STL - Earnings call transcript Q3 2019

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Operator

Good day and welcome to the Sterling Bancorp Q3 2019 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Jack Kopnisky, President and CEO of Sterling Bancorp. Please go ahead, sir.

Jack Kopnisky

Good morning, everyone, and thanks for joining us to present and discuss our results for the third quarter of 2019.

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

results. have website detailed release, quarterly our presentation information along our We on press which a with our on provides

solid During and quarterly targeting the alignment. loan deposit solid income improved strong growth, will significant credit call, highlight quality, commercial financial resulting and from we metrics strong fee growth, growth, the cost controls

partnership our $XXXX announcement beyond, also the discuss of balance Deloitte technology million of finance will acquisition balance an environment. sheet rate our We of given and The equipment portfolio. our the in outlook with Consulting re-mixing the for changes and XXXX

which $XXX second year income last common quarter second on basis than slightly average return Adjusted X% First XXXX on shareholders Adjusted higher earnings or tangible quarter on and common points XXXX. assets our of per $X.XX return were million, higher quarter. solid. XXX the was XX.XX%. was quarter adjusted average linked both available basis, was was to Adjusted and net an than for equity the operating tangible share $XXX.X results was

per Our over of to efficiency the value among leaders $XX.XX XX.X% the ratio and and book tangible increased be at XX.X% X% XXXX, September our quarter. XX, industry over continues share linked

basis, adjusted our termination Astoria from defined of GAAP earnings were plan $XX.X the from we $XXX.X $X.XX excluded a EPS On and a benefit was gain million, which million included earnings. that pension

finance, mortgage more year-over-year. $XXX and is over annualized XX.X%. have an than portfolios Commercial estate, continue of strong We by growth traditional warehouse organically linked the growth to produce C&I, which quarter, XX% finance loan public million lender grown organic rate of real

residential of of quarter, saw mortgages. we low rate During runoff $XXX the million a non-strategic

middle $X a portfolio On October of to yield acquisition is tax of loans approximately a with X.X% relationship comprised equipment the years. of announced duration an Santander million, and and finance of leases and an Xth, average market corporate size the The million Bank. from portfolio clients $XXX we equivalent X.X

will end close transaction We by expect November. of the this

the We to to portfolio achieve returns. remix will securities continue loan higher adjusted risk and

growing We sheet we the behind overall the us. return will have also most repositioning sheet to as balance of balance

driven Deposit new of deposits launch mainly of increase municipal and significantly new channel. a deposits, a increased relationships brokered by seasonal our CD direct bank balances successful

end We a quarter. Total the also million commercial increased linked September toward deposits the by of generate deposits compared XX, relationship substantial at to $XXX quarter. the

actions quarter. quarter, the cost or in basis that anticipate the the will total taken cost overall over lower basis the four past We deposits XX were we points than higher funding X cost For of have prior third point quarter. and deposit fourth months

municipal We third to costs will specifically which in relationships, target higher deposit higher quarter. price the report not continue did balance,

XXX quarter the points. increased funding for point basis total costs to Although basis X by

spot cost at September Our was funding basis. XXX XX

Our mix while grow balances we flexibility lower of products, channels and costs. to funding sources funding provide

comprise resulted on core accretion basis approximately margin. margin yields rate Our deposits one that and loans The XXX was acquired had coupled loans lower with declining on of interest interest asset which net floating income environment competition interest rate our net pressured assets, securities third our our for excluding in points.

our NIM interest a of core maintained page reflects year the earning stable However, the XX as re-mixing, as margin months, essentially a as the focus and controlling balance was deposit third quarter ago. on costs. we asset XX we repositioning sheet This presentation, detail net past on have over same

interest points an wish quarter, I steady rate will that FHLB anticipate securities for reduce approximately long, deposit Assuming our margin at net one our XXXX. cut first interest and additional costs. as was At rate in and core of our earning environment that net remain profitability. reduce We assets, flat basis interest and margin pro to balances increase. fed proportion costs should lower we borrowing the impact XXX continue

commercial income swap portfolio. result income restructuring a strong from loan fee as of income income, and bullying resulting Core fees, was accounts the treasury growth this fee of receivable management fee fees,

