FLIC - Earnings call 4 2023 | The First of Long Island Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

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

On the call today are Chris Becker, President and Chief Executive Officer; and Janet Verneuille, Senior Executive Vice President and Chief Financial 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/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. results March a that for Investors ended the refer on September XXXX differ list supplemented factors as to XX, XX-K our also XXXX, those actual by implied for of from quarter cause risk such should by filed XXXX, indicated to X, materially our XX-Q or statements.

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

Christopher Becker

network, commercial to tangible Thank afternoon, of fresh top-notch our a efficient transformation key which of technology, Good innovative partnerships, fourth of underpinned and for is position, bank aspects quality, proven strong and X%, began The First strategy history XX.X% more the ratios largely are a in a The by Long proud Island capital on with bankers branch strong quarter rearview. and of which you. of in growth, say welcome leverage earnings has end a capital focused all the asset call and of Corporation's year respectively. look, relationship XXXX to I'm XXXX.

Combined that the for future. especially lower, remains about XXXX with bank a optimism bright outlook short-term for generally entered a rates moving with liability-sensitive, we

It over right sheet in X our fixed-rate our transactions As XXXX. the pretax earnings transaction $X generating our assets completed lessen rates we balance entered converted as repositioning floating we quarterly These liability in to in approximately reported first million X XXXX. earnings XXXX million to was quarter that were early move proactively sensitivity. $XXX of call,

moving of did similar considered the rates As or outweigh of benefit we throughout rates moving not the staying down. flat of the year, risk up remainder the transactions

so our technology down. for bounce as for we begin can of struck the business net sentiment balance, to to and additional rates, rates announced XXXX. on DNA and interest based back our XXXX planned consider The have come app, will and an upgrades we believe system, strategies online margin appropriate We biometric But teller nicely the banking, technology current branch live summer February tested Upgrades systems, in platform paper-eliminating efficiencies. in are to include business Fiserv's mobile core XXXX. built, processing go identification short-term

The will team enough and began partners. and our transition generate thank bankers to continued to relationship-based institution provide dedication believe their We our the and our clients experience needed make and cannot work service the teams project. commercially business. with I systems work their to in branch to more outstanding enhance lending for a our that our thanks new this to focused of customer new progress hard commercial best-in-class in XXXX, tools XXXX,

into social footing, better a company a is and adjusting the both media consolidating our objective of the our business. We bank over all grown closing combined component digitally. our per such growing presence physically vacated getting portfolio pay has bank headquarters, back branch and and the notice. commercial relationship-based has to and and buildings, much a and XXXX, Other is year are brand key as industrial now Refreshing This moves operations new starting selling solid our $X.X with XX% period. average A building since commercial loans on dividends. branches portfolio are same billion this administrative believe owner-occupied hours, loan total a office mortgage increased

it X challenges. than XX% is years more much ago, team Our was smaller adept today's at but just meeting

fourth of Janet? full the you quarter. and Janet now take Verneuille highlights will through financial year

Janet Verneuille

on assets totaled Net earnings The per average its return diluted share X.XX%. or on equity everyone. Good income average return was Chris. for company's million $X.XX. X.XX% fully afternoon, $XX.X XXXX Thanks, and and was

of Our not and the company diluted earnings in the in up net performance record per income overwhelming from the The $X.XX, XXXX fully the to in respectively. was ROE X.XX% XX.XX%. in was for X.XX% and produced XXXX share performance to for million XXXX XXXX, was decline reason interest $XX.X ROA drop earnings and did X.XX% match in net XXXX. In margin

the The year pace in XXXX. when margin on noninterest of million, XXXX, million year. significantly excluding slowed securities, of in XXXX XX bank's of bank's other $XX The was XXXX $XX compared net from of noninterest basis the second pension half to and in The interest expense income, points losses decline for $X million the margin the and XXXX. points comparing the first flat sales quarterly XX net basis with the throughout of has items, in relatively credits half onetime decreased declining

life incentive bank's rate in estate the effective XX% effective trust in of and assessment in higher by mostly due income FDIC of pretax fell offset expense bank's bank percentage The the short in was from from benefits down expense insurance decline $XXX,XXX XXXX. of $X.X savings Salaries employee metrics an XXXX, to investment tax XX.X% stock-based the to was due incentive increase derived year. rates this and in compensation. million, increase An declined the the The the rate as over lower compensation insurance. partially performance real tax and for due its bank-owned to

million, Net $XXX,XXX from income XXXX resulting totaled fourth funding interest of outflows. $X.X the net seasonal is that to down quarter due The income lower $X.X alternative higher-priced deposit for of million, linked decrease the replaced mostly from quarter.

