Good morning, everyone. Thank you for joining us today to discuss Sterling Bancorp's financial results for the second quarter, June 30, 2021. Joining us today from Sterling's management team are Tom O'Brien, Chairman, CEO, and President, and Steve Huber, Chief Financial Officer and Treasurer. Tom will discuss the second quarter results, and then we'll open the call to your questions. Please note this event is being recorded. Before we begin, I'd like to remind you that the conference call contains forward-looking statements with respect to the future performance and financial conditions of Sterling Bancorp that involve risks and uncertainties. Various factors could cause actual results to differ materially different from any future results expressed or implied by such forward-looking statements. These two factors are discussed in the company's SEC filings, which are available on the company's website. The company disclaims any obligation to update any forward-looking statements made during the call. Additionally, management may refer to non-GAAP measures, which are intended to supplement, but not substitute for, the most directly comparable GAAP measures. The press release available on the website contains the financial and other quantitative information to be discussed today, as well as the reconciliation of the GAAP to non-GAAP measures. At this time, I'd like to turn the call over to Tom O'Brien. Tom? Great. Good morning. Thank you for that. The company released its second quarter results today, and we're going to spend a little time going through those and then take your questions. The results were, we earned $2.6 million, or $0.05 a share. Margin expanded a little bit, certainly off the lows that it had, driven primarily by deposit repricing during the quarter and then the late in the quarter acquisition of some repurchased Advantage Loan Program loans. That helped bring the margin up to 2.70%. Expenses continue to run high, a little better than they have been, but still quite elevated. Capital continues to be okay at the bank. Although at the company, as I've mentioned the last couple of calls, we at some point have to address the subordinated debt issue that is upon us. The debt is into the variable stage of the initial 10-year maturity, we're in the second five years. Following the quarter, we completed the sale of the Bellevue, Washington branch, that was done on July 23rd. Good transaction for both buyer and seller, we're happy about that. Deposits, I think as we've mentioned earlier in the first quarter call, with greater definition to the needs to repurchase the Advantage loans, both the timing and the dollar amounts, we had built up liquidity and had let that run down in the quarter as we got a little more definition to that. Also that benefited the margin because liquidity is really quite expensive. It's kind of typical with us, the second quarter included a lot of moving parts. The bank is going through an IT system conversion, that probably added $600,000 in cost during the quarter. Professional costs were down net predominantly because we got around $2.5 million back from the insurance company, there's been some, as we expected, some gradual reduction in other professional and consulting type fees. I think we're still pretty comfortable that costs will drift down in the third and fourth quarter. Not going to be dramatic, it's going to be, I think noticeable, primarily because things like the look back that we had to do for AML purposes is nearing its conclusion. The securities class action is nearing its final action. There's several other things that are at least beginning to finish up from where they were, and the costs that go with it will start to dissipate. We still have not insignificant legal costs until these investigations, at least from the bank's perspective, start to wind down some. The asset quality is modestly better. The allowance was basically unchanged quarter to quarter, just about $72 million. We did take a $600,000 benefit there, but that was basically dollar for dollar for recoveries we had on loans that were non-performing that paid off in full. Those were, I think it was five or six Advantage loans in that category. That has been, I would say, probably the most typical outcome with these Advantage loans. For those that go bad, which statistically is probably not too inconsistent with the general residential portfolios in the banking world. The credit aspects are not as dramatic as the compliance and the different, you know, activities in the original underwriting that led to the investigations and the problems that the bank faces. That's not to minimize those at all. They've been painful. They were, just from the pure credit perspective, did give us $600,000 back in the quarter. Non-performing loans hedged down a little bit to $92.6 million. As I think, again, as I've said the last couple of calls, in that total, there's about, say, $50 million of commercial credits, and maybe mid-thirties or $40 million of Advantage loans. I think as you all know, the ones I'm most concerned about from the credit side are the commercial products. We have a lot to deal with there. In terms of the criticized classified loans and all that, it's the ones where we expect to have some difficulty working out of those. They will occupy more of our resources and our time and probably the allowance than anything else. I'm not expecting the Advantage loans, again, purely from the credit side, to behave much differently than they have to date. Other than that, as I said, the look-back is nearing its completion. That was certainly a long time coming. It's been very labor intensive and expensive. The litigations appear to be at the tail end, I think, at this point on the class action. We're looking at September for conclusion there. Income tax expense was up in the quarter. In all candor, predominantly because a certain person's executive compensation is not deductible for income tax purposes under 162(m). That, with a lower dollar amount in earnings and a non-deductibility, that drives up the effective tax rate. As the government has changed the, I guess, clarified or modified the 162(m) regulations, we have to deal with that. Other than that, things continue. Progress at the bank is moving directionally, I think, where we anticipated. It is not something we can speed up or control because it's