STL - Earnings call transcript Q2 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Please standby we’re about to begin. Good day, and welcome to the Sterling Bancorp’s 2018 Second Quarter Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jack Kopnisky, CEO and President. Please go ahead, sir.

Jack Kopnisky

thanks second us quarter and results present everyone, the for of afternoon, for to joining our Good XXXX.

Joining Luis me Massiani, is our Chief on Financial Officer. the call

our results We provides release, the have outlining information. along our a quarter the presentation detailed on website, press which with for

transition has positions model. to continue to us effectively mix, a we to as forecast. high-performing performance our to the to pleased financial second metrics continue the company's expenses with managed NIM, continue loan We The how are In more quarter, the very within expanded and financial grew be mix progressed. the strong and evolve deposits core optimal core

our operating to opportunistic metrics of the our our strong continue XX% of XXXX, to diversification throughout Revenues and earnings than on the model, model adjusted $X.XX the strong efficiency representing of an positive basis than metrics our ratio ratio were higher from $XXX million quarter organic quarter tangible XX% year, second quarter year We per activities and as $XX were over first linked $XXX leverage, XX% million period result XXXX quarter. value will greater on operating return higher was XXXX. business quarter last continues Operating anticipate common M&A share expenses strategy. return assets demonstrating our XXXX, of For million than and than demonstrated our by of to second operating leverage average complement equity of Adjusted XX% XX.X%. increased core our X.X in times. the operating the improve earnings XXX% and and adjusted activities. the the average performance The same quarter of were M&A increased by operating was higher growth adjusted points second XXX and

high the drive activities Now number income that statement let and and continued of levels a sheet of categories associated me highlight performance. will balance

with First, XXX net expectations. our the margin quarter in interest equivalent taxable for second was the line basis points

accretion of linked interest changes impact was the which tax an relative points with the our to and the and line net basis points, XXX in core was law, X basis quarter income improvement for margin adjusting of forecast. the Excluding in the

We the the have increases benefited sheet. rate repositioning and of from balance continued

approximately We expect to be NIM the year to and point point range XXX full the the basis overall point range XXX NIM basis basis be point XXXX. to XXX XXX in basis for to core

in note at in XX% Secondly, commercial year was C&I the X presentation, you quarter. $XXX commercial an loans our finance of XX.X% million annualized have Slide commercial grown growth loan loans, will beginning since strong the rate. inclusive On the total grew annualized of or the and second businesses,

multifamily growing off mortgage and yielding are C&I loans. running and lower higher loans We yielding residential

mortgage traditional Overall, highest in quarter, and increased lending balances. Total quarter. finance continue outstanding areas prior warehouse XX the acquisitions of where growth yields XX% points be loan During over equipment with year. the basis in of C&I, with to loan the and we as accelerate commercial the net we growth generating X% organic supplement commercial half to confident in loan portfolios growth second annual the this loan

the rate quarter annualized for grew X.X%. of linked over deposits core an Third, X.X% growth

core strong to continue We deposits. a base maintain lower cost of

have CD aggressive of types portfolios. and core not experiencing and points deposits market base deposits. base CDs a strong levels mix reflects of especially and more that segments have demand for strong priced high savings certain to pricing have balance for and high deposits. which grown market, changed a clients consumer demand have deposit deposit that of products deposit become The aggressively, market loan-to-deposit interest-bearing commercial commercial balance ratios. money deposits High has now The been of are We and select retention of banks core pricing money and building

continues be deposits, loan-to-deposit XX% increased CDs XX% market with savings, XX X link XX% deposit and at over and mix a was was of The money the quarter basis The to XX% deposit basis points ratios a demand the approximately XX%. deposits points. XX.X%. strong cost beta Our cost of year-to-date

over growth environment, However, and of given our to expectations anticipate betas increase XX% range competitive XX% to the will we a year. year-over-year the

XX% operating ability integration to better than to levels in with our continue growth expense carefully we net to executed deposit ratio as loan-to-deposit XXX%. our and a confident planned match program. XXXX continue maintain in growth Fourth, loan We be to between have

personnel pace through all We in integration consolidations, the centers year-to-date. X of on a have We financial consolidated branch which of of year. for the will anticipate We quarter occur the X second financial XXXX. in XX with the consolidating total exception half the steady second completed of a centers

estate have real additional our and our linked We also headquarters executed by of holdings closing an streamlining strategy selling location. success back-office the

continue estate we high-quality standpoint, add from footprint analytical From relationship XX%. and real our many to risk-oriented our staff reduce refining an to company, that to are track attracted new on by model. are to support managers, capability professionals those We investment this

and We robotics internal that technology in and productivity investing technologies are improve like efficiencies. also client-facing

