ISBC - Earnings call transcript Q3 2017

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Operator

Good morning and welcome to the Investors Bancorp Third Quarter Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. We'll begin this morning's call with the Company's standard forward-looking statement disclosure. of Inc. representatives call, this Investors Bancorp On may financial business. position, forward-looking statements to its with respect results make some of operations and forward-looking which and those in guarantees subject not Bancorp's differ control, which statements from performance to Investors actual These are predict these results difficult and materially and are of beyond forecast to cause factors forward-looking expressed other future uncertainties or are statements. some can of risks, are to Harbor the release, refers Company press disclosure night's Safe and to it's last statement. that In you included document presentation. That is incorporated into this

Bancorp's and to Investors a affecting sections now And discussion For Kevin of Discussion conditions Bancorp. forth over complete of like filings more would Factors, I CEO Investors of Risk Bancorp, the and turn Cummings, the with certain see the results the risks of and call financial set and uncertainties SEC. please Analysis President to Management Investors operations entitled in

Kevin Cummings

third Thank improved you, compared Bancorp strategic prior the good welcome the The morning plan. Earnings on and Denise, ended September the quarter and for to quarter. and posted bank We execute continue quarter business Call. its to Investors earnings Company the XX, XXXX to

improved, capital and leveraged to in we've by have a expenses, Our prudent asset buybacks dividends Through stock XX.X% and we a deposit our strong a culture, our growth and our maintaining operating quality share. manner. strong declared quarterly recorded $X.XX dividend reduced credit $X.XX increase a in from organic growth,

XX.X%, completed second in of we June X/XX/XX Our our tangible XX% capital offering. XXXX ratio down from almost is XX%, at step when

share. a period from that of gone over $X.XX Our share a to $X.XX has dividend time

May a the price we balance of capital you XXXX. program some The in $XX.X at in issues shares as second or to We our BSA from million September were an execute from remind third the have to our share. I Despite quarter step buyback and XX in per in at $XX.XX of share leveraging of continue plan to $X.XX stock bank that of per diversify or million the purchased for AML or this the of quarter regulatory for And over $XX.X share $XXX diluted on strategic headwinds due $XX.X year-end. our million average million per XXXX. second XX, recorded earnings ended quarter should XXXX share $X.XX results $X.XX compared million year. our restated

in benefit For on of $X.XX was Without a of the benefit XXXX XXXX-XX $XX earnings the and of XXXX. million quarter adoption the our share quarter EPS reflects million. that ASU of $X.X tax for third third

the that to maintain of million XXXX the $X.XX Loan as to For per and nine about in $X.XX in and quarter year income $XXX.X slowed effort accounting year-to-date a a rates period share spot the from net increase the on XXXX share. on the to XXXX a XXXX of margins. to XX% as cooled XX% change our our The to third months prior conscious diluted million earnings in the volume down ended we was XX, markets pricing share share during a growth $X.XX $XXX.X $X.XX September across saw bank to transaction market compared totaled a $X.XX a or or impact $X.XX. bit

XX, September did year-to-date versus was the originations for average yields originations those X.XX% a of on million and As result and million our quarter for $XX our pricing the the multifamily for CRE XXXX. originations $XX see CRE improved and the as the X.XX% for for the as CRE portfolio We and multi-family of June multifamily client X.XX% respectively. X% on

consumer $XX we growth million, and where loans $XXX quarter, saw and residential, million. residential increasing C&I, increasing categories, of For XX.X% $XX the construction and million, loans loan the construction, consumer, for million, annualized an C&I $XX other

On our points to the quarter basis of the to from loans points. for loans non-accrue decreased XX XX basis asset quality front, ratio total

calls, these relationship second the we million loss on at on one sold portfolio. the end third-party In of mentioned the to September, quarter. previously the to from at placed the we in of remove loans had loan As no non-accrual $XX the a that in we without financing month, our bank multiple loans to

for as $X.X the quality compared quarter. credit the prior $X.X to remains Our strong million net were million in charge-offs quarter

multi-family and for for the of losses provision ended the a September was XXXX. for loan and $X.X second versus result in quarter our our slower and quarter $X As decrease loan portfolios, million growth $X in quarter XX, the CRE million our million

