BankUnited, Inc. (NYSE:BKU) Q3 2022 Earnings Conference Call October 20, 2022 9:00 AM ET
Company Participants
Susan Greenfield – Investor Relations, Corporate Secretary
Rajinder Singh – President and Chief Executive Officer
Thomas Cornish – Chief Operating Officer
Leslie Lunak – Chief Financial Officer
Conference Call Participants
Ben Gerlinger – Hovde Group, LLC
Brady Gailey – Keefe, Bruyette & Woods, Inc.
Stephen Scouten – Piper Sandler
Operator
Ladies and gentlemen, thank you for standing by, and welcome to the Q3 2022 BankUnited 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]
I would now like to turn the call over to your host, Susan Greenfield, Corporate Secretary. You may begin.
Susan Greenfield
Thank you, Kevin. Good morning, and thank you for joining us today on our third quarter 2022 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 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 without limitations, 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.
The company does not undertake any obligation to publicly update or review any forward-looking statements, 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, 2021, 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.
Rajinder Singh
Thank you, Susan. Welcome everyone to our earnings call. Thanks for joining us. And let me start by just highlights of the quarter. Net income came in at $87.9 million or $1.12 per share, like [ph] 37% increase in EPS, ROE came in at 13.5%, we’re very happy with those results. This growth in earnings really driven because of NIM expansion, I’d like to remind everyone that we’re not very asset-sensitive or little asset-sensitive. But, I think, we’re writing business at better margins, which is helping. And, of course, a slight asset-sensitivity is also helping.
So our margin expanded by 13 basis points compared to last quarter were [indiscernible] this quarter, last quarter, we were at 2.63%. And if I remember well, third quarter of last year, we were at 2.33%, so nice trajectory there.
Our core C&I and CRE businesses grew by $444 million this quarter. This was pushed partially offset by declines in mortgage warehouse, which is a slight decline in Pinnacle and Bridge as well. But mortgage warehouse declined a little less than $200 million. I think the utilization now is that historically low level given everything that’s happened in the mortgage origination business. Consistent with similar trends at the Fed tightening, deposits declined by $1.1 billion. Our non-interest DDA declined by $851 million, but NIDDA now it still stands up 32% of total deposits.
I’d like to remind everyone that this journey of building NIDDA, which is like 5 years in the making now, when we started on this journey, which was let’s say going back in 2017, our DDA balances were just 14% of our total deposits. Even before the pandemic, which was, let’s say the end of 2019, we were only at about 17.5% and today we’re at 32%. I don’t like seeing these declines happen. We’ll talk a little more time will get into the details of where just coming from a large part about, half of it is coming from one particular business line, and Tom will shed some more light on that. But despite that for this year for 2022, if you stick like a 9-month view, NIDDA is down by $182 million, because in the first part of the year we were growing NIDDA this quarter we shrunk.
Overall cost deposits came in at 78 basis points. Again, given how fast the Fed is hiking, you should expect this to keep climbing up. I think last quarter unless we were at 30 basis points, so 30 to 78 basis points now.
Really quick, the last week of this quarter, we were hit by Hurricane Ian, happy to report that there was no significant damage to our facilities, our people are all safe. And we’re reaching out to our customers who might have been impacted. So far, the information that we’ve compiled, we don’t expect a material impact on credit.
Having said that, we did put $5 million into our provision just in case as the next few days and weeks roll on, we might have a credit here. Therefore, that purposes we did take a $5 million provision that’s included in our numbers. We’re not seeing any systemic credit issues. We’re looking very hard during every walk around to find any issues that they might be out there, because as the economy is slowing, it’s natural to be very, very careful. But, so far, we really have nothing to report. In fact, I’ve criticized classified loans, they continue to decline. This quarter also, it was a very healthy decline of $175 million.
Excluding the guarantee portion of our SBA loans, the NPA ratios stood at 32 basis points, which is a very small uptick from prior quarter. And annualized net charge offs for the 9 months, not this quarter, this quarter was very low, but for the 9 months stood at 16 basis points that compared to 0.9 basis points of net charge-offs for last year. So we’re happy about that credit as well.
As you already know, the Board did authorize another $150 million buyback, sometime mid-September, we have executed about $11 million of that already through the end of the quarter, and we’ll continue to judiciously execute on that as time goes on. So if you take all the buybacks that we’ve done so far through the end of September, I think the number comes to about $337 million.
