FLIC - Earnings call 3 2023 | The First of Long Island Corporation

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Operator

Welcome to The First of Long Island Corporation's Third Quarter 2023 Earnings Conference Call.

On the call today are Chris Becker, President and Chief Executive Officer; Jay McConie, Chief Financial Officer; and Janet Verneuille, Chief Risk 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 web page at https://www.cstproxy.com/fnbli/earnings/2023/Q3.

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.

actual March a that for Investors ended the refer on March XXXX to list supplemented factors as results XX, XX-K our also XXXX, from cause statements. by or for of materially quarter could risk by should implied filed XXXX, those to X, differ our XX-Q indicated such

I the Becker. Chris like would now to call over turn to

Christopher Becker

you. Thank with third the income of of the and for third consistent First The quarter earnings $X.XX $X.X of were million quarter of net and pleased to per that Long Good XXXX. share prior Corporation's report Call afternoon, Island Earnings I'm quarter. welcome to

Most XX prior importantly, the margin after from interest quarter averaging decreased points points basis basis only X our quarters. net declines over of previous X the

Assuming which correct may bottom quarters. the over that anticipate the not short-term margin out the rates, raising internal projections the next assumption, be X has done Fed should

regional of assets, failures. quarter. the comparing average increased and Average the of bank total XXXX, the quarter These second of to total all large third shock deposits, average total averages some loans all during quarter XXXX linked when decreased the after

consistent deposits the Our Loan the consisting end broker third borrowings remained of from the quarter. funding the wholesale of Home quarter of Federal end and second to Bank

of generally of money with higher-yielding other million to rates moved for Investments short-term options, or looking needs. customers funding year-end. to but providers. have down funds the consider deposit satisfied non-deposit Commercial are Consumer operating treasuries $XX some higher wholesale customers, prior as First certificate investment the normal our for is Program our offerings, Overall, in excess from such continue

focus. deposits, of to new year. December consolidation deposit in banking our another out management in the funding moved We has continued relationship-based teams net accounts challenging While replace growth current branch Expense that recently this with have remains a announced of environment. been able coming is

is into consolidating branch, X branch our branch be Manhasset our closing the Our optimization Great which and under XXth will is This away. strategy. ongoing branch Neck miles approximately closing

In through of this prior have over consolidations, we retained hours several including are deposits. branches branch XX% attrition that Earlier eliminating these on we hours, justifiable year, levels based changes. the adjusted activity. in down not being did Staffing adjusted Saturday

mortgage a a one in announced meet still recently to co-marketing leading timely with partnership needs. This agreement solutions nation's to new We industry response is best-in-class clients Mortgage, with providing lender. referral mortgage changes end the our Rocket their while demand,

eliminated a going annual we result of mortgage million residential As forward. relationship, our $X expense this in nearly saving department new

can customer want outlined expectations to against mortgages of to our in rebranding threats. offset salaries and bank meet sale the our that Should portfolio, upgrade technology to maintain behind the Glenhead, done expenses add X The buildings through its benefits, previously competitive majority be future purchases. and should We expense, just of residential and the savings expense large occupancy pressure to us. reducing are protect reported cybersecurity

inflation as expense as and to X other corporate due increases, the well rates in rise general higher past Pay insurance administrative over years. rates

will have upgrades efficiencies. bring postponed but planned additional been until Our this XXXX, back quarter for implemented, technology office when

goal beginning XXXX process, XXXX just to our below is noninterest budget our While expenses we are actual. reduce

the been Financial call. now an years. executive release. the earnings for more excellent guidance Officer I XXXX in Jay We company on announced upcoming year-end the McConie past expenses will Chief management changes our earnings address will in provide over specific X noninterest our has

position the banking of Jay, in in and most Board still navigated While exceeded confidence him the the Directors one when I difficult in world all to have of as the XXXX, especially through environments our expectations, January XX we of in over we he had the named years.

