FISI - Earnings call transcript Q4 2021 | Financial Institutions, Inc.

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Operator

00:03 Good morning. Welcome to today's Financial Institutions, Inc. Fourth Quarter Earnings Call. My name is Candice, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for question-and-answer at the end. would our to of host, I call the Investor XX:XX to over Shelly Instructions] now pass like conference Relations. [Operator Doran, Director

Shelly Doran

now of detailed intended February over X-K. XXXX. Harbor for earnings factors Marty accurate provided Form exhibit as non-GAAP to to measures materially Providing from Director prepared other only forward-looking Actual President join differ a on call Safe discuss to note GAAP supplement XX:XX you comments Chief Today's and to Grover Community XX:XX today's Thank website and and for to are financial of will Justin us and us GAAP Planning that Plants. today's results XX:XX variety relating Bigham; and financial description certain that and a available of include as Q&A factors. release to Officer, Investor risk SEC and Mike historical you this and also joining of CFO, President date, substitute statements measures. an Jack We'll statements. forward-looking forward-looking Reconciliations Q&A. comparable will of comments Financial and the release includes I'll will be refer call filed XX:XX information yesterday's CEO, in turn statements. Birmingham. and these uncertainties measures Please measures the to earnings call. be Relations the Banking Marty our filings discussion a due may of risks, Birmingham; We for may for prepared X, not Analysis, CEO,

Marty Birmingham

from and XX:XX pre-tax our to income $XX.X million from and from was $X.X than call. accretion benefits third several increased consumer I'll quarter with strong businesses liquidity the Thank of of prior-year XXth. record with now investments. from derivatives grew per our share, from both We up $X.XX net growth comments was XXXX. the quarter income program, highest growth, few provide you, net XXXX credit in a in our loans X.X% residential by factors and another bonds X.X%, X.X% welcome declined prudent and and increase loans the including from of excess loans, were mortgage deployment our million quarters. quarter revenue tax by diluted fourth earnings decreased of estate portfolio forgiven the about credit Shelly. pre-provision million and the Commercial of reported million, loan It the Results and XX:XX a fourth morning or of positive impacted Good quarter higher September interest fee and Pre-tax second $X.X reserves PPP income. fee-based Total income X.X%. linked million or pre-provision loan XX:XX real the business positively $XX.X commercial credits. combined increase X%, release was and $XX impact indirect

$XXX from XX/XX/XX. the been decreasing XX:XX impact portfolio at total we commercial forgiveness $XX loans, has increased X.X%. XXXX and of million increased loans year-end to than with million anticipated business X.X% PPP at faster Excluding the PPP loan outstandings

commercial levels of we deal growth in been supplies have strong has banking Business team to increased see levels. of peak us activity. are real business supply by going more lending into a XXXX are and XX:XX cost activity XXXX. lenders in a lines experience Banking, our of XX:XX some unit, and share estate market This While in as from constraints, business the for credit chain customer labor C&I challenged In waning request for continue M&A this with small lending we quite for new in flow are space. seeing increased well experienced pipeline to high origination positions in combined markets We increases increase our time and activity, seeing liquidity

to known high projects. sponsors viable quality with We they're work presenting and quality continue

to and consumer to XXXX. auto good the to portfolio to opportunity the have class estate this at loans, credit contributing new in we of pre-pandemic continue materials lumber dealerships XXXX, as relatively operational XX:XX highs Provision delivery for characteristics. for and year-end of yield access leader credit XX:XX brought through as strong continue to decline the experienced levels. This strong Residential excess represents loans first a cost $X.X some returned benefiting the While normalize Our developers loans to year. half and a duration, with our in our experienced further to face short originations. increases down was XX% current provided some in asset credits personnel build XXXX, total in quality valuation, us fourth turnover to new to new we from network are and efficiencies to losses deploy million in extended performance quarter. benefit loan a XXX dates, a us The real have loan has franchise We've seeing quarter and grow the higher on continue recently compared credit prices and the of business of XX:XX product auto liquidity they're indirect in discipline. opportunities XX% high develop unit portfolio relief auto and positioning from identified dealer