In terms of quickly updating the guidance that we’ve given you, we expect loan growth for the year to come out at about mid-single-digits, driven again by C&I and CRE. By the way, CRE was a positive quarter, which is – we have not said that now in many, many quarters. So we finally have – it’s not a very big positive, but it is a positive quarter and we were very happy about that we’re now sort of inflected onto the other side of nice [ph] growing CRE. C&I still will be the largest driver of growth, C&I’s small business, middle market lending, all doing well, my clients are very healthy.
In terms of deposits, I think deposits, this will be a challenging environment, I expect deposits this coming quarter to be under pressure, somewhat both NIDDA and total deposits. And cost of deposits will climb as the Fed keeps tightening. We’re expecting another 75 basis points here in a few days, and then another move in December.
So having said that margin, overall should still – we’re still positively biased when it comes to margin. So, yes, deposit costs will go up. But, our yield on assets, loans and securities will also go up. Overall, we still think there is a room for margin expansion in the fourth quarter. In terms of, overall, I usually actually start with this talking about, what is seeing the economy. My comments will be very similar to what I said last quarter, which is that we’re cautiously optimistic. We’re looking very hard to see if there are any cracks appearing anywhere, but we’re not finding that. We’re talking to our peers. We’re talking to smaller banks, bigger banks, non-banks. We’re trying to see where trouble will emerge, but we’re not seeing it yet.
Having said that, we’re not sitting and assuming that everything will be fine, we are taking a view that long-term, there will be a significant slowdown. And sometime next year, we just have to be careful. So this is not a time to be very brave and aggressive, but be a little cautious. So we are on the scale of that 1 to 10 that I described on the call last quarter, we say about the same way we were around the six in terms of cautiousness and optimism, and we’ll keep revising it as more data comes along. But, Florida is doing very well and we’re very thankful that the Hurricane missed us for the most part.
Let me turn it over to Tom to get into a little more details about deposits.
Thomas Cornish
Great. Thanks a lot, Raj. So driving a little bit more into the loan number, as Raj said, of course C&I and CRE segments grew by $444 million for the quarter with $375 million coming from C&I and $69 million coming from CRE. It was the first CRE increase, as Raj said, that we’ve had, in quite some time, we were happy with it. On the C&I side, it’s kind of a continuation of what we have seen all year long, which is strong growth and commitments. And pretty broadly based across all industry sectors, if they look at some of the supplemental information that Leslie’s provided, and you look kind of industry by industry, it’s pretty broadly based across 6 or 7 major industries, the largest ones that we have exposure to so we were happy with that growth for the quarter again.
In CRE segment, the largest growth that we had was in the industrial area, which is an area that we have been focusing on increasing our industrial portfolio, we say $9 million of growth in the industrial base. So we were also happy with that. C&I commitments grew by 6.6% quarter-over-quarter. We did have – we thought it would be just slightly better, but we did have a few loan closings, they got delayed at the very end of the quarter in Florida due to the impact of Ian that pushed into the fourth quarter.
On the mortgage warehouse side, as Raj said, they declined by $194 million at pretty historic low utilization rates in response to the macroeconomic environment, around the residential real estate business. It’s a cyclical business, we recognize that. We like this business remain committed to it. Our overall client base is strong in the group. There’s been no deterioration in the client base, but we can’t outrun the cycle right now in that business.
In the aggregate, we saw a runoff of $77 million in Pinnacle and Bridge, we continue to – struggle to find the right profitability opportunities and margin opportunities in that business. And given that we’ve got good core growth in other areas. We’re being selective in those segments, to make sure that they’re profitable for us and help us and what we’re trying to accomplish.
As we look forward into this quarter, C&I and CRE pipelines, look strong, we’re already seeing good growth in the quarter. So, overall, I’m optimistic about kind of core growth in those markets heading into the fourth quarter.
From a deposit perspective, as Raj mentioned, total deposits declined by $1.1 billion for the quarter, of which, $851 million with NIDDA. A significant portion of the deposit outflow business we saw in the quarter in commercial was related to businesses in the residential real estate ecosystem about half of the NIDDA runoff for the quarter was related to clients in the title insurance industry. We’ve made over the last few years a major investment in this segment, and balances can be cyclical as well.
But I would say the good part is we’ve continued to add new relationships. There’s not a lot we can do about the decline in activity in the residential market. So we have a client base there that we see average balances. For account down, there’s not too much we can do about that. But the addition of new account business has been very encouraging. Our new account business in the title industry is up 25% this year over last year.