by the factors were reasons the salaries items in full were and benefits employee Additionally, the losses million our lower offset These for in offset tax partially and income in and XXXX. $X.X for mentioned as charge-offs expense quantitative provision ACL credit year for improvements previously increased qualitative various model. $X.XX million by lower expense net net of partially same

in net wholesale fourth in The quarter. lower-cost bank's noninterest compared quarter the margin interest quarterly The linked bank's by was $X.X in XX-point of the in quarters. interest largely was to income margin decrease net the fourth X.XX% X% being outflow quarter costs. The million, the prior funding seasonal prior guidance was with is to consistent due nonmaturity which higher replaced deposits and

The quarter of bank's benefits noninterest million, income million and was reasons $X.X reason full to is decline $XXX,XXX, $X.X incentive quarter. $XX.X XXXX. fourth expense compensation the salaries Net $X.X in losses the changes, lower The an The for a the the the down attributable mainly to increase year-over-year of decline the linked million as a tax for in to was a stock-based for net to income decreased including expense the quarter interest credit same in million XXXX linked in year. mostly compared provision decline attributable and respect expense to million quarter of $X.X decline the compared $X.X of with decrease fourth cited expense of and employee income, million. to

make longest balance The of and excess sheet. to yield inverted curve in it months, XX has continues the periods difficult banks been history, leverage their to one for utilize for it approximately the to capital

loan at the is continues deploy side, and new cash the $XX As the securities approximately quarterly current from asset far as $XX on to bank concerned, flows market our into sheet balance rates. to assets portfolios million million in

repricing $XXX million or assets within approximately sensitive. XX% has remains or liability bank one maturing interest-earning year, but The of

continued pricing balance the of sheet, side liability the year-end. through pressure On

of declined priced million seasonally advances. of weighted and FHLB of X.XX% total The tax a bank's of mostly $XXX.X to lower by due on had competitively deposit including December the months. funds and X.XX% funding, borrowings deposits. deposits, $X.X and XXXX, maintain deposits escrow to brokered cost total deposits average linked The replaced balances, Although bank wholesale was and an municipal quarter or to billion, a overnight total assets maturity and were average XX% XX, X on

with cost in funds X.X%. of bank In that $XXX average the time has deposits an in addition, retail million of mature XXXX

coming this anticipate upward As the final cost pressure. some quarters, funding additional in matures we

income will shortly However, management expense margin should Reserve higher liability as margin to repricing from offset believes largely follow rates, asset Once flows thereafter. leading short-term interest stabilization. Federal be repriced expansion begins to we believe additional cash additional lower the by

New the Reserve and maintained Loan in borrowing indicators York remain We Federal with the Liquidity ample. lines Home Bank. billion Bank $X.X Federal of collateralized

had approximately well of quarter, of unencumbered $XXX total, and $X.X securities. available excess billion had uncollateralized of cash our also is The uninsured and We the In liquidity approximately end the deposits. million which and in in given plan, we at repurchase in during will not We shares did under repurchase XXXX. XXXX. likely strong program resume levels, any authorized million the stock have capital $XX still bank our Board approved recent buyback the most

little about will Chris? bit Chris talk a XXXX. now

Christopher Becker

and political fees call, reviewed the projected bank's the over to net the fourth so-called Federal our for Thanks, years, earnings charge lower putting XXXX. XXXX for mentioned XX included in quarter removing downward cited, not services interest Janet. pace ability been the message I In at pressure margin. forward-looking have which is interest a this I rates specifically Reserve's the provide. challenges remarks, We increases we today's margin. fundamental in I junk of limiting bank's for on regulatory preparing

projected of $X.X We in XXXX. quarter per million income noninterest

an million stated and $XX.X expense We continues and management $XX efforts kept branch no check. per expenses back-office size. noninterest I in pile projected matter efficiencies operational have XXXX. institution oversight on create costs, that between through million But quarter regulatory growth to to consolidations in

Federal our now, more we margin than more increased net rates on during the times interest know Reserve putting pressure As XXXX, all X anticipated.

