Ready? Great. Thanks everybody. Thanks. Good afternoon. Thanks for joining us. We're excited to have Flagstar Bank, N.A., no longer Flagstar Financial. Joining us today we have Joseph Otting, the Chairman and CEO, and Lee Smith, the CFO. Thanks very much for joining us here.
Thank you, Jared.
Thanks for having us, Jared.
Honored to be here. Phenomenal conference, so thank you very much.
Great. Thanks. Glad that you're having a good day. You know, maybe just to start off at a little bit of a higher level, you all have come into a franchise that needed some dramatic transformation. You've executed on that. Maybe just spend a few minutes at the beginning here, sharing with us where you are in that transformation journey, what some of the bigger challenges were, and, you know, what we should expect in the near to midterm from that.
Great. Thank you, Jared, and thanks for people that are here to hear our story. When we came into the bank in March of 2024, the bank really was experiencing capital issues, liquidity issues, credit issues, and regulatory issues. As I like to kid, it made the Bermuda Triangle look like an amusement park from where we started. You know, really We're proud to say today, you look 25 months later, our CET1 is 13.2%, if not the best, the best in our peer group. Our liquidity is $27.5 billion. We started with $6.5 billion. We had a lot of unrecognized credit issues where we think we've now recognized those credit issues, and we've continued to bring those down since we've been there.
We really built now a solid risk governance structure that we're proud of, and we brought a lot of talent in to build that risk governance structure. We feel really confident, no matter where the levels of enhanced regulatory standards land, that the bank would be in a position to accomplish that. The other thing that we kind of talked about when we got there is we wanted to diversify the balance sheet. You know, clearly one of the legacy organizations had gotten highly concentrated into the multifamily, and then with a further specialization in rent regulated in New York. We set out on a path to really look at the balance sheet from a third, a third, a third.
A third being in commercial real estate, a third being in C&I, and a third being in consumer cash flows, which we put mortgage-backed securities into that category to show that diversification. When we got there, we really didn't have a commercial banking group the way that we felt and envisioned that, which was a relationship based where we knew the executives of the company, we could be important to those companies, and started that build. We now built where the last 2 quarters we generated over $2 billion of new loan outstandings. We've continued to see good deposit and fee income growth. Really that business, you know, we think we're in like the bottom of the second inning, that we really have a lot of future ahead.
Rich Raffetto, who came into our company, has recruited over 300 people into that strategy. It's really proving where a lot of people questioned, "Could you do that?" Now people are like, "We know that's now a really core part of your business." We've also taken, you know, our criticize and classified, you know, problem loans down. We've reduced now our non-performing loans. We have a really, I think, a glide path towards the end of the year to really improve the overall quality of the institution. When people ask me, like, "Where do you think the journey is?" I'd say the journey is, like, halftime. The neat thing is we get to come out of the locker room at halftime already with really well-established reels, and now it really comes down to executing, which we're really excited about.
you know, one of the things, you know, as you have targeted this one third, one third, one third, I think that you had mentioned in the past was just the rating agency rating made it a little more difficult to grow the deposit side. You got a couple upgrades recently. How does that sort of help accelerate that transformation? you know, is that something that, you know, we should expect to see an acceleration of deposit growth coming from commercial customers out of that?
You know, clearly we're, we were excited about the upgrades, really were reflective, I think, of not only telling the story with the rating agencies, also being able to deliver the results. You know, after, you know, the 2009, 2010 challenges to the economy the disruption of the banking business in 2023, a lot of companies had implemented policies where they had to have the banks with a certain rating to be able to put deposits over the FDIC limit. It really opens up the door as we are adding 75 new commercial banking and corporate banking customers a quarter for us to penetrate deeper into those customers and becoming their primary bank.
Because most of the time, the business customers carry multimillion dollars in their checking accounts for operating funds, and if they were constantly, you know, at a $250,000 FDIC limit, it limited the amount of activities they could do with the bank. Now we're in a position where they feel very comfortable, and we've seen a large influx of deposits. In the first quarter, we were up $1.1 billion, which really was our first quarter of significant growth in our core deposits, and that was really, you know, prior to the rating increase. We're very encouraged, not only by our products, our people, and our service, but now having the backstop of that the rating agencies have made our deposit investment grade.
You know, as part of that transformation of a third, a third, a third, it involves reducing the CRE component. You've had a lot of progress with exiting some of those maybe non-relationship balances. You know, I think last quarter was down $1.1 billion. Is that pushing out the You know, what's the impact on NII from that? You know, it feels like it's more of a near-term pressure as opposed to, you know, still creating that long-term opportunity. How long should we expect to see sort of accelerated pay down on the CRE side?