And, in general, we see very strong new account growth across all areas of the bank. I think, you can also see that reflected in service charge income, which year-over-year was up 13% from the quarter-over-quarter was up 2.8%. So given the environment of increased earnings, credit rates and things like that, to be up over in service charges, I think it’s good reflection in the fact that we’re continuing to generate a lot of new opportunities for new account business throughout the bank.
We saw some general decline in the corporate deposit base over the quarter that was really kind of all episodic, no real relationship losses, but you may have had a dividend recap or a large insurance company pay, reinsurance cost or other things that were not related to any account loss opportunity. All of the areas where we saw some account run down in the corporate business was all really reflective of sort of transactions within longstanding accounts where we have kept those relationships, so we’re not overly concerned about that, and for the most part that’s growing back.
We also saw some decline in municipal deposits for the quarter, which tends to be kind of seasonal as you come into the municipal deposit quarter. Overall, the loan to deposit ratio ended the quarter at 89%.
So I’ll turn it over to Leslie to get into more details about the quarterly results.
Leslie Lunak
Thanks, Tom. Consistent with the guidance we gave you at the beginning of the quarter, we did see the NIM increase this quarter to 2.76% from 2.63%. The yield on investments increased to 3.12% from 2.12%. The duration of this portfolio is very short right at 2% at September 30. Yield on loans increased to 4.11% from 3.59%. In all of us, we saw resetting and coupon on variable rate instruments, new production and new securities purchases at wider spreads and higher rates that drove that increase.
Cost of total deposits were 78 basis points for the quarter, up from 30 basis points last quarter, we have added some term in the deposit book, we did that intentionally. Time deposits grew by $976 million in the third quarter. We took advantage of the opportunity to lock in some term in the deposit book in a rising rate environment.
Total deposit beta for the years at about 29% about 46% for interest-bearing deposits only as compared to the peak of the last time in cycle where total deposit beta was about 61%. We continue to expect betas to be lower this cycle, in part because NIDDA represents a larger portion of the book. And I’ll draw your attention to Slide 6 in our deck when you have a chance to look at it where you can see that deposit costs are by all categories lower today at September 30, with a Fed upper bound of 3.25% then they were at 12/31/2019 with a Fed upper bound of 1.75%. And I get that we’re still midstream in this hiking cycle, but I still think that supports our expectation that betas will be lower this cycle than they were last cycle.
As Raj said, we do expect NIM expansion in the fourth quarter, probably not quite as much as we saw in Q3. But we do expect NIM to continue to expand even if we have some amount of additional NIDDA runoff, which we hope doesn’t happen. But even if it does, we still expect them to expand the reserve and the provision. The reserve as a percentage of loan was flat to the prior quarter at 54 basis points, not really seeing any deterioration in credit of notes. And, as Raj mentioned, the qualitative ACL includes $5 million related to the potential impact of Hurricane Ian.
Non-interest income and expense, I’ll hit on that real quickly. The main reason for the increase in non-interest income compared to the prior quarter was really the mark we took on some preferred stock investments in the prior quarter, and that did not recur this quarter, so just comparison quarter-over-quarter that’s the main reason for that variance. Increases in non-interest expense for primarily in the comp and technology lines, as we’ve been guiding to all along as we invest in both people and technology to support our future growth and business strategy.
In technology, we’re making investments in digital payments, and in certain aspects of our infrastructure, particularly around data and integrations. I will say that, back at the beginning of the year, we gave you guidance of an increase in expenses of mid- to high-single-digits. And that’s exactly where we’re coming in, and that’s exactly where we expect to land.
I will point out in that other non-interest expense line, there’s a $2.3 million charge in there related to a write-off of a specific technology investment where we just decided to go in a different direction. So that kind of employed at that line item for this quarter.
And I will turn it over to Raj for closing comments.
Rajinder Singh
Thank you, Leslie. I will actually open it up for Q&A. I know it’s a busy day. And I appreciate all of you joining us, but let’s get into Q&A.
Question-and-Answer Session
Operator
[Operator Instructions] Our first question comes from Ben Gerlinger with Hovde Group. Your line is open.
Ben Gerlinger
Hey, good morning, everyone.
Rajinder Singh
Hi, Ben.
Leslie Lunak
Good morning, Ben.
