Earnings call transcript Q4 2022

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Operator

Welcome to the First of Long Island Corporation's Fourth 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 snbli.com and on the earnings call web page at https://www.cstproxy.com/fnbli/earnings/2022/q4.

Before we begin, the company would like to remind everyone that this call may contain certain statements that constitute forward-looking statements made under the safe harbor provisions of the U.S. Act Reform Litigation Securities of XXXX. Private set are that may statements those U.S. in including subject with company's differ to factors other contained as statements, such and uncertainties any in cause the from the filings risks, materially Such forth actual to results Exchange and Securities Commission. Investors Difficulty] [Technical

Chris Becker

banks Honor record The share with $XX.X both recognizes in Difficulty] company XX-years. assets set Roll [Technical of of more your highs gratified KBW than $XXX million and total income in announce to Net I'm at in past and list. new that that million increases consecutive company annual have respectively. $X.XX that is Stockholders earnings the Bank in reported should know year XXXX earnings on another performance. per per share each

named outperform proud market growth, with industry companies to total Sandler's also of which non-interest-bearing in XX% that small a checking represent relationship-oriented Year-end and over profitability, stars quality these Average were capital to in billion bank the the XXXX, $X.X We over increased averaged Piper believe strength. all We and recognizes bank. assets, increased credit in all average cap below true year. and numbers X% deposits deposits XXXX. during total a deposits and loans be

I XXX our earlier previously Broad of year. reported to this on corporate Hollow headquarters the relocation Melville Road in

for a the of location five to leased nearing buildings Veterans street Glenhead branch that new on completed of location main and freestanding sale Port quarter, relocation Highway also XXXX on we location. ATM village branch. we included drive new Bohemia are Memorial a During up the moving completion the fourth a and Jefferson closed our

establishing in we missing on XXXX. Hampton Bank and name branch branch in of opened Island, the a our a XXXX Combined we East are a by ourselves South in XXXX, corrected We the First a end of that Hampton East for with late end. on Long oversight Riverhead As in presence National the island. branch the making were early East

to markets. the hire fortunate We these some have bankers in best of been

Our institution XX-year-old this team a bank. focused is dedicated modern to commercially transforming to

are growing sheet balance Our bringing helping teams our mix. in relationships, banking

Our new branding and fresh complemented inviting. being is as

and of impressions. to presence continue website visits new social and terms in grow Our media

and Our by are commitment And to technology industry customers. our acknowledged investments successes. employees be and in recognized upgrades being cybersecurity for our we’re the

We to our moving history strong staying are criteria. consistent including underwriting while true deliver that fundamentals loan of forward, results,

XX-years XXXX. Reserve's pace Looking in forward, this we in margin. see pressure been on the net interest bank's at landscape in challenging putting over increases The Federal have downward not a rates interest

more bank's rates. sensitive Our rising us liability position to makes susceptible

net the December. interest of quarter was was X.XX% of the margin fourth in for X.XX% month but XXXX, Our

XXXX. Fed's margin and first of and our speak the very deposit to likely betas. lower moves than in the full-year Our much the on conditions. quarter competitive future depends number will December be How will Jay

reductions. matter time, $X.X Non-interest A fee and removing ESG provide. junk management, the charge at offset change projected seems information to related regulatory other At by climate currently quarter more among income income political million to costs third-party limiting ability we is and always to security to XXXX. in areas, operational continues on institution's same pile per no size. oversight is competitive regulatory of services fundamental the bank's the Progress so-called fees for be in message an

currently $XX.X projected and to kept expense XXXX efforts between through and in consolidations expenses line million per are numbers. with back-office check be expenses should branch have quarter and million XXXX Non-interest efficiencies growth Management $XX create in non-interest in XXXX.

to asset support base I with quality, and directors, doing through them. all of thank remain their things strong a strong the capital, have to deposit past right stockholders. for a them committed employees, remain years franchise We challenges dedicated persevered and for strong valuable and customers we

will and full-year fourth McConie Jay? quarter. take through Jay the you for highlights some now

