FLIC - Earnings call transcript Q2 2022 | The First of Long Island Corporation

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Operator

Welcome to The First of Long Island Corporation’s Second Quarter 2022 Earnings Conference Call.

On the call today are Chris Becker, President and Chief Executive Officer; Jay McConie, Chief Financial Officer; and Bill Aprigliano, Chief Accounting Officer. Today's call is being recorded. A copy of the earnings release is available on the Corporation's website at fnbli.com. And on the earnings call webpage at www.cstproxy.com/fnbli/earnings.

provisions company contain to forward-looking certain under Safe the this everyone statements begin, the may U.S. call statements Harbor we would remind like that made Before the of that constitute Securities Reform of XXXX. Private Litigation Act the and set statements may factors Company's forth materially those in cause Such such any with differ that contained to the other in risks, U.S. results statements, subject to from are uncertainties, actual including filings as Securities and Commission. Exchange XXXX from XX, a XXXX actual such XX-K or Investors risk filed that list implied should also to factors March of refer results our on to those by for could cause differ statements. materially indicated I call over would the to now turn to Chris like Becker.

Chris Becker

Island to first And you. call Corporation. afternoon. Thank Long quarterly the Good of welcome earnings of The First

mission doing to continually works Our the and succeed. a company our help on thing shareholders employees, customers, right of

communities to While the socially we being serve. accountable

create strong integrity our out intent webpage committed First And believe are through stakeholders to a We ethical efforts sustainable Island Long making of on The to business corporate we showcasing rolled practices. impact dedicated This week, meaningful long-term value and at new a Corporation. these constituents. for

results. our six of initiatives. the positively second We quarter months strategic and reflect first the believe XXXX to Turning

the We despite worked past to have implement the seamlessly during years, two pandemic.

our include Some strong have of teams quarters our balance growth of growth banking new growth relationship the have onboarding and initiatives these three as shown sheet continues business, key of supporting been with loans customers. profitable deposit successfully relationship

A from their core A been that relationships. responsiveness banking asset bankers position, seeking are the lack out is growth the longstanding The in getting recent with has focused exhausted word cash at frustrated in have recruiting on has future deposits. driven we with become loan they as out. being us loan are go-to-bank East established and the geography. management of initiative is and seasoned Increasingly been third bank, a professionals customers presence branch the larger excess minimal two At these bank's on second branch looking Riverhead, initiative growth Our increases with We over three nearly XX in consolidated disruption. to our branches bankers totaling branches past change. Eastern We successfully $XX Long years has a and XX, Island customer June make million. the South a optimizing has for market XXXX, Hampton deposits both Hampton. across network

We working visible and much are Jefferson three and branch relocations convenient on in Bohemia, currently to more Port buildings Melville.

a We geography. XXth new novo bank's appropriate our expand look continue our has to We presence. improve website to name and recognition locations been branding year. de community-first branch and for October Xst the to of social this fourth celebrate focus initiative our A on media and anniversary enhancing

have XXXX. been using as the marketing in We catalyst our that for milestone

a several Glen to moving was happy the completed been I'm to Head. working contract entered Finally, space our sell conditional report. report We I'm pleased to in support to in to on just second Also a Melville buildings we have growth. administrative new that in move quarter.

much the in X%, and borrowing term While rates our half some are in second our best higher do headwinds these well to rates customers helped starting Deposit north generally the been pressure and performance XXXX. month history. Company's initiatives produce successful are $XXX average decline from is down have We on number of pipeline demand mortgage six net of see of putting fed moves. the and of from depends the the among of over second could $XXX million, level margin interest things, prior half We three million quarters. How an the other margin. which on anticipate at XXXX. is The

could there charging for first will We eliminating August rate item, half currently inflationary the remaining overdraft now charge. loan its be Jay? of be where from of eliminating as will grace the instituting one daily charge second will multiple McConie and the lower not a deals fee revamped in the take environment. Jay these $XX for estate through pressure some items real for the and $XX, recently return of no over consumer Reducing high rethink charge on second be customers charge charges year-to-date. you to XXXX There the XXXX. by overdrafts of XXXX. changes bank items, overdrawn take originations than $XX, see $XX to our starting new are limit income anticipate We quarter this and in X, on effect overdraft will highlights half

