that, perpetual issue think for I

warehouse multifamily, I well. and industrial behind, part, banks think that for the very still most doing have is put

portfolio, think Yes. in. geographies as a asset-allocation about very sectors, disciplined we categories, approach about we the real take to I focused. and really When have multi-categories. thinking we've said, classes the add, And we're exposure super what would even got broadest Rod estate asset

we Boca the grocery Raton Tom Street. kinds retail, a Ford in be XXrd could different of softness, in Madison we that So an very highly feel there on portfolio at pretty might estate That's really different real where we but look some in the anchor are retail I store platform levels we what of in when have. think – anchored the very Avenue categories. we think across about than think be And of center those exposure store that a quality good our is exposures areas

Thank the help. Appreciate it. Okay. All you right. for

for standby next question. Please our

comes question next from with Our KBW. Will Jones

is now open. line Your

on back jump me letting for Thanks guys. great. Hey,

the repurchased math, to buyback at And XX% somewhere then level. I the internal actually, I see where it know the know look Thanks. have to kind don't plan follow-up, here? Did to? as the buybacks common guys you quick you bank on our the to that current stock a hovers relates buyback. this the year, XXXX. keep wanted around Just to hit of capital, threshold gas as internal you had in want you any levels, Tier the you of I around just wouldn't X at if Raj, TCE much ratio your more do or so guys massive by targets company draw any down on

Yeah.

So Leslie at, yeah, it's Yeah. a my I'll look stock we The now, of answer price ratios no-brainer actually what is of we the that. are And at terms active. right from got perspective. in

Yeah.

we about investment focused more couple things we are CETX. think company's rating. of about when levels, think we A capital grade are We the of protective very on

very the of agencies' buyback. view ratings So of we're conscious

We see also we're support growth we sure capital to retaining on want to sufficient the be that horizon.

think the those we about. two So, are constraints

happened in hasn't to refrain changes the going yet. way targets, plan probably gets the month XXXX. is actual out them anticipate from Board but think for putting That there capital I don't plan to our capital or Currently, in we I'm so capital Our to going finalized. that improve next meet about any until

Understood.

the we've capital don't that in certainty laid the that anticipate not with would past changed. the out until I changed. But meets. anything think don't Board I I But targets have know that

Yeah. perfect. you. Thank This is

conference At back Singh I Raj closing to would the I turn now like show remarks. for further this to time, no questions.

We're Leslie questions, three much Appreciate you. joining if are months. and all again, you thank the you questions. so all any back I talk But Thank follow-up again here, and both We'll you in for us. forth. your to here. Bye. have

participating. for you Thank call. conference today's concludes This

You may now disconnect.