September. million to of million new secured fourth the category. in late $X.X three at $XX one the other sale $X off loans million in being This problems non-accrual of secured so to $XX from this portfolio no for of non-accrual Walgreens will one delinquencies We contract portfolios an increase another delinquency is there extended. time. - be and process is at significant under is XX-day those relates two CRE see did well, performing those in million and And group commercial have five-year no are that XX loans, end being loan We the close to for for in in at relationships $X.X properly which status increase by XX-day process for for June million both are in renewed and our our In quarter, of Walgreens term. but the backed in which loans are extended by the the renewed, is multi-family

continue in to quality strong problem our to we monitor credits. Asset remains proactive quality continue as resolving credit our be and

from credit have full have commercial regional resources we community service process as management a bank bank. mile our significant moved within a to risk We invested

up ratio our base. to improved service the the deposits core credit have by CDs the Our quarter as million. $XXX million with quarter $XXX data be together our and rate streamlined net our to deposit growth Despite the at remained quarter reducing This for $XXX quarter. business with and interest increase growing March for that approval are and flat XX margin our quarter increase end. process analytics XXXX, loan the outpaced for remained to the functions for X.X%, up loan customer loan a with Deposits from pleased increasing margin in and flat of second our at and XXX% at third of we funding X.XX% CD million XXX% work are our will so base promotional

on discussion the Sean Now like results to will our turn for Burke, to I'd color quarter. financial more the give CFO the over

Sean Burke

previous $X.X due in alluded totaled margin quarter consistent in Non-interest of increase I related offset XX% the from loan BSA costs. for to were $X.X with yields environment expenses second million decrease the brief. quarter $X.XX cost. by Net X.XX% per income quarter as as $XX.X from for Thank to QX. compensation be earnings quarter. compared representing the you. interest the Kevin. increased totaled $XXX.X a efforts, deposit million, was million second will share Prepayment growth Kevin million the to share million in $X income Net to by professional of quarter was an higher a penalty remediation decrease offset fees partially per

totaled the $X million loss in loan for for to provision compared QX. quarter Our $X.X million

disclosed June ratio to X.XX% from due asset commercial previously at declined loan of in our non-performing to X.XX% relationship. XX the disposition Our September

to and from increased a quarter, $XXX decline to quality ratio loan resulting XX. asset to million allowance September Deposits XXX% capital strong in coverage peers. trends, ratios during our in deposit continue at charge-off to the Our XXX% be relative

Lastly, X.X we share. our increased shares totaling million per $XX.X repurchased to also million $X.XX and dividend

for concluding Now I'd to remarks. over Kevin like to some back turn it

Kevin Cummings

and but other we're were our results good, right, we still quarter All matters. third through move satisfied with as challenges BSA not regulatory

are of XXXX. progress We on $XX.X this $XX.X million for an monitoring totaled Professional make remediation to impact front and progress. relating continue BSA with after-tax fees year-to-date million, our to

teams and it us we diligently projects on to the working Our on journey a are XXXX. are behind in BSA put

our do efficiency we at that look results. grow our continue to and With we will continue M&A, everything operating We organically. improve to to

We have right almost second after billion to assets at at quarter total XX, step $XX from our end. $XX grown billion June

community to deposit our We our franchises efforts. momentum our continues have loan strong brand through in marketing expand and and and

capital, result stewards valuations one and the first capital most good by in as step XXXX second evidenced successful are XXXX, results, step the in $XXX of million of to and We years leveraging that our period billion to leverage operations an the return need X% approximately tangible and we equity a manage on capital and raise $X.X quarter, for our At your capital grow the in results. XXXX. to with X.X improve continue to

on goal tangible X% return of Our X% in is tangible with XX% ratio. to capital to capital X%

long-term for value We these shareholders. our goals are and focused creating on

engaged and committed mission employees are to and vision. Our our

issues progress are teams our reducing the to remediating Our BSA regulatory findings improve in and and continue expenses. making

transaction, a strategic potential at billion our optimistic cautiously goals. move we begin But grow we which these to years me let and continue We get year, at should even XXXX that approximately issues in emphasize to without us are in M&A opportunities. four will $X.X a organically looking past

Our recognition in community Jersey never and markets. better activities New brand both our and New been have York

bring are every employees the do to day what that community in efforts proud continue leaders jobs. their Our their a difference. and they make and to in of their passion I'm they

the the markets country. the significant most in the regional We in through years attractive bank have over community transformed past a into

grow to stronger. Our our never franchise and has brand continues been

been mission. path of is will long-term shareholders. for Our goal value that with continuous long-term I employees always on of improvement our ultimate a and are our mean the creating It be. always and It's

questions to our like analysts. I'd from Now over Thank call you much. turn to very the

Operator

Ladies Mr. the Cummings. question-and-answer begin Deutsche [Operator will we now Instructions] go Rochester Bank. session. from gentlemen, of And Please first you, question ahead. Thank and Dave will the come

David Rochester

guys. morning good Hey,

Kevin Cummings

Good morning.