million XXXX expenses expense. projected of sales with compensation, were incentive And noninterest quarter. noninterest compensation averaging lower noninterest net guidance while per of pages projections. with projected to principally incentive Backing to securities, out in expenses due income more spot-on loss of came close than our on issued, XXXX $X.X were our regulatory in Other than line were lower our thousands we

Let's X we XXXX. enter areas as consider same these

interest net our First, margin.

the second Our the half lower the beginning Federal of during Reserve include XXXX year. rates to projections

a interest downward net during quarter X%. the currently of quarter during As of Janet will believe year. second reported, pressure XXXX the was out We XXXX there leveling be our in with quarter fourth the the margin of first

of to and the third rates are projecting begin quarters During margin begin down. XXXX, interest come we recover the to short-term to as net fourth

with our over my to quarter of XXXX. current the should and earnings comments first referring that third the fourth X the next quarter the quarter during call Our XXXX is quarters, thinking of margin bottom out consistent

income. our Next, noninterest

additional as noninterest business XXXX, and card fine-tuned our in and we usage. and checking changes $X.X some such, XXXX. million income to encourage checking produce average should in During are accounts debit XXXX, more on income consumer quarter analysis program service per projecting adjusted we to account These fee e-statement charges

expenses. success are other buildings, with plan, our rate optimization new continued in Lastly, among technology, noninterest residential investing Even vacated eliminating group, run have selling initiatives, branch our reduced our back-office consolidations, our expenses. of mortgage our we noninterest though and

variants quarterly to XXXX that guidance. noninterest quarter likely. income than to lower per guidance We noninterest are $X.XX averages average in million and and Please are $XXX,XXX expenses noninterest projecting are $XXX,XXX or note XXXX, our expense

back With that, it questions. for I will turn our to operator

Operator

comes Our KBW. Chris question from for first from today O'Connell

Christopher O'Connell

Yes, X.XX%, last just on the said item that seems the you guide, on low.

Christopher Becker

XX. XX%.

Christopher O'Connell

XX.XX%.

Christopher Becker

Yes, sorry.

Christopher O'Connell

that That's the for Great. quarter? immediately compensation back Okay. does And normal is kind to reset of line, the helpful. first

Christopher Becker

Yes, the from some the the work year do as quarter. efficiencies we've back-office it will for And done our from And the to first back on reset consolidations upgrades going have and -- some the computer just branches. but there staffing we in in consolidations, normal of branch and such. throughout

an we So of XXXX. year's that realized benefit entire in

Christopher O'Connell

and should on on a in the may of based sounds of funding less like then seasonality. a kind the of having in on quarter back quarter, that it pace into slow the but little pressure coming margin, first little the be first bit And the the maybe deposits mean, I cost down some bit probably

Christopher Becker

Yes.

and If municipal fourth year, some was deposit each the we the of the escrow estate bills. pay tax December deposit from the outflows were outflows, you some of bulk look our and with -- November quarter in that accounts, real at out which

going And that's and little borrowings, alone So as expensive. pushed down obviously bit. more that money mentioned, into that the fourth That quarter $XX number those was with million. a Janet margin overnight outflows

million already we've far, $XX So in this back brought first quarter.

that of back pressure in. that money So that you'll flows as will also some relieve help --

Christopher O'Connell

of color provide the pace a cuts, it the Great. could reacting upward bit the regarding you of mobility of Fed second kind or the as depending half see little margin to with has? maybe how and how you of level Fed And year cuts on guys much the

Janet Verneuille

Okay.

we're improve points for margin but this cuts, over that is XX predicting to basis will every where increase. on Again, projecting X Fed So depends, obviously, to many It basis the time. the we're time, points. it over factors, that's X of

Christopher O'Connell

And what's good for last go-forward rate tax one a XXXX? for me, just

Janet Verneuille

So at the and looking for XX% next between XX% year.

Some benefits capping the the of of are out. REIT

So it's going up slightly.