Jay McConie

December weighted two Commercial period of total loan balance end to $XXX increased loan of million of of compared our part to originations $X.X another June and loan key to the at on our quarters $XXX $XX.X XX, ended same X.X% XX, diversify and second grow new portfolio. current by six or XXXX mortgage driven rate quarter $XX.X initiatives industrial should compared is when were to million we XXXX, quarter Thank as compared million was business originations income respectively of December and X.X% for total of of to June significantly increase The you, at relationship growth strong XX, period X.XX%. X.XX% by the a to $XXX XX, X.X%, an year. million to in when million, over last Net mortgage million further grew months our quarter our an and to our average year. Strong loan net Chris. increase and income $XXX improve billion, continue for rate pipeline million $XX.X originations bringing the loan was and or XXXX. XXXX the strategic XX.X% for million $XXX Weighted average mortgage continues increase which loans, as loans the past

XX last for year. to following interest margin to was X.XX%, net was Our due quarter compared when our the the factors. improvement an increase of quarter the The same in basis margin points

on average X.XX% life securities depending improved First, and on range the reinvestment rates have mortgage in X.XX% duration. were backed and to

reprises – to portfolio, year XX continued Second, corporate rate, a on floating quarterly the corporate $XXX long-term in increase million with floating the based which improve swap bond rate rates.

points. points, the to billion bearing deposit time home certain on market $X.X funds $XXX.X deposits money now the repricing and Fourth, Third, on XX the improved was at funds the maturity to maintain advances broker savings on $X.X average by year. as non-interest on thorough of Bank basis XX the improved and its XX% the balance on over portfolio cost bank checking billion. basis downward of finally, able accounts past million or cost interest liabilities And bearing

announcing years of point The fed increase continues target interest between were all in on intensify end the downward six as yield ability longer months Bank costs by and rate could to the on the remain at funds cycle. deposit flattening their increase in XX five and income remarks, flatten. As our and customers as nonmaturity X.X% rising deposit the XXXX. result starting July curve – on the pressure to increasing between to terms in X.XX% his difficult more with both mentioned or another rate could deposits A becomes to base increase inverted to that curve of to the pressure margin rate higher Federal duration rates Reserve rates. X.XX% Current wholesale just net on near demand Chris are rates funding yield curve to meeting the delay

yield to an on costs could be inverted or remains the offset increase a further to earning ability our period. assets rising funding if interest limited flat extended curve yields Additionally, for

year. $XXX,XXX Moving had during in the Bank’s was the offset growth, charge-offs points June loans to XX, XXXX, on we XX just net rates. non-accrual which have basis We of historical The on December $XXX,XXX XXXX, current the loan to mostly quality. asset were coverage of ratio decrease on basis and for points provision $XXX,XXX X June had by loss was XX, XX, XXXX. base Bank’s reserve attributable partially points lower XX from on a quarter,

first slowdown XXXX quarter as economic released this economic our quarters. rates industry to is waned, XXXX and reverse as by the COVID during banking lending reserve, tightening not of see of could in and improving of during the the has relaxed in the conditions fed reserves inflation due trend industry GDP While period current the as growth. the standards pandemic aggressive headwinds this coming loan Management cognizant well and

$XXX,XXX in for XX, six incomes on XXXX the months June increased non-interest excluding XXXX. securities gains on, Moving sales of ended $XXX,XXX,

due conversion and fees from of the our in the final a advisory insurance release, broker includes the from life purchased bank-owned an activity for additional from noted As debit income approximately was transition $XXX,XXX months currently million period and higher came second of run accounts. XX, million a increase compared to Bank’s and as for pick-up million last the increase payment earnings in in cards credit Financial half the retail of to of LPL we $XX $XXX,XXX The $X anticipate March and December $XX.X XXXX. second in three increase per XXXX. approximately ended an quarter, of additional year for quarter XXXX. Non-interest expense We the at same when rate a

noted higher quarter, for occupancy the $XX.X As rate per new and XXXX. was anticipate incentive of a due the earnings higher open half expense the run the our to related office costs non-interest our salary approximately quarterly costs additional increase loan quarter corporate and due during costs benefit in volumes to of were million location. currently relocation to We in second of positions origination filled release, as

pay dividends repurchase and grow shares. sheet shareholders Our remain profitably, capital appropriate priorities to on the balance to win our

price at $XX.XX. quarter During of bought XXX,XXX shares approximately we the back

We ratio XXXX, $XX second remaining of and million we could this half anticipate our approximately continue strong have given of X.X%. authorization, current during our in the program leverage

on share, a a over represents July the same per the announced of X.X% the addition, which quarter X, year. of last declaration quarter In paid dividend dividend XXXX, $X.XX we second increase

the to With to our that, XX%. anticipate turn for we I approximately it for operator XXXX Finally, remainder back be of rate our questions. tax

Operator

Thank you.

from for Piper Our question Sandler. Alex today comes from Twerdahl first

Alex Twerdahl

guys. good Hey, afternoon,

Jay McConie

How are Alex. Hey, you?