Sean Burke

Hi, Dave.

David Rochester

origination On just post XQ. the the recent your multifamily the and wondering on where NIM, current the appreciated today, in is pricing in weeks? steepening deals I for a all color CRE Was

Sean Burke

are Dave, asking? that commercial is The loans we

David Rochester

[X ones, the ones?] carrying Yes just and multifamily, X

Sean Burke

X.XX multi-family. ones and and X.XX] [X are ones that's are X

David Rochester

then and for real commercial estate? Okay,

Sean Burke

so It's X.XX. and an spread, it's eight X.XX

David Rochester

Okay.

to So back trends XQ like growth it drive effectively? pricing changed was stronger that sounds and in you

Sean Burke

Yes.

the so difficult quarter. volume I I we've I fourth can Dave I looked mean is early about that you the there. say activity can looking that pretty was year-to-date budget can lower what get that the the quarter originated at terms billion now $X.X is in rates which it's $X.X it's to then you at mean believe close and we look original end we close to billion. what if the of at of of that our that expect October by we're and part what Although,

in get some quarter beginning do But of So about that drive expect to instituted lower XXXX. additional fourth will our original to we were the in start the those to business rates million done part that for quarter to XXX get us need of early numbers. fourth the we the

David Rochester

sounds well in up the and good the one first think It's you going Great. the of then you terms like for sets into sort is Okay. of still quarter? that pipeline

Sean Burke

Yes.

Kevin Cummings

Yes.

David Rochester

this multi prepay talking movement increased X Great. that the I yield origination yield Okay. in was and higher think fees And notice up just points? Was the and about I that X% were basis from was you any roughly quarter there CRE? X.X% for loan the X loan that or

Sean Burke

impact our Yes, the it Dave higher was of rates just rate sheet. was on the

David Rochester

for what in then together I all just is it guess your And Okay. rate XQ. X putting hikes outlook NIM

Sean Burke

We're likely today. to end with basis it's X lower David, margin range looking X of of compression the more Sean. that at points appearing

David Rochester

what be impact right you for then And roughly? estimating that now Okay. hike would rate the guys the next are

Sean Burke

front about to I call. our earnings that certainly do can forecast prepared be next don't that of in in our me XXXX we have on Dave, will talk

David Rochester

this at if of down to Okay. and do in we you and last And to this most expenses here step Are the you I first you roll quarter? on step quarter big expecting had that stair continue then into down heavy XQ the the guys point done as is could then one think. expenses lifting a BSA just

Sean Burke

step we will quarter, I par third quarter XXXX. start we with think we the down the should for see fourth to that but were where for probably in be on

David Rochester

there's BSA a into the expenses of stable common the expense extend rest then And of base.

the basically overall? from So expenses stable in XQ XQ

Sean Burke

we're Yes, to for looking I'm XXX is to say to I think at quarter. going XXX the what be somewhere

David Rochester

guys. it. Appreciate Thanks Great. Okay.

Operator

The go come Inc. of Please Nicholas from Austin ahead. will next question Stephens

Austin Nicholas

my taking questions. Hey, guys, good for Thanks morning.

Kevin Cummings

Thanks Aus.

Austin Nicholas

already private most should - know BSA you but know on how focusing bit answered, be what of questions maybe you most potential targets given my M&A what likely a like little think and maybe and what your just your in really and valuation thinking concentration? of public size CRE I were lifted? How is just gets there we mix look strategy acquisition your about know is business versus after are you terms

Sean Burke

Austin that deposits first transactions in I always that obviously and looking foremost think provide can good market we're for for us. core

significant we we look any and payback booking any any we - not want of would deal really that's to at reasonable look obviously tangible would valuation that in to impact have think I would period. have ensure not first or that do dilution some for terms significant on could always

a valuation at it question I or over mean where I so about So valuation I I between always month know talking better our our of about getting there is mean to it is, just is the if XXX% and look book. somewhere being last XXX% we're

is mean to Now us those larger more for pricing that smaller and we what given where that we difficult to the may do deals have may it may institutions. for look towards deals see types of be

Austin Nicholas

is last been sense. of there. and seeing just you're that step now of looking out run quarter. Anything quarter? Maybe which low credits give on up kind Make appreciate of been thoughts I tide good a the pretty Sure. your you credit maybe rate your this

