BDGE - Earnings call transcript Q4 2019 | Dime Community Bancshares, Inc.

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Operator

Good day and welcome to the Bridge Bancorp Fourth Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions to ask a question. [Operator Instructions] Please note this event is being recorded.

I’d like to turn the conference over to Kevin O'Connor, President and CEO. ahead. go Please

Kevin O'Connor

the thank and be And conditions. as joining today. questions our and insights us - on results I'm Good call regarding we our our you will quarterly will by about some sharing discussing well John performance, market strategic and I initiatives. as joined McCaffery morning. CFO, as for bank together full general well your year take

quarter of am a this I to historical $X.XX of net report million hit income $XX.X per pleased that EPS with high share.

loan These million funding Our in impact reflect income geography continued earning portfolio. was full the our growth and costs year to $XX.X XXX of of of a share. and evolution results assets, the management aggressive mix the of

fact true the despite over of proud our I'm balance NIM last direction, maintained sheet the staying especially management. changes nurturing two growing a X%. deposits a of by to to years of this we've and approach consistent Fed taking in core thoughtful strategy and done two We've that

$X.X most a some in offset XX% originations to fueled continued exited - our the key some strong long-term lift of loan Western markets their growth experienced a in core our loan the sizable customers billion. in helped Our loans resulted as addition in producers markets new in growth These loan and successfully increases the lap of businesses. we paydowns several our to portfolio loan activity of The commitment overall types. net strong and

sales, best basis. large the products an on strategic rate deposit to and of assess decisions impact our to it's considering this business de-emphasize deposit given to In flows aforementioned related higher performance, the deposit average some

basis also XX% past over of grew interest managing quarter We've cost DDA two percent million of with very year-over-year deposits of by of was XX growth versus and is aggressive the QX these Fourth bearing the total the X% billion, deposits. $X.X cost XXXX been XX% in points. deposits and the representing deposits or down quarters, IPC $XXX

loans in billion. average in momentum growth $X.X last assets and assets total declines of positive partially an with versus of in year, and XXXX X% was we by asset offset ended earning This other resulted

From a and course strategy bear this in smart are stay and we on teams, to hiring who continue branch to technology, perspective, strategic on partnered fruit. investments focused by more bankers people with continued making

loan This experienced our net in contributed a portion of year an in significant those markets growth or we XX%. over Western of XX% uptick deposit and annual markets

and of expanded helping well launch to offerings the customers. existing share new in drive products relationships new is our as market addition, as In deeper with segments,

should of customer few This banks hemp Earlier our we extract New [ph] banking the process CBD. York to companies reach. this to with became year one offer industrial permits in and to grow traditional services expand

We checks site. businesses recently is the other versus many functionality acts competitors. This differentiator that customers launched to as on considerable allows print official of a and cash for existing our share value

engine to and launch XXXX, internal decisioning freeing timeline loan originations, reduce reducing small development significantly are we technical in significant planning with business friction. small to finally And and the a with customer credit associated loan resources work up

and greater to turn on in margin over I'll to expenses. detail other and discuss specifics this the now income John

John McCaffery

my Thank intelligible. meeting the us you, you I for Kevin. transcript, And be for those best joining to and morning, do thank this all will

the that. right to after morning me get Let

XX compressed decline. will through basis by of quarter-over-quarter walk big The NIM you parts moving I a that points,

resulted the in in foremost amortization bond depression portfolio increased prepayment higher activity yields. thus premium and First

loans another rates and deposits. has the Secondarily, to in phenomenon with do changes timing our of the on

deposits Fed lower, moved move. and we was rates move several our our quicker effectively some we larger as more During than and the the our deposit to loans. lowered quarter, Fed manage rates the before were accounts Therefore than impact third

