BankUnited (BKU) 18 Jul 242024 Q2 Earnings call transcript

Good morning, and thank you for joining us today for BankUnited, Inc.

Second Quarter 2024 Results Conference Call.

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

Before we start, I'd like to remind everyone that this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. That reflect the company's current views with respect to, among other things, future events and financial performance. and in the are or company company's plans, made historical on on statements current of performance and estimates forward-looking this based call the the Any expectations. its subsidiaries information The inclusion representation the company expectations that company will not or regarded future estimates by as by plans, should the contemplated of a be be forward-looking this the achieved.

business company's to relating prospects, and assumptions, results, limitation, events any those new developments or to industry. obligation services such Such including company's as any direct by undertake uncertainties financial strategy update as forward-looking including, external information, The future the growth publicly and whether control, condition, of review statements or and as impacting liquidity, circumstances various the result to risks not otherwise. forward-looking are financial adverse the company subject does operations, statement, impacted without outside financial a

Form actual indicated factors differ be factors number are report could SEC's www.sec.gov. on to Information current on found XX-K materially Form of can on or the These X-K, statements. December XX results year forward-looking these be those cause in from should as the exhaustive. the factors important on the construed XXXX quarterly A not and XX-Q annual company's report X-Q, Form report available ended at any which subsequent for website, by

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

for been towards start the will joining things some Thank you. end an you're on always I'll you There's really our when coming Welcome, quarter. variability us. Thank end to by call. quarter. of outstanding saying everyone, out earnings this the has how

way, sometimes sometimes And fall they don't. your things

really you margin, you way. everything think I better quarter. NIDDA, loans, our mean, couldn't capital, liquidity. of expenses, deposits, have This asked I a cost the end deposits, at for quarter, Whether to look look at credit, I fell whether

were Cup day the World we on course, India celebrating, of as quarter. just last the And of won the

have couldn't stopped still said, asked haven't for more. I celebrating. So really like I I

team So thank for you, day. making my India

I'll highlight me in Tom Let with Leslie and quickly will details. go then and few, the a and numbers, jump into more

at to course, Just of came $X.XX. EPS highlight, in

think days that grow, as expect ago, $X.XX. you of nicely. been margin, for around we did And we've I time very which telling margin a checked consensus some it I couple was to

I XXX. up think XXX quarter. quarter, last we were We're at to this

margin So both grew ledger sheet, seeing right the are That simply -- we and of left very on being about happy we at because that. side transforming the the success are here. balance

for deposits. So first Deposit talking time. the first, down came cost of right the actually side

quarter, actually of will place So dropped you told XXX. kind to last we we're getting we report Happy costs grow. XXX from that down to costs the where deposit to not deposit

only you drop little all came But look if Last the the from were X from But also they XXX. deposit plateau way, bit up this to XX about We're quarter, happy they DDA while came peel not deposit XXX were basis out. a little which by of from growth, basis to costs, costs onion bit drop XXX, XXX beginning it's that -- that. of up to you If very at really were lot down more, back phenomenal a quarter, a up points the points. was of this overall quarter. interest-bearing

DDA, very, growth solid we a well. of $X.X $X.X was story DDA this noninterest billion which Deposit by just is very billion, growth, solid That's, number. quarter pretty the way, non-broker grew million big and in a which the previous that is had $XXX the deposits on as that quarter, by here, top of

billion. NIDDA year, first think the for is I half $X.X the of up

keep going the the improving to course, the right not well the it mix. job talking But underway. that balance transformation I'm is We're about and of sheet the to deposit side done. So of keep is at