Alex Twerdahl

a Thanks. first prepared I your ups couple Basically a couple good. from here. call to remarks. questions, ask I’m the wanted follow earnings

actually you little seen the up that think the First the estate likely side? to the the different a in real and this growth shift more applied the put to But strong half estate. commercial just maybe the excess second overall commercial or you’ve real on couple of you of off, just in those bit the quarter to a comments little some residential I a portfolio resi year. is a on the to the loan And relative more bit make quarters I bit can last is that with abate you fairly portfolio? I’m mentioned mix curious if that And bit noticed Chris,

Chris Becker

I you’re actually the the And high residential side housing keeping combined also high very obviously refis seeing up the on It’s is with of the prices No. sidelines dry rate increases, interest both some because portfolios. think on The that. people rates.

So you’re We a total pipelines. you give number, reducing. but both both are pipeline seeing pipelines

Alex Twerdahl

you on process brought where early was have number guys are you of higher rate a with of But us across bit that mentioned, if not customers, market. environment? go-to of bankers on know your a I just could could then but the coming couple pipeline kind these of, you that’s last and the some you bank for that in of not sort continue that of if there’s sort years whether even people I new also of, of for from board And little or know the and Okay. over bankers. share a I being built in wondering

Chris Becker

we Fork has leader I as End. Fork in focus commercial been East you added know, people added deposits Nassau East comments, mean, indicated South some have team market good their both utilizations our Suffolk team on We we’ve on in onboarding a of I to lines residential is. up line business for End a South And been And team. four, the and of my we’ve customers, a relationships, that added, the little middle teams. recently It bit. new our our bringing credit, rebuilt as

business that good. been So has

But percentage smaller portfolio. it is growing. a that’s know, you As our of

when you related slowdown the the at business. look to think I mainly it’s mortgage

residential the momentum we’ll CRE multifamily, side. good pretty our So C&I is business, say, mortgages, the on

Alex Twerdahl

on impact value you’re quarter? another Head. me, mentioned selling going in buildings or think have or that question for I Okay, great. third in you the then And Glen gains to some that Is anything like book any just

Jay McConie

our Right to now, in the financials did going for this contract. back available Q we’re XX/XX is those But properties, sale. of not disclose Alex, the at we

they’re any that been there, at And so so mark-to-market reduced property cost. would’ve to carried

Alex Twerdahl

taking for questions. Thanks great. Okay, my

Chris Becker

Alex. you, Thank

Operator

All right.

Please next Our KBW. question. for with proceed O’Connell Chris today your with question from comes

Chris O’Connell

Hey, good afternoon.

Jay McConie

Chris. Hi,

Chris Becker

afternoon, Good Chris.

Chris O’Connell

third that increasing you of wanted cycle? quantifying around start So to the at going deposit kind on comments quarter to going rates for deposit be assumptions where on the you guys are using beta any Maybe think now, rates you’re in this forward. or deposit might moving or rates to you where be

Jay McConie

are Hi. It’s Jay, Chris. How you?

Chris O’Connell

Good.

Jay McConie

Good.

the why but been beta open sensitive, little portfolios Bank we commercial duration is banks. We’re it, Bank of – is, not a longer some discussed it’s remarks reason bit obviously other those assumptions, more having liability kind little way and looking things our bit of the as disclose the with in fixed at a to traditionally C&I that assets less going

would where likely most about guidance where So, are we so point rate X% have looking say or with be. go of the XXX about at they which of up probably shock, sense right – we’re now negative scenario of a forward we XXX hopefully fed on their increase in to this kind where the and, we being think think is based target point, from fed of viability basis funds points, the a

Chris Becker

Chris. is this Chris, And

our out those on on X% X% plus we’re rates. years, rates five at pretty rates one CD much through from on year on and Specifically

Our see on to remain both some now consumer X%. also business savings, in like up most can from quickly. rates rates move you municipal low pressure rates those and And those and accounts some and those of north now banks, money are market starting see customers. that And to