Additionally, our more immediately. rate loans floating do reprice not

part up monthly prime deposit a rates, Some could Therefore, with and or LIBOR. falling story that be to catching [indiscernible] rates. adjusting of whether the the to the of the loans through up take fourth quarter

third of X and basis fees credit to not lower new quarter. has [ph] by points fourth and usually have deposit the in to loans At point, renewal DDA about continue manage rate the of Lastly, near increasing enhancing cost lending this interest-bearing floating-rate quarter our deposits. the occur do – our mix the that levels, adjusted we

that deposits deposits. growth high broker compete the are [ph] loan for Most decline came notice to down the late IPC quarter-over-quarter in as of with [indiscernible] will rate quarter. You cost lower we replacing

loans the we see So will in full those effect QX. of

forward, hands margin. our support will interest our all keep on to net we Going levers

swaps loan our bad higher. income impacted are These drove non-interest

press in make of transactions the want financing. referenced overall the yield level flat As the low these curve release borrowers and long-term to low attractive rating who

the fourth pricing. fixed over quarter and of effect in are swapped basis QX. In to loan [ph] we XX close giving we factors the These for $XXX in up million loans, continue versus us still points only

up growth incentive were incentive our accrual our to fourth due pushed linked payments, Expenses strong mostly expected quarter higher. payouts on basis, cash income for quarter a and loan

several We to forward. expenses have instituted programs control going

guiding the add the coverage [indiscernible] to basis time. specific basis We We significantly to we includes this about are last at committed year as not quarter. far from This of in are ratio and which have stock stock the is X At where reserves points process. authorized our this our phases support during ratio testing ratio using to time, second third buyback did are has points. CECL a final we of This still an our it and been historically.

a rate [ph] for of XX.X% XXXX. We are tax estimating

make some closing now remarks. will Kevin

Kevin O'Connor

this to related several John As margin was factors. indicated, quarter's contraction

funding costs performance deliver believe us with to to capital and achieve coupled and our will in income focused to expenses our manage we ways, manage ability aggressively However, multiple non-interest targets. approach a allow

results prudent to and Company including shareholders. related you, to was they positive management delivered in decisions, the for to The continued those confident the and make team our our our capital ability tested and XXXX to achieve I'm ability

now I take the will this turn operator over questions. to

Operator

Please first Instructions] The Will question ahead. Hovde Curtiss from [Operator comes the from go Group.

Will Curtiss

everyone. morning good Hey,

Kevin O'Connor

Will. Morning,

Will Curtiss

quarter swap the fees. on strong a Obviously,

and curious I'm income So about maybe for fee the then should and to we expectations your first quarter, more quarter should or how how broadly, the think year? Thanks. as look about first this think growth just we we

Kevin O'Connor

Sure.

So - I mean, we January do - have closed loan in several swaps we swap already.

We some the have pipeline. in

quickly but some these QX long borrowers still think pretty those in as we’ll the And again lower was given be follows I going who to So reason they are that go to it the rent want not to again, booking I they here, rate in new as of environment raise coming long to rents keep City, past. rate going term, in New as lock is we have regulations to the strong longer have borrowers QX, since for York the they're up as as environment. able multifamily fees. think feel

those the year, think the are we going factors this going. momentum I can going that keep So together to into again for - keep is what the quarter. And

Some from of actually fees are generated of the swap refinance existing loans.

as out there. refinance in So we and loans come can from that be want that think people to benefit there much as I that also renewals are have

Will Curtiss

and hires year. as And thinking And to you this opportunities you're the do know you brought all the year, maybe past on have I'm number about that forward? of you of board part just for wanted last then then - Okay. I curious, mentioned how producers additional strategy the ask, going

Kevin O'Connor

other this many I them of to time earn bankers not the having get as the each people to their going they're side when we're between they going to bring is bonus with [ph] the where on throughout want we're to the on. to of people dance guess out set producer net and had next year. a year it begin half we increase say and But X dozen conversations it,

Will Curtiss

Understood.

change? Okay. the last then fourth accretion And quarter for me, have or one for do number the just you the any

Kevin O'Connor

number? accretion The

Will Curtiss

Yes.

John McCaffery

The premium piece… amortization

Kevin O'Connor

was Premium a points, in X amortization, quarter it of is minimal, dollars X couple million X thing. to think basis There's basis I that. of Purchase accounting only the to it's believe. points X that I whole last

Will Curtiss

very much… Thank Perfect. you

Kevin O'Connor

but and last quarter quarter was I think same. is this second less, than the about tracking quarter higher the usual,

Will Curtiss

Understood. Thank you.