the specific to fourth unemployment assets. XX:XX loans in forecasts, Continued release of reserves. reduction in these most fourth quarter moved at-risk COVID and in the to and quarter XXXX, to XX:XX the returned loans fourth was which loss $XX reserves credits our in million Many the million full-paying Year-end million, positive $XX pandemic to recall specific $X.X on in of from XX:XX intentionally have COVID $XXX the to you customers were we decrease the the criticized due $XX third totaling the XXXX, of third The in million. reduction to $X.X national $XX As million status the credit that identified quarter specific trends at-risk pass-rated. the and that in COVID a qualitative XX, occurred of factors down December loans, consecutive a believed driver reserves the the million primary loan was and million pool at-risk quarterly will of industries quarter. of resulted were of at-risk improvement and be end upgraded in

of million. in trends quarter continue primarily non-performing review of positive see normal indicators million these in with We of annual cycle with spring. will and of as time commercial credits there to optimistic $X.X were The from linked and mortgage loan as the the $X.X result this charge-off several charge-offs status. and improvement and credits performance return in we one pass-rated quarters downgrade remain the review the was partial to these continue a increase passage Net the XX:XX prior-year to credits

credit result million. a these quarter for The factors, from allowance down million to the was basis of on the in end, total by $X.X to XX As allowance quarter XXth. loans X.XX% $XX.X September all loans credit for losses losses points decreased at

as loans, portfolio the total the pleasure of has testament guidance. evidenced linked XXXX, since basis decrease by our million, the for the onset XXXX pandemic to ratio NPAs of PPP in did XXXX to a of in While quality. the loans focus additional to net X.XX%, increases and a quarter. credit we performance details Excluding on growth points $XX.X Jack continued demonstrated XX stabilization XX:XX experienced points over of charge-offs turn to basis and results now on XX:XX credit premier call XX my It's from

Jack Plants

quarter on Nearly accretion the vintage quarter forgiven revenue income with the overall the of growth all the basis $X.X key loan compared Net XX% Thank of fourth of FTE million, been for respectively $XX to have basis and points was of commentary fourth PPP fourth of interest fully $X.X of providing you, excess basis the approximately from vintage Marty. of result with Good and on up of connection million quarter related was begin the a cost $X the $XX.X XXXX of everyone. quarter or areas into performance XXXX, quarter XXXX of deployment was I'll the XX:XX higher the fee to loans, third million in repaid in Approximately quarter. forgiven in morning, NIM fourth with XX:XX quarter. investment than quarters forgiven in points XXX funds. third our million linked fourth from or loans third X as higher a million million quarter of X today XXXX. in basis the linked a and the lower the by and comparisons in as loans securities, PPP fourth $XX forgiveness and taxable points, liquidity were equivalent of in up XXXX. of XX:XX quarter XXXX

point negatively NIM X basis decreased decline the of fees point excluding the was quarter negative guidance of excess interest of loans, XXXX liabilities. NIM to and a of the interest decrease XXXX. Excluding XX:XX points, asset X due provided impact excess basis the in each the in X and we've PPP NIM to from a point XXXX. points in line year yields primarily prior of in and compared of impacted from fourth impact quarter X XX basis with by liquidity points the cost bearing a income impact The liquidity basis earning quarter, from PPP in quarter, basis XXX July third of impact since Full basis

approximately to on as of onset liquidity the third sheet, for incremental compared increase The quarter sources of public however, profile manage the are linked once of These from deposits higher in with to an quarter. linked been to $XX XX:XX again ongoing on a quarters. Our as forgiveness moderate deposits securities have which mortgage-backed or higher yield purchases through rise. continue to drove in will our average approximately duration million the over Cash provide Approximately rates of liquidity liquidity with that comparing reinvestment to focused We resulted liquidity for of securities million federal tool PPP fourth added excess than flow, portfolio this loans $XXX at that balance average the an investment balances in utilized when which public quarter. XX:XX balances. quarter have low-risk the seasonality average into balance investment prudently we the $XXX quarter. the allow low when begin cash million investment securities flow securities the generates management XX:XX reserve additional incremental the