for will Fifth, and capital expect strong. expenses remained below We guidance, million the excluding or credit at amortization intangibles levels $XXX XXXX. be of ratios

loan loss low capital ratios. reserves and levels of strong have We charge-offs, higher

unfolds. to continue the expect financial we to improve year as the metrics Finally,

see team-based continue consumer We meaningful to grow model organically segments. to select in and opportunities the commercial using

greater average XXX ratios equity per on From of average XX% seen increase acquire we basis to standpoint, at commercial in and or return and have basis. finance greater or opportunities tangible on than and companies. expect to consistently a deliver XX% growth, assets on an less portfolios annual XX% common We significant a efficiency macro earnings also tangible share points of or higher, return earnings

on remains two core leverage that three operating building grow creates a Our times where of revenues company that positive to focus expenses.

$X.XX EPS $XX was million. $X.XX, end income. At $X.XX our ending was see first income EPS, in as and million, drive In quarter earnings I we’d earnings million performance quarters. XXXX, EPS And million improved to look and the XX, want as to year Look, $XXX day, in and March read, each XXXX consistently, the we earnings. six incrementally quarter past EPS $XXX EPS metrics and but each exceeded our June $X.XX years, I ended from our levels or progression the September high in XXXX, our was $XX improve everybody adjusted Over have met EPS you in $XX June of was million. $X.XX XX, income continue we year adjusted were of know last XXXX, leverage. and In was and highlight in can can over earnings were to operating several quarter the

So now questions. let’s open for the call

Operator

Please take Thank We go [Operator Casey you. will ahead. Instructions] first Haire with question Jefferies. from our

Casey Haire

Thanks. afternoon guys. Good

Jack Kopnisky

Hi, Casey.

Casey Haire

I outlook. wanted the deposit start on to

to You you nice loan-to-deposit a and want capability your the it half a quarter growth ratio going up keep back your in guys uptick see guide, and this – the here. step had to to gathering you're to where deposit to loan – but to hit in get need

Just be wondering, of XX at loan does and dollar-for-dollar or your deposit organic that beta growth assume deals? a to it guide funding XX

Jack Kopnisky

yes. and Yes

of have there and also a have there rates in opportunities opportunities are so we type the at that That in comfortable that deposits we growth. is or assume naturally years the uptick said Different business but dynamics also this pretty pressure, third around an we Remember of deposit we're But have out to time the in we we can that there's environment. we the Rates, municipal the given pricing So, and appropriate competitive level be priced ten some gone work assume it's deposit market. have quarter, model this. going in levels. find this competitive first up. that

way. expect ability loan be way, growth core to kind but thoughtful say, along with deposits, – we core So I going with our our of conscious we're along to deposits should with the and fund the

Casey Haire

NIM great, loan and with of the on side the Okay, the other pricing. equation

Given could X.XX, from hit yield loan that new guys to an out be lift portfolio that on you where is organic need loan yield a X.XX so that money is and today to pricing here, target perspective? there there a the

Jack Kopnisky

Generally, to trying as variablize two new commercial rates to loans. things. we’re do acquire we trying We're the

means these that more And at then, and are become we secondly, so loans. want rate which over basically, it's more short-term So want to or least more mostly loans, loans, C&I we rate X%. variable are sensitive, asset anything

general yields we at trying excess And of the product again, be And one to from that X% you of most balance support different in sheet categories. as category. loan look increases – to by comes NIM of in diversification want and we loan at in the to that look have of advantages yields good as know, higher C&I able different mixes this we're of future. mix So to type of again, the the

Casey Haire

Okay.

Luis Massiani

we Casey be reasons seeing – on so why real interrupt we're multifamily rate, that’s the of side. That's the one one estate doing rates. of commercial the sorry we’re continue to that of you to Casey, because move in on should seeing commensurate increase and in selective reasons the because fixed be pricing you. not the It’s everything that that

ability support find to and – growth you the the which the to place business of with lines where and funding return, we Jack's sides couple you have diversify you yield various resources can presentation And allocate to so attractive during a and demonstrating cost diversified return that the of a get to had the increase to portfolio risk-adjusted that it. point ability has before, is coming in where the from can loan diversify been the where capital depending funds of the one on best to reasons the would to risk-adjusted dynamics

Jack Kopnisky

So we along I'll go be more blunt here. as

in like York So metropolitan brokerage always loans. New originating in the big the things multifamily deal is

need also relationship-oriented just categories right be certain give Luis’s the may sensitive of that. we don't no category, we again, good little getting some to relate There which that price, they to yield. to lending have makes because that we out are it levels don't risk-adjusted able a yields multifamily yields. do to close out they ability the say that And are anywhere bit us want. But the We point, good on would that than asset not term of so opportunities we to less to that

that So and when need we no to be we're no when can and frankly at realize. opportunities there smart out what say saying looking and to is trying selective we about

Casey Haire

the And on is me your Understood. for of a from what lift lot of And – still a opportunities out portfolio is is mean, there last I a out opportunity sweet that perspective? spot robust just sort size opportunity, there?