Excluding non-interest fee XX% million linked securities losses, income pension or gains and grew gain and $X.X the quarter. the by over

expect XXXX. to be fee over We core $XXX income for million

Core expenses or of exclusive of prior intangibles declined $XXX.X the from to X%. amortization million quarter

and to our to have and and continue XX of support back We commercial reductions growth one teams, financial staffing management to reduce We in centers. centers and areas. consolidated financial the office a bringing the XX portion technology aggressively total network enterprise reallocated risk the financial center location,

be Overall, the in to people. net full under XXX XXXX. time We centers XX we quarter by employees reduced in financial expect equivalent

expense expense run operating level Our of the annualized an equates $XXX million. quarter to rate for

use to a excited us as we no core are client in over operating a announced with enhanced current allowing experience past costs expense colleague Deloitte enabled business and this and relationship technology and access support expense year rate, the partnership our parties our based and to basis, Consulting provide utilizing view will provide which incremental maintain provide the artificial will strategic be of capability relative areas able to cloud We've their incremental best-in-class for been infrastructure, Yesterday, digital to AI variable We successfully these Most and run expand capabilities both capabilities experiences. we applications, levels. operating current intelligence best the technology automation, an opportunity this our banking service to importantly, positive where on to capabilities. at robotics are leverage. aligned

of quarter. the quarter, Credit that quality and for increased strong. we continued highlighted to resulting levels Charge finance offs from and last capital loans remain the equipment resolution ABL three million $XX.X

levels level we off XX and point the have six all XX quarter this for over quarter. loan fourth quarters. return to to charge basis the substandard past levels of expect delinquency, to loans, We the realized non-performing improved categories The

tangible risk-based tangible to at Total XX.XX%. total was assets common equity was and strong X.XX% capital

million our remaining X.X authorization. and million shares have in quarter, we shares repurchase the During repurchase X.X

our use dividend and fourth share repurchases investment anticipate the shares payouts, capital quarter. evaluate business, we million core to million and and X repurchase continue between We in of will into for excess the X

exceed our targets in and reasons. to model our even our meet a return and in confident with more ability several for and are we environment the future, growth rate challenging Finally,

First, the to effectively balance sheet. balance repositioned have plan we now grow We our sheet.

loan We fourth in growth $X.XX be expect quarter to range. net the billion in $X.X the billion

Secondly, effectively model loan produces commercial that we organic have a and acquired strong growth.

XXXX billion can organic Our exceed our we group in in the acquisitions, loan coupled portfolio growth with will objectives. commercial growth support $X.X and

Third, we're are of cost additional lowering and channels funding adding growth. support the funding to

channel from have strong We flows in time. period short deposit direct our of a seen

expense efficiency higher to reducing run prior million evidenced reallocating core as declined businesses. savings ratio $XX Forth, compared in levels, we and have been quarter. our very effective, return Annual the OpEx by to rate

capital quality, core us support and will Fifty, growth. levels, we liquidity to earnings have enable strong that credit

the We leverage have structurally the to strategically and aligned in future. positive incremental company operating produce

the the the continue actions point of We past that information page several results X to overall years. our of on presentation to reflects over the

year at five our ending of compounded tangible XX.X%. XX, growth growth the EPS September shares annual per rate at XXXX, adjusted XX.X% common grown an Over period our book value and

results. to continue We expect strong to financial deliver

for So now the line questions. let's open

Operator

ahead. first [Operator Please Haire from question Jefferies. Casey Instructions] take will We go our now of

Casey Haire

Good morning, guys. Thanks.

Jack Kopnisky

Good morning, Casey.

Casey Haire

I wanted to up NIM. on start the

to what's here NIM in just October you assumes to the level? square X NIM some guide release I'm fourth guide I'm then the this – off that just the trying quarter, XXX my assuming sustaining And cut. bps know, at compression math, an with that NIM the the XXX First by speaks to imply at does this

Jack Kopnisky

your understand question. didn't I Sorry,

a decrease perspective do of what the mean of for you mean, You points? basis X

Casey Haire

to get to the quarter? NIM So So guide you for that NIM to year, imply is three now right to know XXX would about XXX, XXX is the level the fourth correct? in get

Jack Kopnisky

Yeah.

guide we're XXX. we're going to you – essentially Sorry, know, maintain about is that's the – so it

that's QX we anticipate just, the be And think So kind driven going to that, I around of, by, it's semantics going Casey. you of be presenting know, that's to level our somewhere XXX. so

envisioning we're So decrease not the NIM, in XXX no. a

going So and ability. it's our XXX by be it's driven to about steady,

to And three that in you couple the that we there's asset another going there's so a amount And else next of on repriced we for borrowings subordinated yields, entirety givens the moving notes, borrowing days. is have, on of cut that's know, some stack the and our by, substantial offset compression reprices you be everything this You into then we month except eight NIM, year, of next repricing quarter. there on to going repricing know, largely be thus those the think the know, an senior notes window.

