Stephen Scouten: Okay. Great. Okay. And then maybe digging back into expenses really quickly. I just want to make sure, like if I look at expenses, it looks like they’re up 12% year-over-year, 7.6% quarter-over-quarter, so just want to make sure if we’re
Leslie Lunak: When I — yes, when I take total expenses for this year, total expenses for last year and I back out, once my math is wrong, which is possible, and on back out debt hedge termination loss we had last year, I’d get an increase of right about 7.5% year-over-year.
Stephen Scouten: Yes. Yes. I’m doing the same thing and getting like 12%. But I guess, either way, the expenses have gone up about $10 million a quarter, each of the last two quarters kind of in line with revenue growth. So do you think in 2023, that, that revenue growth can kind of outpace the size of expense growth?
Raj Singh : My comment, a couple of questions ago, long-term, that’s what we’re shooting for. It doesn’t always happen every quarter, and 2023 is a tough year to actually achieve it. But that is certainly — we’re going to achieve long-term.
Leslie Lunak: I mean, our forecast would show that revenue growth will exceed expense growth next year, but it’s a very challenging revenue environment, and there’s a lot of things happening in the environment that we have no control over.
Stephen Scouten: Definitely. Okay. And then last thing for me is the big question I get from investors a lot is where is the margin for error at BankUnited, if we’ve got, what was ROA this year, 80 basis points, 67 basis points this quarter and then 1 of the lower loan loss reserves still at 59 basis points. So, I guess how would you speak to that and kind of a wage folks that might have concerns that if we do enter a worsening environment that there’s just less margin for a given the lower profitability and lower reserves?
Raj Singh: I think our margin as well as our reserve levels are a function of the portfolio that we have. We have — compared to a typical bank, we do have a much higher level of resi on that resi being government guarantees. We have investment-grade municipal portfolio. So, we have a lot of these loan portfolios that have lower margin and lower losses and lower reserve. I think that the point I made early on, that if you look at where our NPLs are at the absolute level at 26 basis points, excluding sort of guaranteed SBA loans, that is also alluded to the kind of portfolio we have. If you look at on a relative basis where our NPLs were, December 2019 to where we are today, our NPLs are half. So, the portfolio over the course of the pandemic has really become even safer, but we’ve been able to grow margin, not because we’re taking more risk, but because we improved our deposit base.
So, margin has improved significantly from 2019. NPLs have come down significantly from 2019. Deposits have improved significantly from 2019. So, sometimes just looking at a number at the top of the house without color behind why that number is what it is, is often where people get tripped up. Every bank is a little bit different. And over time, you really have to look at the composition of the balance sheet to really get good answers on why the numbers make sense or don’t make sense.
Stephen Scouten: Okay, great. That’s very helpful. Raj. I appreciate the time everyone.
Operator: Our next question comes from Jon Arfstrom with RBC Capital. Your line is now open.
Jon Arfstrom: Thanks. Good morning everyone.
Raj Singh: Good morning.
Leslie Lunak: Good morning Jon.
Jon Arfstrom: Steven kind of took my question, but I’ll ask it a different way, Raj. What — are you more pessimistic, or is this step-up in provision just out of caution, your cautious nature? And what is–
Leslie Lunak: I would say we’re more cautious.
