You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: I'll start by talking a little bit about the environment, the economy then we'll get into our numbers.
Since we last talked to you three months ago really three big things have happened in terms of reducing uncertainty and reduced uncertainty is a good thing, always a good thing.
So the first and foremost and probably the biggest news of last year was the vaccine, which came out in November and is now being administered.
Obviously, we had the election uncertainty last time, we're past that now.
We also had the stimulus, which compared to the other two news is small news but nevertheless positive news.
We weren't expecting a stimulus to get done until the new administration takes over.
But I'm glad it was passed a few days -- a few weeks ago.
So with that as I look through 2021 it feels like a year with a very, very strong potential in the second half of the year possibly starting as early as second quarter.
But I do see a slow first quarter as all this good news is great but it actually has to get converted into reality.
The biggest risk obviously still remains vaccine distribution and to some extent a new variant of coronavirus.
There is still some uncertainty around it, but a hell of a lot less than this time 90 days ago.
So we're feeling very good as we put together our budget for the year.
We basically took assumptions that first quarter is always a slow quarter for us, but this year will be slow as well for all the reasons I just stated.
But then pipeline start to build up and we started executing on a growth strategy somewhere in the second quarter, but really bringing it in, in the second half of the year.
Quickly looking back to this quarter, I'm very happy with the results where we announced $0.89 per share or $85.7 million in earnings.
That compares to $0.70 last quarter.
And if you compare to the fourth quarter of 2019, which feels like a 100 years ago, it was $0.91.
So not bad for what we've gone through this year to come out just very close to where we were fourth quarter of 2019 from an earnings per share perspective.
Sorry, NII was $193 million and change, which was $6 million more than our last quarter, about $8 million more than fourth quarter of 2019.
PPNR was down by $10 million compared to the last quarter, but showed a little increase compared to the fourth quarter of a prior year.
Leslie will walk you through this, but there are some unique items in this in the expense category mostly having to do with compensation.
We had reduced our variable compensation accrual quite dramatically in the second and third quarter.
And we've adjusted that back up, not all the way back up, variable competition will still be much lower than in previous years, but just not at the rate as we were accruing in the second and third quarter.
That's one part of that adjustment.
There's some -- we made a change in policy to give rollover pay time off due to the circumstances wherein to our employees that costs a couple of million bucks and then there's an accounting thing, which Leslie will walk you through -- smart enough to walk you through that.
The big story obviously continues to be deposit generation as well as deposit costs.
We had another solid quarter.
Total cost of deposits declined by 14 basis points.
We were at 57 basis points last quarter.
This quarter we ended up at 43 basis points.
And if you look at our stock cost of funds at December 31, we were at 36 basis points.
So in other words we're starting this quarter already at 36 basis points and working our way down from there.
So I feel pretty good that this quarter will be another very strong quarter in terms of reducing cost of funds.
I think we'll end up in the low 30s and on a spot basis I feel pretty confident that we will end up with a two handle.
So that's sort -- the one side but also our average DDA -- non-interest DDA grew by $966 million, which is again very, very strong.
I will repeat what I've always said.
One quarter doesn't make anything.
You should always look at four quarter average or four quarter -- or last 12 month numbers to really get a feel for how the business is doing.
But no matter how you look at it this last four quarters or the last quarter has just been a very, very strong performance in the deposit side.
Our non-interest DDA now stands by the way at over 25%.
And I think a year ago we were at 18%.
Still more work to be done here.
We are expecting this trend to continue into next year and for us to slowly work our way toward 30% DDA.
As we had predicted, risk rating migration has slowed quite significantly.
I think for the first nine months of 2020 there was downward rating migration on $2.1 billion in loans.
This quarter it was $169 million.
Provisioning came down very, very materially.
In fact, we have a net recovery of a small number of $1.6 million.
Also we had reported back in the summer, $3.6 billion in loans that were on deferral, if you remember.
That number is now down to $207 million or about 1% of total loans.
We do have $587 million in loans that were modified under the CARES Act.
As you know, under the CARES Act, we don't -- these don't show up as TDRs.
But nevertheless these modifications by the way are mostly IL modifications or 9 months to 12 months.
A lot of these modifications are in the CRE, the hospitality portfolio, the hotel portfolio.
And we believe that most borrowers who are going to come to us for temporary relief or deferral have been identified at this point.
NPLs ticked up a little bit to $244 million, which is about 1.02% of loans but excluding the government guarantee sort of SBA loans that are in this bucket if you take that out, it's about 80 basis points.
In our C&I sub-segment, actually NPLs declined.
The net charge-off rate was stable at 26 basis points for the year.