year. of that number in that thirds over billion quarter and of reprice six going balance our happening municipal what months, then focusing CDs are And cost fourth about on the that commercial have happening third you through getting a kind work of to one first is two continuing teams next then know, commercial now, of down. quarter, is $X.X to of we're about the our deposits of the right area the on on in We higher next banking which the accounts –

cut, that's can that today. that for this roughly we a we're stay assuming So you rate think even that we're think know, we with semantics that one we XXX quarter, we're at that

we So below XXX, it no. falling envision don't

Casey Haire

sense. makes that great, Okay,

in slide the – XXX, that. then XXX on quarter, is what loan were the where and the to quarter, XXX up know, know, just the at yields XXX can rollover and million know, On through, third today? following the money is new of XX, you just borrowings, you rate you So this take you that your

Jack Kopnisky

is level. So, the same roughly money the new at yield

to we X.X% the another seeing we on will quarter. to So, good But, seen, about based we're we be that there pretty haven't what here. know, the the new if, for cut do pipelines in the you some loan have yields, you X.X% fourth know, feel on that impact

as get is a same You we've X.X% going their there book about yield. are highlighted the to time

new by of acquisition, it's yields the is fourth points. we about that about basis quarter. the even – there slightly should we – below in should we So that factoring loan X.X% But XX their

cut of the from then repricing should We're basis there's you borrowing next movement we the see points, see the week. days about today But X%. XXX couple it's next today. down in some know, should that some a On stack the we at

So repricing yeah. basis that. could potentially be decrease quarter be there in lower year, higher in point next than should that the XX fourth XX the and guess to between somewhere than, that I borrowings reprice in the

Casey Haire

of XXX out know, shift the Okay. XX%. bps. securities know, was mix assume to down, I the pace this continues, And that you book, we down Should then you guess,

XX% You long that getting do you XX% today? anticipate how do when know to you, from

Jack Kopnisky

the It depends. municipal going on depends That performance forward. book the of

So about municipal are side past, we've collateralized of in we the the having that what substantial that normal, in right. affect larger deposit, security talked the the than chunk one balances reasons do of are we

the that quarters happen side, municipal you're To reduce likely deposit So, of early are targeting know, what more to cost will to way outflows areas is, two we the – you to know, extent happen accounts. us know, over in this they for would programmatic higher from To side comes take the we're could successful that the the – focus going one whatever we accounts of security that faster that, municipal that much you those going it'll year. extent the be, are the you the that that targeting – quarter, we get get to to then but municipal repricing balance decreases will, reprice, key know, accounts and potentially going deposits not next on there to margin than to on you the three funding to in there's it's time, XX%. get that those anticipate not reason,

And accounts to order the off – in be to yielding that to securities perspective roll on we – And security between, today sell I depending that somewhere or on the is, you get XXX the commercial somewhere municipal sorry are XXX, know, – balance that are the to XXX so from those math down between XXX, our higher numbers would the know, roughly. fund account. you am yielding would securities portfolio municipal

going we're going of have funding balance that you sales a of sheet, would by sell, the if decrease we're in again, municipal to because the deposit environment, offset types front security municipal components this of the securities rate net-net, with earning make going to is size we like environment, but that the assets, perspective. economic municipal we really we're in decrease the decrease of we a on. wouldn't flat So, are there's sense But lot. the the with business income the focus And on that rate that don't much those an flat this from to business parts sacrifice size

deposit that you So if from substantial don't perspective, you outflows. to – anticipate municipal we be modeling I – there's your would, going know

So get two but quarter on we that some that – XX% I year accelerate unwind it could side. to municipal need on fund would focus two to to to three potentially target, – three outflows sorry unwind the deposit to