Ben Gerlinger
I was curious whether if we could start on expense base, I know, you just said that there’s write-down or write-off on one item. But can you think about the base overall, and then you gave pretty solid guidance at the beginning of the year is held true for that mid-single-digit, upper-single-digit range, but when you think about this year relative to potentially next year. Are you pulling forward any investment and I know you haven’t given complete guidance for FY 2023? But you think of the trajectory isn’t something to expect a similar range for next year? Or just kind of pulling forward expenses?
Leslie Lunak
I wouldn’t say we’re pulling forward expenses. But I’m not – I don’t think we’re prepared at this point to give any 2023 guidance. We’re in just kicking off our budgeting and business planning process. So I would be, I think, going to hold on that one until our next earnings call, because whatever I say, I might independently eat my words in one direction or the other. So I’m going to hold off on 2023 guidance.
Rajinder Singh
But it’s – we like three of us haven’t yet reached a consensus. We’re still debating exactly how we’re going to plan for next year. So we’ll have a better view in about 4 to 6 weeks, and we’ll probably share that only in January with you.
Leslie Lunak
But I don’t think there’s been any conscious attempt to pull anything forward in answer to that part of your question.
Ben Gerlinger
All backwards, I guess.
Leslie Lunak
Yeah.
Ben Gerlinger
Yeah, that’s fair. Okay. Well, that’s good. I figured I’d take a shot at it. But, I think about…
Leslie Lunak
[They’re going to say upwards] [ph].
Ben Gerlinger
Yeah. When you think about loans, in general, it’s good to see the CRE rebound, hopefully, that trend continues higher. When you just think broadly speaking, I know that there’s the initiative’s kind of outside the initial footprint. Historically, you guys did the North Florida, now Atlanta, potentially have something in the works in Texas on the medium-term? What do you think about the footprint in mix? Or are there any areas where you’re consciously targeting either from a price perspective? Or do you think that there’s a niche that you could actually make some height?
Rajinder Singh
I think if – listen, we didn’t talk much about – in our comments, we didn’t say much about Atlanta, which has been a big focus for us this year. I will give you an update that we have hired all but one open position, right, there’s only one open position left, which is a junior level position. But all the senior people, whether it’s C&I, CRE, its credits underwriting, its treasury services, everyone is in place. And we have booked a fair amount of business that we don’t disclose geographically where our numbers break out. But it is exactly on track with what we thought we would be able to achieve. And I’m happy with very early success we’ve had.
Dallas, which is a different strategy, it’s also on track, again, deposit only not loans. We have been doing some work trying to understand the lending side in Texas, whether it’s something we want to play, and when we want to do that, we don’t have a decision on that yet. We’ve been out there to the market. We’ve met a lot of participants. And we will have a view hopefully in the next 3 or 6 months exactly what we want to go and do beyond if anything. Also we’re looking at some other markets and you won’t be surprised by them, they’re not going to be out in Ohio or the West Coast or something, it’s going to be somewhere in the eastern seaboard markets that we may already be servicing a little bit out of Florida or out of New York. And those markets will probably be the next step.
But like I said, we were deliberate in taking these steps, we just don’t jump in. I want to make sure Atlanta is off to a very healthy start, before we talk to you about something else. But sometime next year, we might introduce another market. But that is really what will drive growth over and above, of course, what Florida is doing by itself being so healthy. And, where we’re not seeing growth is in places like Bridge, as Tom talked about. We’re looking at the best places to deploy capital, and wherever we don’t find the good risk reward. We take away capital, and we find investment in places where we do see a better return.
Thomas Cornish
Yeah, I might add from a product perspective, since you asked that, I think as you look across the Southeast, from a CRE viewpoint, it’s clear that the fundamentals are very strong. In industrial, which we had a good quarter in industrial, they’re strong in grocery-anchored retail that is predominantly service oriented, and population shifts and really all of the southeast markets from a multifamily perspective are very strong. So, I think, as we think about our plan going forward, those are probably the asset segments and categories where we will look to increase portfolio and we think in Florida and in other parts of the southeast. There’s always a question about whether Florida is in southeast or not, but we’ll include it for now. We think all of those assets segments are good quality opportunities for growth near-term in 2023.
Ben Gerlinger
Got you. I appreciate all the color. I appreciate everything. Thanks, guys.
Rajinder Singh
Thanks, Ben.
Operator
[Operator Instructions] Our next question comes from Brady Gailey with KBW. Your line is open.
Brady Gailey
Hey, thanks. Good morning, guys.
Leslie Lunak
Good morning, Brady.