Sean Burke

when losing about was anything. penny. what see coming we that decrease Kevin it difficult thing good. got of Truthfully, certainly our said, to It we the credit. look pike. in unload without been that don't don't a you out credit. talked not obviously Kevin was And down very see one. anything, that our good at as credit has a I considers It see provision the We

with we coming see and I it So investors past really anything know down pike. conversations we us the had don't in asked even who've meetings some at about

Austin Nicholas

a as And taken know by think your real one regards some to there's month last simplified estate, out concentration? meaningful you helpful. maybe put That's advantage capital Okay. some regulators to one. rules about capital about that just extent Have how if then a at any there's ratio HVCRE. any proposed ago been look to the I quick ADC, makes commercial your you it CRE

Sean Burke

familiar with am I referring that guidance the you're to.

a it that benefit becomes but our I time look to We looking significant on the to we'll more expect our spent new that analyzing real structure. at more or a us under would and a closer but of outs take a impact I ins don't capital. obviously, have think haven't lot that, be significant portfolio, imminent, there, that at don't But

Austin Nicholas

for all have. my Thanks I That's guys. question taking Understood.

Sean Burke

Thank you.

Operator

will Please The Sandler ahead. of come Fitzgibbon from next O'Neill. go Mark question

Mark Fitzgibbon

morning. good guys, Hey

Sean Burke

Good morning.

Mark Fitzgibbon

balances. I question First for you had cash is on

balances reason guys you of your soared, peers, to for that? ratios, any really For deposit some other like high that have guys particular loan particularly and seem for cash it

Sean Burke

about bit, bought the campaign, get of that We we little We But up the growth it's million securities. additional getting matter in in so fast was loans. enough. deposits obviously, down, $XXX loan during some had Mark, just brought campaign, enough securities out raised of fast the terms we a a able in not we quarter deposits it and raising weren't to it just but and out

Mark Fitzgibbon

those a that, just Okay. with Dom. what of And bit little then of right have the Can talk rates about kind you sort promotions deposit you are sticking now, at?

Domenick Cama

in is out non-interest there on the more offering intended the effort a promotion cash driving have The accounts campaign bank. customers on new who who Yes. program. checking those with the capitalize into XX-month checking now account deposit account targeted CDs, right specifically have bearing are on another now in or however us. offer at we the going opened came to We're don't The

we business went so and order to calling campaign a campaign some And there. mailing generate in through

all it's of bank. with in the more that October, bearing the driving balances non-interest into of the So part started but continuing. That early is objective

Mark Fitzgibbon

What is the rate on that?

Domenick Cama

rate. bearing. They non-interest no is There are

Mark Fitzgibbon

I'm apologize. sorry, I

program. about were You talking a XX-month

Domenick Cama

through early was XX-month September, through XX-month That that was the million. the campaign program summer. The $XXX part raised from of over. is so That X.XX%. ran at a the program That ran we that July

Mark Fitzgibbon

size with mix? the us the wondered Okay. today maybe pipelines rate the of average and I if And could you share then

Domenick Cama

it about is The - pipeline commercial and billion end up where about estate was XX% today is is pipeline, at June. that's this of a $X.X the real C&I, about from

the the rate C&I the In about X.XX% CRE on piece. and average X% the terms of rate, is about on piece

Mark Fitzgibbon

Okay.

quarter, also next up back normalize of picks provisioning we growth quarter? the in the assume fourth back loan assuming So kind should will

Kevin Cummings

Should…

Mark Fitzgibbon

Okay

Kevin Cummings

the of product type originate. on Depending we

Mark Fitzgibbon

Thank you.

Operator

will ahead. Jaffray. The from of go Please Piper come next question Breese Matthew

Matthew Breese

Good mooring, everybody.

Kevin Cummings

Hi Matt.

Sean Burke

Matt. morning, Good

Matthew Breese

It X the bit mentioned pipeline one and the family from the pipeline we're of rates in for the on some were like CRE. rates quarter stick in the the growth Just a and mentioned the seeing. seems above

a that just want get the and typically Is I you're X days. underwriting for it to one it sense or So really X duration one? these is XX

Sean Burke

Yes, that. It's one Matt, in it's there. it's the right and right both five seven one,

impact had the haven't from significant reduced if quite today I pipeline look yet. As hold yet at the rate a not is really said, hearing I has that really we

last but pipeline as with - rates. where point, to is point becomes rates your we was trend quarter. but it the pipeline are seems lower, lower the right, in should, our start more those It's your yes, as it So mature about should it but down

Matthew Breese

so Is Okay, not so seven. five predominantly It's and it's seven. much that accurate?