higher XX.X%. $XXX,XXX redesign salaries relationship million banking largest Income the initiatives flat to value our $XXX,XXX employee based was cost much effective and quarter, in income was in year lower which down to excess bank's of from did limited of points seasonal was experienced which based largely we've and which increase non-recurring We structure. of higher in quarterly due rates XXXX. than of with benefits, the the an the comprehensive insurance been timing related remain a from the branch on of expense investments relatively was tax the a year to categories of asset in by digital was as past of $X.X the third of basis points. investments previous liquidity. which the changes $XXX,XXX to result transactions which from comfortable instruments, million, $XXX,XXX tax funds, in a the from and in commercial given up This level In driven policy with higher the Non-interest $XXX,XXX. rate data in processing, quarter-over-quarter growth retail are net and and on linked the of our of assets, Revenue the $XX.X earnings benefit as margin down computer primarily of $XXX,XXX result partnerships, third down a basis value. the have fair result of that which was was income XXXX compared and XXXX as in XX result Non-interest comparison underlying the with the capital customer XX:XX new Income XX:XX income the market pre-tax representing the XX:XX interest low-risk XX:XX X quarter, derivative renewals. the include position, of quarter $XXX,XXX XX:XX activity changes increase of down tax to Our severance was of solution. expense number technology, expense increase Effective $XX.X was impact from management an and quarter. performance million primarily

our our basis in to areas. few capital increased XX:XX regulatory X.XX%. minimums XXXX ratio quarter comfortably providing in spend X.XX% outlook the and Our like to the capitalized now above remain I'd XX ratios points from for next minutes well TCE key

the $XX high-single the to digit deposits. digit loans plan first remaining category commercial the mid expect three loan million for driving our portfolio of repayment in in growth We growth. this forgiveness quarters. or Guidance low-single PPP loan total during of assumes growth non-public with We

balance impact to partially deposit on offset these accounts forecast. most new consumer are interest expected recent account accounts average by the decline positive as commercial and new of an and the expect of outcome rate in per attracting We focused be the an

We deposits to relatively expect NIM to are fee of XX:XX projecting reciprocal points, basis year XXX excluding and full XXX of be we the public impact flat. basis Overall, accretion. points PPP

the increase a NIM we're using Although fed funds during rate economists guiding are an on forecast. XXXX, in predicting spot rate

continue PPP carrying in XXXX. relative to investment to our will although early There to expect will XXXX from relative NIM the We balances liquidity put in XX:XX NIM position, securities XXXX. carryover be higher to excess continue and due muted noise pressure which forgiveness on

year. excluding on guiding of impact NIM, last are PPP We as did activity the we

of deposits quarter fluctuate due lower asset where fourth While balance funding NIM and our our sheet given rates. our asset its and to NIM deposits balances to guidance rate the mix. and to are yields is was portfolio opportunities XX:XX loan rate earning seasonality of of public indexed and short-term average deposit our excluding due inflows limited both XX% the forecast, the is our higher a to utilizing reminder, for funds. In well are in seasonal to the PPP flat a quarters As public interest rising positioned the second quarters this the quarter on impact our invest environment, from a earning variable XX:XX developed our duration

environment. of limited refinance gains digit the activity non-interest growth sale to are on expect income also as income. income difficult projecting to a mortgage securities a investment non-interest revenue banking and and excluding in result such that of rate low-single tightening XX:XX lower spreads categories due in partnership are decline We interest predict, gain anticipated We as on