We to originally planned. down did the than had of more we take this opportunity pay broker

our net pay million. $XXX was in brokered, deposit growth down So of

at a ago. when billion so just rate see this, level this and define that you wholesale year beginning I as we were brought this look back where this. quarter. had funding, combined, $X.X have or we numbers ago XXXX at or If at lower, you yesterday wholesale wholesale if as of was years X.X to low look this funding really the brokered go as Leslie to by cycle, FHLB And to this early funding down and we

when the still So despite flat Fed X.X% we're taken funding back was funds to the at the fact X. we've way all at that wholesale down rate, our

in quite period a that's year. in an the short So basically achievement of last time,

mix just $XXX to, million. improved declined while we also by been guiding resi as Asset had

as corporate quarters now. declined a little for business, over $XXX been CRE, growth in you it of business, grew. combine the if business leasing run business, said, several Resi, everything to And that, million has categories. Our small all commercial and like off those was I continued the XXX,

trends Actually, but down little credit just quarters. few the quarter solid. Overall, proactive is risk bit in classifieds are our in where last this been over time declined and some still first we've a the criticized credits rating

which We quarter, for New this and pretty loans. surprise. the a good up a time The in already York, X a to $XX as was actually bit. that most had this X some the loans in X in of some Florida for about but actually, been way on the We've reserves are we've came feel migration we're this these million, bit. CRE, this none office quite office tracking trend that fully taken reserved about So just amount went little NPAs in little other There notable CRE. go

the good just over expenses. to having were talk last noticeable, launched to fee good -- big a the the card. noticeable, be products, up. happy of X very been the that worked success to and Capital terms teams to wanted not in years are on to last been of Leslie over making We're very are But years. you who course even beginning but with the In beginning I income, of Markets couple last shout couple commercial we've with pop having numbers out more about the that about the and I'm out this of point success that, that will of course have stuff they and years We now over we've investments

Capital liquidity are The to book continues to continues value grow. mark all robust, the tangible portfolio bond come on down.

news, said, very like but things good with happy I'm So I out. turned nothing how and

success not guidance, still terms growth heads the much to the company. we're not is midyear. changing delivering We've the In thing important our of terms DDA of and most keep keep got strategies in down of for

the is take mention growth that in new York, minute with we've New broad-based Florida bringing this this a happen $X.X without large billion and from businesses. and our lot had okay? to both This national of success of A come of in new had clients, customers, doesn't -- in me has a bringing DDA. Let part we've

optimistic when also that as helped past look have you It pipelines, And been which the by Tom in has feel some to you about at about. we seasonality, continuing will about, growth. very talk we talked

helps year The first half the us. seasonality of

year, towards the so the us. actually of half much, of second end hurts the The not year

trends will again. happen similar think I

billion seasonality. new you relationships least should $X core level X at for foresee can pipeline. only, I see terms one So other on of a that is of the of that than based will expect similar reason But you growth, on quarter coming in DDA a which don't think we for type next that, growth the our months

of by What bank all else, lastly, like-minded built has attracting am this, years. this want be growth important organic one this who I been Oh, we're while over And in very we people that yes, part to whole built on a bringing doing missing story. sort like anything. topic of also, the bank people

was to to Consumer here. a months done retail the couple our Ernie [ ], Head ran room this announced Bank, team. with ran add the We Ernie of is ago about that, job But who Finance the every us from me just he's recent Bank Auto most the where as TD not in he And Diaz management came Our the the of bank. wealth before business, business. at entire footprint,

I we're that thought bringing ideas probably if very we someone with table but of caliber he's He's months, that was the happy of with So join only have couple bank, he his the to already us. said, would us. wouldn't like of been a

welcome a big happy to BankUnited. So Ernie and join choosing are that to people

to and go move Leslie over Tom, numbers little over more he'll this turn a then me and the in after Let we'll detail, that.