Operator

question Bishop next David ahead. Please go Davidson. from The from comes D.A

David Bishop

morning. Good guys. Hey,

Kevin O'Connor

Good morning, David.

John McCaffery

Good morning, David.

David Bishop

sounds the third that some obviously there the quarter. margin know, elevation on you were in quarter, - Question some pressure in noted the the there like fourth

on some room it we see had can think pressure you see in do do of yields asset stabilize the stabilization bring most here side you year? on it of expect you second curious Just some pressure you has cost the the a the before you half the to Do – been bit do little we'll here think or like deposit felt sounds and down. more you

Kevin O'Connor

have we far we those as the think them question go. I the I past, mean, part the the off for do I can loan, I think loan most as repricings in offset things. think of is

the a desurge look, to quarter the being can second forward. I be think deposit kind across we We the quarter, of of track think going so of same benefit. the that If on kind quarter of level, kind that's where fourth we kind you third

David Bishop

I the mean second sorry? delta you and So between the am fourth, the

Kevin O'Connor

Right.

the quarter that kind bit - So sustained in quarter the quarter should think time. the able that a rate second cycle. over noise be a second given of of - and was is XXX, in the was There's back We're cut of move range [ph] prostate forth, those little and loans also deposits be XXX. we but the to fourth period

John McCaffery

And occurred of and in the on reviewed I releases early in the would quarter think that the were more many and early the really in third moving rates has as I've fourth continued know, quarter. you we that competitors in our of fourth,

continued you think liabilities. I So down repricing will see of

Kevin O'Connor

when rises. over had bank rates customers and rate some kind cutting came a some [ph] [indiscernible] we kind anymore they better who get can than of told they we of kind go were back do who that them to can We to of

kind on cutting I is rates on the of everyone So board deposit. think with getting

David Bishop

curious then how or And new how that coming? third yields coming quarter of just weeks relative it. X its board, terms maybe market the in to compares loan and yields so are new Got on

Kevin O'Connor

about on loans was yield then was come on because of it in fourth the lot multifamily had quarter in quarter we the So and new were the That loans a fourth X%. swap.

with - again But of for better term expecting to us. especially base anytime go I that one’s longer some a for the this XX – feel floating-rate having rate. [ph] the points multifamily up no We soon. So assets, is money of think XX, having basis

C&I. the producers mortgages we the on QX certainly X%. some So - year focus commercial X.X% this new on during in the over with in themselves are at more a little but of and business focused The C&I brought came

to So yields. up, we're changing get better loan going mix the by we're hoping

David Bishop

desire and it And some lower quarter, control the multifamily of like it. longer. some to driven maybe - rate in was fourth sounded of lock by then Got for commentary, the the just the obviously, a growth rent

As in you the into any expectations out in of pipelines, for longer? sort XXXX look comments your of terms

Kevin O'Connor

bank growth the of certainly We less a I expectations for and than multifamily entire year commercial are last we more for - mix was loan for in guess, less it slightly is in are XXXX, our XXXX [ph] of loans the targeting year.

sit where we're at not looking and the - we think curve margin and But I rates in strong the in or less are we current pretty single paid each high pretty we to with we still close grow environment or the on, piece getting high is we yield were, have past. as digits. put

David Bishop

then rate outlook question. year? this John it wasn't clear the Got tax one for it. final And

John McCaffery

We are saying XX.X.

David Bishop

XX.X?

John McCaffery

Yes.

David Bishop

Thank it. Got you.

Operator

Scattergood. from Erik Please comes next from Zwick [Operator & go ahead. question Boenning Instructions] The

Erik Zwick

Good morning, guys.