Sean Burke

accurate. that's Yes,

Matthew Breese

transaction as I then slower heard for think forward We've our volumes $X.X outlook other higher there. The in City And offset about your billion it how in come like billion, bit besides how we you said the I year. going perhaps this is you do long levels do that Kevin areas to traditional neck does a woods York that with quarter saw lot and multifamily get a think about and CRE growth. $X.X what but of bit from a growth New a you was

Sean Burke

diversifying - Well, certainly focusing we're our we're sheet. going balance on C&I to and be

a residential lending So in in also that'll looking the focus. lending. be We're and for consumer opportunities

Kevin Cummings

pipeline $XXX C&I year million. at theory, have breakdown, XX just and it pipeline, pipeline by look to days we million our a a about give our look $XXX months at is the ago you is about would the if CRE these dominated you Matt, been when pipeline or say

pipeline coming a can more So see the C&I. of from you even there's distribution

Matthew Breese

okay. it, Got

transaction Nice of lower offset that And trying do to so with can C&I you so volumes some we're perhaps. essentially.

Matthew Breese

Okay, I that go know than reasonable are you you progressing the there? you conversations Kevin and mentioned into can't goal you update a things the extent you exiting and and then it talk a also know why about but feel much, just some I about that to how think us like XXXX possible, good feels could too and on

Kevin Cummings

We we're would of - basis been I use progress. continue mean lot a making Well, effort has regular to have it. regular and into put we conversations. have

we're and look earning where we're are issues are The up our way minuscule, that things and back making the they've almost You that a the coming lot of be can up a know call, I to XX% to expense issues extended on stuff and that on change addressing expectation the or it earlier our back findings The the progress. and of coming are good of issue, I goalposts things all firm in look you said gets promissory and or to we're trying the the reputable see time. been to through that positive Having ahead given headcount may line. said what now. with and feel all working assurances the curve us that, consulting managing that get I that the are or seem bigger no have And that through things that. going and working

our opinion working exam we're is site internal one guy we're next doesn't the appropriately. on that, their and and we're that and from communication the on both with track year So all comes that do what hear we time with are to from person's get that matter, agencies in here should opinion to is the only audit matter, Having managing that to where our regulatory the here promontory, said be. right there to we group

Matthew Breese

the bit. buyback, repurchased then we is wanted okay. quarter, just some to touch Great, up And stock a the this I shares saw on

your to just more or So then talk repurchase the could bit a you about you little aggressive? here and levels willingness less be might

Kevin Cummings

XXX% Matt, would the I book, I buying at stock levels book talked of of where it these becomes has about and we it XXX% up certainty honest around be always Washington are in stretch obviously [indiscernible]. this attractive less we the we've run to a imagine still that's and and so that it to that sit mean it's while assume talk due a we done here tax little in gotten getting is better recent of can't terms the of

levels we'll going little still to we're two So to be skeptical close stay a XXX%. of probably and XXX% to

Matthew Breese

it. I Okay. appreciate

Sean Burke

add we're more a we and set we in that lies, so our to couple the I manner change efficient months see we repurchases with to the but stock in to a I our be thought of sign just at level capital opportunistic know will appetite now. the use would in heads as next deploy I'd can where levels but we'll had that was look and be and you over looking think point some we will think maybe that that dividend terms of you opportunistic what an and take increase share right efficient we'll

Matthew Breese

Got it.

much guys. That's Okay. very helpful. Thank you

Operator

The from come ahead. question Collyn Please will go next Gilbert of KBW.

Collyn Gilbert

morning, question guess the is you Good my Sean Thanks. for NIM. first on guys. I

think So you basis then to quarter just understand X I this third trying last and obviously occurred flat. in for down a quarter in basis X points guys to points NIM the came quarter. you looking unexpectedly were what And

to see not what months So three ago? trying that you anticipate happened did just

Sean Burke

to just influence then that have in we're one cautious in in an impact we well. the and a of guidance off being be looking a how had CD of of prepayments middle that raising Two we're does that get science cautious guard. predict a trying always in much we're terms around caught that because raise money money want to Collyn, campaigns giving don't there could the that and because And things terms we to not as we're campaign we're

of guidance combination we factors those provided. the that think led two that the to I So it was