Jack Kopnisky

to surprisingly You looked of continues continue $X.X in range kind high There see. And it’s the billion know to we billion are that to opportunity. many out portfolios very $X we've be generally there.

have in that portfolio, can from right allows interest some assets to again, us earnings margin down transition. the yielding it comes we means this So, of run we find lower that net if and add and That that the the accelerating portfolio it.

most again, opportunities biggest be of there to right from They return plenty And have they opportunities risk out things, from standpoint. to a the are opportunities be credit a standpoint. So importantly, right the there. have the

environment, comprise this plenty that look conditions We we within there to in have. credit are of and so context especially not to – at but the the a going risk take are the opportunities

Casey Haire

Great, thank you.

Operator

Piper Matthew Please Thank ahead. from Breese you. We'll next move to go Jaffray.

Jack Kopnisky

Matt. Hi,

Operator

And please is ahead your And standby. please Breese, Mr. go open. line

Matthew Breese

guys can you hear me? Yeah,

Jack Kopnisky

bailed We can. thought on you us, We yeah.

Luis Massiani

something. And just said

Matthew Breese

on Sorry let that am that. end, about sorry. my don��t I but through I

we where Just thinking about are mid-year.

of now were and period that considering billion XX% loans year, the guidance year-end for growing leaves between kind the So X% to $X about low end. to end billion hit $XX.X

the that you any growth, going Just other organic? to portfolio to curious is be Or of include it expect deals? composition that

Jack Kopnisky

You there right? you thirds get going are and of the – of the to it's at yield know to want. from toggles, it. you really toggle was to back percentage portfolio We the of So of where about a and would come about year third opportunity can come two But at and hard frankly said from assets of kind the you’re organic. that the forth growth expectation would our beginning M&A as the prescribe of the of quality a kind the

We have but are organically, don't this we this answer do M&A exact we to also. feel generally to need activities through comfortable. opportunities to an that. So If do potential there

Matthew Breese

deals portfolio typically thinking loan the than yields with what's Okay, about guidance, higher the NIM obviously, originated. come

the X.XX. thinking Just to about it's X.XX guide, NIM

Jack Kopnisky

That’s right.

Matthew Breese

would you get another portfolio outside that that If acquisition, range? of push you do

Luis Massiani

Yes, it would.

Matthew Breese

Okay.

Luis Massiani

size, had, that versus which the fixed that Depending, meaningful of is but net fixed would which sizable acquisition Advantage see there would, go type asset of a lot pickup on that have – into rate had, margin. similar acquisition Yes. is duration the interest another the of equation. in Funding It would Matt. of of would that the impact variables floating course, the rate, Advantage you It Yes. nature a versus depend the short class,

another and that deal So it. range end above sizable that to us slightly take definitely would higher of

Matthew Breese

Got the Can asset we it. And is modestly hold then or see sensitive. balance excluding here a slight expansion? NIM deal, the I sheet mean, some still

Luis Massiani

it. hold can we think I

I think we that can it. hold

we the that residential are end a the I how on we the the it same inherited, right. the the transition books think yielding originated still and that of rule standalone happen fact have and kind on it’s were The quickly adding of lower expansion on But of the out. the runoff the the a assets think – But that is have because the that continue you're wouldn’t equation, replaced other in multifamily between just $X.X stuff to lower of over we we assets the asset, depend I in low yields it's a time interest basis, the than assets portfolio we have billion at by mortgage lower or the of rate then that cycle. and fixed twofold parts rate today. yielding lot – of better what

So longer-term would might to being more absolutely over but growth than interest is it of – transition runway or I happens, it But with itself, depending one two a to there. But that ability quarters this it’s margin drive to time. net take itself, in transition think quickly the we net to drive margin continue creates the to continue and how great on interest able want.