Kevin O'Connor

Erik. morning, Good

Erik Zwick

about Just looking deposits X% growth deposit talk up factors base in success of at up the at demand to total for XX%? what deposit I is just in in what deposits, deposits you from XXXX were now and Can year-over-year, ago. about down, ratio that represent deposit X% and guess, deposit while remixing were IPC balances now balances are a XX% you're contributed expectations the year your loan total XX% change the

John McCaffery

the deposit Kevin that remember few other the us about money quarter, he we that moving last in we investing of year have, this Number in business. you year-over-year. kind referenced, first in in the one - from customer kind a So moved the He has had sold did talking of we deposits that this business deposit parts the if had sold he things. then and out, - we're we gave we large one, is

go was account. X% [ph] from So, paying that about down, you about one money they we to were and other rate accounts in them market people. know, that money million The started also still and XX-XX $XX getting were just X% we

savings another So we that was go, decided million, the that money that to accounts. that was $XX

growth DDA is of So there that's flow that. - was just us. the out on for some ground The boots

exited account haven't So rate broad-based money we the the haven't seen that or in cuts based - get market upon QX. a bank we leads savings of we seen

deposits They to reason pulling we find. for transaction they need that highest chunky out had we're just rate the are that to getting more have people they not customers in that chose - that were paying we were we - so for, places. the They other money match highest

Kevin O'Connor

the really I commercial in us. line mean, lines we have we've bankers credit. that them deposits, the those had from flows of big a of comes that from DDA ground. generation give sort exposure their joined on and really customers They move increase

participants. driver draw really that's they sometimes Sometimes of the the they don't, but

Erik Zwick

ratio higher? you're or deposit bit expect up letting appreciate for And I growth the drift there. would a deposit loan you color the to, to you loan to match year be growth little this comfortable - would

John McCaffery

it little loans, I'm deposits everybody. comfortable going this grow lots it. of I'm I'm to expecting up forecasting put higher. year. think the in challenge how I drift front with commensurate positive into bit momentum certainly letting there's not a of a And we That's that's

Erik Zwick

the to kind growth of a start. Great. we XXXX, side good kind level is the And expense in perspective from of terms expenses programs quarter And ‘XX of curious rate first quarter year? then throughout of several in one expenses just should run just fourth in how to the place then the think about mentioned you on manage

John McCaffery

XXXX should So quarter I XXXX than that lower say first slightly with QX. would the for be

a year than to and X% asset drive little bit higher expense little to but X, it the get in - won't goes bit can the on we we the came are on back We on. ratio, down more a as you

of the so - we're expense going be say will or not back be growth, we're our to balance the will looking on income getting prospectively sheet We the ratchet kind we budget to know, at expenses. you

So we’ll over looking keep out the year.

related floor place we and and in that were year The to running some for manual were growth - new a and the put system we on expenses doing growth they're that then concurrently. software

So who doing we those other people things. should it review had a manual we - to to as are of fraud able be some

in branch are have transactions staffing people branch the we to so a make employees especially We universal, or can are slower. task looking the at, model, different our in when little look are begun branches, nutrition, manage they more do bit

numerated talked replace up loans that some putting control in far We free going about or we the origination as product on so before, things Kevin are space more, to have go. should I in expenses the people that there is think and as loans few them, other you don't on -

well. there this marketing western we I Marketing of at focusing new Director we're how think some bit dollar remixing place we're year, a that in which as each venue, back as looking different on our our and sponsorship spend a changing by have little cutting spend also the on – and we more is markets

Erik Zwick

And to the an the estate where are multifamily finally, give estimate real think ended of quarter. I total given you. year, just the and you're the end in fourth you growth commercial third CRE quarter, Thank XXX% around the at capital of strong

ticked Just would curious, little expect I a up bit? that

John McCaffery

XXX end year. of the at the

Erik Zwick

Great, so thank for you my much taking questions.

John McCaffery

welcome. You’re

Operator

The comes question Piper ahead. Sandler. Please Alex from next Twerdahl go from

Alex Twerdahl

morning. Good

Kevin O'Connor

Hey, Alex.