Great. Raj, you. thank

in So total is up by mentioned, total the including million billion. nonbrokered by quarter-over-quarter. as reduction and brokered, NIDDA were deposits grew the NIDDA million up for $XXX Raj XX% quarter, $XXX $X.X deposits

I As of Raj think, look the to, very the forward, as remain all across robust teams. pipelines, alluded operating we

the looks think, I business, account very for quarter. good New

for look opportunities in seasonality and to pipeline is he think not mentioned, third the new to but but the back out quarter, days As strong the into only continues track we relationship always subject fourth of the quarter. kind book issues, I XXX very

are rates We this and looking higher-priced at advantage some some on reducing of taking deposits.

the we these we're is that a of take higher funds the advantage of rate relationships previous cost some very now and at Some disruption increase that the clip and during we relationships financial we increased to type to as at And doing deposits specific of deposits. reduce deposits to look think time were of year. down or are good moving continuing and opportunities

side, our $XXX $XXX million leasing our that segments our in side for when you was finance the pick you where for quarter-over-quarter, of $XX overall that the data, was have core the see strategy, On and also residential geographies we teams a up both nice million million our say $XXX $XXX X quarter, supplemental down were million base or C&I increase $XXX the would for look segments. have loans up at saw consistent subs X practice the in on the the would quarter, growing focused. we I total, that and also and segment, Cree. the pretty municipal growth in on largest side, million down. can up say within the broad-based loan I the the broad ones all segments We information we C&I with was growth were CRE across it growth. predominantly warehouse grew Mortgage from for C&I can C&I

and grocery-anchored at urban grew multifamily now, If asset it be that quarter, the industrial, would Cree for core the we're focused predominantly type kind you on retail, segments business. of which within look

distribution so with stayed the the growth some except And overall the of previous CRE exception not the with obviously everything it we was as did you'll and almost for largely grow. portfolio of quarter, see exactly office,

for us, commercial healthy QX. very But going pipeline looks very overall, into quarter good

$XX some by I portfolios municipal continue Resi assets loan-to-deposit as The and going C&I strategy. yesterday CRE. this We consistent and we've equipment years, single prior advantage business. with lease at lease some to the than of declined $XXX equipment with will we've been the to portfolio from and operating continue in period declined improved More of selectively to the for opportunities year, XX.X% commercial finance to The time, was high moving looking $XXX sell that over our million million decline. growth XX.X%. million to core expect to continue exposure quarter, last from from took that we that ratio away X we're over it guidance.

Let's dig well. bit deeper talk as CRE a about and little office in

through additional You disclosure. XX where can the added in XX deck some Slides look we've supplemental at

So overall, modest is exposure of created XXX%. think, total CRE XX% remains, loans capital total relatively risk-based I big picture, our to

numbers to to others Their XXX%, think in $XXX in I $XX billion peer billion XX% respectively. range. compared group the were our and

the continued a parameters number that we've that we've keep overall, and always is and on, of we're within XXX CRE risk the comfortable So portfolio kind kind focused that to of with. XX%

LTV was the the average DSCR and XX% Tri-State was portfolio the area. At York June in X.XX, weighted Florida XX% of XX, New is average was portfolio the and CRE of weighted the XX% in

I time down all the as follow more submarkets. you we we told by office on in bit little break and right me front of call, single last a track Spend submarket it all on every right loan. They're the when office now,

better quarter we to of in XX than quarter, would of statistics exposure CRE XX $XXX we have have in. better in submarkets in X [ we're look I different at over were company compared The million submarkets the last Just were submarkets operates X general, the X ]. office they quarter greater where and quarter that say that this the last in in we loans this if credit

credit reason. the we're So we segments it different as metrics that positive in. tracking a was was the business And at quarter primarily really look for across that one

was off. Occupancy across we generally the but roll remained pretty portfolio, what really strong saw abatement

the the years of abatement saw the that ratios in count in, we debt contained because improvement don't time. pretty of has activity, and broad of in last And we that quarter the abatement lot a segments over improving of a major so that And obviously, leasing in abatement couple period NOI, largely coverage situations. periods during this time, we're service of

coverage have So specifically, office, $X.X service debt suburban million an which ratios industry are they're York XX% of neither in existing of includes of those pretty construction, Florida, $XX Manhattan, has portfolio in medical different $XXX office-related office ground-up Of CRE which exposure, area. and predominantly Tri-State that debt billion total is in renovation buildings. in with from dynamics really an construction we perspective. of yield additional The was XX% the that $XX also is million in million portfolio New the really

