BankUnited, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Bank Unite third quarter earnings conference call. At this time, all participants are on a listen-only mode. After this week's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press the Start and the 1 key on your touch-tone telephone. Please be advised, today's conference is being recorded. If you require other assistance, please press Start and 0. I would now like to hand the conference over to your speaker host today, Susan Greenfield, Corporate Secretary of Bank United. Please go ahead.

Thank you, Livia. Good morning, and thank you for joining us today on our third quarter results conference call. On the call this morning are Raj Singh, our Chairman, President, and CEO, Leslie Lunak, our Chief Financial Officer, and Tom Cornish, our 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 reflects the company's current views with respect to, among other things, future events and financial performance. Any forward-looking statements made during this call are based on the historical performance of the company and its subsidiaries or on the company's current plans, estimates, and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the company that the future plans, estimates, or expectations contemplated by the company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions, including, without limitations, those relating to the company's operations, financial results, financial condition, business prospects, growth strategy, and liquidity, including as impacted by the COVID-19 pandemic. The company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. Information on these factors can be found in the company's annual report on Form 10-K for the year ended December 31, 2020, and any subsequent quarterly report on Form 10-Q or current report on Form 8-K, which are available at the SEC's website, www.sec.gov. With that, I'd like to turn the call over to Raj.

Thank you, Susan. Welcome, everyone. Thank you for joining us for our earnings call. Let me make a quick few remarks about what we're seeing in our markets before we get into our results. Three months ago when we met you on this call, Delta was beginning to surge. Florida seemed to be caught up in it more than probably any other state, and there was a lot of concern as to whether that will impact the economy and to what extent. I'm happy to report three months into it, now Delta seems fairly in the rear view mirror. I checked the numbers just a few minutes before this call. I think they've come down to even lower than they were three months back. So we're happy about that. But what we're most happy about is also that it did not actually have the same kind of impact that previous surges have had on the economy. I think the economy is learning to live with these surges as and when they happen. Hopefully there won't be any more. but at least over the last three months we did not see a significant impact to the local economy here or in other parts of the country where we do business. But it's good to see Delta behind us, obviously with a fair amount of pain that everyone took on the healthcare side. The Delta surge did put our plans about return to office on hold a little bit. We had started bringing people back in in the summer. We had to take a pause. Later today, I will be making a call internally and we will be talking about how we're going to restructure that process. Our expectation is that by January, first week of January, we will be in the new normal. And between now and then, slowly start bringing people back. We're going to start that, believe it or not, even for board meetings. We've not had an in-person board meeting since the start of the pandemic. Yesterday, the board met telephonically and decided it was time to, you know, to It will be over two days in the middle of November, so I'm excited about that too. Overall, the economy here in Florida is doing well. There are obviously widespread labor shortages and supply chain disruptions that everyone has talked about. We are seeing that. Our customers are feeling it. Indirectly, we're feeling that as well. It's hard for me to say when those will resolve themselves, but that is the challenge that we're dealing with. look at this, you know, the biggest economic crisis of our lifetime that we went through, if 18 months into it, if all we're dealing with is supply chain issues and labor shortages, I think that's a pretty good place to be. This could happen a lot worse. So I take this as actually a victory that, you know, these are the issues. This could happen a lot worse. So I'm thankful for, you know, where we are and how this pandemic is being resolved. Quickly getting into our quarter, we posted net income of $87 million and 94 cents a share. This compares to $104 million we posted last quarter, which was $1.11 per share. The annualized returns so far for the nine months so far are return on equities, 12.4%, and return on assets of 109. Net interest income declined slightly to 195 from 198 last quarter, but it was up compared to the third quarter of last year, which I think at that time it was $188 million. NIM contracted to $233 from $237, mostly because of lower asset yields and less than expected commercial loan growth. Also, less PPP impact this quarter versus last quarter was also a large reason for that contraction of NIM. Cost of deposits, as we've been telling you, The company used to come down. We dropped the 20 basis points this quarter. It was 25 last quarter, so five basis points reduction in cost of deposits. On a spot basis, we were actually at 19 basis points. And I checked last night, we're down another basis point, so about 18 basis points as of yesterday. So the story on the deposit side continues. We also had decent growth in deposits, especially DDA, non-trust DDA. meaningfully, you know, we're not trying to grow the balance sheet. Growing the balance sheet and hanging things up in liquidity does not really create value for anyone. Instead, this quarter, we decided not to grow the balance sheet. We shrank it free of capital and bought back stock, you know, quite strongly. In fact, one of the things the board did yesterday when we met, is approved another $150 million buyback given that we are going to wind down the authorization that we have based on how quickly we bought stock this quarter. Also, the fact that the stock was around $40 or so makes it very easy. From my perspective, given where our book value is, we're trading at such a low multiple, it's so easy. much of rocket science to figure out that it's a good buy. So we've been aggressive and we've been buying back and we've gone through much of the authorization. Loans, total loans, excluding P2P runoff, they grew by $74 million. Residential business remained strong, as has been the case the last several quarters. Commercial segments, the payoffs outpaced production. On the production side, actually, we were pretty happy Our production, you know, we tried to go back and said, okay, let's see what we were doing pre-pandemic, and we compared the production this quarter to the third quarter of 2019. Now, production was actually higher this quarter, but it's two things that we can't control, one being payoffs and the other line utilization. Those have been disappointing this quarter, which is why it all adds up to only about $74 million of growth in the long portfolio. What else? Credit. I would say nothing but good news on the credit front. I know these days credit is not on people's mind. It should always be on everyone's mind. That's the primary risk we take as a bank. So I'm happy to report on the credit front, credit size classified assets declined by $240 million, loans that are on temporary deferral or modified. under the CARES Act, also declined to $285 million. They were $497, I believe, at the end of last quarter, so almost cut in half. NPL ratio also got better. It was $121 this quarter. Last quarter, it was $128. By the way, that includes the guaranteed portion of the SBA loan, so if you exclude that, NPL ratio is actually 99 basis points. The $69 million large commercial loan that we spoke to you about last quarter, the resolution of that is moving forward. We're pretty happy with how we reserve for it and feel very comfortable in that level of reserve. Net charge-offs annualized was 19 basis points last year. I think we were at about 26 basis points, so good news on the net charge-off front as well. Capital book value has grown to $34.39. Tangible is at $33.53. And of course, as of September 30th, we had $58 million left in the share buyback, but we're adding another $150 to that. Going forward, in terms of buybacks, again, we will remain opportunistic given the volatility in the stock market, and we'll continue to execute on that. Before I hand this over to Tom, let me say what are the top things in my mind in terms of what we're trying to achieve in the short to medium term. Basically, low growth. but not reaching for long growth as in getting caught up in that and going outside of a risk spot. That's not acceptable, but long growth, restarting the growth engine on the left side of the balance sheet is a top priority. Continued improvement of deposits. While we've made a lot of progress on that, I think there's more work to be done there, especially in light of the fact that eventually rates will rise. maybe nine months, maybe less, maybe a little more, but away from a rising rate environment that we have to be ready for, and we're basically working on our deposit business to do just that. In the very short term, it's return to office safely is another priority, and then launching in new markets. The new markets that we talked about last time to you, we don't really have much to share yet because it's not very ready for prime time, but we have been working for the last three months on finalizing, and hopefully over the course of the next three months, we will make some announcements and launch one or two new markets. With that, I will turn it over to Tom, who will get a little deeper into the numbers before Leslie.