XXXX solution, mid-single $XX digital is range customer XX:XX spend We new are in range Our for to targeting our $XX the expected which enhancements an in digit further to in expense management increase quarter. to and investments non-interest strategic including initiatives, per banking million from banking-as-a-service. million relationship includes

one We a begin of over incremental we however, increase By efficiency back expect that reference, efficiency short way quarter third we in of investments short-term longer-term investments a to executed coming efficiency benefits. altered are example, of realized benefits investments revenue full ESP contributed our to be years. yet XX:XX record in the in support the year XXXX these likely benefits producing of making realized initiatives long-term XXXX, was For have in the our earn in on and our term ratio, XXXX. to the an inside ratio performance demonstrated

service We placed which tax in the an to credit the upfront costs XX:XX the aforementioned the range including investments of XX%, by effective in negatively range of We XXXX XX% amortization of the XX% expect a within fall impact efficiency our investments year, strategic and recent with impacted ratio has tax rate in to of years. for to XX% expect initiatives. associated

would further charge-offs continue positively taking credit our within of historical our We advantage opportunities XX:XX investment XX to to by to points. approximately tax XX rate impacted will effective tax basis expect and of be be basis range net evaluate opportunities. We points annual

That with outcomes. concludes call back I'll focus overall We improve line believe initiatives operating includes executing remarks. that Our now these my in that will results XX:XX strategic on return provided achieving drive leverage guidance Marty. time. over the the prepared profitability will to and

Marty Birmingham

Jack. you Thank much, XX:XX very

being past some that Our remaining cases, management and the strategic transformation future. those position a over of and evolution, risk lessons initiatives, We resilient and long-term guide shareholder learned for two value years company and on the of to focused lot frameworks into the our execution drive in and a team remains strategic are us incorporated nimble. strong learned the while bright

growth, the strategy to critical fundamental diversification sustained evolve. correlated expense of growth, revenue, business strategic XX:XX outcomes discipline continues practices high deposit loan remain Our and While disciplined sustainable of to and credit performance.

money outcomes, Recently, collaboration our the fintech the strategic leaned six takes their experience added as out for to is customer gives banking digital of broader send partnership. Star customers XX:XX and currencies. CHUCK the economies innovation will by enhance between that the and and payments digital of heart Alloy open Labs In importance are and the offerings capabilities the rising go. commercial have scale in primary will promoting customers a we macro by to XX operating to for digital of benefit customers cycle, are active reach that customers, payments want Our rapidly choice along consortium of the our have banks efforts leverages we the relationships. bank and enabled Five we and investment Payments the launch in our robust they banks our option money consumers. months we strategy over our taking our digital and payment while experiences account point digital both touch transformation recipient part of in two and forming trends, of CHUCK to digital power current from the coming where strategy announced Overall, continue planning XX:XX CHUCK, that choosing into XXXX costs. next the to During with friction and exceptional market their flexibility. consumer primary complementary response, several reach. payments network other additional of expanding allows payment hold

of of the decentralization together a playing behind maintaining blockchain of they consumers, the weeks ultimately to news not to and role an While respective downturn, why do could NYDIG if Bitcoin recent This our push is are interest strengths in benefit Smaller with nonetheless due Bitcoin finance. in to fall to services. consumers. great meet and while sound bring its has in been our change to technology embrace safe unregulated behaviors. consumers may is and providers certain That's financial banks system. partnership opportunity it innovate significant XX:XX consumer financial changing to a

our drive with to our lending and with small recently business that consumer lending increase efforts partners for origination, payments deposit among help will We launched addition In and digitizing create and are loan AI of is gathering further others. the collaborating decisioning in on banking-as-a-service XX:XX pursuing several bank Bitcoin, initiatives line business. efficiencies our