on $XXX this next average the service rollover the rate office office Slide of XX% XX. numbers rent also the There's by ratio office portfolio the additional portfolio. coverage and breakdown June weighted XX of XX debt of geography loans of as next in is a in million LTV average X% the of of $XXX The mature weighted those million was XX. X.XX fixed months, was stabilized months

months. relatively rollover So in have the rent next XX we light

to is XX lease and a of With is has York the occupancy in next XX% months stabilized $XXX the and this New million Manhattan, Tri-State portfolio, respect in X%. XX% rollover approximately

market. to We encouraging continue in some see the signs Manhattan

A year, the -- was leasing prior leasing we X% consistent And in If in quarter we've that the is previous this Class first seen months. was the to level it strongest XX.X over pandemic the have increases the about look not of improvement feet, in square the million year, last Manhattan but is at years. the a seen half last you activity was space. certainly total predominantly the X over at XX This the for over which up

to generally favorable continues demographics in be and Demand Florida.

the Orlando, seeing XX a We Florida that Slide market, Raj have Tri-State some geographic Orlando spots you York suburban by Leslie would the lease pretty activity. say million square the that over the of in to and weak predominantly are portfolio in strong. feet was all looked are of Florida couple that of North that X.X of segments markets numbers on morning I quarter we for loans at Tampa certain of New are only There one and in breakdown space gives other I mentioned. is this submarket. sublease where I further mentioning the and a charts X% was

seeing seeing of generally you're down in positive go activity the most So you're and sublease fairly Florida. consistently submarkets in markets in Florida, all major the absorption more virtually

saw second rent rent year-over-year For year-over-year rent modest, quarter increases over -- increases. but

office in totaled Raj -- loans, segment. million of quarter CRE Nonperforming nonaccrual quarter. the loans classified in this for some have did the as was by We during the and first loans as Total CRE $XX This moved June mentioned, time. the million predominantly criticized XX. $XX all increased to

continues is in assets specific, owners, properties. characterized concerns manageable support and loss for and strong the space underlying portfolio by portfolio asset we to levels asset continue be date, delays ultimate us. have. migration and low believe the build-out in lower Overall, to very seem basis the completing periods generally very from continue renovating and cases, to perform sponsors, to long-term whatever this contributed to generally well be we To of overall, the some occupancy will did content And lease to risk comparatively

over I'll with to So Leslie. that, turn it

Thanks, Tom.

of quick quarterly a results. Just the summary

obviously per income this The $XX.X XX million NIM quarter and million As up most Raj was share. increased points or net income interest the to quarter, said, Net XXX. basis was $X.XX for the $XX.X of in increase NIDDA to increase NIDDA. was average Average margin million that's contributor total significant this XX.X% prior deposits, an and the quarter. in average for $XXX compared grew XX.X% to to

securities The was loans new as and portfolio up higher-yielding continues on The essentially higher into to to yield yield X.XX at assets. rates production shift on X.XX was flat on the quarter-over-quarter. from expected, composition as came

very pace average in slower X.XX a second to the quarter, to interest-bearing to declined see increase last cost with of quarter total We happy cost X.XX of for the of compared deposits. along are the deposits

interest-bearing up cash quarter-over-quarter. due advances really did basis, couple of expiration That's cost deposits spot stable the for just FHLB average flow of this hedges. a X.XX. On of cost The go to quarter is to a the X.XX of

From per love would a quarter. NIM guidance what it's back expect not standpoint, we the continue over points half but think that, to although XX basis to of the 'XX, expand see don't I'm we'll expecting guess but And I I a idea mean still higher the of to end the that. have high I in little you Xs, that X.XX, than the continue by at given to year what Xs. now expect already we're high better NIM I

expect digits digits high double and income do we to be mid-single up So net -- we year-over-year. low interest to

this Provision loans to and increase ratio, ACL stood The finance franchise points. XX. in includes the million, was reserve. commercial at from C&I provision $XX XX ] quarter [ The X.XX and the ACL, June CRE, XX equipment ratio which at basis to continued