Collyn Gilbert

to if it take forward hear it just think then through. your trying now but again And I looking I Okay. guidance

you me but then focusing us sounds you're also and campaign guess so to. with more the maybe XXX the timing I just don't into I'll done it be of at think from be maybe trajectory suggesting help cash million you're the remixing what the as is know you loan Than a what's I non-interest to you're yield. would I could So of the But on loans better. should to NIM like now bearing. guiding that lower

through deposits quarter? wanting how into about fourth again maybe to the just you're elevated of understand sort So the these that thinking of XXX and the flow

Sean Burke

I It prepayment trying we're look again in conservative and to elevated it we're Collyn a big we when thinking quarter bit and think or providing to be points. so could NIM be a here the this strip this to core quarter it at the hey prior prepayments is guidance level was we're factor about and altogether might if basis and X our quarter return repayments down back that you to X up relative

expect trend out we're all manner play basis we're to but group similar that in that on to looking at something things margins be of even we conservative the though just certainly surprised NIM, could end next that providing but that's a here and could the we're the So a and of we X see look quarter, more be giving guidance. favorable looking we X of where guidance told and right think here if to we points compression is the lower

Collyn Gilbert

just bit the on of deposit Okay. kind a on And touched then you side.

there's maybe or deposit catch and the cap feel pretty is can a rate But up just in was you focusing obviously pricing that a deposit is quarter of step but campaign intense. that do think of year at new general pressure the XXX I on million. overall you've but huge like in still do is come on of going mean the the beta the where that period you kind of non-interest outside obviously be this you part do to deposits, bearing cost So ongoing up now sort of up because that see

Sean Burke

think pressure the just on that to significant - least our I have are any this But continue raise are at because of have to quarter. Collyn I for in reading deposits. there million to I deposit we $XXX and scheduled see that cost come had expect on funds to of see that continuing don't quarter the reported primarily the come think increase we we'll fourth cost. large they fourth still I week, in think pressure rates the on journal banks, nothing this on a to banks mean number I

we will these while customers out wake happen up have ask what the higher rates. starting a as increased rate you rate to and who products, there, are are for speak. so all campaign lower big have so there don't who have been And in That's to

Now we can decline can walk and them and them some door or obviously in watch the negotiate accommodate out way. we

third So deposit expect to will we was it that intense see it on continue as cost, however, in as be we pressure don't the quarter.

Collyn Gilbert

deposit then And to sort into helpful. start That's next you're see to Okay. that could what saying, back again just up I that would of loan tying imagine, the loan deposit ratio to tick ratio, we the in quarters. couple

Sean Burke

Yes.

Collyn Gilbert

right, multi-family pricing pricing? a I than just Okay. NIM, so CRE is your think your question you heard that just - I the another And then on lower

Sean Burke

use by inclusive. term No. I'm When No pricing CRE, is the X. higher I CRE our

is If you X and is X.X, look rate, X.X. five-year product our our multi-family CRE at our five-year and

Collyn Gilbert

but I on for beginning I you of pricing multi-family guess thought Okay. initial to X.XX% I heard the September, that of say X% comment maybe wrong. your at I CRE, with heard

Sean Burke

what origination. we are doing forward. That That's going was on

Collyn Gilbert

Okay. so the But on I it's flip-flop, X% heard on that yield. on origination X.XX% and multi CRE

Sean Burke

was was and multi, multi on X.XX% CRE. X% It higher. on Actually

Collyn Gilbert

interesting. so I Okay. that's That's was at, getting what

Sean Burke

having transaction like Recognize the number outsized have particular - one that effect impact an were effect could number involved deals the so of that of for the on yield. deals of you were lower, much an having the example,

Collyn Gilbert

it. Got

makes And Dom, Okay. want just I That sense. then to clarify.

quarter? that the think range side, or you that of gave XXX I think was you fourth for OpEx quarter XXX said so to on it I the for was first

Domenick Cama

Fourth quarter.

Collyn Gilbert

Fourth quarter.

then XXXX. And throughout trickle there Okay. down from

nature was Walgreens. And you it. think credit? it by the secured classified, on guys indicated What just of got then I that the the had classified it was was Okay, that on curious, credit

Domenick Cama

Was a good customer.

Collyn Gilbert

Walgreens it a center where shopping was Was like an anchor?

Domenick Cama

tenant. Single

Collyn Gilbert

Walgreens But Okay. was securing it.

Domenick Cama

Correct.

Collyn Gilbert

They are that tenant.

Domenick Cama

They they're the tenant, but the property. owner the of are not

Collyn Gilbert

Got it.

I all That's had. you. Okay. Thank

Sean Burke

Thank you.