strategy is driving acquisitions Five Star find the the discipline are working on team. capital for of and to to both operationalize and loan and Our our program, the experiences. are markets and to X. the and enhancing initiatives optimize the fit we results. are our the and the viable our professionals to philosophy expand and was our to of capital and purposeful Fulfill. way Star Another working We've our continuous our balance of while our operating a that addition completed associates work successfully new XX:XX and embraces everyone customer of building human human period and improve strategy We City operating Finger lowering In undergoing healthy and and These provided services diverse analytics. a record organization office initiatives right inclusive people great making and in Simply attract, presence increase on of remote Five important the by workplace commercial existing to a retain nurtures styles The helping Buffalo, to and a in today of culture. and financial organizational right many finally, Star individual reimagination. experiences can Five robotics new our Lakes, have platform, deliver when and recognize of one time Insurance revitalization. XX:XX throughout strong and strong branches update and navigate are support we working or the April our are expanding an and all we resignation these And of our where human meaningful enterprise put, We two to XXXX open in growth, that closing fits right offerings all significant year customers in live and branches of Long-term pandemic, are way of in subsidiary, are in scheduled size urban of processes was business. to production costs, people of that's styles uncertainty. benefits with are recruitment access in go to the essential our commercial two and of not strong delivering of the continues SDN XX:XX in the approaches associates track skills new it's of our framework footprint. great for XX:XX strategy the offices employee ensuring and Rochester great and future, expanding insurance to Both in them and and terrific to in working, strategy rollout work. include refresh company components leveraging our to markets, is fundamental new area success strategic thrive. an response our the our benefits the future supported large efficiencies, standardization establishment talent develop the outside loan investments identifying to and opened banks we market resources that XXXX to the One outcome intended growth consulting redevelopment XX:XX ingrained and customer a context of the associates available ability credit linked normal flexible bolt-on

the Bank Star across few special XX:XX recognize available Five many follow website many community of organization their our ago our one operating encourage the Relations support. and Investor partnering We critical is each our to and Through needs businesses in and ups with my I development, this of have thank provide branch also numerous website. the We of lost our we Star commitment need on communities they customers, area, and new better customers and housing prepared want ways associates City our concludes York affordable and relocated our for serving the footprint ongoing this critical report the sight our and experience other hired area. financing To our the Bank projects the a initiative, downtown and Elmira provide to understand years affordable footprint. for and of existing support the a read across our I to XX:XX we debt highlighted XXXX, XXXX XXXX for with housing revitalize equity to state initiative downs mission report lenders included to revitalization housing. Just New geographic deep Five affordable lead and and teammates you never help in to other footprint. areas across many call we operating to their our contributions achievements. ready dedication the for communities XX:XX our for to to are sincerely comments, our Operator, open questions. my in

Operator

Thank [Operator Twerdahl first Our Instructions] Piper Alex XX:XX question of from Sandler. come you.

now ahead. please Your line go open, is

Alex Twerdahl

Good morning. Hi. XX:XX

Marty Birmingham

Alex. Hi XX:XX

Jack Plants

XX:XX Good morning, Alex.

Alex Twerdahl

costs question some Jack? didn't out First Can that see us me, for release, break you XX:XX but in the the severance you I said for breakout. just exact

Jack Plants

Yeah. XX:XX

the side fourth the quarter some that was about then the redesign the had areas in some retail during other to related of bank. on of I $XXX,XXX and and we it's think changeover

Alex Twerdahl

XX:XX through guide. new of Okay. then going expense just And the kind

$XX much due of kind up the you you going number guide, which I else And Can good in just to there is that out we around terms bit anything there? us think side, in as run be ramp XX:XX or $XX are the year timing a of the how of a each is fourth much said kind that's in then, the you of goes of for inflation, quarter there's year wage click rating million talked on? where how some that up of if of of initiatives is little million, these to from some is to tech for the break quarter.