Let's talk a little bit about NIM.
NIM was 2.33% for the quarter, I think last quarter was 2.32%, so 1 basis point improvement.
Total loans grew by $87 million and deposits grew $899 million total of which $219 million was non-interest DDA.
These are spot numbers.
What I gave you earlier was average DDA.
Book value is now up at $32.05, which is higher than what it was at this time last year, it was $31.33.
Capital position is strong.
The board met yesterday and reinstated our share buyback program.
If you remember when we started we still had about $45 million left.
So, that hardly has been unfrozen.
And then, the board wants us to get to this and then we'll meet again to talk about additional repurchases.
Capital is -- CET1 is at 12.6% at holdco, it's 13.9% at the bank, and we, of course, declared our usual $0.23 per share dividend.
Strategy for return to work; let me talk a little bit about this and going forward, not much has changed in terms of our positioning for return to what we still are working remotely and we expect to do that for at least the next two or three months and then make a decision beyond that at that time.
There have been multiple other cases in the company as you would expect in this quarter than in previous quarters, but none that are serious enough to have impacted any of our operations.
The strategy going forward again, we're waiting very anxiously for economic activity to pick up and for us to start participating in the next business cycle, which as we speak at the beginning right about now.
The focus will stay the same, which is to build a relationship-based commercial bank with a focus on small and middle market businesses, stay focused on building core business through non-interest DDA, identifying niche markets that the big guys don't pay much attention to, investing in technology and innovation and not just in branches and locations.
The game has really become about technology and solving customer pain points through innovation.
Also we haven't lost sight of all the initiatives we had in 2.0.
That was not just an exercise in time that you do and then forget about.
It really was about changing the culture and we will keep pushing forward on that front as well.
We did launch a new initiative earlier last year.
It's called iCARE, which stands for Inclusive Community of Advocacy Respect and Equality.
It is something that -- have been in the works since summer of last year, when we really announced it inside the company about two, two and a half months ago and gotten a very positive feedback.
It really is our effort as an organization to push and build a culture that celebrates and intentionally promotes diversity within the bank.
This is not just words.
This is, we're putting our money where our mouth is and taking on initiatives.
We think if we can do our bit and move things in the right direction by an inch and everyone does that, it will make a big difference in society.
So we're very excited about this.
Our employees are very excited about this and more to come on this in the future.
Let me see here.
Let me turn this over to Tom.
And he will walk you through a little more on the business side before Leslie gets into the numbers.
So let me start with deposits and a little bit more detail on the deposit book.
As Raj mentioned, total deposits grew by $899 million for the quarter and non-interest DDA grew by $219 million for the quarter.
So the deposit mix continues to improve.
We allowed higher cost deposits to run off this quarter, which we continued to do for the last few quarters as time deposits declined by $1.1 billion for the quarter.
A little bit more detail on cost of funds.
So the total cost of funds plus cost of deposits declined to 43 basis points this quarter.
On a spot basis, the APY on total deposits was 36 basis points at December 31, which was down from a spot of 49 basis points at September 30, when compared to last year at December 31 it was 142 basis points.
So they continued progress there.
The spot rate on interest bearing deposits was 48 basis points as of December 31 compared with 65 basis points at September 30 and 171 basis points a year ago.
So we're seeing reductions in cost of deposits across all lines of business across all products that continues to be a very broad-based trend.
As we think about December 31, 2020, we had $1 billion of CDs in the book at an average rate of 1.61% that had not yet repriced since the last Fed cut in March of 2020.
So in the first quarter of this year, we have a significant amount of that just under $800 million that will reprice in this quarter.
Additionally, some CDs that matured and repriced early in the cycle will also reprice down again at their next maturity date.
So there's a very significant difference between what these will reprice at our current rates or running about 25 basis points.
So we right now continue to see good healthy pipelines and opportunities for core deposit growth across all business lines.
It's always a little bit more difficult to size deposit pipelines and timing of treasury management relationships coming onboard, but we continue to expect growth in non-interest DDAs at the levels that we're seeing now.
It's likely we'll see more time deposits run off at the same time as the mix of the overall book will continue to improve.
We are seeing some of the maturing CDs move into money market category as well, but obviously at significantly lower rates.
Switching to the loan side, as Raj mentioned in aggregate, total loans grew by $87 million in the fourth quarter and operating leases declined by $13 million.
Just a little bit more detail on some of the segments, the residential portfolio grew by $408 million in the fourth quarter, of that $330 million was in the Ginnie Mae EBO segment.
Mortgage warehouse continued to perform well.