rethink to desire Financial as in Chief role Unfortunately, caused our that continue environment, personal have with along Officer. reasons, his Jay his other to

for and has in he through accomplished to We role with are at March for all that grateful has he end company date. XXXX, but least the of consulting a defined agreed continue no

my will Officer has highly XX Risk worked of as strong mine years, Officer, other On over Officer, a Bancorp. executive we we the works qualified and Chief with Bridge trusted executives. and been Verneuille In at the for step. executive here when both is to side, her forward closely Financial without previous positive Janet take as together have Financial including role move Chief Janet institutions, X role. a She at bench a missing over partner Jay and Chief the

as to worked closely our works Tan Senior As Vice President on new also an the Officer. Chief next Financial with continue Risk on years, everyday build over the a over advancements take me. company Chief with she will basis Executive X and directly Jay's our forward. Officer, Tan Ansari move and Janet will past and

banker our and take excited for he the to seasoned counsel, and opportunity on a in-house additional responsibilities. this As prepared is well

Chris resulting mix in guidance, to product bank and midsized With improved this improved cash and be growth position. in funding over well-deserved small assuming bank will promotion Hilton President, digital he Senior relationships and in an is business loan sales more the banking key his commercially Executive responsibilities leader Vice the our additional focused. our management. to transformation make a organic Under

With would like Verneuille to comments. few have that, I make Janet a

Janet Verneuille

afternoon. Good

since our mid-XXXX, addressing work Jay commenting the Chris I and control with SEC other investor as community communications, pleasure closely I the releases on Risk and the press Chief joining reviewing enhancing company and in Officer While our have not the had filings of environment. investor

the business X KPMG finance. Officer later and started into transferred a in and small CPA years, officer experience in spent banking a my served years loan license, back the to financial I X different My after also office, Financial years stint lead Chief as the the for banking, I treasury banking to municipalities. I and as mainly in Subsequently, returned became ago. lender branches with obtain in

I Returning CRO to now the positive and moving into the Chris role the challenge. at will Long different corporate experience CFO at both contacted and a Island, to the another familiar became me appetite, in bank-wide augment especially years CRO through and the governance the me of role it When lens, intricately changes. Risk my to Officer views was current my a First position processes. The with the In challenge, an Chief opportunity allowed about our company as environment. use risk diverse here bank, be

develop will Jay upcoming the strong financial and to mutually ability weeks, me transition. all leaves these discuss now our relationships, the with together bank will community. with Jay? confident a strong and and quarter. work the am he McConie closely results to my team the I I in Jay further investor outside respect for the support analysts also and

Jay McConie

$X.X slowdown basis declines X Thank was basis significant XX quarters from XXXX, and and XXXX. in second to respectively. The Good interest Janet. compression in points of you, linked margin the margin to slightly the resulted improvement margin, from was of comments quarter X.XX% first quarter in interest second XX the basis afternoon, decline net $XXX,XXX provision The the losses of XXXX, also a compared in X.X% a bank's net everyone. second when compared interest partially smaller in point Chris' income tax income or income to income credit margin offset on and quarter. $XXX,XXX, a expense of decline X.XX% net was current the expense, Quarterly income down net million a of for the quarter as $XXX,XXX the points lower Adding in of decline noninterest of noninterest much credit of in and lower income.

Federal ROA by balance by policy, company's respectively, over has sheet. X.XX%, to increased for rates has making XX Reserve difficult net be The XX and points. curve fueled to income to income were The XXX quarter. by and utilize ROE net The basis it Bank's interest monetary bank aggressive short-term the interest continues for over which excess decline adding points in inverted basis its leverage increase the months, capital to our been for yield the

$X.X run compared when to The quarters. noninterest continue was million prior quarter. income Bank's during million, is quarter. $XXX,XXX, which in with current fourth guidance noninterest the is the the $XX.X in was to prior of quarterly expense anticipated This rate decrease Bank's third linked consistent a quarter,

We expect of remain expense QX million between to noninterest $XX to in million XXXX. $XX.X

X.XX% is As Chris noted and XXXX. mindful move in to X months Bank's Bank's The is ended increase a his total ended lower effort September the the for to flat XX.X% interest control as ratio assets XXXX, year expense to the every given up comments, and making XXXX, ratio current we months respectively. expense is income. ever net the The XX.X% in XX, was decline X for rate prior of the remained from Bank run XXXX at the into mostly average in attributable efficiency noninterest September XX, management environment of period.

