Thomas M. Cornish: Yes. I would also add generally the ones that we stepped out of were unfunded participations that we got into to support the deposit relationships. So when there’s nothing to support.
Leslie Lunak: And Raj, with the two relationships, I know you mentioned this earlier, but just to reiterate, those deposits did not leave the bank. They just reduced spread their exposure around among more banks, those accounts are still here. Yes.
Jared Shaw : Okay. But on the — those eight loans, though, it’s more you won’t renew them, it’s not like you’ll actually go and call loans that had deposit requirements?
Leslie Lunak: We’re just a participant in a much larger facility, and we just won’t re-up that participation.
Jared Shaw : Okay, thank you.
Operator: Thank you. One moment for our next question. And that will come from the line of Brady Gailey with KBW. Your line is open.
Brady Gailey: Thanks, good morning guys.
Susan Greenfield: Good morning Brady.
Brady Gailey: When I look at loan growth, commercial real estate is going to be flat, C&I growth is maybe offset with resi shrinkage, should we think about loans kind of being flat going forward so maybe loan and asset balances are kind of flat from here on out?
Rajinder P. Singh: Yes, I would think so. Yes, for this year.
Leslie Lunak: Yes. But you’ll see an improved margin because of the shift from resi into C&I.
Brady Gailey: Okay. And then BankUnited has repurchased a lot of its stock over the last several years. I realize the uncertainty and the increased risk just in the banking system right now. So I totally get the pause there. But at the same time, your stock at 65% of tangible book value so when do you consider turning that buyback back on?
Rajinder P. Singh: I think it will be a topic of discussion at every Board meeting over the course of the rest of the year. Starting in May, we will have a discussion. I don’t think we’re going to do anything in May. But at the August board meeting and the November Board meeting, this will be discussed. It is the prudent thing to do right now, given all the uncertainty around liquidity, around the economy, around even regulation for that matter. So when things settle down a little bit, we have a little clear line of sight then we will probably step back up. But I don’t see that happening over the course of next month or two.
Brady Gailey: Alright. And then finally, if you look at profitability levels like ROA and return on tangible common equity, they remain fairly depressed. I know there’s not much you can do about the net interest margin at this point. But is there an opportunity on the expense side to see some, I know you guys have done their cost reduction plan previously. Like is that something that is on the table that could help get the profitability of BankUnited up to peer levels?
Rajinder P. Singh: Brady, our — the lever that was going to move profitability more than any other is going to be revenue, not expenses. Margin is depressed given the makeup of the balance sheet right now. It’s like I said, has gotten much more wholesale because of what has happened over the last two years or three years now. And that mix has to actually change to a higher performing mix. That is what will move the needle. I’m hesitant to say we will stop investing in the business, because if I go back and think hard about the mistakes that we made over the last couple of years or three years, one mistake was that during the pandemic, when we really didn’t know where the world was headed, we pulled back and did not make investments in producers and revenue generators.
Hired hardly anyone during 2020 into early part of 2021. And really, restarted the engine only last year. And that may feel good in the year you do it but you really pay a price long term, and I don’t want to make that mistake again. So you heard Tom talk about Dallas, we’re moving forward. We did a client there last year. We’re moving forward with that. We just picked up the team in Broward, we are about to pick up a team in New York. And yes, those are investments that they’re not going to pay off immediately when you bring them on, but they’re not very long-term investment. It doesn’t take four or five years for those to pay off. So what may look like a bit of a drag for six months or so, within a year that should start producing revenue in excess of expenses.
So I want to keep investing and really solve the profitability problem with remixing the balance sheet. And you need the right kind of producers to do that. You do need some time also, right. The resi is going to run off the way it’s going to run off. It’s — CPRs are low at this point in time. But that is what will bring margin up, revenue up, ROA up rather than let me go. And listen, we are obviously squeezing the belt, don’t get me wrong. We are doing that. We are looking at any kind of investment that can be — that is very, very long term in nature and see if we can delay that. But on the revenue producer side, I just see there’s an opportunity here that doesn’t come up very often, and I don’t want to miss that.
Brady Gailey: Okay, great, thanks guys.
Operator: Thank you. One moment for our next question. Our next question will come from the line of Stephen Scouten with Piper Sandler. Your line is open.
Stephen Scouten: Hey, thanks guys. Appreciate it, good morning. I guess one question I had just on the funding side would be capacity for broker deposits. Can you give me a feel for how much — and maybe that’s in the slide deck, I apologize, but where — what the level of capacity you guys would have from here to add those as needed?
Leslie Lunak: Stephen, there is still capacity to add. I don’t actually think we’re going to need to do that in the short-term. I think we’ve got enough other types of deposits in the pipeline right now. But we certainly could add there another $500 million to $1 billion, but I don’t think that will be necessary.
Stephen Scouten: Okay. Great. And then can you give some color maybe about that marginal cost of deposits today, where you’re seeing new deposits price and kind of what spreads that’s leading to in respect to what you’re able to book new loans of that as well?
Rajinder P. Singh: Yes, it’s a wide spectrum. So usually, when people ask the question they are asking about retail, and I’ll tell you, retail is a little easier to answer. Right now, we have money markets priced at 3.50. And I’ll say at 3.50, it’s not getting much fraction. We have 12 months CDs priced at, I think, mid-4, 4.50, if I’m not wrong.
Leslie Lunak: It might have gone to for…
Rajinder P. Singh: Yes. I think it’s still 4.50 or 4.55, and so mid-4s and two year is slightly lower at low 4s. That’s where — and that sells. At 3.50 money market does not sell. I think you have to be a little bit higher, but we haven’t been pushing that. And on the commercial side, it is a much wider spectrum. So we are engaging — we’re right now engaged with kind of a two-yard line with a complex treasury relationship, and it’s going to be priced in the 2s. So — but then there’s other money that may be at 4%. So it’s much wider in the title business, it’s much lower. The book of business is still sitting at under 100 basis points. So it is a much bigger spectrum on the commercial side based on what you’re selling and what is a complete package like.
But on the consumer side, if you want to grow, those are the kind of numbers we’re seeing. And our consumer business, as you know, is really Florida, not so much in New York. So that’s indicative of where the Florida market is.