Rajinder Singh
Hi, Brady.
Brady Gailey
There was a big move up in the bond yield of 100 basis points link-quarter. I know you have the short 2-year duration. Was there anything onetime it nature impacting that? And how do you think about that going forward, I’m guessing we could continue to see a decent amount of upside there?
Leslie Lunak
I think, you’re right. I don’t know that it’ll be 100 basis points every quarter. But, yes, I think we’ll continue to see that go up. And now there was nothing unusual that really drove that it’s just purely keep on resets on the variable rate portion of the portfolio, and which is the majority of the portfolio in new purchases and hire better spreads.
Brady Gailey
Yeah.
Rajinder Singh
Spreads are just under operating across the board, anything you’re buying spreads are better. So but it’s not like we’re growing the portfolio by leaps and bounds. That’s not what is causing the 100 basis point. Most of that is because it’s a short portfolio, a short duration bond portfolio, that’s a great move as aggressively as the Fed is moving them just see the benefit.
Leslie Lunak
To see that. Yeah.
Brady Gailey
All right. That makes sense. And then my next question is on the buyback, you guys have had been a huge re-purchaser of your stock over time. It’s slowed a little bit in the third quarter, you only repurchased about a little under half of 1% of the company, so should we think about the buyback? Is 3Q kind of a good new run rate? Or do you think you’ll be more active like you’d have been historically,
Rajinder Singh
I think we ran out of our buyback middle of the quarter, if I remember well…
Leslie Lunak
Kind of early in the quarter.
Rajinder Singh
Early in the quarter. And then we got another optimization much later in the quarter. So sometimes the timing of board meetings and stuff gets in the way. So we’re in the markets, even now we’re under a 10b5-l with multiyear [ph] plan. So we’re executing. We have said that we will be even more opportunistic, given the volatility that we’re seeing in the market. But we’re so net-net or buyers of our stock. And we have the extra capital to do this, and as you keep upgrading capital, probably to do more. But, we do it 150 at a time. So we’ve already, I mean, in the 2 weeks, from middle of September to the end of September, we did $11 million already. So that’s a decent healthy clip, because the stock was weak at that time. And so it’ll depend on where the stock trades at and we will be opportunistic.
Leslie Lunak
And I do think in times when we expect that the market might be volatile. We’re perhaps a little bit more opportunistic in our approach, and in times where we don’t think that those opportunities are going to arise. So…
Brady Gailey
Okay. And then finally, for me, optically, if you look at your reserve, and if you back out the mortgage warehouse loans, I mean, it’s running at 55 basis points, which relative to peers is kind of thin. But how are there some adjustments we should make there like backing out maybe some low risk mortgages? Or are there any adjustments that you will make that ratio higher?
Leslie Lunak
Yeah, that’s a good question. I think the mortgage portfolio overall, which is a big slug of the portfolio, carries very low reserves. They’re not zero, but I think it’s disclosed in our slides. I think it’s like 11 basis points or something like that, very low reserves. So, that’s just an extremely high credit quality portfolio, very high FICOs, very low LTVs, almost no historical charge-offs. So that part of the portfolio carries very low reserves. Pinnacle carries almost no reserve, that’s an investment grade portfolio really shouldn’t be zero, but we can’t get away with that. So we have to put something on it.
I think even our CRE portfolio, LTVs are so favorable that even in the event of default, it throws off very low LGDs. So I do think there’s a lot of – we’re also in a geographic area. It’s easy to talk about these macro GDP and unemployment numbers, but particularly in the Florida footprint, economic trends and demographics are still very strong, so all of that weighs on the blunt instrument of just comparing our reserve level to that of other banks.
Rajinder Singh
Yeah. The biggest adjustment that I would think you should consider is looking at the size of the revenue portfolio. It is outside compared to other banks, and it is a jumbo portfolio with a very, very pristine credit. And a large part of it also is government guaranteed, which has zero reserves. So that throws off the numbers and Pinnacle which is about $1 billion is another one. Warehouse that is small now – yeah, yeah.
Leslie Lunak
So, I think, you have to consider what’s in the portfolio, when you do a kind of broad-based comparison to peer averages. So, there’s no credit card in there. There’s no auto in there. There’s very little leverage lending in there. It’s a pretty loan loss historically, it’s tended to be episodic, not systemic. So…
Brady Gailey
Okay. Great. Thanks for the color, guys.
Leslie Lunak
Yeah.