This quarter's migration some offset partially specific were loan in ACL risk provision in in and the increase rating the in driven improvements some economic the characteristics by forecast. and reserves, by production, increase portfolio changes new

migration on property market reserve XXX up that of see June at office build XXX March changes XX. you prompted That's CRE was This and at the forecast. XX. by in from was some risk The rating commercial

picked getting up this negative you migration. some from reserve the that over reserve calculation. quarter, qualitative likely that this move You a rating in fact we And might reserve we put were quantitative million in risk saw that the of office pretty saw the recall large of and $XX some qualitative last up of quarter, that we CRE quantitative anticipation quarter, on to the see to

percentage getting likely the XXXX, over expect as the to loans of ACL rest do closer a build to We of gradually X%.

that's driven to of some shift expected by portfolio And in going the be composition.

flat quarter-over-quarter. with declined asset As the last fluctuation $X.X this Lease financing of was in classified compared increase $XXX reduction few CRE portfolio quarter was million to small is the residual $XX offset by income criticized well and much by noninterest as on about Noninterest the expense. a and things, two pretty income $XX Raj down in being which in million in loss this quarter commercial income, due as size expense small A million gain the That's mentioned, categories. just a to assets comments quarter. million. of other overall decline a

we an card have income our derivatives commercial noninterest this did from income, in increase Other and quarter customer our fees. business, syndication business

I'd some forward, overall in gradually an expect in are can there trend that cause quarterly things here increasing Going some volatility. item. line But that

I'll about going does in expense. is the in special share in mid-single-digit driven salary by what railcar really the include we're expense expense, brief Most things of for changes back costs this really year one FDIC driven P&L that's in didn't comment compensation refurbishment liability the a year-over-year that stock up make I'll for volatility fluctuations some reiterate the increase. classified and expecting that year, year-over-year by prior company's to the you're in the that are in Core awards vest. guidance of awards some of drive noninterest reversal in on is that in that's of expense X%. only seeing assessment, price half the our increase the excluding some and the increase

CETX at XX.X% forward, expect and going I'd was this to compared X.X%. increased XX.X% a to capital have. stable [ That's be The quarter to ] I to ETR, last from items. quarter discrete perspective, excluding TCE all TEA around CETX

turn it to we'll Raj questions. then to your for take comments, over and closing I'm going

looking pipeline. look happier turned at beginning with optimistic I call, couldn't and think, when I way very I the the of I forward, listen, at the out said the quarter be like

well So to to over all glad We'll for we'll the and happy operator take be Q&A. as questions. and it turn

of Instructions] KBW. Our [Operator first Will the comes from question line from Jones

like think But a might dampen to nice seasonality year, noninterest-bearing front. this the way what impressive It continued a there's mean bit on of we the easier the good. maybe little really on sounds that. the it's nothing wanted So that year, in quarter. doing I on first year. pipeline noninterest-bearing the still maybe the deposits. second half on but for X-year just optimism to Growth start look congrats of see I all, you growth are about the And guys was kind of rate. just of maybe spectacular

what done, terms see growth in at have XX% look already already due just just you guys you're year for you Is maybe this there If target rate? approaching broader growth the a a what of you year. for noninterest-bearing

should but quarter, and of noninterest XX%, if the especially when for is you take in double-digit to That's XX% growth. growth growth. XX% take as to pipeline stay what given DDA, downs XX%, the is environment. we're by very they shooting healthy and hard sort between get mid-teens I would deliver, comfortable what way, able in seasonality, projection. type XX%, as as are any not That's you growth of ups XX%, -- environment think out our out of be this is having DDA be the space, a long-term we But somewhere

the depressed Right example big reality originations just the kick LOBs, mortgage the you very to that rates you one originations are I share. from is now a really market market coming start business. that market now, year that or one the stay is because know and When can when a will wider around getting from from the is growth don't impact. lows. at supercharged. is who is be all will now, XX that simple will years itself, But our historic give knows. a the up, title mortgage of of gets will -- not refi Things when very pretty move I'll that have which same. a is boom, see there Now

