Flagstar Financial (FLG) 30 Apr 192019 Q1 Earnings call transcript

Company Profile

Participants

Salvatore DiMartino	Director-Investor Relations
Thomas Cangemi	Senior Executive Vice President and Chief Financial Officer
John Pinto	Chief Accounting Officer
Robert Wann	Chief Operating Officer
Ebrahim Poonawala	Bank of America Merrill Lynch
Brock Vandervliet	UBS
Ken Zerbe	Morgan Stanley
Dave Rochester	Deutsche Bank
Steven Alexopoulos	JP Morgan
Collyn Gilbert	KBW
Matthew Breese	Piper Jaffray
Christopher Marinac	FIG Partners
Steve Moss	B. Riley FBR
William Wallace	Raymond James

Call transcript

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Operator

Good morning, and thank you all for joining the management team of New York Community Bancorp for its First Quarter 2019 Conference Call. I’m now going to turn the conference over to management for their prepared remarks.

Salvatore DiMartino

Thank you, Matt. Good morning everyone. This is Salvatore DiMartino, Director of Investor Relations. joining XXXX morning results. for our we all quarter first you us as this report Thank and Thomas Today's performance Officer, Officer, by President John will of Robert be Financial discussion our Company’s led Senior first Wann; and Pinto. Executive Chief Chief together with Cangemi; quarter the XXXX Chief Operating Officer, Accounting Vice family Absent call is morning Joseph not could who us from President this Officer, today's be to due matter. unanticipated an Ficalora, and Chief with Executive

to contain Mr. uncertainties safe to from of to number to including future over Reform I that Securities investment for market of the cash that beyond legislation, changes Such its Before have policies. those made Private and cause financial and and Act markets; trends, income, and in statements of which XXXX. and company's the I regulation call conditions general which by differ harbor turn affect local many nationally company's and the other currently value intended flows factors, its services; are actual a few Cangemi, in read. investment other deposit, on a factors are its income or changes products assets, securities; the the the are and of may results the the net demand to statements in interest loan both economic rates, and anticipates in due covered prepayment be are company those this forward-looking materially forward-looking Litigation could comments provisions of Certain call will subject risks to statements changes Among control.

for be including financial the SEC also quarterly the statements conference period September release discussed non-GAAP risk You earnings this XXXX. XXXX and Form Form report forward-looking XX, ended will company's that on filings, certain annual release this XX-Q measures GAAP morning’s and in call. in XX-K reconciliations may find factors This associated includes the morning's of about with its during its more

I a the turn will As call [Operator for to recorded. go discussion, opening over Company's will now is please of start the brief Cangemi, who before Mr. performance, call today's lines this the overview Cangemi, reminder, Q&A. being ahead. provide a Instructions] To Mr.

Thomas Cangemi

diluted morning the results Earlier margin Salvatore. offset XX, you, discuss and we morning with the the has thank and webcast. on XX, XXXX good for to And ended operating today we first on reported company. common unchanged to joining phone months from were share compression performance. XXXX. everyone quarter of Thanks for ended $X.XX a this And We a leverage able and earnings XXXX manage March us three December operating solid XXXX months our gotten start you to as for good off some per three quarter. the resulting in the

which fully diluted was earnings are Excluding $X.XX per our also first more discussed in earnings share. certain release, our items quarter XXXX common

several solid to addition In forward. this on the us benefit going we company are strategies, executing other which also quarter, would results

of thorough of First, our we in branch resulting XX a closing analysis network branches. undertook

sold we quarter Peter wealth Company. management first the our during subsidiary, Cannell Second, & B.

of sale. the in realize will we will be by result noninterest cost level savings offset will this While substantially lower from income, the it

products service generate to employed by and entered our be but of further this in with forward We will very a be during are excited expense we we new agreement Fiserv, maintaining a having look result continue beyond. into product will year. will fee agreement fourth consultants still XXXX we us for the our income relationship reduction overhead This forth, provider with to our And associated base. a a partnering entire force. Third, third-party convert in Under long-term deposit agreement with the as non-depository system core of financial to account with services. sales them, large without processing this them. will quarter and This

the our year leverage. these to focus other like opportunities structure of course on sheet, out the size core right will as seek and grow we We operating continue over our continue balance to

annualized Turning following our continue growth, our XXXX growth assets X% were $XX.X million December or and of by highlights extent loan was to quarter, last quarter billion, to XX, March the in of this XXXX. to Total we of $XXX financial a up driven securities year’s an on the portfolios. the of basis, year. growth as This now assets lesser first in compared grow growth resumption to XX