I would say that, when we arrived in the bank, you know, we modeled out that we could see $600 million to $800 million of payoffs of real estate on a quarterly basis, and that occurs both from maturities and rate resets. The last couple quarters, you know, we've been in the $1.5 billion or $1.6 billion. The market really has demonstrated there's ample liquidity to be able to reduce our real estate exposure. We see half of it coming from the agencies, another, you know, 15%-20% from JPMorgan, the rest is kind of spread all over. The market has helped us, our documentation helps also because when the loans reset on a SOFR basis or five-year SOFR, we charge SOFR plus 300, the market can be found in the 225 range.
People, as those loans are interest rate resetting, are looking to take those and get cheaper interest rate. You know, as we've ran multiple quarters well over $1 billion, that has reduced the earning assets on the bank's balance sheet and obviously the impact of the NII. You know, we've started to see now net loan growth in the balance sheet, and so we're really optimistic that, you know, even with the payoffs, we'll continue to grow the balance sheet with the C&I growth that we're experiencing.
The thing I'd add, Jared, is the other thing to remember is, from March 2024 through pretty much the end of 2025, we deliberately took ourselves out of originating new CRE loans because we were overweight that asset class. If you look at our concentration to capital, it was over 500% in Q1 of 2024. If you look at where we are now, we're about 365%. We've made phenomenal progress. In Q4 of 2025, we've started originating new CRE loans. We're obviously not looking to do multifamily New York City, good quality CRE loans with real estate funds, in other parts of our footprint, the Midwest, South Florida, California, short duration, floating loans, not fixed rate. We're looking to do that.
As we said on the Q1 earnings call, we're also looking and saying if we've got high quality CRE loans, we've got a very active builder finance business, for example, and there's a relationship there in the way of deposits of fee income, then we'll lean into that, and we want to retain those relationships. The other thing you've got to remember is a lot of the multifamily loans that are on the balance sheet, they were brought to us by 1 particular broker. It wasn't a direct relationship. You don't have those deposits or that fee income business. We're building a relationship bank where it is a direct lending relationship.
We're looking, as we talk about a third, a third, a third, you think about a $100 billion balance sheet, it basically means that we should be $30 billion-$35 billion in CRE, C&I, and consumer. We're about $36 billion today in all CRE categories, but what we've got to do is pivot out of the low coupon 3.7% multifamily loans originated during COVID and move those into market rate, higher quality loans, and that's what we're looking to do. That's part of how you see the NIM expansion that we have in our projections.
When you look at the loans that are either coming up for reset or being refied away, are the sponsors there with equity? Are you seeing them, obviously, I guess, you know, to get a new rate somewhere else, they're having to put new equity into their deals? Do you see any concern with that trajectory going forward?
It actually has gotten better. We modeled out last quarter that 50% of the re-rate, rate resets would roll over, and it ended up being about 35%. Whether borrowers are adding additional collateral or paying down the loans or using cash flow off of other sources, they've clearly been able to tap the market with a lot of liquidity.
When you look at the remaining rent-controlled properties, or book in New York, there's a lot of talk with the new mayor about 0% rent increases. You know, I guess the city has been in that environment before, but they didn't have the impact of the 2019 law limiting the ability to recoup some of the maintenance investments. How do you feel the book that's remaining on the balance sheet is positioned to absorb a, you know, a tougher rent environment?
Yeah, sure. We've obviously looked at this in detail. Today we have about $8.8 billion of rent-regulated New York City units that are over 50% rent-regulated. The analysis that we did is we assumed a rent freeze starting this October for 3 years. We also assumed the operating costs would increase 2.75% a year. Think of that as inflationary. Market rents would increase 2.1%. Non-rent-regulated units would be able to increase the rent on those units 2.1% annually. What we found is the demarcation line is 70%. Any building that is 70% or less rent-regulated, there's very little, no impact on NOIs because they can offset the rent freeze through rent increases in the market units. Where you have an impact is those units that are more than 70% rent-regulated, and the impact on NOIs over a 3-year period is 7% or 8%.