Casey Haire

one me. last just And great. for Okay,

sounds all and Just coming are then cut, you together, yields, XXX-XXX range, XXX know, it you tying on I even are then know, know, with like your – and that mean, falling. somewhere you costs have funding and it the loan you between

seems you're about incremental to talking like the it's decent XXX NIM mean, XXX and I So XXX. a

what So I'm missing? headwind that is the

Jack Kopnisky

we commercial the It's the municipal being to what bread components accounts. to clear Very are, what's of will reprice happen you on accounts bread down commercial continue know, butter manage very happen rate and CDs, and as the to of butter what's house commercial going The of to municipal the very pace do. borrowings. able consumer to in and how the and clear, going side, especially clear the and on

we know there that with us. relationships deposit also have lending relationships You have grateful

last for We just sacrifice moving manage sake down. But anticipate relationships. that our going book the that are the deposit and at teams there's we're those essentially building deposit seven the of of the going we time, have done But book, the cost and same commercial banking to down work good move that we're of to that deposit protect opportunities years rates to not going to smartly. over definitely

is cautious of able We're as move we're being where those get So it cautious. that being but optimistic we're well. down, being with to

where would upside NIM even it. is get good faster it Yes. maintain feel that that. the there. able want yes, to – XXX, to than some about so, the And faster, we we point, And your there the be we're extent to better. side, we that on know, of to to to the get if getting you better cost can to positive happens path there's But if being And

Casey Haire

Great. Thank you.

Jack Kopnisky

Thanks.

Operator

ahead. We Riley FBR. will B. Please next take Moss now of go question our from Steve

Steve Moss

morning. Good

Luis Massiani

Good morning, Steve.

Steve Moss

I wanted the from expect benefit you the and from to expenses to ask plan total saving cost about as closures? quantify a if you the center cost accelerating financial

Luis Massiani

looked of be from have comfortable we're kind And range lower to of, range the for of basis. the core we So expense core pretty a know, at XXX. at it XX end you expense that

other, or into area. the take also those of are core different more growing. real them able pocket of the things, what you aggressive So, into it cost. feel able The enterprise And you centers the and of putting teams, some we opportunities savings to then consumer, in comfortable we we where into us like put channels, areas do branch cost the of of and know, kind overall back and based one we've in out, the we allowed some down costs costs. know, risk, technology, and lowering we deposit tried municipal reallocate putting to take Putting commercial the in we thus is, and bank in it's as to be grow being been some some commercial reduce deposits financial to direct turn of the have,

coming we're to centers XX XX the deposit financial balances. So down that the demand centers the million of balances, We consumers into of will and in excess that we're now held of that in by are feel And end by offices. well size we're of getting point of $XXX kind for the that those the be and XXXX. structure right the average situation right financial comfortable is those

Steve Moss

it's perhaps Okay, rate? expense then sub million a so run safe to XXXX, for fairly $XXX core assume

Luis Massiani

sub about that We're area. the XXX believe XXX it's not ready toward to but XXX, know we talk you

Steve Moss

loan include exclude my or acquisition? to X.X for second X.X, growth fourth guidance that the question Okay. the does quarter, on And then

Luis Massiani

the growth. it is acquisition loan net includes and It

Jack Kopnisky

have so resi XXX XXX resi teams, run million you're components, components somewhere to Three and portfolio. again acquired commercial we you organic it, million have know, XXX the the growth of of acquisition, three yeah, multifamily to between you to million between and XXX the to, you see going off somewhere million will between and then through

Steve Moss

XXXX. Okay. potential I question. CECL around am impact in have if you And from color last wondering my any

Jack Kopnisky

call. more an an quarter's we're consistent see and we're know, loan to going information our to we're have the increase, increase talking going sheet, going know we've, We're our filing in our somewhere you today. to additional shortly picture, – know, big but see it's likely what loss we've XX% talked So will we'll between there, you some to very relative reserves for ranges, of in last, about XX% XX-Q but and you than balance allowances

you Now the remember, purchase that bit an you a the sheet. difference and of on portfolios to orange numbers, create to little our that at have acquired we apple organic relative to kind know, product know, balance have a accounting because look you not of loans their a have, little had of portfolio an when you that's that various bit have, folks adjustments and

So, be half today, that pocket dynamics between relative accounting to now is it's anticipate relative million CECL. adjustments we that allowances XXX about required left to XX% the about of we to pocket, of of increase kind unwinding but you under purchase a to, type have right going know, XX%

know, able you our don't kind can now, we been imagine, know, be full around envision close of two you to doing the work feel being So position. shortly. for significant provide And, a that, a impact of we as being will lot to to we we've it years pretty details past, capital and you

Luis Massiani

that We remain on expense statement we're effect is don't reality, where at view – this financial today. in of pretty consistent. basis will our around the And net a will expense provision provision remain all

and allowances reserves the cut So up moving, that it to through around, level. know, when ends you you all

Steve Moss

thank very much. right, you All

Luis Massiani

you. Thank

Operator

Please Ale Sandler take our from now ahead. O'Neill. Twerdahl question of go will We next

Alexander Twerdahl

morning. Hey, good

Jack Kopnisky

morning, Good Alex.