Matthew Breese

one capitalized into type see the metrics getting just profitability easy position. one. Okay. with bank have an versus of then It’s And other growth fairly to the you profile over the

find So with to terms us are we work growing, do could range buybacks portfolio, And you is capital what adding where strategy the to might ourselves manage you it that capital, do how would where give a too? it of want leverage you if securities be in out? of

Jack Kopnisky

Luis, one? take that do want you to

Luis Massiani

good Yeah, a that Matt. a optionality the in question, place and – be There I to will ratio. we dividend take sense that is have It’s lot payout flexibility, a good one. of the it’s

The So dividend dividend was the the third in XX%. $X.XX. ratio quarter payout was under

to to growth So find are is capital our loan a we that extent great we ended is Funding of acquisition do capital we that. short we and we can can example. opportunities The organic Advantage ROE acquisition that that that and short exactly part will to – retaining before, Jack continue seeing business we're X% question for to to to can X if price premium compounding growth the multiple growth of on an seen find generate business of businesses capital think opportunities years. last answered today, do. the more like what going that we not that the that EPS to We into And times. that many right it We and that. of are we’re we that. – generating to internal our in that opportunities anticipate – redeploying the – thing and that risk-adjusted going allocating implied the these the returns up couple have going the We to the and forward buying answer earnings we’re greater opportunities substantially continue under than that – is doing continue hurdles, continue The as criteria in to

said, broken that we record sound – at always a have we with So times. like

about We world. are the pragmatic

don't While opportunities the issue, to that growth we we're liked. going not force we find

flexibility to we identifying flexibility the various we all seeing that And that the would But of We to able shares. growth the securities continue grow increase of we're to being capital continues moment, have have and We more able at opportunities to opportunities. advantage decided. buyback fortunately, be on be than opportunities enough strategy the the to execute to these and have to that to way. able taking portfolio being

Matthew Breese

sizeable, that certainly it? to be the another to that you billion, year. into funding to end $X sheet wanted it, for you seeing ties But of think the are if acquisition? about Did can that I seems done my confident get of by enough your balance sense And Understood. another kind last is one type how which call liquid handle about, would come the were portfolio deal of just

Luis Massiani

form lower the be of the at would end be would to we're high without trying assets on the to we execute billion – the think that the $X of of of of we be we to would end what run it'll range able off. some be having of sales do

We that. have capacity plenty of to do

securities we portion is able it. the the to a for the have down same book of to We Advantage, liquidity which with did the to thing that be create run do ability

So are billion, $XXX can still confident at we do million about to that. we $X that

organically. have of billion, we call we If to of being to Let's regard. would could over it that mortgage the and – assets be residential in some $X able something to the would we plenty to to meaningfully that I and that think have were that multifamily run-off to buy have able assets we’d be – ability run-off

So a do we sizeable govern something concern there’s to have that is as it. fund on ability not to our ability the would they

Matthew Breese

Understood.

Thank Okay, I out. for questions. my will hop taking you

Jack Kopnisky

Thank you.

Operator

you. Thank

Nicholas Austin We ahead. Please move Stephens. will next with to go

Austin Nicholas

Hey, good guys. morning Good or afternoon.

Jack Kopnisky

same I Yeah, good – doing? the did afternoon. almost I you thing. are How

Austin Nicholas

the you borrowings, few it And color is incremental over here? an strategy in more funding Maybe that growth ability next just – trade can out on fund just and give accretive borrowings maybe a at and on the there's to as call from the deposit kind with quarters. look deposit the you pay looking if retail if down in us little maybe of

Luis Massiani

trade. accretive an be would That

side that – quarter took at on lower in we're it be that number dollar doing what in the are both be the second the second we will a up, in deposit we the any meaningfully than quarter were borrowing borrowing. – will – anything So on originating

and weighted time, accretive see will that fed margin every funding, will the market increases competitive So bit replace on over with an strategy vast that from perspective. we in. cost will deposits the weighted from for anticipated that growth it's deposits generating we're we country. the of average so we perspective in of cost be a is – expense it yes the little as net the our as that’s change replacing that Long interest have dollar a which in forth, And where a how average Island, a interest function we’ll anybody a and New super majority operate of think of to that the secret Boroughs, And don't York competitive I geography places it's market. are gets in The a deposit growth,

to as It center transition center to balance the pricing and front still to that is And why order to so ability we’re reasons With origination of the relative grow. and generate you want past of one with of and have that we to if a to and do in we confident going and we’re kind at discussion mix of the front an portion important but is increase up rate that’s every rate, continue rate beta that this said, think a growth of even too, the seeing on to we the commercial continue even dollar guiding that is the point. larger increase are that that higher the new on balance, yields we’ve with us to sheet are able that the what with a have we on in of the been discussion – the we deposits, is deposit account. to type giving client, – NIM especially obviously – the maintain balance that product component

give and rates that side that have profile still the profitability of that deposit So the at comfort maintain asset balance and of sheet we higher the continue on the we us flexibility want. generate we growth even to the will slightly type return

Jack Kopnisky

sensitive. at little we have generally the interest different way, about deposits Yeah, mix rate ways we bit a or different slice at not a have XX% and XX% if you to look it the of is