Jack Plants

Sure. XX:XX

as the are of total million not third then that banking run million merit through for normal of quarter-to-quarter there's the and market a XXXX, appears underway, We the expense it's of is of platform, that that that's number far as $X.X pretty digital levels initiatives, incremental wage it for at rate to overall is inflation are good XXXX. attributable $X.X get And current non-interest adds then to quarter. stable expense at as strategy there's end then to really that's about any our outside basis, some increases past budget pertains out view quarterly staffing and rolled the increase on XX:XX incremental -- a annual expansion. did from of the form as there our So a in the far the for those CRM and upgraded initiatives use,

Alex Twerdahl

So $X.X could million of that say you in guide XXXX? XX:XX [indiscernible] the

Jack Plants

correct. XX:XX That's

Alex Twerdahl

Okay. XX:XX Speakers] then And [Multiple

Marty Birmingham

returns. benefits cases very very has the been conversation business XX:XX add enterprise out driving The And to costs, internally, lays efficiency in those of that, take things. we expenses. Jack in the couple investments, the consider of return, in rounded robust would allows the leading Alex, timing on I we're a that just as and position a through that a it clear standardization us, puts expectation terms us the incremental of

Jack Plants

initiatives the period XX earn of are CRM of years. platform others, XX:XX inside of about Yeah. payback two Several these months particularly, and have periods benefits a that back have that's

Alex Twerdahl

be XX:XX flattish? of beyond XXXX? just roughly expenses to is this how kind about 'XX that mean, Or I so does mean, set do I -- think in up it Okay. we

Jack Plants

earn XX:XX Yeah. the operating I'm going period. positive to back from but expenses, initial on initiatives begin not generate that past they base comment leverage to as XXXX expectation mature as these a

Alex Twerdahl

normalized today XX:XX your then is? you their are those -- what I kind about can prepared line Okay. just trending Marty, talked in you And where higher, utilization potentially rates level and think remarks,

Marty Birmingham

Yeah. XX:XX

in reduce our with relative and we're of So credit normal in to those business starting majority see to in all own hit for we've they're kind C&I and more balances that a talking particularly. lines the working to really terms fashion. utilizations the to of vast of their our And I -- lines of their think liquidity XXXX customers XXXX of experienced of starting we're modest commercial

Alex Twerdahl

XX:XX Okay.

the I C&I that course so be if that to if what And a associated mean, And be could of of percentage take to with value over -- you lines from just of step what sense with or just that and could give portfolio kind further of normalize kind growth a kind do us the piece? year? dollar the one associated

Marty Birmingham

relative XX:XX anecdotally that share and year-end So, closed. our XXXX then variance I just was in to at business gap performing budget with the C&I would a was negative

there there acknowledged my in momentum remarks. we've So prepared is that

Jack Plants

XXXX. from in Yeah. digit growth the high-single in Alex, budget at C&I we're XX:XX a standpoint, looking portfolio

Alex Twerdahl

XX:XX in that that is And the so question with COVID, is the that's could piece there to and of then specifically reserve $XXX classifieds just that even million on criticized classified? or to related a a from paying so before me, associated be just reserve and going that's million status? general there $X.X return and Or final criticized to or full those really

Jack Plants

There's for the positive at releases we them of COVID in performing stage think are of for well -- XX:XX to to reserve they're before consistency as this loans need I really $X.X game. -- we look passage their that need a and million there, about deferral Yeah. equate those time the of of to but reserves, at can release on couple behavior there are outlook that payment we potential specific so that we

Marty Birmingham

risk intentionally provide process is emphasize part bridges the our in would status. Alex provide those COVID bridge commercial We I criticized downgraded that where Yeah. COVID our we to bridges. XX:XX we of as rating

the So return course, our cycle seeing to go status. past the positive to this their as why anecdotally, will I those through said credits hearing natural very we're and is that's in expectation as review customers, that, spring we these annual as well trends

Alex Twerdahl

for Thanks my Okay. questions. taking XX:XX

Marty Birmingham

Alex. Thanks XX:XX

Jack Plants

XX:XX Thanks Alex.

Operator

Thanks you, XX:XX Alex.