Alexander Twerdahl

credits higher quarter the the cause those three us start off remind I of that. ABL – just you presume that charge we'll can characteristics with that I and off, First this guess

Jack Kopnisky

of exposure. industry them printing One printing was sector, a sector

or finance was them business operator. of business. a was lending one And, One lender a of them commercial construction you know, crane

pretty know, And operate in. perspective to sectors the there's you diversified they you So of, from a industry the which in know, story always credit.

we've be our we the you At it's two with happened off nature of telling had of and three for our charge up, them receivables business, the through going and here one. going we've are and so more some forth. kind you now them, collateral accounts the of and we're executed we're there's day, now to what still of working and off two So off behind we the know, charged essentially where of hours have us ABL end we're know, then way each you collecting pop one selling these inventory equipment and and could our

in So they sideways, one in of ABL be off is should us this when things collect behind fourth charge But the day, you – much can should we also the number. do know, this some and to what have at as we quarter. as sometimes, third money and the end we go go we

know, three painful end go but collected moved through they that. much actually should a and work to of workouts, you you as So, as day, from know, and we workout you could on the way the we we the know, they

Alexander Twerdahl

is this then what higher collateral difference that – should charge sort the there in else then difference of be we were? thought thinking in quarter. last value Or a sort in versus we Is just of the about you that something talked And when quarter level maybe indicated about? they off this of

Jack Kopnisky

good dynamic clearer discount driven enterprise accounts where to it's borrowing easier concern that though, or out or business one to driven resulted where greater versus borrowing of workout amount behind a much them be, then of instances, it of – of of and charge was figure take which of it's that's you're or as much base receivable accounts relationships kind those in is when going kind of done much to In one some us. receivable the uncertainty lending against out to that's and estimating kind receivable, what your and what figuring and and and largely or the of more arises the, that's value some what included selling by Pretty account value now but realizable it's, how an is. dynamic is, kind the by offs, the haircut

Luis Massiani

XX basis credit, going expect rates to points XX that we forward. All return of basis return We to there's rest XX going pristine the side. expect and trends – point relatively your us to remain to in to come concerns instead us, see the charge as we down, a of alarms offs, credits nothing that continue that frankly, to

as they're be pristine rates of low, stay very to levels long going credit metrics. As

Alexander Twerdahl

it. Appreciate it. Got

it’s following to that to So, million assume this safe to XX provisional that quarter per million the returned event? XX

Luis Massiani

Yes, that the case. is we anticipate

Alexander Twerdahl

that's that tighter is up to that NIM, did quarter? back is the just what is then the in – in going much this some be in fourth like the of guide the bit presumably metrics if the closes costs little down, state that XXX sort kind And excluding seems a you other so, Okay. coming the indicate of the thing the NIM, November, than would the acquisition acquisition of has spread in actually a the that funding that's margin

Jack Kopnisky

do deck, slide some we but to some some don't that are so that pages information just fund on and have – in we me, of shows That's sorry as going I in security – anticipate, in the have deck We has That is right. of we’re sales. the slide the put acquisition front – some that we one going the it with to correct. put of the, of

not replace the entirely we it's acquisition X% them X.X impact securities with these to yielding So, for dollar NIM going that, yielding are doesn't assets. because dollar

to know, without have going and term NIM would have would margin relative interest a the that higher this net, quarter. a it providing But the slightly, basis, we been, positive. that slightly it net on yes, for net, a would would guide So, short be decrease fourth is to been

Alexander Twerdahl

my taking questions. Okay. Great. for Thanks

Jack Kopnisky

Thank you.

Operator

Please from take will our We now KBW. Gilbert Collyn of ahead. question go next

Collyn Gilbert

guys. morning, Thanks, good

what saying. with and understand make guys are growth sure start Just I you to wanted

you're that purposes all indicating sheet So, the that and balance repositioning for is done. intents the fact

that then So, also more the not we multi the means book runoff book? resi no assume any and in off should more in run

Jack Kopnisky

There will in runoff be No. that.