Jay McConie

Chris. Thank you,

of earnings record million the were As the on a million X.XX% in basis to interest $XX.X mentioned, or improved respectively. increased return $XXX.X and to had in and X.XX% year. and Net per income and share in bank XXX XXXX, XX.XX% X.X% assets $X.X Chris prior million our from X.XX% equity earnings to XXXX. of Bank's points margin $X.XX up

income on and capital with income in to expense million of slight The was year decline ratio excellent the XX, $X.X a remains for average asset $XXX X.XX%. in stable our increase non-accrual growth of XXXX $XX.X with million loans December and in $XX.X leverage strong a the year. million no for year, loans position to million the mostly quality for remains of attributable The non-interest bank's net non-interest a

year, the bank to originations improved on higher originated mortgage the approximately For the rate $XXX X.XX%. to loans from to of Mortgage quarter, the the million less yield with during fourth year and at rates in C&I weighted average portfolio X.XX% and the increased X.XX%. but $XX of a businesses, to the rate million our demand end slowed and approximately average consumers due

issues quarters, were closed committed, mortgage committed, closed a On not they XXXX was $XXX letters million number previous XX, mortgage but This not the intent, XXXX. in was bank loans. but XX, going That committed, and we XX XX, loans million. of $XX consisting yet underwriting December September closed million, and December at of but pipeline In to compared report number million. loan reported are yet forward, loan period of On loans not $XX XXXX pipeline September loans. $XXX that a on reporting yet

single-digits pipeline definition demand The Bank broader upcoming the to quarter. loan yield activity low loan in given indicator XXXX growth expects in concerns and our overall be the curve. in in loan the increase recession better the believe for and We is inverted a of the of a rates,

outflows interest declined check expense, to and when in interest compared for cost deposit increase primarily XXXX, income higher of from bearing a to XXXX quarter average $X.X quarter fourth the into of million, deposits due borrowing Net million the liabilities. $X.X and seasonal to due third

since During the deposits. they has federal to aggressive XXXX, The non-maturity the Bank increase XXXX it months fund March to Reserve's continue basis of rates of on first the pays increase the first nine cost on XXX points by increased lag able rates will to Federal half increasing of rate of short-term X.XX% of was the to possibly funds deposits. XXXX and expectations, types in we these pay push

XX%. the increased of rising deposit cost non-maturity interest-bearing of points XX wholesale and The The has retail beta deposits XX been The cost betas XX, on XXXX. historical from about plus XXX bank's on since non-maturity bank's points basis through interest-bearing XX%. liabilities cumulative on minus deposits funds December deposit cumulative or was interest-bearing with basis funding September also deposits to

million rate using funding that with current loan our inflows monthly environment, XXXX in in weighted $XXX anticipate repay bank The securities on the and has in the matures to cost we flows of average current based a XXXX of portion portfolio -- wholesale due seasonal bank position. interest and X.XX%. approximately wholesale cash The our deposit from funding

analyzes will be is assets improve at rates our could assets, an maturing flows market potential These bank approximately million in sheet sensitive be sensitive either additional flows cash or XXXX million in earning of position. current from our help interest interest repay X% that XX% or to The or $XXX securities balance repricing earning and or and liability of available Management cash wholesale $XXX liability reinvested loans. annual approximately restructures regularly funding. with

income The bank's four the over core items one-time approximately non-interest quarterly quarters. excluding spent has run past rate million $X

the approximately $X.X decline to expect run to this pension bank's due is decline million component will of rate non-service We XXXX. The expense. in a

The to to including on quarter, of the and $XXX,XXX net was the several premises the one-time increase $XXX,XXX charges, expense banks' and an disposition in a bank's loss in $XX.X when Glenhead relating during of due relocations. locations million of to branch costs fixed $XXX,XXX non-interest assets fourth compared branding for to $X.X branch initiative was former The quarter. locations. third of two several the increase relating million,

when million XXXX. non-interest We expense to million flat $XX expect $XX.X in to be compared XXXX, to

customers moved the headquarters bank versus Melville effort and various have and expects relocation, openings, the in headquarters of its Bank closings the the in April XXXX Melfield corporate be disposition our XXXX Glenhead As to XXXX. and lower more employees. the occupancy noted, a we for branch and in assets, previously to equipment to location new convenient the an Between expense

its As noted in shares stock in repurchased XXX,XXX outstanding bank Bank XXXX. purchase in earnings up release, our to in million additional the plan. million or $XX common approval to an has $XX.X

rate Finally, for a approximately tax we XXXX XX.X%. be anticipate to

turn questions. for operator back With I'll that, to the it

Operator

Thank you.

ask for you Our your comes first Alex, Alex Sandler. question question. Twerdahl, Piper from may today

Alex Twerdahl

Hey, good afternoon, guys.

Jay McConie

Alex. Hey,

Chris Becker

Hi, Alex.