really in the hand of some government agencies. Time has moved us along, and I think we continue to be optimistic that we're much nearer the end of these things than anything else. I will say, I did make a trip out to San Francisco in July, I think it was. Spent some time at our branches out there and got to know the people. That was my first opportunity to make that trip. There'll be further opportunities to do that for me in the near future. With that, operator, we can go into the Q&A. We will now begin the Q&A session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question will come from Ben Gerlinger with Hovde Group. Please go ahead. Morning, guys. Morning, Ben. Morning. I was wondering if you guys could just take a second to kind of walk through the mechanics of the funding aspect of the balance sheet. I know that the time deposit balances have come down $250 million one quarter. Also the yield. I know last quarter, I believe you guys gave the repricing aspects per quarter. I think that might have been in a vacuum, though, if you didn't lose any deposits. I wonder if you could just kind of refresh us in terms of what is repricing when, and then kind of that new spot rate in terms of time deposit yields. Yeah, Steve, why don't you handle that? Yeah. The deposits will continue to reprice. Most materially that has occurred in Q1 and Q2, but we expected that to continue into Q3. We expect another, excuse me, $384 million to reprice. Again, mainly our certificates of deposits, mainly in the 12-month category. A lot of those are still at over 1%, so they'll continue to reprice down certainly to something lower if they continue to remain with the bank. Our total borrowing spot cost at the end of the quarter is 0.70%, so we would expect to have continued improvement on the deposit side, certainly for Q3. Probably less material into Q4, as Q4, the repricing volume is about $152 million. Okay. That is helpful. If we could move to the expense base. I get that professional fees are a little out of your control, and then based on the guidance that you gave, excuse me, for the explanation for the $5.7 million this quarter, $2.4 was a reimbursement, and then also $600,000 approximately for IT expenses. Just back of envelope math, I'm netting around $7.5 million. Previously, you guys had indicated that FY 2021 would be about two-thirds of the level of 2022. Or excuse me, FY 2021 would be two-thirds of the level of 2020. Is that still the guidance, or is there anything more material that you might want to include? No. The timeline supports that. As you note, we can't accelerate the government's conclusion on any of these things. The longer it takes, just the more it costs, and that gets a little bit hard to predict. On the schedule we're on, it does seem like that's where we're going. The look-back had its own shelf life, but we're basically at the final drafting stages of the report now. That is, again, not entirely in our control, but the end is pretty predictable. I can't even venture the cost from start to finish, but it was significant effort. The legal costs are wide-ranging, but they are heavily centered around the DOJ and the OCC investigatory activities. At least with respect to the bank or the company, as those come to conclusion, there's the obvious benefit from that. Again, the timeline would suggest that as we get into the second half of fiscal 2021, they will inevitably moderate some, and then certainly hopefully more significantly as we get into 2022. Okay, that's helpful. Just touching base on the IT expense. I know you guys have the conversion or the upgrade in August, so this month. Is there any sort of dollar amount you can tag to it that might be in your 3Q numbers, or is there anything that's changing from a go-forward perspective in terms of the expense base? There's two things with the IT conversion. One, it's not optional. It is a total system conversion. The bank was operating on a homegrown system with a couple of programmers in-house, and it just was really problematic from both a regulatory and management perspective in terms of getting reports. We wouldn't get out of the regulatory handcuffs we're in without a conversion, and frankly, we couldn't operate the bank without a conversion to a more contemporary system. We were spending next to nothing historically, which is what kept the bank's efficiency ratio pretty low, as low as I've ever seen, frankly, over the years past. It was low to a level that strains your ability to believe. Just too low. Not enough resources put into things like that. At the end of the game, that's where the cost comes. I don't expect any efficiencies from the IT conversion. I think there's probably going to be some net cost to that as we complete the conversion and roll out. That might be over the historical record, it might be $1 million more a year. As I said, the cost of the regulatory difficulty and all that is significantly greater. The absence of comprehensive management information is a real roadblock for us. It's not one of those things that you would say is optional. Got you. Okay. I appreciate the call. No efficiencies done. Okay. Unlike other ones I've done where you get some efficiencies. This is a cost. I should have added, too, actually, just a sidetrack for a moment. On the Advantage Loan repurchases, we repurchased $90 million. We were expecting more, but the sellers have call date difficulties, so we will be repurchasing the balance of those over the course of this year and then I think two more in 2022. They are coming back, but it's just a different time perspective. The $90 million, I think, closed, I don't want to say at the last day of the quarter, but pretty close to the last day of the quarter. Okay. Yep. That is very helpful. I appreciate the call. I'll step back. Sure. Again, if you have a question, please press star then one. Our next question will come from Nick Cucharale with Piper Sandler. Please go ahead. Good morning, everyone. Hope you're doing well. Yep. Thanks, Nick. You too. Good morning. In the press release, you mentioned the commitment to repurchase another $100 million of Advantage loans. Can you provide some color on the timing of those repurchases, or is that yet to be determined? It's pretty well set based on the call dates that I mentioned. I think, was Steve, March next year was one and July next year was the