Bryce to from Our Hovde. Rowe next question goes

Your open, is ahead. line please go now

Bryce Rowe

kind to of mind. Good loans margin, that is or to reset? immediate are morning. function 'XX? loans a Jack when speak might it you I just of maybe rate. variable indexed don't of coming those start of of if kind you more maturity the percentage Can wanted the a Is you're timing of XX:XX Thanks. when on to it the in some up noted kind seeing level you of here

Jack Plants

impact. are so loans mean prime that XX:XX those hikes fed an that Yeah. LIBOR, immediate to price tied and I assuming are have rescissible and prime

Bryce Rowe

XX:XX Okay.

might floors any And see would so of that rate from fed that no of hikes? positive kind you kind impact

Jack Plants

Yeah. XX:XX

we were ago, that years implemented unsuccessful floors get regard. to in try we as much As

So repricing the we instantaneously. now have of benefit them

Bryce Rowe

the you Ks, of kind then deposit asset the beta assumed the and of Qs those is in sensitivity analysis, XX:XX sensitivities? of analysis in And kind within terms Okay. provide that the what

Jack Plants

that and When deposits. XXXX cycle Yeah. to last we XX% hiking betas look deposit XX:XX the behavior X% it on our non-maturity fed timeframe, in back during was our to

So fairly of low in the things. grand scheme

Bryce Rowe

And the of cash Okay. terms flow what one one here estimated XX:XX at is then in maybe of here coming bond the portfolio, on the coming and off NIM, that year? last

Jack Plants

in and for flow expected analysis We're have Yeah. year-end million it XX:XX like XXXX. at we cash $XXX about estimating looks

Bryce Rowe

XX:XX for Okay. one And then Marty. maybe

little that prepared more kind You up of there position of would a comment remarks, that production loan made that production you bit were that possibility about offices the your or you you to new talk strategy? in mentioned think in loan about offices Can and markets. of opening if execute how on

Marty Birmingham

that experience type their native who footprint, supporting XX our business and on Quinn, early for worked teams to line Chicago one and of has commercial open commercial Kevin a Kevin expanded M&T of in and in bank a executive having Buffalo, New a from in Sure. our to that years spent of is worked named XX:XX extensive before activity. over the markets broad leads out geographic officers up with 'XXs York. having running them is swath Boston, helped of

not and activities where is necessarily for forward. lenders through located an and to opportunity we've would having we're think as help an play. I once lenders advantage is driven with of Consolidation we're is that so impact imperative be leadership in work activity our about new and can in XX:XX with work expertise the LPO us they like play Frankly, to are organization the experiencing to that continues there to that, can ours to Kevin's opportunities working do out it. who and are footprint. around think looking drive take to branch loan business and got it XX:XX what the network going expertise commercial establish market a our institution was. and where been Syracuse, geographic have also the is success And which digital of the in driving of next us we've technically being an help So out the So the

technology. well with drive we utilization work open balance but sheet leveraging activities, current our up customers can So, lending as through of to accounts deposit

Bryce Rowe

mean, you're XX:XX the. constraint it with lender open Okay there is most geographically, any really I it great. now, around landscape ads how I about geographies? to And thinking does the that's or guess, up

Marty Birmingham

by XX:XX Ideally, to know fundamental introduced so these the and discipline lenders. them walk being is getting get drive lenders people us together in get these I that would a they we we then we and we'll to know say, it's know through can forward much manner. know broader to really can can in most to geographies, and gate credit

Bryce Rowe

XX:XX your in Thanks right. Okay. I'll for answers. All queue. jump back

Marty Birmingham

Thanks Bryce.

Operator

XX:XX Bryce. you, Thank

Marla goes Please please question Marla your Sidoti. open, to next line ahead. from ahead. go go Our Backer

Marty Birmingham

think I looks like Damon open. his it's XX:XX DelMonte, line

Operator

XX:XX your open. Yeah. please line ahead, Damon, go is now

Damon DelMonte

Good everyone. XX:XX Great, you. morning, thank

Marty Birmingham

Hi XX:XX Damon.