– fights kinds is of base, of their have What this kind cost balance is balance, growth sensitive. balances, base at as it side XX% core, and plays core on in is accounts, of part NOW you the certain commercial, case that of of low out. the some interest and rate to all generally very everybody banks you money sheets where So our higher XX% that’s over types very CDs, market look is of kind some an

you that where that very not to that specific and are So – the appropriately low core key to after. a rate, we foundational then segments we’re you look but a segments is very is cost relationship. and at go have to the element paying have origination creating where There adding just make sure this value relationship strategies relative deposit base we’re

but So composition. this a each plenty of of especially have in stable bank you are this spending and think different the rates. about We low are grow how terms relatively we – has cost for there base, smart very to a be market opportunities money

Austin Nicholas

just on really getting to ex-amortization That’s helpful. And mentioned call then maybe Thanks. expenses, for it, XXX number that think you XXXX. know you I Understood.

to estate that given this we has kind on XXXX bit look for it be and around a as been of cuts announced As that XXXX, branch maybe year? level, the real rundown the possible ex-amortization even or XXX executed below to and well is out

Jack Kopnisky

our Yeah is. expectation that’s what

XXX, a to level added have at similar the level and XXXX around remind still expense the kind a you that that just would As way. of we for XXX we XXX Advantage the and too even as we’re – as under be are cost I at along now. guiding

yes. made So acquisition the down. last amount we guiding the even still we're answer came But that with of with X is expenses,

Austin Nicholas

it. Got

the guys off. will thanks hop Well, for questions. great. I Okay,

Jack Kopnisky

you. thank Yeah,

Operator

you. Thank

with Our Gilbert Collyn from comes next KBW. question

Collyn Gilbert

afternoon have as try to efficient questions. slew to of a be whole guys. possible. as I good going Thanks, I'm

Okay.

back came talked some of say, quarter. balances start movement guys XX% the get that with organic only know over? do Or Because we you portfolio, the wanted you're just I that. XX%, think grew speed this to and have Let like around of loan of know looks to didn't just I about that just because addition me if have the going I advantage right. What were Advantage, which that C&I unwinding, it clarity actual out I the if

organic the with to your So reconcile trying growth. of rate just growth optimistic on lower more views some C&I

Luis Massiani

Yes.

balances approximately million. approximately that not And in portfolio XX% will meaningful that running of a has time, Advantage – $XXX fashion the so we off be happened over were So yet. but

the So throughout of around right the balances Advantage were end of the course and period the towards quarter still the $XXX million.

So there was – remember deal X. that we on closed April that

did So the of the quarter. of we the get Advantage the benefit Advantage, million the balance course over $XXX of full of

had a you right? when there from, the C&I now So there's So on end the say bid where I period that the that XX%, have growing came shows on slide that deck think in those an – side we – only Advantage; and of slide beginning of the mostly funding the acquisition public finance has warehouse of growth. which traditional with year, nice business, since the business; business; sector the and the equipment the basis been then also growth driven some the finance by C&I,

seasonality better we that. where have of as in Into some to year, are to you talking of that of were finance a to we in growing asset seasonal benefit. to that balances back thinking again, in beginning going So We the were year. doing flexibility the lending and about continue in about have quarter lines, our and we half – the going third sheet to business some allocating balance classes. is in different a always remember do have bunch the of public sector has our quarter third the the in will always than quarter also Factoring payroll Warehouse perspective, a experience well same. and the a from of the fourth

traditional business the C&I commercial have better always year So of second those lines than the the – half a the all and first.

second And in type than the a lines going across so growth first. we dynamic similar to the board all of should half the and the better to anticipate business continue be we're see that

Collyn Gilbert

for pace changed runoff? just Okay, outlook Astoria, terms that's all of at runoff of has the helpful. portfolio your And then that for in

Luis Massiani

little lot we cash a rate We a will where side have were flow actually we But mortgage slowdown, a guess, before. see to – on not rising curve anticipating so bit were going residential I pay-down been those – at we that we much the of a a activity. as it's the thought of and a the of that part given change to the especially function rates, portfolio of bit same a assets' experienced little priced price seen of and be exact hasn't of really continue we have

So of of to we've been guiding months. to XX $X $XXX course over first the the billion runoff million

residential of This class, had, had perspective end mortgage an of period quarter, from million. we asset in the we rundown a $XXX

So number. the middle right of in that

but going feel mortgage be. and billion $X that of number we still anticipating this been to we it So similar is that good year in residential type we're slower, a the seeing was were runoff for of – multifamily runoff has

we also had as anticipating. performing it's previously So

Collyn Gilbert

about then What I of this added you think that? forward? what liquidity Okay, And going that certainly build think – up, And for. were how I was sort was that's quarter. borrowings driving so leverage beyond helpful. should were up, Liquidity we securities I some mean, – looking