Alex Twerdahl

mind the just those securities Hey, through the first kind flows cash off, deposit you went you of expected again? quickly. and flows Do on Jay, saying

Jay McConie

Sure, sure.

of then based so our look And just million prepayment me have $XXX I X% run and look our or on our XXXXs, about quarterly look loan I in million that approximately to Yes, I’d XXXX. I I at another do of $XXX XX% interest look that, at at securities from Let assets annual flows. earning about projecting or like and mature year's system XXXX, we of, estimates pull earning last that. kind is from cash kind reprice flows dialing or assets interest we full-year Alex, I'm then in based what speeds, rate at cash and on

Alex Twerdahl

of able you that, us of get? a might you you be would do higher, potentially loans might for have And to pickup reprice that like Okay. sort sense portion are that give what kind of, --

Jay McConie

about would actual those prime come repricing the I mean, ones core, that on with really that's are more the repricing up or million quarter. up. the in loans, that each what $XXX prime about reprice And that repricing are on is $XXX

So be there. best that indication the would

Chris Becker

treasury off five-year plus ago. was when five right. during the margin, remainder of the booked in the booked, it typically The increase on Obviously, it price time, it was it depends would five-year be years so that is treasury a

Jay McConie

date. based kind to quarter with and flows up $XXX each prime $XXX is of So on reset with is clarify loans CRE a are coming about

Alex Twerdahl

just guess depends Okay. on, five years… I And the reset date

Jay McConie

were but maybe some be a to a five-year up seven. And little of price off the either would Exactly. probably depending, mostly treasury, bit off

Alex Twerdahl

the And in sight it. of of about XXXX. of on of got little sort be deposit expected line Okay, strategy any talk might just in inflows early terms that outflows? then the deposit a or you maybe today? deposit a bit then give flows And sense Can

Jay McConie

the comes for always Chris and of in. DDA typically had, I $XXX It December, for we're throughout there. back it the interest-bearing year, of right up. fourth or we million We've that the end we've quarter come But in and outflows increase. seasonal usually at amount the in from Yes. quarter. coming very about comfortable And with it was like right mean quarter saw the kind probably back had of, some first said,

inflows portion to coming flows, try to seasonal wholesale and those of some well those growth in about the to as of utilize down loans. at also from those, and in then bit little to come in as looking use and borrowings look funds -- securities loans talked pay and both we're for a So then use in cash and we securities of growth for to it a

Chris Becker

deposit interest-bearing we've strategy to building the added you our three to percentage the up or on beefed need new relationships years. in that be to And teams a continues And competitive DDA. side. And that, you bring past be loan obviously, with with get They the relationships. deposit continue of over

Alex Twerdahl

we're be where underwriting. that loans? or there from Got you're And curious you guys least you going respect that types on multifamily, And about? the estate, guys guys always look those very that also ask to indications seeing a I'm what's is I you just it. if to are know, you cracks real like sure credit on color just conservative potential of would then, have Any commercial pain lot in anything early worried not of with market out there's starting said, of at visibly. to wanted anything your seeing I'm helpful? And

Chris Becker

very multifamily really obviously We at market We vacancies, slight in point. causing every a a uptick this data, that's at nothing do most quarter. concern haven't seen our us recent, pre-analysis say at in we point. I would look any this cracks but so

Chris Becker

Thanks taking questions. Okay. for my

Jay McConie

Thanks, Alex.

Chris Becker

Thanks, Alex.

Operator

Thank you.

question Our Chris, of from Chris proceed is next you O'Connell KBW. question. your could with

Chris O'Connell

to to the of coming hoping bit little clarification as was -- that's the a fee guidance So where I of to and start out get year. just

XXXX. think I for quarter a said $X.X you million

like which the immediately an start ’XX, relative line in items out at is in of we and quarter? level that So the to guess I which that most where that coming the where is XQ fourth variance were is

Jay McConie

Right, right.

quarter. up, some various going the the million that our $X.X we have some and interest all down, but So Chris, is be we core coming throughout expect non-interest income lines. income core going Obviously, about to our

As in in debit then activity of competition card, regulatory because Chris we're some like fees the seeing card and we're alluded credit some industry. just pickup loss and NSF to, anticipating within

The the is for our pension. real reason decline

the So piece. decline have or in $XXX,XXX This four it or net to had it, over for is year assets to But rates the a funded. expense. a well part our and for it’s been the assets. fair net in the each part five, value hasn't out break our the expense the over in of credit pension. you of the the to five -- years salary XXX% decline six our The in a increase of has and usually pension, income in to pension because we make funded credit. fully interest get They past contribute about contribute is And bank $XXX,XXX fund non-interest of years, that we in financials bank,

amortize the million. that accounting requires income to our closing loss GAAP The you on income decreased $X.X than -- assets liabilities non-interest a income and more down the going the to average in -- that's

the to non-cash file kind item, I of it's that what's -- buy the if interest rates could four, funding you see -- really that's and so need by that's So on decline increases, to switch a position year. that driving we

that's So business. item it's not a to non-cash the core really related

Chris O'Connell

it. Got

most correspondingly out compensation So line the the you the that's fees then, and guys item other going for to part? for come like of expense like on