Alex Twerdahl

you fourth quarter. the huge XXXX. fee the end income, And is the for in like quarter more seen growing that the appetite going at Just storm et could to ramped repeat foreseeable - swap perfect of we've that Is and the which we're is that rates a future? the is through do quarter to business big the think kind as going fourth that is of least or is really momentum, obviously back kind you up that for – a like of now be through of quarter cetera and a

Kevin O'Connor

It the we together. still month, it's the January factors close same still we is were get to place so all reasons QX. for and again, I doing overall they're financials increase in are kind a that and in in those January, people of tax in of getting think in loans two slow did in

it's loan quarter - fourth think I a originations. is to So quarter more busy the for typically going and

year place, year more in throughout as conditions So then the the stay goes do can on. we

I it it you second you year So the or business up, it's quarter you quarter is itself. if based whether the think but know, kind ramp first last the of upon the of close

get, be when at timing we’re customers' get second the happens, quarters. in we So, can time if as we control and different them, close growth in still - fourth seeing that chunky but number that would last may to certain do behavior we great be year's come that we it points differences can in to do if

Alex Twerdahl

Okay.

of comes range to if lot everything year full the in in $X right? it that that volatility goes a So $X maybe that of million kind line

Kevin O'Connor

Correct.

Alex Twerdahl

seems then, the happened into quarter just strong mean first the of rebuild, growth backlog. given head as loan the sort Okay. pipeline the that it And late quarter. like to that of maybe very it a Does and the you kind lot of in was into a

good pretty actually the loans quarter? first closed to for So ability the in

Kevin O'Connor

First focused of is behavior going quarter because on. peoples what's and

-- showing in pipeline money new Our and million XXX is of refinancings. kind $XXX of, including almost

at, I fourth. So will in if think you we began down XXX the and it's about look

Alex Twerdahl

XXX. a about Down

Kevin O'Connor

Yes.

Alex Twerdahl

the you the Okay. the just And from prepays margin handy impact just fourth then in have on quarter? the

Kevin O'Connor

Year.

the a MBS have We the just to going portfolio? say, on lot. am Are - I it's talking you prepayment not

Alex Twerdahl

be there but paying is attention we the quarter timing of fourth anything of was versus seems kind for most coming else the the what just funding yields - loan a it of of real the Yes, to? yes, costs the in be of of I'm sense driver by it that might the kind driven like quarter, non-recurring that mismatch trying kind to to third right get margin, should down,

Kevin O'Connor

Yes.

loans $XXX,XXX loans or point the probably amortization on the prepayments you versus was impacted, quarter, an that's second on - portfolio. probably the X quarter, a fourth prepayments increase had premium make to depends it on portfolio want on our –how you about basis So want in the how But investment in about the it. the

Alex Twerdahl

Versus the you quarter third meant right?

Kevin O'Connor

Versus second quarter.

Alex Twerdahl

second Versus quarter. a

Okay.

Kevin O'Connor

into Versus as quarter. continued going in it ramped because the quarter the third fourth and out it well third, up the

X So versus quarter probably third points. basis the was

Alex Twerdahl

great. Thanks All taking right, my Okay. questions. for

Kevin O'Connor

right. All

Alex Twerdahl

from [Operator question Collyn ahead. KBW. Please comes next The Gilbert Instructions] go from

Collyn Gilbert

Good morning Thanks. gentlemen.

Kevin O'Connor

Morning, Collyn.

Collyn Gilbert

here loan came bit that this that loans the the quarter? yields. came wanted to I and some right, kind what make this the, know the loans of blended the multifamily a little on origination the I on sure understanding into multi-family you so dig just dynamic were this was I'm quarter, But on just what yield gave of

Kevin O'Connor

quarter This XXX.

Collyn Gilbert

Okay.

guess like you're it perhaps you're of but So I about of loan it even if to kind I moving a flow-through I question if I I'm the meaningfully. or you was the on seems guess second. you're the the lower and yield what outlook, I'll for now to the guess the know as like that really ask seems - yield where understand which at quarter, with, assume portfolio to below can year, and maybe this is they talking came I for market I shift don't if it stuff deposit mix compress. outlook But - know seems year continue just the of and it it then want XXX benefit trying fairly and for reconcile you - looking of that XXX the we most but that on coming you're quarter just say

you loan maybe year the where I more on the the could quantify yield the bit in as think But go just yield little side. as first you progresses? a mean, can loan compression

