Good afternoon, everyone. Thank you for joining us today to discuss Sterling Bancorp's financial results for the Q1 ended March 31, 2022. Joining us today from Sterling's management team are Tom O'Brien, Chairman, CEO, and President, and Karen Knott, Chief Financial Officer and Treasurer. Tom will discuss the Q1 results, and then we'll open the call to your questions. Before we begin, I'd like to remind you that this Conference Call contains forward-looking statements with respect to the future performance and financial condition of Sterling Bancorp that involve risks and uncertainties. Various factors could cause actual results to be materially different from any future results expressed or implied by such forward-looking statements. These 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. Thanks very much, and good afternoon, everyone. Welcome to our Q1 call. As you saw this morning, we announced earnings of $5.3 million or $0.10 a share. You know, there was kind of the typical you know, noise within the quarter that you've seen in the last four or five quarters anyhow. The you know, the trends continue to be in the right direction, and I think we're you know, we're feeling better about that. The margin got a nice boost as rates moved up a little bit, and we continued to shed some high- cost funding. That's big surprise for us and a big change from where it was a year ago. At you know 3.03%, we're I think last year at one point we were like in the high 2.50%. It's a good improvement in what we were hoping for with higher rates. We did have a recovery in the loan loss provision. Basically improved credit quality continues to drive that. Capital continues to be quite strong. Loans and deposits you know moving more towards where we want them to in terms of the deposits to you know more transaction lower cost deposits less of the heavy reliance on CDs that the bank had historically had. Loans in the Advantage portfolio but also in the commercial portfolio continue to pay down. The concern I expressed in 2021, especially with respect to the commercial portfolio and the, you know, the credit risk inherent in that, has been significantly reduced in the last several quarters, predominantly by the great work in our credit department and by the sale of $62 million of what were the toughest loans in there, the single-room occupancy hotel loans, I guess I'd call them, in San Francisco. That was, at least in my view, a very successful sale, and done quickly and efficiently. You know, the non-performing loans now are down to $46 million. As I mentioned in my quote in the press release, you know, $16 or so million of that includes Advantage loans that are, you know, at some point in the coming year, likely to be restored to performing status. Again, you know, I think we're all feeling a little bit better about the credit risk and a lot of that, you know, the market in, especially in residential real estate for some of the construction projects we've had has, you know, frankly bailed out a couple of deals that were pretty thin. You know, we'll take that help where we can get it. As I mentioned just a minute ago, the sale. The quarter also saw some, you know, continued and I think pretty significant improvements in a lot of the regulatory milestones that we had set out last year. Most notably, I think most of the regulatory items, you know, are moved into a position where we've got to just show sustained performance and competency. We've, you know, accomplished the foundational work of addressing, you know, the multiple issues that were in the Formal Agreement and which we've been working on pretty dramatically over the last six months. That is good. I also mentioned in the report that, you know, we've begun the preliminary conversations with the regulatory enforcement side and with the DOJ criminal side. There's not much more I can say about that other than that we, you know, we'll continue to move that as much as we can in a you know expeditious manner. Our conversations to date have really just been kind of laying the groundwork for what the issues are, how long they went on, what the magnitude was. You know, there's really no economics that I can speak to other than what is in the 10-K and what will be in the 10-Q. I'm hopeful by the time we have the Q3 call that we'll be a lot more definitive on where we all stand. As I've mentioned, I think several times in the past, there's kind of two competing interests in this conversation as it respects Sterling institutionally. One is that we have provided an enormous amount of effort and work and expense to remediate the issues, but also to investigate and identify the issues and the individuals who created the problem and who, you know, led the bank down the wrong path. That has been dramatic in, I think, anybody's estimation. We've provided full cooperation, and I think that will certainly work in our favor. The negative, as you well know, is that this went on for a fairly long period of time, and the volumes were fairly substantial. Those are, you know, I guess, what I call the competing interests. We'll have conversations about those in the weeks ahead. That's kind of what I see at the moment. You know, the rest of the story within the bank, again, you know, things like asset quality and margin and all that are just going, you know, the way we had hoped. You know, the continued increase in rates will, you know, likely have a, you know, a further beneficial impact on us. Although we'll, you know, I guess, as most banks will get some, you know, write down on the securities portfolio as rates move higher. We're invested in a relatively short-term manner, so, you know, really isn't gonna be dramatic and gets recovered with maturity. Not a big concern there. You should also note we added two new directors at the holding company, I'm sorry, not at the bank. At the bank, that'll be subject to the OCC's non-objection, which we should have hopefully. Well, they have up to 90 days, and let's hope it's not that long. They are seated on the bank board now, and they will be up for election at the shareholder meeting, which is upcoming in a couple of weeks. I'll just note with a note with respect to the shareholder