Total commitments grew by $90.5 million for the quarter and we ended the year at a little over $2.1 billion in mortgage warehouse commitments so the entire quarter and year was obviously very strong in the mortgage warehousing area.
In the aggregate, commercial real estate loans declined by $89 million for the quarter, multi-family declined by $171 million of which $151 million was in the New York market.
So beyond that, we had overall expansion in other segments of the real estate business, obviously.
If we look at loans and operating leases in aggregated BFG, including both franchise and equipment, we're down this year by -- down for the quarter by $124 million, given the COVID impact on the BFG portfolio in particular especially the franchise.
We've been focusing our efforts over the last couple of quarters really on portfolio management and exposure reduction versus new production.
So if we look into 2021 a bit and kind of break down sort of what we see happening in the different business lines.
We expect to see continued strong growth in the Ginnie Mae, EBO, and mortgage warehousing businesses.
We expect to see the C&I business start to return to a more normalized growth mode as the economy picks up and the vaccines and so forth are distributed.
We're seeing that as a high-single-digit growth for 2021 predominantly in the back end of the year.
We're forecasting a low-single-digit decline in CRE for 2021.
We continue to have some concerns about valuations in certain segments of the portfolio.
Clearly the hotel and retail segments will be challenged for a good portion of this year.
Small business lending is an area we expect to see good growth in 2021.
We've invested a lot of our technology and time and expanding small business area.
And in the franchise area, we expect to see that continue to run off probably in the 20% kind of range in 2021 as we continue to work through that.
Pinnacle is expected to decline slightly mid-single digits but that may turn around if there are changes in corporate tax rates with the competitive landscape right now from an interest perspective.
Switching a little bit to the -- give you an update on PPP, I think the overall PPP process is going well.
We're in the forgiveness stage of -- on 3,500 loans that we originally made in round one to PPP, that's going very smoothly.
We probably have about 700 loans so far that have been forgiven and we expect that to continue in the first quarter of 2021.
And we're participating in the Second Draw program to eligible businesses who were given First Draw PPP loans that just recently opened and we'll be open for clients in that phase.
We're expecting maybe a 50% to 60% Second Draw request from clients that we had in the First Draw.
So overall, I think PPP is going well.
Some additional comments around loans that we've granted deferrals and I'd refer you to slide 16 in the supplemental deck for more detail around this as well.
So starting commercial, only $63 million of commercial loans were still under short term deferral at December 31.
$575 million of commercial loans had been modified under the CARES Act.
So taken together this was $638 million or approximately 4% of the total commercial portfolio as of December 31.
Not unexpectedly the portfolio segment most impacted has been the CRE Hotel segment, where $343 million or 55% of the segment has been modified as of December 31.
I would remind you that the majority of our hotel exposure is in Florida.
The majority is in leisure properties.
And so those are the segments that we're expecting to see rebound a bit more.
And over the last few months, we've seen occupancy tick up to much better levels than we had seen a few months previous to that.
And so we see in that segment more travel and leisure coming up and we also see some surveys that we've read recently about companies returning more back to the business travel segment as well.
Our hotel book isn't really a business travel segment, but overall, we see the travel markets improving as we get into further deeper into 2021.
On the franchise side, 8% or $46 million of the franchise portfolio was on short-term deferral or had been modified as of December the 31 compared to $76 million or 12% that were on short-term deferrals as of September 30 and 74% that were granted initial 90-day payment deferrals.
$48 million or 67% of our cruise line exposure has been modified under the CARES Act of December 31.
Almost 80% of the total commercial deferrals and modifications and almost 60% of the total loans risk rated substandard or doubtful are from portfolio segments that we had initially identified as -- meeting of heightened monitoring due to potential impacts from the pandemic.
So it continues to be those same segments that we're seeing all of this activity and we don't at this point see really any level of difficulties coming from other segments than the ones that we had at first identified.
On the residential side, excluding the Ginnie Mae early buyout portfolio, $144 million of loans are on short-term deferral, an additional $12 million had been modified under a longer-term CARES Act repayment plan at December 31.
This totaled about 2% of the residential portfolio.
Of the $525 million in residential loans that were granted at initial payment deferral, $144 million or 27% are still on deferral, while $381 million or 73% of those loans have now rolled off.
Of those that have rolled off, $362 million or 95% are now making regular payments while only 5% or $19 million have not resumed a regular payment program.
Just as a reminder, when we refer to loans modified under the CARES Act we're referring to loans that have been excluded from modifications other than short-term deferrals and these are loans that if not for the CARES Act would likely to be classified as TDRs.
As Raj said most of these have taken the form of 9 to 12 months interest only deferrals.