other big piece. Yeah. All next year, basically beginning in March and then throughout the next two quarters. We have a piece for $59 million and a piece for around $35 million at this point. All of these loans were into securitizations that have call date features. Right. Okay. Preference of the securitizer to do it that way. Okay. That's helpful. Certainly a fluid situation, but given the changing risk profile of the bank and the substantial build since the beginning of last year, do you sense that the allowance to loans ratio has peaked here? Yeah, I would. That's my own opinion. The last two quarters it's been steady. We haven't seen significant migration into the criticized and classified category. We've spent an awful lot of time trying to identify the weaknesses from the credit perspective. As I said, the credit loss perspective, I think, is going to be in the commercial portfolio. Identifying the level of classified loans the way we have, I think we've taken a more appropriate look at risk rating and trying to be in front of any potential problems or weaknesses with either the property or the project or the guarantor. We've had a couple of, in the last quarter, towards the end of the quarter, we had a couple of loans that were non-accrual, but paid in full. We got a couple more coming where there's some net recoveries to some previous charged-off loans. That's not to say there won't be some realized losses in the period ahead. That's why I was saying the $50 million of roughly non-accrual commercial loans versus the $40 million of non-accrual Advantage loans. From the credit side, I would say that predominant source of risk is going to be in the $50 million, not the $40 million. Okay. You know. Just to follow up on funding. Borrowings have remained pretty consistent over the past several quarters. Is there an opportunity to prepay some borrowings over the next several periods, or is that not part of the strategy at this point? Not part of the strategy. It's pretty expensive. We'll probably look at it a little bit later, but I think at the moment, we're really just looking at letting them run off to maturity because they're basically yield maintenance payoffs. I don't know that it helps anything in the long run. Thank you for taking my questions. Sure. Our next question will come from Ross Haberman with RLH Investments. Please go ahead. Good morning, Tom. Just a follow-up question on some of the deposits. Is there much more room to keep on lowering deposit rates on your CDs, money markets, or basically have we hit sort of the floor here? Thanks. I think we've hit the floor, Ross. Sterling funded predominantly in the manner of more of an old line thrift, not a big demand deposit base, not a big transaction base. It was basically money market savings and CDs. We've been careful lowering rates because of that propensity of the savers that we did have to rates. We didn't shock it. We kind of gradually drifted down closer to market. Unless there's some change in the market in general for interest rates, I'd say we're probably pretty close to the best we can do. Just one last question on the litigation. Could you go over the non-government litigation? I guess you're being brought in on, I guess what the ex-employees litigation. Where does that stand, and when is there going to be some sort of resolution there? There've been criminal complaints and plea deals with two former employees. Again, other than supplying information that might be requested by the Department of Justice, we don't really have a role in that other than being cooperative. That's ongoing, and usually when I refer to trying to get things done, I try to be careful to say with respect to the bank or the company, because that's about the only thing I can really care about at this point in time. Individual issues are what they are, and they're not our concern. The securities actions were the class action and then the purported derivative. They're hopefully kind of at the tail end. You're hypothetically reserved for all of that. That's hard to say. Okay. We are reserved- Right. at a level that is our very best approximation of the likelihood of the bank, as the Department of Justice said in their own press release, the bank's been the victim. Right. That's not to say there's not some accounting from the bank, especially in the BSA space. Based on nothing other than our best estimate, we have set aside a reserve for potential fines and penalties. I can negotiate those, but I can't set them. I got you. I wish I could. No. I just want to know if you could be dragged in on some of the other non-governmental suits. They can drag you in and you might have some liability which you really didn't anticipate because, for whatever it is, they're going to go for the deep pockets. Yeah. They're going to make your life hell until, I don't know, you need to throw them a bone, possibly, I don't know or not. Yeah. You get involved with lawyers, they're going to drag in any and everybody. Okay. I know. I've seen that movie a couple of times. Yes, you have. I did not- You can't control what happens in these kind of messy situations. The foundations for the problems were laid over many years. The consequences and the number of people involved is significant. The time and cost involved in kind of unwinding these Gordian knots are just, it's painful. Right. Painful. It hurts. I know you can't control it, but what do you think is the timing on set of all these things sort of wrapping up? Is it going to be the next quarter two, or it's going to go into 2022? Well, this is purely aspirational on my part for a comment. I'm hoping that only, again, as respects the bank or the company- Right. that we have our reconciliation with the agencies by year-end. I think that's right, and I think that's fair. It's very hard to run the bank strategically until these things are resolved as it respects us. I got it. So I think that's- Okay. The best of luck. I do appreciate the time. Oh, anytime. Yeah. Thank you. Sure. This concludes our Q&A session. I would like to turn the conference back over to Tom O'Brien for any closing remarks. No, anything. I hope everybody's enjoying a nice summer, through the conclusion of Labor Day, we'll look forward to our third quarter call. Again, thank you for your interest and participation today. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.