from insurance. Bank's tax estate of to XX%. and the effective XXXX third percentage bank-owned to quarter due effective of in rate year the for in to to the in our investment effective Bank's derived be trust XXXX Decline third mainly XX.XX% tax the XXXX. quarter decreased in the rate an of XX.X% is increase We real full from rate between life tax XX.X% income pretax of anticipate

quarterly the with within of weighted flows XX% in Bank but average with $XXX also continues Bank Bank rates. million deploy repricing loans side X.XX% Bank our quarter. of cash approximately third interest-earning X loan maturing $XX mortgage-backed into assets securities of approximately quarter. securities sheet, yields in the On in from The during the gross portfolios, approximately $XX or at $XX the rate new a year, asset to has liability the and remains mortgage million X% approximately of and million originated purchased sensitive. balance market current assets million approximately for

has points $X.X sheet, funding the remained increased funding deposits comparing very to side, billion but changed at as On quarter of from XXX noninterest-bearing to the in the deposits rates. average the XXXX mix stable The interest-bearing third moving customers X.XX% cost the deposits XXXX, of XXXX. approximately fourth when higher on by quarter approximately the interest-bearing demand total deposits of seek XXX shift balance of with deposits basis to

rate deposits in cumulative nonmaturity through on approximately rising close environment. deposit historical which our is to average a XX, was Bank's XX% XXXX, beta The September

both that given the finally and deposit could ends. be rate rising betas when our higher increases, of this size cycle However, pace

was assets including of cost on and September XXXX, Bank's total $XXX total maturity XX% X.XX% million wholesale average funds average months. weighted X XX, of had a or and of funding, broker deposits, of

months in cost average In addition, XX the had retail Bank over mature X.XX%. of $XXX deposits the of that an with million next funds

it in some in these upward result quarters, could As matures coming of in pressure additional each this categories. funding cost

will pricing to uninsured of management entity that liability of total However, margin be The at interest stabilization. believes digital offset remained assets we stable as deposits from uncollateralized deposits lead largely price the from expense income XX% of Bank's to on borrowing Federal the same June Loan XXXX, percentage New ample Reserve lines liquidity. September as collateralized We have billion and Bank XXXX. in continues maintain Bank. XX, Federal the $X.X with York XX, Bank and

$XXX cash had securities. also and unencumbered million We in

we our total, of excess $X.X quarter, uncollateralized the have the approximately in In end available which of of liquidity deposits. uninsured at and billion is well

dividend capital leverage XX.X% under Bank We XX%, during with most not XXXX. XX, on stock have the of shares million $XX $X.XX ratio September cash quarter to Our remains recent plan. XX, position June XXXX. did Board repurchase strong XXXX. share on a [indiscernible] approval the authorized repurchase per third The approximately still any of compared Bank of

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

Operator

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

Alexander Roberts Twerdahl

now. in chapter a working next you best with the over you it's off, in First couple Janet, Jay, the forward in for last working years, next I future meeting been from the and you look -- the wish you. of to And with pleasure

Janet Verneuille

Thank you.

Jay McConie

pleasure Yes. well working with some a and as Thank you, and attending conferences Alex. of you It's Thank the you. so forth. been

Alexander Roberts Twerdahl

if just and grow and -- guess, with growth at I to quarter. the the assets next the thinking particularly When talk about of doing, is this then I'm some churning or funding the over to be kind of should should just if place how reorganization loan loans Rocket the I look can the quarters? in Mortgage obviously your or a figure be out appetite I you just of grow I that? the about we you're trying through just couple it's some the plan numbers seeing know -- challenge. of was to things that it

Christopher Becker

kind for the of I think And certainly staying it's because in just yield place. now, of curve. largely

short-term the it some a you're able comments, in are grow. have "Well, low they're If excess funds strong deposits challenge in and blended sense my but you relationship relationship, and earlier. But that I enough, there to can to yield of of the it's bring they said on paying difficult deposits that have in in as saying, going do remains, to X.X% we're certainly deposits." So said new have repeating gee, some makes good And I again, funds I some X.X% I'm with movements some really get lose not to you excess move what treasury, And interested money just grow. into that, kind of those there.