Kevin O'Connor

there. ahead a not acquire because rate, the maybe So I floating jump up we're giving X just XX fixed I'll for market loans looking below - maybe we little multi-family reason bit doing effectively rate XX about guess to we're what a basis [ph] points year were did

of go it's again I but pre-multifamily. the So portfolio, from be mix loan rates maybe mean, going up, focused to on going forward, away to

for coming extent, think multifamily it's still smart putting owning it's extent, multifamily - portfolio and the mean, they're can some But upon how if that fees I I but an doing more against To to swap a them, refinancing much on more good yields year, again, much the the we no more we have again, – compress having We how fees. loans. for loan compress we can multi-family. you based margin do mean can between

John McCaffery

I XXXs pipeline out I if mix the that's the that average - mean, that's because look The weighted look there of on of it. commercial, rate part the I of today. in is

the mix little a of of see while greater a through a higher going fourth we C&I, So multifamily, bit quarter ponderance was rate. which XXXX carries

So…

Collyn Gilbert

Okay.

John McCaffery

for Based yields flat upon loan our projections the year. of stay kind

Collyn Gilbert

Okay.

John McCaffery

have The in forward. plan our point going we mix

Collyn Gilbert

then Okay, And then just deposit got it. on side. the

higher of on higher the below those rate Just of curious kind or and you're rate market are where products rates the now where those some if on rates CD are those offering your some of with products?

Kevin O'Connor

- So consumer with high just the we don't here rates. really rate – our - and I have really rising, years. come the market, when don't we time products. those and there [indiscernible] actually sort and at think that lost our out for and CD in have We trained, have have base lot make don't But we on - customers a rates at we of we of looking of the don't kind a and higher don't CDs we customers X that's for our money our don't attempt branches they our were one X%

we’ve the – here we below I always been So are side. guess deposit on

banking the XXX think money deposit last commercial I is franchise, quite years a the is toward geared over geared which dozen honestly the market. we've really DDA, deposit built last franchise toward are that reflects years

So your for liquidity customers. excess our

peer. below been we've So

up. are rates QX below going are We

below I down. go rates think we'll peers be

banking loans. they it bring success deposits is relationship, about and it commercial our A our of much the about of in, is offices measure the

in size DDA, DDA - so side. what, we million in the I I $XXX think feel it's continue XX% and to when billion this $X mean was And XX% company

to So mission. our we, we've tied kept

value most is proud the we're and this that to aggressively. continue franchise of and deposits that we'll point it's the manage that's of that's So

John McCaffery

money deposit the fourth feel it accounts those kind through that of we our went account and the to of there how do and individually, our with and third in time. bring As guess we down rates like - the we we customers. one lowered go had market at priced XX% of rates quarter, that third were I in in upwards

So I think deposit door, have dangling you the there, have, when don't that say, we out was to that just people the we way. but a we bring in get record

Kevin O'Connor

X think the points. might right I way basis be

Collyn Gilbert

Okay.

Okay, very good.

I think I'll leave it there. Thanks guys.

Kevin O'Connor

Thanks, Collyn.

Operator

This concludes our turn conference question-and-answer over for remarks. closing session. to I would back any like O'Connor Kevin the to

Kevin O'Connor

He of he that the markets so we walked our appreciate just connected to about much friend if in the I great guess, to I week of to I ago years bank, will and I indulge opened take to all customer us be some ways thank passing us, of the a want big was of proudly. to. our people new park. from, by a And I again around Fox. as - this a was a the a dozen and of want of advocate moment, our loyal everybody network he the in I you missed want Roger take grown that. these introduced when the mine first in branch me acknowledge I pin talk and He we for we've customers of look at one of wearing businesses bank, He that Deer moment

We're prospects the about for again, you. thank XXXX. So excited

different to conversations you to make about through events expenses that and manage adjust and we've cycles, capital our right sort of ability the think I decisions as will occur. demonstrated

forward So each to again, talking to And thank I you. look individual.

Operator

conference today's has now attending The presentation. concluded. you Thank for

You disconnect. may now

Dime Community Bancshares (DCOM) 30 Jan 202019 Q4 Earnings call transcript