When you think about that $8.8 billion that I mentioned, $4.6 billion of that is Pass rated for us with a DSCR of 1.5%. Those Pass rated loans have the cash flows to be able to absorb a rent freeze. If you look at the criticized and classified loans, the remaining $4.2 billion, we have taken over $500 million of charge-offs and ACL reserve coverage against that population. We feel we're more than adequately covered. I think the other things that we've done, Jared, as well is we get annual financials from all these borrowers. We're taking a hard look at all of those. We've got 97% of financials from borrowers. We're doing an 18-month look forward of everything that is resetting or maturing 18 months out.
We're almost through full year 2027 when you look 18 months out. 2027 is our largest reset and maturity year where we have $9 billion. We've taken a real hard deep dive look on three-quarters of that. We're looking at the violations and the lien lists. We don't have much exposure there. We look at the 100 worst landlord list in New York City. We don't have much exposure there. A lot of our borrowers, these buildings have been in the families for generations, so they have a low-cost basis, or they've benefited from the 1031 rollover. We don't have any OREO. People are not handing the keys back.
As Joseph pointed out, there's a lot of liquidity out there for this asset class, whether it be from the agencies, Fannie and Freddie, or other banks, and they get CRA benefits if they're funding a more than 50% rent-regulated building.
When you look at the remaining 2027 vintage that you're gonna be wrapping up this quarter, no reason to expect that there's a significant divergence in the performance versus what we've sort of seen so far?
I think that's right because we're 3 quarters of the way through 2027 already. We're the majority of the way through. In Q4, the actual amount of resets and maturities versus the earlier quarters actually decreases slightly. The way it would show up is if you look at what's happened to their ACL reserve, the last 2 quarters it's come down. Provision has been $3 million in Q4, 0 in Q1. Our net charge-offs have come down to about 30 basis points when you adjust for the 1 bankruptcy.
The one borrower that was in bankruptcy in Q1, criticized and classified loans have come down. In Q1, you saw a reduction of $1 billion between non-accruals and substandard. If there was anything, it would be showing up in either the ACL reserve, which it isn't, or you'd start to see in some of those other components that feed into the ACL reserve, we're not seeing it.
Okay. you know, maybe one more of a technical side of the question, but the loan yields this quarter, I think, you know, were down a little more than people were thinking. Is there, you know, any dynamic that we should be thinking about with loan yields as we move forward? You know, some, I guess, maybe more of the loans had hit reset than some people were thinking, so the roll-off yield may not have been as low as expected. How should we think about sort of the pace of loan yields going forward given a flat Fed environment?
Yeah. There was a couple of things playing out in the first quarter. First of all, you had the December rate cut, you know, that obviously impacted yields in Q1. If you look in totality in Q1, including the par payoffs but other pay downs of that CE-CRE portfolio, it was down about $1.6 billion. The average coupon of those payoffs was just over or pay downs was just over 5%. As we said, you know, it's good news, bad news. It's allowing us to more quickly diversify into about a third, a third, a third, and reduce exposure to an asset class we're overweighting, which is de-risking. It does impact short-term net interest income and NIM.
As we've said, in terms of the overall thesis and strategy, it's intact completely, and the worst case is maybe instead of Q4 2027, it takes us to Q1 or Q2 2028 because you just need another quarter or two of net $2 billion-plus of C&I growth to replace that, CRE runoff that is happening more quickly and sooner.
It doesn't change your view of, call it, the second half of 2028.
No. Not at all.
in terms of the trajectory and the run rate.
Not at all.
Yeah.
Not at all.
Maybe shifting on to the C&I side. You talked about hiring Rich Raffetto and bringing in 300 people there. What's the outlook going forward from that? Is that the base you need? Are you still gonna be hiring? How is the sort of go-to-market strategy on the C&I side?
Yeah. You know, it's important to lay out, I think, the strategy for us in C&I. You know, we have kind of a two-prong approach to this. Under Joe Abruzzo's group, we have been infilling in the markets where we have branches. In California and Arizona and Florida, New York, New Jersey, Ohio, Michigan, Indiana, and Wisconsin, we've been covering now those markets with C&I or commercial bankers, and we did not have those before. When people drive by a Flagstar Bank and they get called on by a commercial banking, there's a tie-in that the bank is in the community. Also, under Adam Feit, we've created a what we call specialized industry strategy, and those kind of trail, you know, your big GDP levers in the economy.