Luis Massiani

the the into of portfolio other was risk-adjusted side, diversifying classes, on asset more securities and of taking classes. return just Yes, securities other it the some value kind there's advantage where securities mainly better of to just asset relative we a corporate of determine

So we corporate we've going built to had the not going in But larger what out past. forward. than that's continue portfolio a

as absolute portfolio well securities percentage of to asset of the is dollars as where it's perspective both the in size the going be. pretty much So

about borrowing the acquisition So fact sell that that had we down XX% you're not on to did going is in we to was we in had Advantage quarter. first see the meaningful funded increases of increase there. of The the larger the pay – of the the securities component

so, was Advantage million so with funded $XXX $XXX The other borrowings. of acquisition or about to half, of million $XXX the million,

to strategy potentially of second so and increase the year the to to incremental pick replacing those is deposits you'll and in replace and year. meaningful some borrowings the rundown overall generated – up going a of gathered be deposits, to see with half And maintain at is in in half see what second of least this that you're the

Collyn Gilbert

just Okay, then helpful. the that’s And NIM. on

X So like it's looks a would the coming the guess, coming later. core indicate which in is reported guide, bit I your bps, that about little expectation, guide but is Is that accretion right? down this holding NIM steady,

Luis Massiani

Yes.

it. for exactly been – that's million. quarter, about – equitable we've million just in guiding over the we In to There's $XXX saw yield. first XX So XXXX $XX

$XX saw million. we quarter, This

to $X the should through about end million year. in number of million You quarter-over a see $X decrease the yield accretable that

be slower million So originally at or accretion we're $XX the what still than pace in going yes, so. had around coming we it is to slightly a anticipated. But –

Collyn Gilbert

market. and latest the Okay, And the generally… asked sheet in Astoria's between differences franchise – I dynamics seeing those still see on think going that discussion. just dynamics legacy franchise? What trend, then we but the and – are pricing Are time, just the you that’s then you're deposit of the seeing kind Sterling on pricing helpful. just Or behavioral obviously, we're how any question last while balance on I that

Luis Massiani

depends. It

retail to perspective not have consumer compare the yes, seen from banking base, base behaving. retail whole consumer-to-consumer consumers a the difference base so the So we lot banking so and from how to of – you legacy a what Provident Astoria retail if are of base,

to in some now products account have market savings seeing are advantage the accountholders on CD the were or that products side. take from CD and rates perspective of in money we started higher of a So a higher that migration of

and seen, Provident/Sterling vast of have similar. So to the has of side overall But sensitivity the the side What some we places. you've the and transition darn Astoria deposits for rate the two have deposits. in legacy been majority overall on pretty both consumer been the seen behavior the cost

of where is portion municipal the book and a but an – performs the substantial point a plateau plateaus, book. municipal in plateau perspective, First But reprice every, of manner. kind not do you portfolio accounts than in where it reach every inflection then meaningful repricing. a reached with rate – reached been kind until see inflection point or specific is from has or foremost of a you points that an municipal The behaves don't typically inflection where

of last lot reasons the having low this and So such of a a we time, seen one first we're not book beta beta originally year quarter second have the what into in year had of – of whole slower the last We or quarter. was the beta we the in second what saw fact had the rate at that a had slower municipal repriced pickup a we than that anticipated. than half

with three be that there's that again, point to inflection of – also runway part there two for another think we the there's quarters that's that perspective Now of or for the book. reached from said,

they get always his rate and that mentioned high Jack sure been make component second say, We commercial somebody have treasurer book that mentioned client fed not before, comments his to deposits. when to been rate staff as a sensitive, the and paid the the day on when money on market next happen, a has to had has is accounts. are clients in yes, balance high has calling that that paid like and funds that getting The balance I the the surprisingly, a of those money types manage their mostly cash, they're market you of

manage as the sensitivity sensitive not as was is that has been, rate come. it been So as where And originally to through model individual as still rate that and we anticipated had and – of portfolio that rate with our you – has we've it portfolio transactions thing negotiated has great sensitive is contact point single started that have clients. see with that about portfolio the how we

range. a And so nice have you

how the that nice deposit clients. rates ability not not of with We're the We're negotiating moving you we're rates. wag separately. portfolio to moving because RAC perspective a individual have manage that for pricing, product to You have essentially from reprices

from perspective. works it that So

Collyn Gilbert

question charge-offs. then last And on just my helpful. is for now net and the provision that’s Okay,