So saying can runoff, growth that we clearly this. outrun just net we're in so we the have

to as increases, we quarter we $X.X the loan components we're the So, in time of portfolio growth, on all range. resi commercial period against the we're fourth example, runoff that worth as $XXX to debt stuff of million and resi the confident of during loan billion said, that million, that frankly million the that kind for up Louis comes runoff of we and net have hundred organic out were where, that $X.X of And that billion same a in range. growth, forward replacing of will have to couple dollars’ side, go be $XXX we'll multifamily

growth begin the have net loan So, grow sheet again. and to we'll balance

Luis Massiani

the same sold the residential forth. so borrowing in sold – sales. if the course towards plus just factor the unfortunate earning beginning of the acquisitions resi since to part about look essentially $X.X, mortgage the we mortgage amount the and of when didn't at there that more year. the of you the you essentially sales It’s sales has gone When and assets was over we've billion them what, that of that started we was of because the talking that fund And at and reduced loans time of like the residential almost year, securities, we $X.X

total decrease resi earning year-over-year this the at to assets is averting is year-over-year of because balance actually composition the sales – and toward And asset security so, the sales.

that quarter-over-quarter that to continuing and going starting doing were we're this be billion, prior transition. are though continuing accelerating billion repositioning, quarter even this we what $XX.X of increase sell today balance so getting our $XX.X some kind we fully to the going to to anticipate to of bouncy some earning assets in to do And of fourth and similar expect securities sheet

you year-over-year. will earning start quarter-over-quarter asset So, growth seeing and

a place. done targeted but sheet not We kind balance better this the that that of year, lower of was the yielding in components of getting have strategy a

Jack Kopnisky

Yeah, But missed would reposition the balance some – done make of the environments sheet. be environments one you of never going kind we I will of some the with repositioning expectations economic always we had we because another also analysts’ why rate changes. make be there's different quarter and where reasons is because to

to Now, in we when start the and types we that really target demonstrate of categories quarter have situations as the us fourth is positive very operating past we majority want of as behind leverage. and where and the sheet the asset grow we feel said to we continue to, that the want confident Luis can in balance

Collyn Gilbert

Okay.

And multifamily were Okay. Jack, this of indicated those just quarter. sort lines and you linked along then the loans but up

about And and so – that mean looks I talk replacement rates of you're is you obviously, the how like? intention what the can runoff. you're is thinking sort adding, to structures this adding the but replace the intention loans, just as said grew you're you you adding, quarter, about the multifamily

Jack Kopnisky

yeah. Yeah,

where on that yield based on basis to the so, relationship side difference, broker and the deposits So, originated just are we loan variance getting loans the points multifamily probably is replacing loans XXX multifamily get. the multifamily in addition we're

category. how the It's and is we things comes the not other what types with do with it's how those frankly, priced. And those clients. this of part then just loan of So,

of that So, to we see that not can that, with we're comfortable out the types as multifamily category replace growth net but particular we're forward. go multifamily we tremendous relationship lending, of runoff based going

Collyn Gilbert

or, loan runoff you're acceleration And talking rate assets about. helpful. than less kind anticipating to of job see paydowns, the have to seems movement environment. of the want a you you've legacy in in pay good just going really How given that like I you that's been of able putting just down traditional enormously you has done broader you're just just okay, we're aside robust some what activity were that the that seeing it market. mean seems But you offset. that Okay, traditional, been like to guys to the just are paid the then downs, origination been right, so

structuring you're your little loans, that it, that understand it or to the dynamic different kind normal is is pay in trying a seeing? the the just course just you're the how of bit the of seasonality of downs how as – So, does loans or business

Jack Kopnisky

slightly different. something say I'd

kind by if activity on multifamily think mean, stated that you I – the coupons the side, multifamily fact of that So, right. loans the the the on the that that we're are super CRE low, seeing and

vast Astoria multifamily XX% X%. that that what remember acquired of bulk and So, $X.XX on the on are and billion multifamily from of those of the banks coupon loans today from majority do the which that for of multifamily Astoria. XX% was we acquired With was or

I don't credit not good loans bogey, just I I the so could for quarter in paying to that managing So, and of to off that yet because a borrowers they the loans think I wish two fact three is have their think loans, refinancing I those are kind that gotten we guess, would those this have at but again, being coupon. take

those a then the of So, we loans decreasing will in would yet off isn't environment, where continuing and to market right types repricing are some of there. there faster. run see, start you refinancing But kind greater be