You know, healthcare, energy, entertainment, sports franchises, technology, a wide variety of segments. We have a 2-prong approach of both geographic and industry specialization. All of those really start by hiring what I would say are highly qualified, you know, 15-30-year commercial bankers. Our approach is a little bit different. We don't go hire a team. I can't think of where, you know, we've gone and did a lift out of any team. Our approach is hire 1 or 2 people in a geographic area or industry specialization, and then as we grow that book of business, we add people to that. I think if Rich was sitting here today, he's probably gonna add 30-40 people in 2026, and then based upon our continued growth in the portfolio, we'll continue to add resources into that segment.
How is that helping drive deposit growth and deposit mix shift and how You know, what's sort of the optimal mix for you as we look out over the rest of this year?
Well, I'll let Lee comment on, like, the ideal ratio. I mean, I think what we have found last quarter, you know, we had really solid deposit growth, $1.1 billion across the franchise, and we grew the C&I book $1.4 billion. I do think there's really strong momentum within the company on the deposit side. As it depends a little bit on the sector. If you look at the middle market, generally that's like winner take all approach. You bid on the business, and you win the depository and the foreign exchange and interest rate derivatives and treasury management fee and the loan. In some of the upper middle market corporate, usually making the loan gives you a ticket to soliciting the rest of the relationship.
I think the ideal scenario is, you know, 30%-40% of every loan you make in that sector you should be able to gather in deposits to fund that. We obviously have the $36 billion of deposits in our retail bank. We look for that to grow, you know, 2%-4% on an annualized basis, and changing the mix in all of those categories to more operating accounts and less interest bearing.
Couple things on that. I want to start with the loan growth and the C&I, on the C&I side because I think that's important. The way we think about it, and the team, Rich and the team have done a phenomenal job, in the areas that Joseph has alluded to, but we have 131 customer-facing C&I bankers. And we put this in the Q4 earnings deck, but, you know, they've got 25, 30 years tenure. We expect those bankers to do 1 deal a quarter, so call it 4 deals a year. The average loan size is $25 million, so it's very granular. We're not taking outsized positions in any 1 name, which is another way we're protecting ourselves from a credit point of view.
70% of our loans are utilized at an average spread to SOFR of 225-242 as it was in Q1. If you just do the math on that, 131 bankers, 4 deals a year, $25 million, 70% utilization, you can see how we're getting and building up to that C&I growth. We were at $1.4 billion net in Q1. We feel that certainly by the second half of this year, and maybe even this quarter, we'll be close to that $2 billion of net C&I growth in terms of fundings. That's how we sort of think about it mathematically, and it's played out that way. On the deposit side, we have about a 90% today. We have about a 90% loan to deposit ratio.
We would expect to continue that as we move through sort of 2026 and into the early part of 2027. We're funding the loan growth with deposits, and as Joseph said, you know, it's coming from the new C&I relationships. We're not just giving the balance sheet away. It is relationship banking, leveraging the loan to bring in deposits and fee income. It's leveraging the private bank, and they've got all the products now and businesses, so we've got the interest only mortgage, subscription lending, chief investment officer. We've got an insurance advisor, trust advisor, family wealth planner. We feel that's an area where we can grow deposits, as well as leveraging the 340 bank branches we have in terrific markets throughout the U.S.
How about on the spreads? Are you seeing spread compression from the competitive landscape? Are you maintaining spreads as expected?
We actually saw spreads widen on new transaction. We were 225 in the Q4 and 242 in Q1, and that has a little bit to do with the business mix.
in the market, but we did not see a fall off in spreads.
Great. You mentioned the fee income opportunities. You've made investments in wealth management and other areas. How is that build out progressed and, you know, what should we expect in terms of is there a target for fee income per commercial relationship on the commercial side, or, you know, what are some of the targets on the wealth management?
We have a pricing model for every relationship. We're not just looking at the spread on the loan, we're looking at the deposits, and we're looking for the fee income opportunities. Incidentally, all of our bankers know the management teams of the companies that we're lending to, which makes a big difference. We're looking at the over- we're trying to drive to an ROE target, and we're looking at every relationship, not just from a lending point of view, but including in the deposits, the cost of those deposits, and the fee income as well. It's absolutely part of the playbook here in terms of driving incremental deposits and fee income business for the bank.
We also hired a new head of capital markets towards the end of 2025, and we feel that you're gonna start to see that come to fruition as we move through 2026. Capital markets, FX, swap, syndication fees. We also think we can drive fees in other areas. With the new loan fees, unused loan fees, mortgage, gain on loan sale, particularly as we move out of the Q1 seasonally low period or quarter for mortgage. Deposit fees as well, we think we can do a little bit more there on service fees and overdraft fees. Historically on the private bank side, the company waived a lot of those fees and we're just being tighter in how we manage that.