Damon DelMonte

want follow the quickly outlook up hi, XX:XX So just to on the and to just margin there. -- wanted

year So basis rate any does not points XXXX and you're filing hikes. assume full Is XXX points margin for of a to for basis that XXX that correct?

Jack Plants

That's the excludes of accretion. And also it XX:XX fee impact PPP correct.

Damon DelMonte

Okay. XX:XX

So I'm I'm starting like what here. trying to trying get to -- a point to

So this XX quarter? points your PPP, was that and from take NIM reported basis of around you quarter, the was this had impact if XXX kind you

Marty Birmingham

Yeah. was XX basis XX:XX That points. actually

Damon DelMonte

points. XX:XX XX basis

it to echo around so Okay, XXX-ish. a comes

Jack Plants

our was XXX Yeah, XX:XX the of excluding impact PPP. margin

Damon DelMonte

it. full okay. it, Got to Got XX:XX the that's comes XXX where out. And the from there, XXX year then for

is came and you. basis you respect Thank forecasting of to reserve on feel down look -- you normalized Okay, portfolio? level. based level a over what specific the your the XX to What reserve XX with the you're the ex-PPP, of that's net have out it as like do helpful. do in Obviously, And basis to COVID place. you then XXX you charge-offs course reserve year, points points still

Jack Plants

could XX our expect be loan growth to stabilized. a XX stabilization a then was ratio those loans release with pre-pandemic basis it a deferral comfortable if So with that the those cover and expecting assuming in have to some them, And point are one coverage XXXX, really and CECL be COVID basis level. points reserves is current associated aligns day that there -- going XX:XX we our for of adoption XXX of the to NCOs we But ratio drop to coverage at bit of regular that normalized lower normalized level little we this seeing provisioning level. credit basis in point potential

Damon DelMonte

Got it. XX:XX

talk Okay, week the And the came guess relationship just and all with right, from I of out then opportunities more that? what term some could are the kind about last how ultimately just can there? of that helpful. a the new longer bit lastly, bank little Bitcoin that's you And benefit

Marty Birmingham

XX:XX Sure.

So couple Damon. comments, of

in agility simply we much connect and get with responsive the buy And us margin and be to the institution, it et we're of advantage internally, demand take cetera. ability to we. to so of have of banking. customer able would I convert to the would So great money -- York for talking for sell me, But able First to can all, terms sell and are perspective, technology XX:XX to it a and digital our that's and of intersection spend for terms in forward, into the trying sound Bitcoin. can't technically sell exciting They experience New can XX:XX demonstrate platform a it I make you we're lean think to this interest it. we buy, financial is so it, terms it's safe to and a the of institution NYDIG our nimbleness the case required and in how buying community experience cold it and think selling that in being about And DFS our hold to attack that that storage, NYDIG at is and and transactions we it. at would seamless it's of example digital cost use in from we're that it's you were you to And externally regulated occur these and opportunities. customers of a can terms of you it make didn't in whole

Jack Plants

is XX:XX Yeah. This Jack.

the relationship important Bitcoin think across evolve consumer both is and take their allows product us they to as it continue NYDIG of on that, I and platforms. other commercial with it our set wealth based to services expand

Damon DelMonte

XX:XX I That's that this Thank great you. Thank have appreciate color. all you. it. I That's morning.

Marty Birmingham

Thanks. XX:XX

Operator

XX:XX questions Thanks no the management team for you. Instructions] time, over will this remarks. currently [Operator I registered. pass the closing to conference At more We have

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remarks. to closing today's conclude for does management hand over I this call, So conference will

Marty Birmingham

and XX:XX have thanks was your Okay. for helping wanted us that little the facilitate It and call those in. this we Thanks much longer to support for called so a because morning in updates on look XXXX. to strategy our comprehensive the Thank for try a the you. to forward and following quarters. provide the to outlook our And building we company, on conversation

Jack Plants

you. Thank XX:XX

Operator

conference today's concludes This XX:XX call.

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Financial Institutions (FISI) 1 Feb 222021 Q4 Earnings call transcript