So little really, the fairly flat but quarter, past be you've similar of future, might little X, far probably have or as one for a the what it's quarters, growth, you one quarter to as where assets. bit foreseeable next quarter, the a seen contraction of to in bit total going

Jay McConie

about our in points has range so and linked at a on XX of mid-X% of kind the kind basis look you when forth. ROE stabilized quarter, and Alex, ROA

So until in a of leverage spread we at advantage a want sloped take then curve. our the positively of now seeing excess margin XX%. low we or start low really at yield want we stabilization leverage such of up call We right curve, to don't to can ratio kind the some

Alexander Roberts Twerdahl

guess, some same the sort currently I'm Makes loans at and market. the maybe lines, selling is on your Yes. bit of -- I in little this know comes I FDA sense. just mean, -- I a but

some something what the You some interesting kind I might participating like, consider some who look that, in guys they like with uniquely and mean ever the something doing? expertise selling pricing but these structures. are you'd in there's where pretty pools. of And positioned could is of knows of be categories

Christopher Becker

purchasing we something assets, to was spread, would purchase consider reasonable. have spread at XX basis We again, not the and if really If point go to a us. that's out attractive

consider line margin, ideally current like can current that. margin we something than something your obviously in would or you with get If the better absolutely

Alexander Roberts Twerdahl

yield I during and your course the sort you know in production yields prepared Okay. the have remarks, loan of us Can you on -- is the think past, pipeline you Can the over where the quarter. you progressed the let the in mentioned -- Jay, new of quarter? just how

Jay McConie

the originate with about and of you're low XX-year be purchase us X-year the high million but range predominantly still commercial out getting up It's business. in of pipeline, million And curve to with mortgages, Xs. stepping residential not $XXX yields the see Xs residential yield and steepening with Yes. starting originate. the We'll spread, into $XXX those the in we a to

come On the on. refinancing cold-feeted looking flip as handles X -- little handles. into purchases those get people a side, there's bit you're starting going new no obviously, to new see and demand you are really activity as purchases X for kind down of the into get It's

Alexander Roberts Twerdahl

Yes.

little looking the of at And transactions liability-sensitive. to which Okay. are you goal boost earlier to a balance back in sense. Back year, restructuring, future? I similar And the pretty sheet mentioned did Makes additional more NIM are move. you think is help I good you was still mean that over looking then guys this a time neutral? know become you I types

Jay McConie

our of any to do it probably of part, take we're X quarter wholesale take we those or the swap, larger rate is additional have residential We before of now, see any and has inning the lot converted and we kind and by NIM for quarter-by-quarter. it does, Where what think to repriced decisions restructurings swaps. We cycle, floating. most right, where Fed quarter the we stabilized. type securities to feel We the a think going make of and we're of the million and Right that kind this ninth do in $XXX not. moves, felt restructuring time rising eighth of

Operator

of comes next Chris from Our question O'Connell KBW.

Christopher O'Connell

next to same add all wish best just sentiment forward great I and steps been with want -- the Janet. your with and working the to it's working you, look you Jay, you, in

Janet Verneuille

Thank you.

Jay McConie

Thank you, Chris.

Christopher O'Connell

had quarter the August, monthly onerous quarters, was I mean, in the July, yes, couple, sometimes compression So was think that obviously, prior margins. less for given than to I this I if the you've wondering I periods. the margin. start September the off was you hoping past a lot on

Christopher Becker

$XXX you obviously do. We lower that caused XX-day margins have the other issue. lower which July, yield on some in it a we put $XXX that month. that's year and And is August, our was that we in was September want month, did on little flow the throughout to than it and little kind in was they considerably orders of to of bit XX-day some the month, see, be always have XX-day are prepayments which lower. $XXX, month, $XXX. In the In a but a the portfolio, investment SBA pressure

be So we it indicative $XXX seen. to don't should forward, but overly want be that of going

