BankUnited, Inc.

Good day and thank you for standing by. Welcome to Bank United first quarter 2025 earnings conference 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. To ask a question during this session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jackie Bravo, Corporate Secretary. Please go ahead. Thank you, Michelle.

Good morning, and thank you, everyone, for joining us today for Bank United, Inc.' 's first quarter 2025 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. 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 those relating to the company's operations, financial results, financial condition, business prospects, growth strategy and liquidity, including as impacted by external circumstances outside the company's direct control, such as adverse events impacting the financial services industry. 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. These factors should not be construed as exhaustive. Information on these factors can be found in the company's annual report on Form 10-K for the year ended December 31, 2024, and any subsequent quarterly report on Form 10-Q or current report on Form 8-K, which are available at the SEC's website. With that, I'd like to turn the call over to Mr. Raj Singh.

Thank you, Jackie. Thank you, everyone, for joining us. You may have noticed that our call is a little bit later than it usually is. And usually we go around the 22nd, 23rd. And the reason it was a little bit later, partially it had to do with calendars, but partially also was we went through a GL conversion, which is a fairly big undertaking, which Leslie sitting over here next to me led, and it went flawlessly. We didn't need the extra two or three days that we thought we might need, but it went really well. So I want to congratulate the team. But this was a good quarter, solid quarter in terms of where we landed versus our expectations. I know there's a lot of noise out in the economy, and we will get to that in a second. But first, let's go through what the last 90 days were like. In terms of net income, we came in at $58.5 million, $0.78 a share. I think consensus was 76, so slightly better than consensus. Margin was 281, which at the last quarter was down three basis points, which is exactly what we had expected. Most of that was around some hedges that rolled off, so it came in exactly where we expected it to. Cost of deposits came down by 14 basis points at 258 from 272 last quarter. Cost of interest-bearing deposits came down 21 basis points. It's now down at 354. Last quarter was 375. And on a spot basis also from December 31st to March 31st, we had an 11 basis point drop in that cost. NIDDA, which has been the story here for the last, you know, several quarters now, again, we had a very solid quarter. NIDDA was up $453 million. Again, as expected, and as we had mentioned to you last quarter at the last earnings release. Average NIDDA was down a little bit. Just that's the seasonality of how the DDA builds up for the year. You know, December 31st is not the bottom for us. It generally is somewhere deep in the first quarter where we bottom out and we start building back up. So March is generally a strong year. And then from here on, it's in several months of strong deposit growth. So we're expecting an even better second quarter. And in terms of, if I just look at total deposit growth outside of brokered, which we paid down quite a bit, total deposit growth excluding brokered came in at $719 million. So a very solid quarter no matter how you look at it from the deposit side. Wholesale funding, which is brokered and our wholesale FHLB borrowings were down $1.1 billion. The loan book, total loans were down $300 million. I'll break it up roughly into two pieces. One is what you expect, which is what we've been running down for some time, our resi book, some of our commercial finance subs. That was around number 200 million of that 300 million. About 100 million roughly was actually declined in our core commercial book, which we're trying to grow. Now, first quarter, I will remind you, is our slowest quarter. If you go back, you know, two, three, four, five years, you'll see first quarter is always our lightest growth quarter simply because we don't have, in our C&I business, we don't have financial information or audit differential information from last year, and we're working off of really dated financials. So we tend to be much lighter on growth in the first quarter than we, the season really picks up in the second, third, and fourth quarter. So, yeah, Also, coupled with some still fairly large paybacks that we've seen in the CNI book. So that trend has now been going on for about three quarters. That has not slowed down. Total loan-to-deposit ratio stood now at 85.5%. It was 87.2% at the end of last quarter. Set one is now 12.2%. And the tangible book value per share keeps climbing up. It's $37.48. Lastly, we'll talk more about AOCI. I don't actually recall the number off the top of my head, but I think that also improved. I'll talk about the macro environment for a second, then I'll talk about guidance. So you've seen the level of uncertainty that is out there. We're all monitoring it. Our clients are monitoring it. We actually had a very large client event just last week in New York. We met 75 or so of our top clients in both CNI and CRE businesses. And I would say that, you know, I went into that expecting a lot of concern and a lot of like, oh, my God, what's going on in this world? But I didn't actually get that. What I got, yes, there's some level of concern, some level of uncertainty. But for the most part, people are engaged and people are basically, while they're monitoring what's going on, they're not writing off the year in any way, shape or form. So they stay engaged. The fact that we had that level of attendance to this event itself was a good sign. But then how engaged people were and wanted to talk about growing their businesses. And yes, there was some talk about politics and tariffs and so on. but for the most part, it was a very positive event. So when it comes to our guidance, here's what I will say at a high level. We're not changing our guidance. So what we told you 90 days ago, we'll stand by that in terms of loan growth, deposit growth, margin, expenses, and all that good stuff. Having said that, I will say, and this is a phrase that I borrowed from somebody that I met last week, that the cone of uncertainty is much bigger than it was even a month ago. So there are a lot of moving parts here. The rate environment is moving around like crazy. The economic environment is also uncertain. And we don't know exactly where we're going to land with tariffs at the end of the day. And all of that will have an impact. So what can we do as a bank? What are we doing as a bank? We're paying a lot of attention to the risks that are unfolding in front of us. I think the most immediate risk that we have to deal with is interest rate risk. When the curve moves as much as it is doing on a weekly basis these days, both the short end and the long end of the curve, that means we have to pay extra attention to interest rate risk management, and we're trying to stay as neutral as possible in any scenario so we're not hurt by whatever happens to rates. Second, obviously, is credit and pipeline risk. I'll roll them up into one. The pipelines right now are actually very strong. So we have not seen a degradation in our pipeline. Now, in fact, I was meeting with our credit people last week and trying to compare what we had budgeted for for this time of the year for pipelines versus what we are seeing, and they are actually better than what we had even budgeted for. Now, what will be the pull-through rate on these pipelines? I think that will depend a lot on where everything lands with tariffs and the economy in general. But so far, I really have no basis for altering the guidance we gave you, except just to say that the possibilities of what can happen is much wider than 90 days ago. With that, I'm trying to see here in my notes if I've missed anything. No. We did, just to note the obvious, we did increase our dividend by a couple of pennies, which I think now going back to COVID is when we started doing this. I'd like to keep doing this very steady increase in dividends. and 10 years from now be able to come back to you and say, look at our track record for the last 10, 15, 20 years. We've been increasing dividends on a steady basis. So we're happy to report that. But all I'll say is while there is more uncertainty out there, we are as prepared as anyone or more prepared today than we've ever been to take on whatever is coming our way. if it is bad news or if it's good news. If it's good news, there's got to be a lot more economic activity. We're open for all kinds of business. And if it's a recession or something, you know, a slowdown, we're ready for that. We have more capital, more liquidity than we've ever had, and we can take that on. With that, I will turn it over to Tom, and he'll get a little more detail behind some of the numbers and then Leslie.