not balances much growth. to see sit and the account enjoy But they will will grow. do, you do, but to have whatever here those except average And

were say, back said to speed DDA the So to double-digit growing, we're but XX%. XX%. I've do want We growth. putting gods shooting And what we business in aside We're get the at I is just at last would for which quarter. think, at I interest XX, will rate

making progress hill grasp and capturing and eventually high was, getting So back our think, then now to getting that I back we're watermark, XX%. within which towards which is

will that next good time be year. for some So a goal

Yes. the headwinds. modest the growth rest from And tail given I recap to seasonal just of just the through here expect year, would

that's side, great very particular, strong see X% guidance helpful. front. look the loan the and We'll the in high margin appreciate CRE still we unchanged on still the that [indiscernible], work of you Well, seeing non-DDA I But And kind in kind Ford can range. family as runoff remakes at of is [indiscernible] happening happening. where that [ is we ] core had and C&I is growth the

off is you words, yield what that run the are receiving C&I other that of yield, off? trade-off mortgage, is you I guys new As versus guess, core kind what what's and running grow and loan in you

call mid-Xs. it, production in yields X% new mean and I around the resi X%, on the to of X.X% portfolio the most

So go. there you

Is to fair that guys range point you to in target high of assume continue will maybe kind that it for yields to X continue loans. forward? increase that of single-digit loan XX as basis going to And kind core see we

seems I yes. mean that reasonable,

And in go quarter, going Ernie We about we that. last which deposit point off they want bunch I many not do paying guys did even year. It's This and hired make just and in, talked of bringing technology didn't really quarter or to brought to a but we this deposit growth and like making. product the it's years effort of was one is is you're on business not that not. about -- that seeing back market, is and in. working not of today. The X really make more something years last I growth. one last

deposits in any didn't yet. He bring

and Not its way. knocking the But strategy doors the not helping usual names. a have over that This that last X-, not see long-term higher. choose X-year more producers coming into now do gone to is that of all that. year we is is We a from could own on did far us. did We lot

point. just So to

what's I loan forward kind the sort of Well, by we the what's look we of side, would add on look approved, yield if sheets that things term going also and between opportunity pipeline at and opportunity of accepted, nature.

think fairly all business Obviously, think differential QX fair of pricing I are market on as that growing we pipeline, much to LOBO banks We're the we're good of loans good. seeing C&I a more virtually now. emphasis too firmness terms put not into early in and quality remains ] versus look growing yields. trying at bit a other parts right I But seeing in of their QX, book. [ the the

That's for it And guys. That's me. job done, okay. Yes, well great.

our Thank you. next One moment question. for

comes of from question next Our from line the Timur Braziler Wells Fargo.

remarks, the Good of been missed DDA some apologize to business mortgage just Maybe opportunity the within business. do frame from the DDA. future questioning rate the but year? in we the just kind first the what growth line And if title the look in then half has might following where relief like increased of title up for you coming on get of through And maybe kind go of prepared activity? and opportunities that morning. can Raj, you alluded I if I this in the

what average tickle a at saw this Yes. be that refi say best. XX%, said is hard. that, lift happen quarter was it's was grower business also That's quarter the biggest broad-based. growth the biggest XX% a it's boom, and when the of guessing that deposit Having seasonality. I this will will predicting It there -- a I'm could balances, in little just but beneficiary you

course X X also out over also that and like X of HOA very also the the organized well. about We has line there ago invested years growing years. to But in into business I would technology point business been or a the over last separate

of that. lot added they're of And people they did to we or but there. paying investment some off. So a here times year, couple team of last -- benefit not the X And sales people, seeing a a couple that and just of the X is of are all

businesses. HOA year, way for New we're But national budget just as is the in well. So far title such ahead of NPS, And in also its as the benefits York story about business the seeing up been New healthy given to opening has has in the little disruption marketplace pick it's And York, a in an core a market. bit business. some Florida, that the the us our

that So quarter. this also grew

those money and are which also seasonality fourth was that in in the DDA. this other the things business quarter that third of not direction, there a second municipal, but shrinks grows the is a in quarter. but largely That quarter first, trends Now couple but are that's market shrunk

way. other the went that So

was a say lot there's broad-based parts. So growth. of moving it overall, But I'd

probably also title business the fourth the most biggest contributor hurt biggest the trends. Yes, goes seasonality in beneficiary was way. other seasonality also quarter when But of the they'll the the the and