meeting, you know, there are several governance improvements items on there that I, you know, I recommend to everybody. They are, you know, things we would, in the normal course, consider to be contemporary good governance measures and actions. Several of those are related to the derivative settlement. you know, we'll move things like, you know, the annual election of directors. as you also know, previously, last year around this time, we had already established a separate risk committee and an ethics and compliance committee and things that, at least in my view, the institution was in need of to meet, you know, today's governance expectations of our investors. that's, I think, enough for me to say on this. as always, it's probably easier just to take questions and hear what's on your mind. operator, if you can open it up for questions, I'll be happy to answer. what I can't, Karen can pick up. Yes, sir. We will now begin the question and answer session. To ask a question, you may press Star, then one on your telephone keypad. 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. The first question comes from Nick Cucharale with Piper Sandler. Please go ahead. Good afternoon, Tom and Karen. How are you? Very well, Nick. Thanks. You? Well, thank you. I wanted to start with expenses. It certainly relates to the difficulty in predicting a close of the outstanding issues. As it stands today, can you update us on your expectations for professional fees and the broader expense base? Well, I'll speak kind of generically, and then maybe Karen can get in some specifics. You know, generically, it's expected that as, you know, these major issues get unwound that what are predominantly legal and consulting fees at this point, you know, those specific items, you know, should diminish. The additional or the kind of the unknown costs that we would face would be to the extent that qualified former employees, and I emphasize qualified, will be entitled to some indemnification of legal expenses as they are questioned. I just say that it's certainly not everybody, but there are, you know, some people who have had some you know, some experience and some knowledge that will be of interest in the individual part of the prosecutions. To the extent they're qualified, you know, we'll honor those. It's a little hard to take a guess as to what they'll be, but that could continue for, I don't know, a couple of quarters or longer. It's a little hard to predict. My expectation is that things will start to move pretty quickly over the course of the next few months. Karen, just specifically, like in the quarter, what were the extraordinary expenses related to the Advantage Loan Program and the investigations? I would say they've been running pretty typical. Legal was about the same amount it's been in the past, just shy of $3 million. We did see a decline in other professional fees of about $1.3 million, and that's, you know, with the resolution of some of those regulatory matters that you spoke of earlier. Yeah. Nick, they're kind of doing what I, you know, I referred to last year. As I said, I think they'll drift down late 2021 and early 2022. The real benefit will start to come when the, you know, the resolutions are finalized. Okay, that's helpful. Have you started to see a slowing of paydowns in the loan book? I mean, relatedly, it's always tough to forecast, but are you expecting a lower rate of decline this year relative to 2021 in the loan book? Well, we haven't seen it yet. You know, to some of the decline, you know, obviously is encouraged on our part. I'll speak to the commercial side first. Riskier deals that were able to get refinanced elsewhere, you know, we continue to be happy to see those go because we're just not set up and not, you know, qualified or competent in many respects, to handle, you know, some of the more esoteric credits that were on the books. So, that's not a rate-sensitive thing rate yet, or at least it hasn't been. Then, you know, on the loans we sold, obviously that was a big bucket. On the Advantage Loan side, which is the bulk of our residential. You know, in my experience at the bank, it has been, you know, reasonably consistent quarter- to- quarter. Some of that is due to the nature in which the loans were originated. You know, they were very high- down payment loans. That's why the absolute credit performance has done, you know, pretty darn good. It was, you know, I think as everybody knows, the compliance issues and the AML issues that, you know, drove the big issues there. They continue, in my view, to pay down pretty quickly. You know, frankly, given what they are and, you know, I'm pretty happy with that. We do model them. You know, if you look at the models over the next several years, they continue to drop pretty dramatically. Okay. Just one example I can give you, Nick, by the way. When I joined the bank, the loans that were sold in the market and serviced by us were something like $750 million, and now they're down to, I think, about $160-ish or so, which includes some loans that we bought back, obviously. You know, the risk we had on the sold loan portfolio is just down dramatically. Yeah. In that same vein, can you share with us any scheduled Advantage repurchases and when you might be able to recapture the remainder of that mortgage repurchase liability? It's a little hard to guess because they were all securitized. We had dates, which I think one of them is already passed, and we didn't get the loans back. I think the next one was initially beginning in July. Again, they were securitized and, if they break the securities, which is what we anticipated, then, you know, we would have the commitment, I guess you'd call it, to buy the loans back. Although, we haven't had any further discussions on at least the first call. Is that right, Karen? Am I on track there? Yes, that's correct. They're just, you know, with the movement in the market in the Q1, they're just, you know, trying to figure out what to do with the rest of the loans. It's a little bit less certain than it was prior. Okay. Can you remind us how much is left in that allowance at March thirty-first? Sure. There's $2.7 million left in that allowance. Okay. Just