Operator

from comes Sandler. Piper question Twerdahl of next Our Alex

Alexander Roberts Twerdahl

strained. loan the more start I'll guess I outlook Obviously, plenty But portfolio. do of potential not the easing -- maybe see little bit XXXX? rate a could up as liquidity, funding for of think and liquidity, loan you to and that's little with much a set yourself cuts in kind wanted growth we just sort as maybe capital, you costs, some you I for of have guys your obviously, more

Christopher Becker

year. be will think lower all there this don't Last think flat year core for it's growth their because be some rate really, as some do year, think with that some loans throughout single-digit do we were loan and that growth some XX-year as down. XXXX. We be will during in going you've And and robust we high. of like, X- hopefully, but pretty seen to rates seen there would to the you've relief, already some, We

off of as rate some end provide the that So loan more curve. that rates are pricing also does the of relief

to additional volume. anticipating some So we're see

the $XXX million on some robust, more not year-end. more there and pipeline certainly of some -- year The the But there about at overly conversations activity. at was end was is going

encouraged going we're that, So that pipeline to grow. is

Alexander Roberts Twerdahl

I sort of Are the in that? to average And given pipeline. able provide us the yield the you think you've past, on

Christopher Becker

you pipeline X%. it's right we that rates the the the tell in because it with is floating of was that fourth -- The moving But the I was every that kind difficult, quarter, around closings right, right day. had the -- yield loan always can

much should shouldn't with much it It that. from stray that. So too pretty be line in

Alexander Roberts Twerdahl

going guys you, about are I wanted And ask just you dividend forward. to the how thinking

Janet Verneuille

dividend, We analyze that quarter. we're obviously, expecting continue dividend And the the we pay every it. to look now, at really, right going Well, we'll forward.

Alexander Roberts Twerdahl

and probably don't would I it, has something on history current lot I a level look know take people you sort payout annually and because nice it standpoint it's of pretty of say have capital given a the one it at standpoint? consideration? of from a Yes, that it at guys and you -- the that of really at a it's extensive increasing rely Is to a from but time a quarter Is a streak. going sort ratio dividend

Christopher Becker

We appreciate that streak.

think I shareholders streak. strength that -- appreciate our

obviously, you Board quarter early again, out of January. Our quarter, fourth And that we an streak. going. like declared environment it but our at quarter to by dividend I in look it appreciate Directors in Board just just this, -- keep that the paid

not committed flat they've year one last so the quarterly do to -- a a at Last And have we continue the But increase did an pay year, point, year. at increase usually the this to share. dividend. keep we did we dividend quarterly $X.XX

Alexander Roberts Twerdahl

Janet, prepared guess, trigger would you I think term. for you feel or near you sense then us a back buybacks in comfortable just things buybacks give And sort said like on the with levels the table in Okay. that that I remarks or your be Can what of capital that? will

Janet Verneuille

at Capital levels, the is ratio capital XX%.

last at We'll said, on do So any year. a like we're watch But didn't where have look We we the quarter, there's buybacks, it buying would at to for we room that think and going to number take sorry. we analyze we each for I'm based if I don't year. point. to go consider back. this have that. earnings do We project a definitely

Christopher Becker

in talked prior think Bank, retained the earnings dividend as we our to have the -- before X to I based that year. company National we've holding we dividend do on the ability years do money a up watch current

monitor we that So also. do

a little money holding of up So bit that's something on the that how also could be dividend to we much company. governor a

have that's to of quarter-by-quarter it's kind that why a we So item consider.

Alexander Roberts Twerdahl

I just the NPLs quarter. of then this sort to ask in about Understood. wanted pickup And the

bit give uncharacteristic relatively on us for more that color guys. something a If you is little you can

Christopher Becker

absolutely. Yes,

to have we seem up. seems when to LPLs, any come unfortunately, it So,

proactive that million business of contracts the we And created fourth was resolve and have $X.X losses There that that fixed-rate non-accruals. the took and we and price to grand do quickly. million had was trial C&I that such. and one $X a pandemic generally delays take So increases actually total about relationship quarter. it longer-term in to some a we due steps in It charge-off

balance charge off. is a little then over of That's that an in -- for, have $XXX,XXX over of we about charge estate. loan, And part fully just that reserved but $XXX,XXX part of still There's we we which that have one small residential a part a as that's But mortgage, on $XXX,XXX. that.

So list. we're business not a concerned in is even than SBA that about small that. SBA then $XXX,XXX business And there's that line, smaller, small less line guaranteed

million. there, below total in in grand loans $X the the it So total, all is is X million. $X And

Operator

Chris This floor concluded will the for now I Becker our turn to question-and-answer comments. closing back session.

Christopher Becker

want on and day. shareholders good Directors you of loyal a the I of you to first improving management on participation the focused today. Board We forward rest reassure the call and Thank look your talking and performance to team returning attention historical quarter. on our our are end the metrics. at to that of for to the Have

The First of Long Island Corporation (FLIC) 26 Jan 242023 Q4 Earnings call transcript