We feel that, you will see our fee income, increase and increase proportionately as we're bringing in those new C&I customers in particular.
Great. Any questions in the room while we Just wait one sec. If you could just wait for the microphone, sorry, so we can have it on the webcast.
Hi. Can you say a few words about your digital strategy?
Are you referencing consumer or are you referencing wholesale?
General.
A couple things I think are important to point out. When we've got to the bank, we had 6 legacy data centers. This last quarter, we completed the conversion of those, closed all 6 of those data centers into 2 co-location centers, which, you know, what that does is brings a state-of-the-art solid foundation to grow off of. The second thing is, today the bank operates off 2 cores. We have a FIS core and we have a Fiserv core. It's our goal in the second quarter of next year to be down to 1 core. In conjunction with all that work, we've been looking at our treasury management and our direct offerings on the consumer online.
On the commercial side, you really have to have digital offerings for your customers, meaning when they go in, sending wires, checking balances, transferring money, account reconciliation. We have those tools today. We're in the process of enhancing those tools. On the digital format in the consumer side, we've been upgrading how people come into the bank and how they open up accounts. That's very important because last year was the first year that digital accounts opened, were opened at banks more than they were opened in a branch. We actually think that trend is gonna continue, where people are going to be digitally inclined to conduct their business, but branch domiciled when they're looking for consulting around retirements, investments, and mortgages, and things like that.
I think the thing that I would add to what Joseph said is, then on the mortgage side, we actually leverage with a partner called Blend to make that digital experience a lot more seamless. I'm, I know you talked about digital, but I'm also gonna talk about AI.
Yeah. I was about to ask you that.
Yeah.
Yeah.
I'd like to talk about AI. The technology team have just done a phenomenal job and they have built what we refer to as StarIQ, which is our own proprietary AI platform so it's contained and we're using that internally. Think of it in terms of 3 levels. You've got a bachelor level, a master's level, and a PhD level. It is open to all 5,400 employees, and we monitor this. About 83%-84% are using it on a regular basis. This is so powerful in terms of its ability to analyze a lot of data quickly. It can access all of the company's records, policies, procedures, and it can just identify key points very quickly.
It can help in terms of producing PowerPoints, presentations, marketing materials, and we're just beginning to scratch the surface. There is so much that that can do in terms of driving efficiencies internally. The fact that we've the technology team has built our own proprietary platform, which they've just patented, by the way, that's how sort of proprietary it is. We think that that is gonna create a lot of opportunities as we move forward. The other thing on the technology side, you know, Joseph alluded to, is one of the foundational aspects of what we've done. We've right-sized our cost structure and taken over $700 million of costs out.
We've done that at the same time we've been investing in growing the C&I business, investing in the risk structure, but also investing heavily in technology on things like AI development and other projects that you're going to see those come on stream later this year and into 2027, that's going to drive further efficiencies. That's how when you look at our projections, our revenues are increasing, but our costs are going down. They continue to decrease.
Yeah, the thing I would comment on AI, yesterday we had our top 100 leaders of the company together for a training session. You know what, the steps we've found is people quit using Google and started using StarIQ as their new Google. We really want them to really advance. We spent time yesterday going over 2 cases where in one case, you know, how to do a proposal for a customer, where you can feed in the credit proposal, you can feed in the treasury management, you can feed in the capital markets, and AI in 3 minutes produces this customer-specific proposal. It's really fascinating that, you know, the 30, 40 hours you historically would do to put something like that together. We also put a 500-page policy of the bank into AI then asked it a bunch of questions.
Three minutes, you know, the answers all came out. Now you still have to take that data, evaluate it, make sure it looks right. Just the opportunities are really endless. I mean, it's so exciting to see what you can do with that kind of tool that you have available to you. I would like to think, you know, we have what we call S2, Simple and Sophisticated, is our technology platform. That'll be a really big competitive advantage for us as we move forward.
Okay. Thank you.
You're welcome.
Yeah, I guess on the expense side, you've highlighted you've done a great job of reducing a lot of the operating expenses, trying to build in scale. You have the core systems conversion coming up, so I guess there's, you know, what, $40 million or so of savings after that. What other initiatives should we expect over the next, you know, 18 months that haven't already been built in, and where do you ultimately see sort of the efficiency of the combined company once it's, you know, up at full scale?