Jay McConie

some salary expense. less benefit getting And in we are exactly. Yes,

So look to expense. we're from credit at it that overall would $XXX,XXX about net a going $X.X I it million call

non-interest actual two the overall of it's position amortization funding So in that's decrease looking have the pieces. closets that return assets and the for million impact. this just decline It's $X.X loss, in the to unfortunately, And on the of the income year. because

Chris O'Connell

the moving start-off have the year? there is lower kind just to of for that. the as different it expense on $XX lot like there is mean, $XX.X any higher the build I year and to side reduce And openings throughout Understood. that? a any and million, million things the or end branch and relocations you the guys just the Is seasonality cadence particular end there or at on

Jay McConie

and of up and down, say it's would just, little in that, expenses anything in pretty so of, bit maybe forth not I consistent, quarter payroll a kind trending because but higher the add FICO first significant. maybe

Chris O'Connell

going to Got margin the back it. just And discussion.

the the December. any to I I to it trajectory guess were as -- then where So appreciate and either to the the more hikes on NIM where guidance to guys bottom for sense part you trend level? or in on pause going And lower? of or And how call as first year based timing it a here the assuming the on of as two could it's

Jay McConie

to X.XX% the come why was X.XX% our just our just pace that we it was it's month, and Fed that take the increase, for then the since for in low mean, getting Like we non-maturity XX%. we we we over the is quarter, up take about that was the we to And that's I provide tried is our -- number, rate year-to-date that where for December. and with and point, volatility but on a way which get from simply probably which hard Yes. it increase deposits, really XX%. of through point it now, June -- divide kind over X.XX%. betas, the funds The said, beta it's for is us based easier -- we

deposit deposit at continue going still the to beta probably since And to when Fed obviously studies, but back we when historically pause, look increase. our is XXXX you look

look stop rate been of or deposits, that when when It's full kind the current of, in kind then level cycle at So you their and their probably they reach XX%. minus seek plus cycle. rate

that's of where So funds that, up if going take and XX% historically kind of Fed to at look where ended you up. is kind of wind we've you

But rate be previous inflation over funds higher. those the could we bit a pace X%. basis of cause below period is Fed And the of cycles, a a to shortness magnitude, up do XX X.X-year increase X, this went that little points lot and the that caution was

and went a year. high were XXX in Here inflation under basis XX-year up they points

giving we're and trying pieces can why we cautious as give that's to help you on So out We're much with that. guidance. as you

Chris O'Connell

And absolutely. perspective. you macro of slower bit Yes, then Pretty forward the left Loan is about the growth are well How buyback basis? a thinking guys lastly, guys buyback a have capitalized. kind here you on of go on the from utilization authorization.

Jay McConie

might more in Yes. half. be time-to-time We're bit a the the we to from first the in quarter, market going in be cautious little

they Just between the Fed a Fed, to rate you kind want futures to XX plays the how battle you in get there's kind last can little maybe X% trading little down. going of coming see that end with this see emergence and basis And of a X.X XX-year rates the when and kind Fund the bigger we the and Fed see X% you of at the over have out short raising between quarter. on with points economists look down

the just a a inversion cautious getting more an maybe and kind be be see going whether bit to in bit how So the to things it's soft play in aggressive little we're then and hard landing landing, second a more and little of half. then of we're more so and or might preserve of out a first disconnect capital half

Chris O'Connell

Jay. taking and questions. Thanks, for Great. Appreciate Chris Thanks my the time.

Chris Becker

you. Thank

Operator

you. Thank

American comes Partners. Gulino you your with proceed from question Nicole question. next Nicole, from may Our Capital

Chris Becker

question. in we Or question Any No the okay. call?

Okay.

Operator

back final for floor to the comments. question some our Chris I'll closing -- concludes comments turn over That session. Becker

Chris Becker

the certainly another to and record call. the to the you the look we today's on thank end of forward results present year, pleased you day. at We're to quarter. participation of attention Have great and Well, very a first rest of for all your talking

The First of Long Island Corporation (FLIC) 27 Jan 232022 Q4 Earnings call transcript