I would quarter, which that the it transactional of all business corporate a saw we that the also banking is we're was geographies add across virtually and the kind of increase all in business in in. good

So and it businesses was businesses. specialty of broad a combination of both geography kind

Great. the are was then to that again, And opportunity, of balance in What [indiscernible] those what follow-up kind Okay. just [indiscernible]. are balances maybe has just, rate then And specifically. the on DDA? title the business a rate today sitting

make the business. kind in I $X around about kind and but So billion, don't disclosure. title don't me, deposit numbers we most don't -- those of just of is of typically we public though, really is of line really balances DDA, that have we aggregate, that of the that I and In think detail by disclose exact don't front business

Understood.

last one for just then one And me. Okay.

quantitative in last really last other reserve I seeing comments today, this portfolio office appreciate the issue within right reserve qualitative commercial biggest the And quarter book? stay of degradation office that's now that as here the is the it you're couple sit into the maybe abatements, and couple to last quarters? kind stable, quarter. I should how guess of what some assuming we the quarters, over on categories at the about just on portfolio relative looking think the office Just the the in you seeing of lease of you're for the the trends moving

we you outside for to several that a are and is I'll Nothing now reserve, we the We've is our the at then been some quarters We we've telling line kind little our color going X.X%, for bit adequate. been the And what reserve what know going on to the that's comment issues. and feel is happen I'll seeing and around this are was we loans to which like ones. in expectations which in book. expecting happen. Tom didn't office of exactly know of that -- about book these of of now of add ones, have let with

is would say it yield at overall office service the debt I of that overall doing the occupancy, points debt a well. Yes. performance to overall portfolio coverage and numbers, you if the and that portfolio look

building be impact early deals will the to period, abatement it NOI. there issues because I couple abatement not not very the that will ] it's that economically asset lease-up [ predominantly, be a spots specific within would occupied DSCR contributing there have but occupied, Now is that of during physically rent challenge, a say, on because it's it's

renovation. are building Raj that's one gone a through the There New in is building mentioned York

those lease-up do and period buildings then renovation period. New in and an X have have a go York, through to abatement We

So a through vast you are them all loans couple go me, specifics of performing asset well. have if that the there very But that portfolio. in I are overall, the of in XX of majority are front

it. I color. appreciate that for Thanks Great.

Instructions] [Operator Hovde the question David from next of Bishop Our from line Group. comes

know I commercial have Raj, about here, morning. lot maybe Leslie guess, Good there's know spoke exposure I there. added the about a but of, CMBS some specifically. I you this, and market we been

to out been press of there? -- sort the Just days impairment. feeling of about Are curious portfolio what's how seeing you're that relation in you any these the in risk

holding that's overall. how curious Just up

Yes.

So yes, seeing portfolio. are but market of no our whatsoever in CMBS we have impairment increased risk in collateral the losses

rigorously. quarterly each credit those are test at at on see of a have. very our every one securities level and time signs that we potential at stress deal-by-deal rigorously we well extremely on don't a We and of the enhancement enhanced. holdings least all it All basis, impairment do because And of of any this of we basis, monitor

the in single investment? tenant avoid guys assets you And

you asking. Correct. Yes, thank for

borrower We have no single single asset, exposure.

expense be And that the the then half It I like sounds in guidance, just the how year? it, should it. think some expenses. about there'd we Leslie, I escalation Got operating missed in of think back

in mid-single-digit the increase aggregate. Yes, year-over-year still

our no that the that drive just guidance. happen. no point going is to the I to So guidance. And railcar things overall in our that's change refurbishments But of change one made some that will