Chris O’Connell

for going helpful. that to you And duration and securities plans going forward securities shift And what’s the Got is any do or kind expect back book. mix on there less loans of or bit the more overall hold into it. book book, the That’s little to a forward? move the then

Jay McConie

now as replacement on We're looking get little portfolio so, to really kind around far years. securities you and or when security life X% and probably go they little put letting loans. it handle. security rates our at, want the We're rates, MBS said, to a right we portfolio five were those average and we is more with at portfolios bit looked actively look And Whereas the are and going sector, levels, Jay, when can were kind put we roll year really of like flat. liquidity off. loans it's Chris, where the it in the a money a maybe keep at to lower portfolio just we of and bit security into into flows money cash into the above go four replace securities ago into around security as more

rest should year. it be of fairly the flat So the for

Chris O’Connell

pipeline repeating with I I And the comments, it. That it. was yield you Got had believe XQ. I sense. on opening four makes into on the new missed origination think you it the mind handle on that? said a but it, Do

Jay McConie

XXX, it Yes, quarter. right in booked first the – average XXX. was up was weighted about average yield, was around It what the from

Chris O’Connell

What for in the there, into think guidance nice fees. just quarter? Great. going is Yes, to on And trying the NSF income, really out up there. of the fee pick appreciate itself the parts the figure impact that third do I that you and

Chris Becker

consumer the change $XXX,XXX that anything side, an on the program but side, change the on on business The consumer change the we basis annualized this side, and approximately on Chris, the could – be the is in in annually. didn't

picking some Now the like some charges, the debit pandemic. we've up were card interchange service down and momentum during things on that, that been fees

that's kind fairly But of the of are So non-interest to still why quarterly income pieces. we're the the guiding those be impacts number consistent.

Jay McConie

million an Jay. of it's Also Chris, remarks, and borrowing. my $XX we in purchased I additional put Hey,

in offset value So the fees up help the portfolio, that it there's again, borrowing lender a to increases cash incremental each goes income overdraft somewhat, loss will if quarter. as while and

value just little through the a bit it's cash part more rates then up, company's of you interest surrender And go portfolio. increasing. get insurance as the income, So

the that on also contribute. should You yield see

tailwinds increase to there borrowing think also do is as and income card the the some compliment So to credit well. allow activity we

Chris O’Connell

there's novo on there, on, admin thinking are relocations Great. potential moving you That's guys helpful. helpful. the the I Head higher again, terms basis growth into how lot at mean, and very guidance put you the you And sales, other space, wash between some How the – the about side, as about, a a mentioned going new are expense the appreciate of these and parts thinking it de into you out you that going adds Glen on of space of or growth in rate lower rate or growth of go kind XXXX? does next bit all a building a moves the net year? these do little a management

Jay McConie

Yes, Chris, I mean, it’s Jay, I agree.

We have to done kind We down pieces. a of two break it lot.

closures, added standpoint, expense. that had branch And we there. it, year, in to lending that annual you if also we Chris locations also last remember we've to look the you location saved If on locations probably about us alluded the to three staff. from non-interest at of we about closed million And some put as $X and Eastern dollars

in, offsetting to So when new kind other. we the location of to those and look And at buildings, fairly we look Melville we're of that cost we at two of neutral. be our look once here, you liquidated those buildings of announced then that, to sell out those some kind of we are a cost move over have contract each while the here that and and should with those

head that run. levels And but negotiating we're high with vendors fairly XX.X a we deposit have just moving So, guidance, really to around expense where little everybody count is have lot of also bit it's this kind with all quarter, have while XX.X, as that cognizant it parts which all-in-all, pressure a we up flat. vendors with sees, very maintain rates, of too, we a the full inflationary pricing

do planning try to neutral. much want And How that okay, discipline? parts we cut is keep something saying, we we're it's they're goal we all part with here to and but So do expense maintain costs we that's why our guidance, that improve our to of pretty as always is gave moving here. those

Chris O’Connell

Yeah, great. absolutely. for I taking Makes my All sense. had. all Thanks questions. right, That's

Jay McConie

Thanks, Chris.

Operator

I'll to the back Chris Becker comments. for our some closing concludes you. Thank This floor question-and-answer turn session. final

Chris Becker

want the forward common your Thank we're thank today. everyone to quarter again, additional participation of on the in and pleased look enjoy for day. rest very you. to their call Once I quarters the updates the and attention with providing

The First of Long Island Corporation (FLIC) 30 Jul 222022 Q2 Earnings call transcript