I to the and come elevated of think have be now provision should that charge-offs? and think, $XX of at on lower million net range that Do you it it’s both Luis, provision end. be range. been where bit bar will be had kind range to of indicated of quarter, a is set the this maybe charge-offs we the in kind at think thinking end million high to I that now provisions little more start $XX couple higher that, quarters been guess, the in a would you

Luis Massiani

say would I not reasons. for yet. two I’d say not Not – yet

look inherited you if the as see think yes, and an to and why I delinquencies delinquencies from – – at to the on we we charge-off NPLs we when been and of delinquencies actually you days increase when reasons that the look Advantage, formations, acquired First that But under the have and look of to fact you the XX the higher. foremost, NPLs – them. XX add has trends at is the activity we and one in that

fair stripping amount we’ve of actually we’ve properties right out the move an the to working delinquency activity for actually in some underlying the perspective trends at from out perspective of other been started you a a had, and So acquisition we’ve from both assets NPL managing continue of see and oreo out are that direction perspective, to of when time. quite to actually activity, that look XX-day XX

seen So I don’t think that elevated we charge-offs. more have

the time. assets improvement we’ve of that our slightly specific – broad-based about working doing taken we charge-offs the at that have been And of $X have But working out again, two we’ve circumstances higher the the type were clients. credit that It’s Ultimately, credit we last provision it’s issues by not by of many been from been quite or episodic past. across We some driven are for – or in the types some quarters. specific million for the that – seeing we had of of what – the portfolio. some these and with in we had think some higher we’ve

feel year. still should guidance think I the that in that the mean, to of good half that maintaining So I $XX million we’re I to able meet second be $XX and we that million

Collyn Gilbert

great. That’s much. there. Okay. I very will leave you it guys, Thank

Luis Massiani

you. Thank

Operator

Thank you. FIG Partners. We’ll with David Bishop next go to

David Bishop

Hey, gentlemen. afternoon, good

Luis Massiani

Hi, David.

David Bishop

could side, Jack deposit very pricing multifamily chime people are sector, as funding that of can side? market? the to or would improve, or real pricing commercial the poised on spreads competitive as the think back on would to pressure that adjust, the on happening you what’s the Luis, to that, curious, in, maybe in coming you adjust that obviously, it just are or sense Any semblance to pertains have improve to estate has rationality Hey, terms side. sense any Any

Jack Kopnisky

no. Bluntly, Yes.

for we’re price and pricing talking relationship. that rabbit slow multifamily to come frankly into effectively. of we one where about But go the it broker-originated broader on multifamily we – do if the about have some don’t down how don’t and that advantages some hole irrational been been So price have how to side the increases – see – have you to. big relationship-oriented on rate has We is broker-originated has multifamily it loans. been again, and surprised again, benefit need And and market the we have loans we on the the

David Bishop

And a out there’s you FTE And those. headquarters back the or and bit side, assume terms out lately. number little a closures are I you thinking, to that past we it’s Advantage. there in terms branch either and Any the target ultimately, there? the it’s FTE to the Got the of it. where added into on of I ultimately divestiture shapes what inflationary for expense of sense a headcount Luis? centers, know What as financial in this personnel pressure from some quarter, look some of maybe XXXX

Luis Massiani

XXXX centers be close to down XXX. Bye to going by the the end end of – so are of financial XXXX, the to

we the of that second XXX then some then year. we the this details some in anticipating on financial we number we’re centers which press seven. is at today of closed regarding – have in year-to-date, we’re added got XX release So the we’ve this – another half closing And

And what So go. XX to end we be so of another by financial in relative XXXX, still or to we’ll by the we this XX year, centers have Astoria. down started in

close time, So we’re integration, around the the we will point quarter assumptions the execute to and that, we kind as of we to same diversity to hire are – of to final again, we end continue by of fund – the centers get today an stages the that’s for But because were it by there’s the at – the X,XXX XXXX. that consolidate XXX FTE David, balance to because of centers, we’re continuing it sheet. to continue and investing to From decrease. commercial growth personnel, as we’re financial fund will FTE, investing to management in fourth perspective, lower and risk to of going be financial lot – of bankers – starting just a going going

folks a – in. business that then continue right we going So that the invest is to the to in are number specifically. having that overall to want we target the we to target to of FTE not mix going and necessarily classes headcount lines that are to is us What the asset the invest get allow

base expense leverage talk positive the being of decreasing we And focus one is that in excluding one million continue when intangibles amortization the is slightly of through operating out out for And to that's still have that operating power we'll FTE going putting so up target want about. the wouldn't not we've are target put holistically model and to a that able and we to had revenues $XXX of – What we OpEx, flat manage you're publicly. to going really there. on

Jack Kopnisky

and would that operating this Another slice We the is, can at just Astoria. reduce decline by that this with expense you we expenses look I can you – XX%. think said as at look we