Operator

go come of question will Barclays. Matthew Keating from Please next ahead. The

Matthew Keating

outlook. would do expense Are last Thanks. I'd you the like the you Thank following second cost year the our of expenses actually obviously next dollar think given to by investments actually XXXX that half elevated mentioned decline to in could you you. in think XXXX, BSA that bank quarter next the I expenses year, obviously, in to of make overall but expecting overall follow-up sort fall? the that vis-a-vis on has

Sean Burke

yet guidance Matt, we we have not given working through are still any that. XXXX, for

the risk to consulting when and appropriate. you face, staffing have down that is while management continue - go issues may of we One you to our obviously infrastructure that obviously expenses ensure

there, be. too you for see early for So say it's expenses may what to but our we expect some to XXXX us offsets

Matthew Keating

enough. you. Fair Thank

Operator

the question Please ahead. come Compass Laurie will Hunsicker And next go of from Point.

Laurie Hunsicker

Good morning. Thanks.

minute realize million this stay elevated? thinking just should be about on to professional to roll a here will is fees quarter, as stay Just that we we December how I expenses XXXX? for still the $X.X quarter

Sean Burke

down be They in professional The should fees offset will by and come partially should come XXXX they down Laurie. in increase compensation.

Laurie Hunsicker

number? Right, million run is so million good the rate, $X maybe $X quarterly to

Sean Burke

Laurie, what run as XXXX. maybe number I'm that a to for not project comfortable rate trying

Laurie Hunsicker

Okay.

Sean Burke

think the I we'll call. next have So on idea a better

Laurie Hunsicker

fair. Okay,

quarter had margin margin. to looking way. points want Okay, I X for core this at margin, basis that your off margin you words penalties. just about that to basis right of the X.XX%, of then compression December The and you to core of to X just was prepaid points talk make the I'm X other go back sure your In is

Sean Burke

margin. all-in our about talking I'm No,

Laurie Hunsicker

Your okay. all-in margin,

Sean Burke

at all-in, basis X points X.X% so we're

Laurie Hunsicker

Right.

Sean Burke

to off margin that Laurie. is based This basis points of X basis points quarterly X of

Laurie Hunsicker

right. okay, Okay,

second points core obviously, margin and have you're round you so a will margin quarter or this or looking back that's impact? X roughly your level assuming talk like X points when penalty prepay numbers prepay basis So that about the basis more quarter penalties a or contracted that first

Sean Burke

right you I margins what - now suggesting Well, that you your X.XX, quoted are guess core our… think I is said verses you

Laurie Hunsicker

quarter the Yes, your prepaid prepays, second December, September closer out basis And about the word word for another elevated? X in to first all core we margin June, as that you're about are being penalties the penalties penalties about running probably contracted level? talking X the you stripping another think X.XX or talking prepaid out your to points, you're point because down so stripping prepaid also X.XX when

Kevin Cummings

then have to done. you Yes, margin degradation point basis a core think prepays of so I and some maybe get

Laurie Hunsicker

it. Okay, got

Kevin Cummings

If looking due prepays. basis course of X margin point what's it to X at call maybe to points basis you compression,

Laurie Hunsicker

sense. okay. it, makes Got That

be Okay how for and next year? we thinking all-in growth should loan about then

Sean Burke

you the asset thinking gave guide you next loan growth of in are terms for Obviously growth, year? how about

Sean Burke

about Kevin billion for XXXX. for be original I us I call Yes, plan billion, projections for to $X.X mean the I to three in range our do talked think year that think the $X.X

Laurie Hunsicker

billion? $X.X But is the of of loan what

Sean Burke

That's a loan growth.

Laurie Hunsicker

great. growth, loan a That's

Okay. And on $XX going recovery cared that? there you million the just was that then back a

Sean Burke

Well, it. we sold

Kevin Cummings

There is no charge-off on it.

Laurie Hunsicker

there Right, okay I there charge-off, was know no no there - recovery, okay. was was but

was…? million So your $X.X

Kevin Cummings

that. related Not to

Laurie Hunsicker

that. to to that's then the loss about back, if thinking prevention Got loan a quarter, realm? on it, mean million to of not I we're question And $X related loan it million out your okay. Not back $X you're go Mark's comes that's running growth

Kevin Cummings

assets of in. depends We it on be coming just the may doing of in lending. say, loans types residential It's types the more hard to

So as to charge-off I'll it's with a say do too. calculate the and look period we has back lot hard just the net to and reserves

period, they of we period, XXXX, away XXXX further more as period the from So have when period. on charge larger than go in recent we you were XXXX much time, get

calculation is was saw without of So reduced. - is into and and it down if you attributes being the get calculation charge-off this the lot net a quarter that

the have We opportunity today. where more are stay course hopefully we of to

Laurie Hunsicker

how to then for great. that just questions about you thinking are [indiscernible], next Okay, And two year? last

Sean Burke

They've slowed significantly.