Operator
[Operator Instructions] Next question comes from Stephen Scouten with Piper Sandler. Your line is open.
Stephen Scouten
Thanks. Good morning, everyone.
Leslie Lunak
Good morning.
Stephen Scouten
First, we don’t claim Florida in the southeast [as a Georgia] [ph] just to note that on. One question on securities yields, I know Brady’s question answered most of mine, but can you remind us how much of that portfolio and you said the majority is variable, right? You can explain me ballpark?
Leslie Lunak
Yeah, somewhere between 65% and 70%.
Stephen Scouten
Okay, great. And then on the new loan yield front, I think it was around 4.3% last quarter. Where are you guys seeing new loan yield this quarter. And I’m calculating around like a 35% loan yield beta, give or take. Does that feel like a pretty good number moving forward for what you expect to see?
Leslie Lunak
On average for the quarter new loan yields were about 5.25 now much lower at the beginning of the quarter than at the end, because obviously we saw rates and spreads move a lot during the quarter. But on average, that’s what came on. And I don’t know how you guys calculate loan betas to be honest. It’s not a term that I’ve ever really embraced. But…
Thomas Cornish
Yeah, what I would maybe add to that is, when you look at the kind of core portfolio today from a C&I and CRE perspective. The vast majority of new originations are floating rate originations. So, if you looked at our CRE, that’s not different for C&I than it’s historically been, but if you looked at the CRE portfolio, 4 or 5 years ago, we were taking more on balance sheet rate risk and smaller CRE loans today. The majority of the loans are either floating or floating for us and swap the fixed rate for the clients. So our fixed rate exposure on new originations is pretty minimal today.
Stephen Scouten
Yeah.
Rajinder Singh
Yeah. A lot of hard work over the years in terms of changing, do what just Tom describe, right, going from a fixed rate through a floating rate shop. That has been also a 3-year, 4-year transformation, slowly changing the business to be that and that is helping us today.
Stephen Scouten
Yeah. And Raj that that leads kind of my last question. Just at a high level, I mean, the bank is vastly different today than it was 4 years ago, the deposit base is different, run down the multifamily, different loan composition. What would you say like as you look forward is kind of the biggest differentiator, the biggest quality that you guys have today that will reach it to success moving forward, as you see it?
Rajinder Singh
It’s that our clients love us. I don’t know how to actually put that into the ratio or show it to you in financials, but that is what matters more than anything else. That our clients come back to us for repeat business, we don’t lose clients. We may lose them on price and something stupid like that, but we never lose them, because somebody is – I’ll give you an example, I’m on a board of a nonprofit. And this nonprofit is raising some debt in the market, obviously BankUnited is not going to be participating, but I happen to be sort of running that process and I’m looking at the incumbent bank and the CFO of this organization said to me, I wish these people were just a little easier to deal with, it’ll be so much better if we just did business with them. But man, did that make our lives miserable.
And without naming all the incumbent bankers and who I’m talking about, but just listening to that, you would never hear something like that about BankUnited. That’s really the competitive edge. We’re not a universal bank. We can’t do everything for everyone. We do a few things for a few people. We know our spots. But when we do we sweat about the clients. We’re advocates for our clients. And we build that trust over a long period of time. And that’s really the differentiator. It sounds very simple and straightforward. But trust me, it’s not easy to do in this business.
Thomas Cornish
Yeah. I would link to do that. I think that part of the reason why the clients love us is, I think, we have over the last few years created a culture in the organization. The talented people continue to join us from other organizations that have great client relationships, and appreciate the culture and entrepreneurialship that the organization has and drive for innovation and just the values that our company has. I mean, that’s also something we couldn’t express in a ratio. But if we think internally what we’ve done under the principles that Raj set forth, I think talented people want to be part of this company, and that’s a big advantage.
Rajinder Singh
Got it. Very helpful. Thanks for the color. I appreciate it.
Operator
And I’m not showing any further questions at this time. I’d like to turn the call back over to Raj.
Rajinder Singh
I know it’s a busy day. Somebody had actually told me this morning that there were 18 banks that were releasing earnings. I’m not surprised that they were a few questions. But we’re here both Leslie and I, and even Tom are available to take any questions if they come up today and tomorrow whenever. But we appreciate you joining us and giving us time. So look forward to talking to you again 90 days. Thanks, bye.
Operator
Ladies and gentlemen, does conclude today’s presentation. You may now disconnect, and have a wonderful day.
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