Christopher O'Connell

Got of the else on rates bottom all it. or just the as know And here I margin either where quarters. kind could mentioned bottom? bottom of of trajectory the to hoping sense QX pressure level of to equal a you're on guys over for the magnitude the that ultimate you couple the next Any of

Christopher Becker

the already repriced, in things as of our so if looking projections hard, still Yes. so give a our throughout there's internal that to even what the cycle of that is And for the you at small quarters. try seen It's misses we're as side very that next some over up we're come to seeing But know, think lot banks. but maybe guidance few on much there's many has on I year repriced good liability that the been you've throughout Chris, have repricing been margin. again

much now. from as they are not obviously where There's upside

We cash offset quarterly flows, the and be kind that's those now bottoming those see that million the margin the pricing, we Jay in, out fully we next why priced liability see over of side, to the to in that's X quarters. about. talked starting being see $XX So able asset

Fed What or hard out exactly other? with in side get side the to see liability and can quarters, And the it. one Is It's see quarter that first specific assuming, same asset bottom the start means? on the then stops the trough. done by quarter? little up. little But it to do increases, over the that X it fourth again, liability see the next the we we and the being side, tick in Does rate we that the

and direction in rapidly. more And the obviously, steepness some get you'll yield if makes Fed turn the see when curve, other around it some in moves we that's the

to of looking best-guess kind guess, bottom but to difficult have where you tell point it's is, So at and the this hate that we at scenario say certain best assumptions. using in at

market Could just down and and very out does -- kind little to to It's go more, what quarters we difficult just But next points? another have X it bottom what basis over tell. the XX could. Maybe X, of does. the a the it bit and Fed see it's

Christopher O'Connell

No, for And to year? at hear thing I next XX% up bit? difficult should That's appreciate tax this Yes. are range. it the -- that think at you tick remain a this obviously, so a you. to I though. the then, it's know just it. will XX.X% well, year, rate discern we quickly, helpful, I for that point. where it Is Or

Jay McConie

I preliminary, start have curve, working yield kind curve and if hopefully I to now I Yes. XX% steepens, expanding would on we that XX%. as for because look of but that yield I'm steeping keep maybe we XX%, to out it would kind and to around get budget XX% a of this can of come between mean, margins through say, probably go forecast that.

Christopher O'Connell

provide how little color can those planned of that mentioned out you as you in to prepared with guys us bring a some remarks, on? pushed upgrades upgrades Okay. of you and inefficiencies. the bit what are plan Great. you And IT those to Can bring just XXXX into the

Christopher Becker

processing item -- just -- the along this online projects a in staffing XX long our branch office be Sure. felt of that, to back that core with our would platform on combination back we We've in with were plans -- outsourced, And the we things, business also those we office, about systems. -- all been XX back talk working we the processing is brings these months. project believe, item so some of is conversion, upgrade certainly the teller and our And types and to efficiencies. go a on banking

closer to [indiscernible] it with were our as getting be that a we few And best it working we months. to off date, would a target put felt

early and to evaluating XXXX. we still yet, but anticipate be that we another haven't we're in So picked date done

Christopher O'Connell

Great. of basis concerned on everything you're fantastic. I side, seeing And your market? the a relative has then in on your issues there industry, and a any anywhere, the guys pop How cracks about? metrics anything individual up seen credit are Especially quarter. on which credit couple go-forward things this mean, that looks to Is your you

Christopher Becker

hear No, portfolio the I we're where maybe and is, in not you're down the our businesses. on with things slowing conversations whole market, concerned customers in some to certain think are with for starting things

general. people ticking about that's numbers I the the But big But not -- specific list something there's could loans always but are that with loan numbers us. that, problems even in like couple showing problem bit concerning on happen, a little a nothing about the sense in us, and get any our up. any a nervous economy the what's obviously, of on think world going also in

Operator

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

Christopher Becker

the Yes. call. to of good at and Thank today's participation of day. you to Verneuille a the for your year. and end Janet talking attention forward you look on Have all the will rest I

The First of Long Island Corporation (FLIC) 27 Oct 232023 Q3 Earnings call transcript