XXXX. we two think have three or to I in open scheduled probably branches

Laurie Hunsicker

And just significant comments to you your book tangible outside have you would be your parameters breakpoint we're to think book how respectful listen by I you you're not would much be book to cross careful you and terms to to tangible last one what of are on said to M&A? in back to won't on or you it? your made know tangible our going go Or you going to Okay. said then of that Austin you back Dom

Domenick Cama

timeframe the don't Laurie, say and know not mind think I dilution whatever to within depending in number it's a I've I that our form the and five about this of want investors breakpoint that comes I But we that outside incur I earn publicly but saying I've at can important years. you certainly it in on show and that it's I acceptable we back been to look that's back. us times. to really and that we our dilution the also said is Right, earn number something have around is to not a in of the deal consistent think know that talked my you

Kevin Cummings

accretion dilution just is too. EPS That on the

to at So you have look two.

Laurie Hunsicker

a you tangible on now that? dilution book and put Sure ceiling on won't

Kevin Cummings

said past I and of in you it's a the ratio we the calculation. think that have no

Laurie Hunsicker

you. Thank Okay.

Kevin Cummings

Thank you.

Operator

from Please Bill will next The ahead. of question Macquarie go come Keith Capital.

Bill Keith

guys, Hey, good morning.

Kevin Cummings

Bill. morning, Good

Bill Keith

reform. issue Hey you it Hey, be comments your it a that. real I congratulations the the like as significant touched could before Dom, great tax I tailwind quarter. But for if a know appears of on on upon banks

get how then color thinking influences As that with deferred would Trump well could the offer especially XX% if your any enhancements assuming rate tax XX% bank? tax to M&A, would write-down the administration. be by thirdly, tax on reform tax you somewhere you. cost of lower And your the Thank asset efficiencies value what as the significant the we would offer rate around the potential

Domenick Cama

you say whole been better we exuberance and we know elected saw months the getting stock our Obviously a appreciate we've a mean and got Trump of situation of I price in way wait I lot will we're the I probability institution there's yes, legs the don't the situation going And like looks because We get tuition at We're going improve room has did agree greater okay. and to around particular to some the to a and tax see better. attitude.” going look our it's got attack you know approaching that think “hey, it's tax sit Trump President happen. in are the if so better. getting I over that and and consistent XX situation here office We'll being mean marketed. you M&A. saying, When regulatory seemed while increase a to

other we what actions this because strategically the the just at or point to reform if it that strategically that worry try and us to situation does and it make run We at tax we're things for about We then forecasts, don't going later. kicks But business have tax estimate sense that to way. in. we'll needs take look to first

Sean Burke

met down that certain impact And that payment think like with last expenses things go or do, minimize we just There tax respect we advisors than can will I our of ways is week accelerate a with impact item rates we which are that and period allowance, to assets. if that the larger deferred look strategies of the that different tax at to as peers with that with as in time. have. our minimize anything of allowances over loans regard mix we The far basically big and most the our do can't of and do

some effective we're by impact asset. do So at like the strategies do looking looking it. on in prepared at at and taxable deferred tax rate our remain that. the to maybe to I We're addition, minimize some housing And different tax looking things things same think the of then lower the things to change credits if

Kevin Cummings

tailwind but it be would think for absolutely significant significant big, it to just - a We for you bank Bill it, could on want But a us. It are a right. be us. I - would win don't big are be you

Bill Keith

so for Thanks insight. guys. much Great, the

Kevin Cummings

Thanks.

Operator

that the remarks. to for over and Kevin final Cummings back I our will conclude question-and-answer would ladies And gentlemen conference session. hand like to his

Kevin Cummings

thank at participating momentum the I Thank everyone you It a Denise company wish much. very is you call. was I and you on Thank to the be Thanksgiving strong. good for talking good and The all I and soon. will quarter you want to

Operator

you and Thank conference this has you, you gentlemen, At today's attending lines. time, may Ladies sir. Thank presentation. concluded. the for disconnect your

Investors Bancorp (ISBC) 27 Oct 172017 Q3 Earnings call transcript