Luis Massiani

of set that, up flip because portfolios the the side But we we've to – have from. the of way company, you it grow multiple is types had too of

any one to slave a category. not You're

estate, portfolios, out So, we different real see there. about commercial categories are in every most of finance commercial niches just frankly, various C&I, category that there

of robots. So, There's is there. lots out volume is this view this this is

you around can categories robust this and can still and we York, X,XXX to that go kind as can It the as really have opportunities plenty of asset in optionality in if player originate have choose a this in categories we what because of to best franchise continued then – as there. because we it there's have too. on said kind our we times, part is loan forward in. time, originations wasn't but New yield small types we're even national confidence pick pipelines metropolitan time, I've move a out you way, Our goes still the holding of along robust we And of capital can gives be a want the in you a back full,

pay potential kind growth at downs categories in categories, certain So, of in the have. the different that opportunities to we outrun look

Collyn Gilbert

guys or maybe the just ratio, seems Okay, right? haven't just okay, coming I than to that's key math helpful. higher you're finally, in end lot maintaining eight the math it a is up yet, you going quarter in still done And not my a quite like and are but but then

Jack Kopnisky

Well, to that. to get take target. to term Not while us number. to take get that X it’s a long get to. while to going a us That's It's going share repurchase. a million it to Total

You are correct.

Luis Massiani

to going next get not We're there quarter.

good math. You're pretty mental at

Collyn Gilbert

in eight you it hitting am don't that yourselves I even I – you not a mean, know that so, really. Alright, do I that I could quarter. even be see XXXX? mean what is. in even

Jack Kopnisky

It depends, yeah.

got we take is what depends we it the continue potential the sheet other the be somewhere between a late opportunities see on growth If in to So there. XXXX. probably To X balance us. sheet earning growth to extent in then grow X.X that it and it the billion at billion would there out we would assets what balance year-over-year, at

continue going we're envision. time the to we pretty active So, front for in buyback some being

Luis Massiani

powder. of So, a we have lot dry

Collyn Gilbert

Yeah.

leave guys. Thanks, All right. I'll there. it Okay.

Jack Kopnisky

you. Thank

Operator

take ahead. our now Please next will from question Dave go D.A. Davidson. We of Bishop

David Bishop

Hey, good morning, gentlemen.

Jack Kopnisky

Good morning, Dave.

David Bishop

Hey, It looking of mean ahead. the it's the complete going I obviously, here subject repurchase to follow-on sounds in near future that share program. you're like the here.

balance recent you next board another of resumption level, for growth envision likelihood to as authorization? the year the a expectations type the sheet, Given similar authorization strong of a in into the most

Jack Kopnisky

more business. at us buy Again, to, shares look the into investing it back Yes. gives optionality or

our board is the in very upping of So, think authorization. I comfortable

David Bishop

fee Got XXX level it's that And this it. turning to like year. comfortably hit looks going income then to

that into XXXX, think of sustainable level? look drivers you current you at do are most those As

Luis Massiani

do. We

are been pretty think and even in grow, fee the those takes time there types restructuring of that that, know, will puts should yield the mix loan fee comfortable of we're income but to done things receivable, categories returns So, accounts confident continue we with you better on. as goes the related has

comfortable forward. So, we going are

David Bishop

am guess the the the terms class, against address beginning, issue that ABL just Got in the could as move lot terms and, been curious we've you – economic history then asset I comfort getting of on just there in in but losses credit us it. in comfort, of here remind level And trend? give I then we manage of of loss as potential us terms comfort maybe goes sort cycle asset, you through maybe credit a riskiness we down sure along your cycle. lately you the in overall the we terms update got migrate just of the the with as questions an

Jack Kopnisky

against our inventory. XX% ABL XX% receivable of receivable, is accounts majority Vast accounts by is advances ABL eligible secured –

So, of to the were value categories value. a and in Luis's that's comment enterprise majority There's we that back loans plus equipment had some that on ABL in this. variation couple that where the cause

finance portfolio flow ABL. portion cash our it. equipment dynamics of There's or some that it most So, of is has some a to traditional

is in ton to deals. of We're some a one where come comfortable, down majority deals The ABL on done know that we're on for of volume vast with what at now cases rates going on point we ton we look have what's where the ABL pass in portfolio. come. doesn't a So, ABL of rates The because negative the in structure. We sense. a the ABL, portfolio. overwhelming some analysis frankly, on the ABL’s cases is given, and We've the now comfortable pricing of it make

David Bishop

of see one Got as third still a question. it. quarter that to fourth the into you public of And quarter, year. the this highlighted sort year? second close sort from the I segment of strong through growth Good you the know the of final carried finance half had

Jack Kopnisky

good the of I lots is pretty America, and by types infrastructure want generally business, of across infrastructure interesting these are credit. those projects the of projects credits. to an community, secured aged It's communities is do good the and And which getting we're revenue think yields do. we infrastructure out We projects think of the