Within the CRE portfolio we're still seeing overall good rent collections in the office market.
Depending upon the geography we're seeing 90% or so in the New York market, 97% in Florida.
So we think the office collection rate is still running very well.
Multi-family collections are running 90% in New York and about 96% in Florida and for our larger retail loans we're seeing -- sort of low 90% rates in the retail space.
Little bit more on what I mentioned earlier on hotel occupancy in the Hospitality segment.
All of our properties in Florida are now open.
And two of the three properties that we have in New York are open.
In Florida, we're continuing to see improvement in occupancy.
We saw about a 46% average occupancy rate for the quarter.
December is obviously a stronger travel month in Florida and we're coming into the better part of the season.
In December, we saw occupancy rates in some areas as high as the 60% range.
But generally we saw upper 40s to low 50s.
So the Hotel segment is gradually showing some improvement there.
A little bit more detail about what we're seeing in the franchise space and in the fitness space.
So as we've said before when we look at concepts where there's significant drive through delivery capability those tend to be doing well.
Things like pizza, chicken other more popular QSR concepts are doing very well.
Many are posting now double-digit same-store sales increases.
In-dining concepts are obviously still struggling a bit and that's where we see some softness.
Certain segments are a little bit divided depending upon whether those concepts in certain locations have delivery type economic models or whether they're in malls or things like that.
Those are a little bit up and down.
But overall we're seeing improvement within the franchise area.
Fitness has taken some steps forward, since our last call.
At this point all of our stores are open with the exception of those that are in California, particularly those around the Los Angeles area.
So basically 90% of our stores are open at this point.
They're not all operating in a 100% level, but this is the highest rate of openings that we have seen since the pandemic started.
So with the exception of just California, at this point of 280 stores that we have 90% of them are open.
So that gives you I think a good sense of what we're seeing in the restaurant and the fitness area.
So I'll start with everybody's favorite subject, CECL and the reserve.
Overall the provision for credit losses for the quarter was a net credit or recovery of $1.6 million compared to a provision of $29.2 million last quarter.
That $1.6 million consisted of a $1.2 million provision related to funded loans and a recovery of $2.9 million related to unfunded commitments.
The reserve, the ACL declined from 1.15% to 1.08% of loans this quarter primarily because of charge-off, which is exactly what we would expect to happen under CECL, less charge-offs are taken the reserve would come down.
Slide 9 through 11 of the supplemental deck provides some details on changes in the reserve and the composition of the provision and the allowance.
Charge-offs totaled $18.8 million for the quarter, which reduced the reserve.
$13.8 million of this related to the writedown to market of some loans that we sold during the quarter or that were moved to held for sale right at quarter end and those were sold in January.
A $34.1 million and all of the rest of the stuff that ran through the provision, the $34.1 million decrease in the reserve and provision related to the improvement in the economic forecast.
Offsetting that was a $32.8 million increase related to increases in some specific reserves and that risk rating migration.
We had an $11.4 million reduction in the amount of qualitative overlays.
This is exactly what we would expect.
We expect that qualitative overlay to come down as more facts are known about individual borrowers and more that gets captured in the quantitative modeling.
And then we also had an increase of $15.2 million related to more conservative modeling assumptions that we've made around behavior of certain residential borrowers that had been on payment deferral so all of that going in opposite directions kind of netted down to that provision of basically zero for the quarter.
The decrease in the reserve percentage also reflects the fact that Ginnie Mae EBO mortgages are a larger component of total loans and those carry basically no reserve.
Some of the key economic forecast assumptions and I'll remind you this is a really high level look.
The models are really -- processing literally hundreds if not thousands of regional and other economic data points.
But our forecast is for national unemployment at about 6.7% for the first quarter of '21, remaining stable through 2021 and then trending down to 5.4% by the end of 2022.
Real GDP growth reaching 4.1% in 2021 and 4.7% by the end of 2022 and S&P 500 Index remain relatively stable around 3,500 and stabilizing Fed funds rate staying at or near zero into 2023.
The franchise finance portfolio continues to carry the highest reserve level at 6.6%, followed by CRE at 1.5% and C&I at 1.3%.
The reserve on the residential portfolio remained relatively stable quarter-over-quarter.
Reductions resulting from the improved economic forecast were offset by changes in modeling assumptions.
As to risk rating migration on slides 23 through 26 in the deck, we have some detail around this not surprisingly as we continue to move through the cycle and get more detailed information about borrowers.
We did see some additional downward migration this quarter although as Raj pointed out the pace of this has slowed considerably as we would expect and we hope to see some positive tailwinds as the economy continues to improve as we move through 2021 as we're expecting it to.
