Financial Data and Key Metrics Changes - The first quarter adjusted net loss available to common shareholders was $0.23 per diluted share, compared to a consensus of $0.27 per diluted share, and improved by $0.17 from the previous quarter [7] - The net loss available to common stockholders on a GAAP basis was $0.26 per diluted share, significantly narrowing from $0.40 in the fourth quarter [20] - The CET1 capital ratio remained around 12%, one of the strongest in the regional banking industry [16] Business Line Data and Key Metrics Changes - The commercial lending business saw strong origination volumes, with over $1 billion in C&I loan commitments in the quarter, and $769 million in originations, up over 40% from the fourth quarter [12] - The C&I pipeline currently stands at $870 million, more than double compared to the fourth quarter [12] - The overall C&I loans declined, but corporate and regional commercial banking and specialized industry loans increased to $147 million, up 4.4% compared to the fourth quarter [14] Market Data and Key Metrics Changes - The company reported a significant reduction in brokered deposits, paying off approximately $1.9 billion during the quarter [18] - The weighted average cost of deposits declined by 34 basis points in Q1 versus Q4 [18] - The commercial real estate (CRE) balances decreased by $5.7 billion or 12% since year-end 2023, with the CRE concentration ratio down 62 percentage points [25] Company Strategy and Development Direction - The company is focused on improving earnings through margin expansion, moderating credit costs, and cost reductions [10] - The strategy includes diversifying the balance sheet away from CRA-driven assets towards consumer, C&I, and commercial real estate [11] - The company aims to originate over $1 billion of C&I loans per quarter, with a focus on relationship lending and specialized industry verticals [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the turnaround strategy, forecasting a profitable fourth quarter in 2025 [32] - The company is actively managing credit risk and has seen improvements in credit metrics, with net charge-offs declining by 48% [28] - Management noted that the economic impact of tariffs on their portfolio is minimal, with only $2.8 billion in commitments across affected sectors [81] Other Important Information - The company has reduced noninterest expenses by $71 million quarter over quarter, aiming for a total reduction of over $600 million year over year [23] - The multifamily portfolio has declined by $3.3 billion or 9% year over year, with strong reserve coverage [25] - The company is investing in risk governance and technology infrastructure while executing cost-saving measures [73] Q&A Session Summary Question: Inquiry about NIM guidance and rate cuts - Management indicated that the NIM forecast incorporates two rate cuts in 2025 and is driven by several factors including the reduction of brokered CDs and the resetting of multifamily loans [36][38] Question: Details on the large non-accrual relationship - Management stated that the borrower had the ability to pay, and the impact of this relationship on the quarter was approximately $33 million [41][44] Question: Thoughts on capital deployment and buybacks - Management plans to use excess capital to expand the balance sheet rather than for buybacks, focusing on growing the C&I and private banking sectors [56] Question: Utilization of new C&I commitments - Management noted a high utilization rate of approximately 76% for the $769 million in C&I loans originated in Q1, with expectations for continued growth [78] Question: Credit metrics and economic concerns - Management expressed confidence in credit metrics improving, with no significant deterioration observed in the portfolio despite economic concerns [90][92]