So, we're and and higher we're comfortable be that that maybe consistent grow the that infrastructure and demand the into given future even expand financing. continue will will to the

David Bishop

you. thank Great,

Operator

We’ll ahead. Markets. Steven Capital Please Duong go Instructions] question of now [Operator RBC next our from take

Steven Duong

guys. morning, good Hey,

Luis Massiani

morning. Good

Steven Duong

Hey.

about So talked line I cut, XXX hold? XXX, guys end in generally December past. would had you up your you NIM, XXX, we XXX rate think on it think that the do do looks getting corridor a If a like

Luis Massiani

would but It it'd would, be, be so. it

cuts similar, put quarter, third we it'd quarter, two to to similar points some seven pressure get in five would probably be this what the down. see that so happened which of basis You is,

those confident starts you're that way up substantial that the way conversely, went to to to if that obvious, book you a very down. on we that the think on deposit talked have thing it'd we point. takes see where I that quarter once think also repricing, feature have and that, you saw next, what not holds still by the it to XXX. again, be, start a municipal – accounts be it the wouldn't saying the caveat day So, call XXX, quarter was – and bases dynamic below having below meaningful third about in one the in it but XXX same that second from going of We're the that good chunk we I the Then but repricing I while this commercial plateau low is that about get

those give costs move to term rate down. us to cover greater longer deposits the So, continue to air cuts

risk some side there's perspective. there term, catches that up from short commercial a no doubt house funds might So, the the to it, of cost but of be

relatively one deposit time of quarter number we run up, we if be up to little the And are meaningfully of not for that the take will commercial it the meaningfully even it well. in But up, to side cuts, but rate catch so, replaces that cuts quickly two versus down NIM bit once proper one, shot. two consider they're this as confident it a catches would because house whatever XXXX change, catches

Steven Duong

correct And Understood. me if I'm wrong.

you around this a similar data has XX%. historical XX% I Are around? go in think at looking been your

Luis Massiani

XX got tale the the to somewhere between XX. that's XX%. And We commercial is is to XX% cities and consumer the and sells municipal XX%, two side to think XX%

commercial for XX% a you on decrease that's we commercial seeing have – play cuts, that basis in side, started that, XX to points, and should start true seeing you see the of that if book. two what about start would to the So out XX% holds every

down, to so of start confident it we're types right rather can comes continue those our pretty teams sooner again, we down. costs later having focusing need of than working just commercial we clients that with with conversations which moving the all and so our kind on So of banking

Steven Duong

the or that some CECL that to going to that capital XX%. going to That's comments good about the going offset on all of to hear. And XX% then up? just to your grows basically going is Is to – that

Luis Massiani

It��s going to capital.

Steven Duong

impact that accretion dovetailing does Okay. outlook? that, And into XXXX how your

Jack Kopnisky

provided the kill that this let caveat because my in that we not folks both does be auditors by going comments said then already there's It past numbers before me saying my accretion not the and would me. now, to legal

results all preliminary and good work Our they that stuff.

adoption XXXX, me let caveat guidance. So, wouldn't meaningfully, our change because providing of it embed we But were to the we you CECL started know, that. it prior into impact already had

XX million fact actually impact in So impact accretion bucks been consistent and think that somewhere the bigger to the than it's bigger acceleration provided that you if saying to pay to million to a CECL. and we've going that is of you year. we that forth, rates of anything, going to so between XX on know, of I forth, be the pretty accretion If low refinancing downs so activity guide and that's see, of continue have because adoption the next

with numbers million feel still So – we good those. bucks pretty feel past million about that going XX to hold we to XXXX provided down in we or the good in still to about pretty XX we that the transitioning are

Steven Duong

just one. to right, one then hear. And All last good

XXX expenses. your It you on came on about points assets. guys looks Just basis in like

assets, number more up pick you to that start gravitating you see do XXXX? into lower As

Jack Kopnisky

Yes.

Steven Duong

color Terrific. right. for Thanks the All guys.

Jack Kopnisky

Thank you.

Operator

the there remarks. no further at this you to like or turn Kopnisky, back additional closing to questions are appears Mr. any It call would I time. for

Jack Kopnisky

interest stock. the everybody's in appreciate really following I

thanks, So day. Take a great have care.

Operator

Ladies calls. participation. for your you Thank and this concludes gentlemen, today's

disconnect. now may You

Sterling Bancorp (STL) 24 Oct 192019 Q3 Earnings call transcript