One moment next question. for our

next line from JPMorgan. Our from Steven the question of comes Alexopoulus

on a a Alex Lau Good follow-up It's morning. I Steve. have on Title Solutions question, business. for and the the DDA

in In that in data being good result to? last Or business a would terms anything good a year has that of seasonal the after? refer to in seasonality point for to that business, trends is model not last changed period year's

yes. the could probably last you be a could that, would Yes, Probably as feel would that typical I you that year year. think yes. I use say best And probably year. that. year Last is

something earlier, that the else rate equal, all sense. makes market, held said yes. Raj happening as Barring, Yes. Yes, in

Got some how from business Title much seasonality? of growth year it. this has gaining share the Solutions versus in And been the market

at I'll would the I if you out mid-teens seasonality. business is you give that take say growing -- level,

in we're about in adding bringing of for growth seasonality, quarter. per rate. In We're clients about terms XX out terms on that of and new relationships it's balances to mid-teen even XX

So that...

And XX% equate base. in a would overall to about the to increase XX% client that

And prior color. compare pipeline And last for is to quarter How how quarter? one. management Great treasury that end? big deposit the your does then my at

It similar. hasn't is that as closing from pipeline, of changed bringing year much. pipeline, beginning things the now hasn't we're very -- -- really it in new this the into It's to in go really

consistent to pretty time. about pretty a for rate. at has tends been some actually pipeline constant get That replenished at It

question. moment One for next our

comes question line Ben the of from from Citi. Our next Gerlinger

pretty this I apologize went good morning, up a some front. lot was There calls quarter. of on a

there loan -- a capital also economic transfer you're the good repurchase indication outsized sense growth? seems backdrop. but capital down given share just [indiscernible] the still in price Southeast have for talking, of continued given and for of of here, compressed overall it way to about growth your general deployment, So had get of rebound are is whether is just a you -- or that road thinking guys a had to any quarter how be share but fairly better potential kind trying the you good guys have I'm a

agenda and yesterday, to for just a section capital Leslie Board add discussion. I August, I on on and working actually, -- We Yes. her the told were

able growth pretty up opportunity. we're So actually We're first facts listen, my profitably. seeing of to choice is of is of is always we're it not for We're not. and some If if deploy or it see an sustained buybacks. back looking set buybacks that always grow time, capital then we to happy in conducive think course, a the build to at here. our of about then, mind environment period seeing capital and And the a

you've stakeholders, heard also, to very all sensitive And about agencies especially quite capital are who us that sensitive our the are past return. in rating the we

now, I'm pipeline. be right sidelines right at maybe best mind. something looking out yet to of And But actually say later or going this maybe don't year. authorized So in all deploy decent that I can myself discussion discussion do we'll that now, the get But we're we're have something want a in past. And in would we keep we'll But a I'm the have if August. had August, Board. in and in capital, the that We'll we've ahead a by the not like the to outcome. in

Got you are you. --

the grow think, the up guidance, of end But were the or there's balance eventually, given And fun. at give not I I that level. not year. we've want no we'll will growing from to sheet take, year, to This beginning We end right? grow probably

next if So want to about get I back But so I I in Leslie me the kill won't. growth start business. talking year, will

I Got data. say what you. to it Board the Are you day meeting so is, know able

be anything a release. press If there'll No. happens,

by right. try appreciate thank But time, I the it in I think you. sounds good. front All about Yes. Well, of I just get to X minutes.

I over to now the this turn Singh remarks. conference Raj At would like closing time, back you. for to Thank

to Like very I big World we thank you We're Bye. any to and this optimistic quarter Sunday. said, We're way very the you Cup morning cherry the was the you on the pretty the turned India with decent future. look as you in And a call talk see winning again questions. more time happy Otherwise, out. detailed X we'll have months. or for us your if

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

may disconnect. You now