I'll say this because I know Joseph will, and he's drilled this into all of us. The efficiency target, we have it as 50%-55%. Joseph wants us to be at 50%. We're working to get to 50%. As you think about the additional cost takeouts as we move forward here, it's several-fold. One, I mentioned we've got IT projects that are gonna be completed over the coming 18 months. As they come on stream, that's gonna allow us to get much more efficient. You're gonna see a continued reduction in FDIC expense. The return to profitability, improvement in asset quality. As we continue to pay down wholesale borrowings, you will see those FDIC expenses continue to come down.
There's still some things we're doing, optimizing real estate. There's a couple of operating centers that we're looking to consolidate. That's another area that will drive cost benefits. Vendor expenses, we've been very focused on the vendor expenses and driving those lower, especially as you look at the synergies from the bringing the three banks together, and I think we've done a nice job there. And there's a little more to come. As you alluded to, we're on 2 cores at the moment and we'll be on 1 core by the middle of next year, and that will lead to $40 million-$45 million annualized cost savings. Those are just some of the initiatives that we continue to work through.
With first quarter earnings, that was your second quarter of profitability. This quarter you're finalizing the evaluation of the biggest slug of that 2027 vintage stuff. How should we think about how you view capital? What sort of an optimal capital level is? I think everybody's excited to see, you know, what a buyback could look like at Flagstar. What's sort of the broader view of capital for you?
You know, it's a fun side of the mountain to be on, is what I would say. The other side of the mountain was not as fun to be involved with. The company today is probably sitting at 13.2% CET1. We think when the Basel rules get enacted, you know, that's another 60 to 80 basis points. The bank does have, you know, a very strong capital base. When we got here, we felt there were 20 items that needed to be dealt with. We think we're down to roughly 4 regarding capital. The first being that sustained profitability at a level that we and the board feel confident of. I think we'll be able to check that box as we go through 2026, and specifically the second quarter.
The second being that continued improvement in the loan portfolio. While we think we've taken strong marks and charged down loans, you know, as we resolve loans, you know, the proof is in the pudding. You know, up 'til now, most of the loans that we've cleared off the book we've traded at or above where we had the loans marked. You know, bringing those levels down are very important. The third is this, you know, issue we discussed at the beginning between C&I growth and CRE payoff. If all of a sudden the CRE payoff started to slow and we had that kind of C&I growth, then we'll have another good solid quarter to take a look at, I think, during this particular quarter.
Once we get to that, you know, I think management will make a recommendation to the board of what we do with the excess capital, which today is probably $1.6 billion or $1.7 billion of excess capital in light of where we are as an organization.
obviously at and below tangible book value.
is a very attractive buyback.
is very attractive. Yeah.
Right. When we say excess capital, we're just taking it down to 10.5. We're not even dipping below what would be kinda, you know, the upper edge.
Normal excess.
Yeah. That's correct.
You know, your background is diverse. You've spent time as the Comptroller of the Currency. I think you have a great view of regulation and the Washington view of banks. What else do you see coming out of Washington for the industry after.
The finalization of Basel. Anything big on the horizon?
Yeah, I, you know, I really compliment the banking regulators in Washington, D.C. I think they've observed what they thought were the most important things to get banks, you know, actively involved in the economy to be a source of strength. I think today our banking industry is the most well-capitalized, liquid, and profitable, and there's a reason for that, is people have worked really hard to understand the risk in banks. I think what we're seeing coming out of Washington now is sensible and logical regulation on items. I think also you're seeing a pullback of regulators looking at what is the end result and not how the banks got there. For a while there, it was very prescriptive around processes, and I think today it'll be, well, how much capital do you have?
How much capital are you creating? How much liquidity you have? Not necessarily how you got to that point. I think, you know, Jonathan Gould is doing a phenomenal job as the Comptroller. I think, you know, him coming out and early on saying that we're going to change, you know, under what case an MRA or an MOU or a formal action that it has to have a material financial impact on the institution, is very significant. Doesn't think it gets the headlines it deserves, no longer will banks be diverted away from serving their customers and focusing on the bank when it is an virtually an immaterial item that they would be cited for.
Clearly, banks wanna do the right thing and have the right risk infrastructures and processes, but every time you're focused on, you know, items like that that are not relevant, it takes away from what banks are supposed to do, which is being out in the marketplace taking care of their customers.
Well, I think that's probably a perfect place to end this. Thank you very much, gentlemen.
Thank you, Jared.
for joining us, and thanks everybody here for taking the time.
Thank you, Jared.
Thanks.