We up will end by reducing around XX%. expenses

that people probably of about, positions, reduction We on right will analytical that spend transition managers. the capabilities, new the in talked the more hiring X% Luis risk

billion $X competencies or cases, you grow, billion likely you'll So billion where or at to our in a here, and $XX billion continue base reset that we as we've types done a a we've do, the because at actually $XX taken a stay than a billion need size different company company. $XX or reductions throughout some of we've $XX

people actual about mix FTE if you we to an to why, as give good – even good So pure transitioning our team matters been number because That's point, tough number. the to out. it has particularly the Luis' matters much as it's wanted

David Bishop

Got it. for Thanks color. the

Operator

Please We'll Instructions] to go next [Operator Civiello go Jake ahead. RBC. with

Jake Civiello

mortgage resi of Luis. the any accelerate coming loan book the down to wind sales? through hey, Hey, guys opportunities you Jack, across Are

Luis Massiani

is wanted available short is it. yes, us absolutely we We whenever could that explored if to – answer want queued and The we've that alternative to have that we that we to. on to

overall it is going we're trying what performing number. anticipated earnings as manage to. was portfolio asset itself, and average an that of we In So do to the loan here is

And – a so that. we execute to anything full or not have like a like this isn't it's share

Those so and We year-over-year. perfectly are off portfolio by fine we're portfolio to $X continuing things that it doing billion having we're manage or the us. two the for fine the perfectly way work run

– we perspective have are I'd Now accelerate to the on Astoria's of executing execute the of require be that's that that these extent and the these it, would where from of call provide to those – for to opportunity right finance multi-family underwritten run-off, in that side very characteristics. of the that it – right good gymnastics credit the acquisition assets, interested most mortgages how way middle one we we would an kind the some and to know credit, the are ability find the extent we of are residential quality But sales. fairway and liquidity the

do very to ability we have can if to. that to those to one the have very have we we're confident pull we trigger sales on pull whenever it trigger execute in very – our the we we're confident that and able quickly being of So

Jake Civiello

question feeds kind or would the than of loan-to-deposit higher Okay, end bank my high give little moves great. the stronger bit. But consistently to you XXX% depository consideration to just if into a XX% range? the then whole target And ratio second of M&A

Jack Kopnisky

of side based on acquired deposit the the M&A this, base. on whole Well, always we've bank banks

we we that at. sticky find that find for can long-term things – low there cost, there we if opportunities look can opportunities – would are if out deposits, continue low are for to those So

looking that out there. some we're So the and is we've always that stuff deposits loan fund. the were niche that at We're M&A of

as So there we some are good go opportunities forward.

answer the like look We So definitely would yes. opportunities at is that.

Operator

Jake address. Civiello, you’d like another question to

Jake Civiello

for set guys. All Thanks, me.

Operator

move Jaffray. we'll Breese Piper Matthew next to with back And

Matthew Breese

guys. Hey,

follow-ups. a had of quick Just couple

do what you is yields, lifetime? to lifetime here? equitable balance long stick And the the yield expect How First, from what is accretable for? of that around

Luis Massiani

million $XX by in – this going is should year XXXX. to decrease for about so $XXX be in million It That's XXXX. total

million million $XX $XX that another And or going year. after a down step or about then have you in, every to have so there you're in come million will XXXX. $XX So of

– by given our So the the is interest XXXX, half and of by net end minimis. have and – – second in will going of accretion where that we margin be size the income today, the would XXXX – the on to by are of end impact be it de

Matthew Breese

it. Got

And bit I rate this Okay. little was after expecting lower what was the tax a quarter. than that,

Just, range is there any good changes there? Is still? XX%, XX% a

Luis Massiani

the And housing things proportion about credit XX good as that fair ability municipal as tax to anything, of income if represented to is income range. CRE the the actually one a investments taxable XX% – there's invest public is the course I bit free in months. to the purposes tax of increased taxable over income a has that growing proportion that think well the or of in last by assets income XX% XX free we for of low the is that our finance the securities – and tax the sector business

we, XX% bit good. the So there's to little XX% do that a anything, that is if to if anything, And we'd we XXXX. a better chance be than think able in

Matthew Breese

you. had. I all That’s Understood. Thank

Operator

or the over conference I'd time. additional like closing this Mr. for have to back We no questions at further to remarks. any Kopnisky turn

Jack Kopnisky

the the from and Appreciate for time. thanks a making in Thanks of the to much and things more just lot. following very forward for it company. look thanks change us So

Operator

everyone their does and ladies participation. gentlemen, today's conclude call. And We thank that for

disconnect. You may now

Sterling Bancorp (STL) 25 Jul 182018 Q2 Earnings call transcript