lastly, can you help us think about the excess liquidity? You know, should we expect to see some incremental securities purchases in the coming quarters to utilize the large cash position? I think that's probably a fair assessment. You know, we're trying to be judicious in that. Obviously, just the increase in liquidity rates will be beneficial to us because they were, you know, virtually nothing for certainly most of my tenure here. You know, we'll selectively look at some securities if the incremental yield advantage is worth it. You know, we're not gonna make any bets on rates that, you know, could come back to bite us substantially. You know, we continue to look at loan originations, and we've done several that have, you know, been really attractive, but obviously it's not enough to keep up with the paydowns. We'll continue to do that also. Thank you for taking my questions. Sure. Again, if you have a question, please press star then one. The next question comes from Ben Gerlinger with Hovde Group. Please go ahead. Hey, good afternoon, everyone. Afternoon, Ben. Kind of following on the same vein as Nick's question. If you think about just the expense base overall, obviously there's a bit of noise that kind of gets lumped into those few line items. A different way of kind of asking the question. Let's say everything's free and clear from the DOJ, the OCC, what would be like a core run rate on expenses? I'll kick that to Karen. Is that a core what? I didn't hear the last part of your question. A core what? Yeah. Just a run rate on, like, what would a normalized expense base be? Yeah. I would say it would probably be down about maybe 20% from where it currently is. Gotcha. Okay. Kind of switching gears here. When you think about the reserve relative to the overall loans, you guys obviously made a lot of progress by selling the hotel loans and credit overall is getting better. Kind of juxtaposed against that, you have loan portfolio kind of paying down holistically. When you think reserve relative to portfolio, should we be looking at kind of like dollar for dollar, or is it like a percentage basis? I'm just trying to get a sense of like the reserve to total loans and how to model that in assuming the portfolio continues to kind of shrink. Well, yeah. I mean, just as the portfolio continues to shrink, I mean, assuming it does, obviously the reserve statistically becomes stronger on a percentage basis. You know, there continues to be, you know, I would call it heightened risk on the commercial side and at least let's take what's in the non-accrual on the Advantage Loan side, you know, kind of remains to be seen how those will play out. I mean, I think we're at the right level. One of the things I never like to do is, you know, keep going back to tap earnings for, you know, additional provisions because you didn't do it right the first time. You know, we, you know. I think we're pretty careful in identifying the entire risk profile of the bank's credit portfolio back, you know, year and a half ago or so. You know, each quarter it'll continue to reflect what we believe is the remaining risk, you know, plus or minus. Then don't forget, at the end of this year, we'll have CECL in place. I'm guessing by the Q3 we'll have some sense of where that's going also. Sure. Okay. That, that's helpful. I'm gonna give you an opportunity to kind of get up on a soapbox here, Tom. You've been doing this whole banking thing for a couple of years. When you just think macro-oriented, not necessarily Sterling specific, is there anything from a macro front from a banking industry that you think is a little out of bounds, is maybe potentially pricing or recessionary risk or anything that might be keeping you up from just a banking perspective, not just Sterling, that might not be accounted for, broadly speaking, for the whole space? I think, you know, in the entire space, I mean, what continues to concern me is that, you know. Guess I'll take the Fed chairman's old line about irrational exuberance. That happens, you know, in the on the loan side, especially as rates were down very low. You know, there was a lot of aggressive lending and kind of esoteric businesses or, you know, very low cap rates, high LTVs. So I do think there's gonna be a price to pay for that. The other side, it's, you know, it's been difficult for the industry to find bankable assets with the non-bank competition and with the. I'll speak just to the community bank space side now, not the majors. What I think in many cases is excessive regulation that has made, you know, a lot of lending markets unattractive to banks. I mean, for instance, it's really hard to have, you know, a good residential lending program, giving all of the requirements. Again, I'm not knocking them, it's just that they're there. To justify the cost, you need to have a very, very healthy origination platform, servicing platform, quality control, and compliance. It's all needed, but it's also all very expensive, and it kind of pushes banks into parts of the market, the credit markets that, you know, ultimately to problems. I think the, you know... You know, my view has been for you know many years that the consolidation is healthy, warranted, and that it's appropriate. You know, the pace ebbs and flows with consolidation. You know, I can't speak to the entire country, but you know for the major regions, the major banking markets, it's going to continue to be very hard to be successful when you're under, pick a number, but $8 billion-$10 billion. You know, you cross $10 billion, you've got other issues. I think to be you know longer term successful and fair to shareholders, you're going to have to be able to, excuse me, spread those costs. Gotcha. No, that's fair. I think- I'm losing my voice midstream. Let's get you a sip of water. Thank you. I appreciate it. So that's everything for me. Thanks. I look forward to start the year. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Tom O'Brien for any closing remarks. Well, perfect timing, because my voice is going out. Thank you all, and delighted to have you here. I'll look forward to the second quarter call. Have a good day. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.