In terms of migration to substandard accrual, the largest categories were in CRE and that would be in the hotel, multi-family New York and retail segments and we downgraded some of the cruise line credits this quarter.
Overall, in franchise the level of criticized and classified assets actually declined this quarter.
But we did see some fitness concepts move from special mention to substandard.
Non-performing loans increased by about $44 million this quarter, the largest increases being in multi-family.
Residential, as we had some loans come off of deferral and failed to resume a regular payment schedule and a little bit of franchise finance in the fitness segment.
As expected, we continue to see recovery in the fair value mark on the investment portfolio this quarter.
The portfolio is now in a net unrealized gain position of $85.6 million and we expect no credit losses related to any of the securities in that portfolio.
Consistent with the guidance we provided last quarter, the NIM increased by 1 basis point this quarter to 2.33%.
The yield on earning assets declined by 12 basis points and this was -- there's still pressure on asset yields, but this was a much lower -- a smaller decline than we had experienced the quarter before.
So that's good to see.
Obviously, this is just due to run off of higher yielding older assets that were put on in a higher prevailing rate environment.
Cost of deposits declined by 14 basis points quarter-over-quarter.
And as Tom pointed out, I'll remind you that almost $800 million of those time deposits are scheduled to mature and price down in Q1.
We did adjust our variable compensation accruals by $6.6 million as operating results in the back half of the year.
We're far better than we had initially expected.
I would call that a first world problem.
Glad to see those revenues up allowing us to do a little more for our employees in the way of variable compensation.
A $2.2 million accrual for some roll over vacation time that we made the decision to allow our employees due to the COVID pandemic and the difficulty people have had using their vacation time.
And we also had an increase in an accrual related to some RSU and PSU awards that resulted from the increase in the stock price, another first world problem.
So that's kind of what went on in compensation expense.
A little bit of guidance looking forward to 2021, I will preface my remarks by saying this is maybe the most challenging environment in which I've ever had to forecast what was going to happen over the course of the coming year.
So all of this guidance is predicated on a lot of assumptions about the economy, interest rates, tax rates, the competitive environment, the regulatory environment and any of that could change.
But as of now what we see is mid-single digit loan growth more of that concentrated in the back half of the year.
As Raj said, we don't expect much in the first quarter.
And that's excluding run-off of PPP loans by the way that mid-single digits excluding that run off of PPP loans.
Again mid-single digit a little bit higher than loan growth, mid-single digit deposit growth but double-digit mid-teens non-interest DDA growth as we continue to remix that portfolio and let those higher cost rate sensitive customers run off and grow non-interest DDA.
We expect the NIM to increase for the year and we would expect that PPP forgiveness to be largely a first quarter 2021 event so the NIM in the first quarter will get a lift from PPP forgiveness.
I think there's about $11 million worth of unrecognized fees still remaining to flow through that will come through in the first and maybe some in the second quarter.
The provisions, so under CECL in theory, the provision should be related only to new loan production and charge-offs should increase -- should reduce the reserves.
And if the world didn't change that's what would happen.
We have not attempted to forecast changes in the economic forecast but if the economic forecast doesn't change the provision for the year should be modest and it would be higher in the second half of the year as loan growth picks up and any charge-offs taken should reduce the allowance and we would expect net charge-offs to exceed the provision for the year and the reserves to come down.
If our prognostication about the economy is true, we would expect over time if we return to an environment similar to what we were in right before the time we adopted CECL, we would expect the reserve to return back to those levels.
Non-interest income for next year, we do expect to see some increase in deposit service charge and commercial card revenue materialize in 2021 and for lease financing income to stabilize after some decline in the first quarter.
Expenses, overall, in the aggregate we would expect probably a mid-single digit increase and that's going to come from two areas.
One is comp, part of that is just a natural normal merit increases and inflationary salary increases, which we think will resume.
We actually hope will resume in 2021 as the as the economy recovers.
But we do expect it to remain below 2019 levels.
And we also expect technology-related costs to increase as we continue to invest in some important initiatives that Raj alluded to.
Tax rate, we would expect to be around 25% excluding discrete items, if there's no change in the corporate tax rate.
The other -- the one other thing that I will point out to you, we had about 3 million dividend equivalent rights outstanding that expire in the first quarter of 2021.
And that'll add $0.02 to $0.03 per quarter to EPS.
So I just want to make you're aware of that.
There's so much information to give you these days that these calls end up taking way too much time in the first half.
I see a line already.

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compname posts q4 earnings per share $0.89.
q4 earnings per share $0.89.

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