$XX.X or to billion. X% annualized on Our an million loan increased basis portfolio $XXX

the real quarter our by multi-family in our our driven this our was a quarter specialty portfolio. growth The and growth business. had loan in During C&I commercial portfolio, finance we first estate portfolio C&I

our $XX portfolio in $X.X this As growth portfolio million the rate to is annualized. XXXX of grew multi-family quarter real of and has slow million line NYCB. a annual grown to estate business a that billion, $XXX as million first billion at of for Commercial The annualized X% loans to quarter X% $X.X result increased loans increased or multi-family since the billion, seasonality traditionally growth was XX%. $XX immediate compound $XX

XX% all multi-family, quarter in of the However, The to is billion money. approximately up has or which is and than specialty pipeline. billion XX% the in picked and pipeline very higher that we quarter's to pipeline were up previous with CRE as that the the reflected new our pleased numbers, $X.X common finance pipeline prior know are the demand $X compared second pipeline quarter, of pipelines

While pricing consistent. relatively rate of our been decline and our to marketing have spreads during loan been the quarter first unchanged continued the year, has current

coming of days. the the B have with to coming and average in billion three years maturity an up loans we coupon of $XX.X and X.XX% approximately CRE option next contractual multi-family importantly, More pricing

to of XX% of $XX.X deposits, annualized experienced we course the continue deposit that Moving very the billion. total one increasing $XXX or million to are XXXX, into deposit see first to strong we happy over also XXXX growth quarter with

CD strong declined growth experienced money also this targeted deposits strategy, in by of and we and While non-interest-bearing interest-bearing while balances, savings most modestly. account growth was our in market retail driven checking accounts

large strong conditions. pay of growth, we securities, we our deposit some the during investing result cash As position portion quarter refrained given excess as the current down borrowings used market from a wholesale a of in to our the of

now quarter. rose Turning points margin, the the our the quarter eight net interest the margin, basis six to and margin down basis. on this income points added as to basis same prior X.XX%, Prepayment was linked-quarter modestly

Excluding interest the quarter’s previous also prepayment the quarter line in would basis the quarter down net my previous six margin first for to been points, with compared have income, guidance.

expenses earnings million $X current in rationalization $X.X as items quarter's costs expenses, $X.X totaling on and our million included Moving certain release, to the cost. our in including million branch severance detailed in employee

on have XXX expense would down million our compared basis, the provided been $XXX Excluding or a down quarter. these embedded adjusted non-GAAP to $X we have efficiency last X% compared XX.XX%, quarter, to ratio items, the million guidance and total been basis quarter, would in the non-interest prior prior came points which

XX $XX quarter rose borrowings On of asset in total quality $XX points remained amount quality strong a million the front, assets. linked non-performing basis C&I nonaccrual assets uptick quarter to asset during metrics one or or first basis relate million, the the despite loans $XX.X of and million on to current an

of from and nonaccrual assets assets. Aside the majority borrower, repossessed aforementioned of taxi the non-accrual our consist medallion-related nonperforming

taxi our As exposure XX, million. medallion March XXXX, was of $XX.X

one quality the remain non-accrual of and medallions borrower, taxi Excluding asset our the measures pristine. portfolio core

program. continue we in Lastly, previously repurchase announced execute million $XXX to our share

$XX in of million or your During time my XX.X please to have you as the common XX first the quarter, I also and to the would shares but later XX. open quarter, repurchased Operator? Based of common of we per May will leaving May of payable dividend share ask to average aggregate, at authorization for price the we if cash under is million Today, $X.XX. price an current operator at the during a now are do the shareholders yield will within to record very shares closing feel best million note, Directors share for the plan. me $X.XX total be $XXX approximately per annual This that morning, we repurchased On million a remaining, Board on yesterday's the declared I all X.X $X.XX on price for dividend of remaining questions. announce average we the pleased today call week. represents of an X%. get dividend to free don't, to lines of that

Operator

Our thank first of go Instructions] here Great, from [Operator you. America Poonawala ahead. Ebrahim Lynch. from Merrill Bank question Please is

Thomas Cangemi

Ebrahim. Good morning

Ebrahim Poonawala

Tom. morning Good

the fund discuss in around would the sheet borrowings, here. guess around in I outlook you as be more just plan first the kind if to funding how great. – progresses less see also context from you forward. how going of terms your that you question of So of And strategy CDs, That could margin balance

Thomas Cangemi

Sure, sure.

we short down their were obviously the So should to basis Fed in respect Ebrahim to pivot that interest and I view a be But that term seeing visibility in came more term and QX. margin short points line would importantly, three with approximate six down seeing we're for given we actions the say and quarter rates their of anticipated.

for little bit this, at in with more growth half believe see come follow-up growth XXXX next in that we’re year, But in importantly, a to still second market margin calling the versus sooner year the given XXXX. of that NII circumstance, we this So we XXXX they conditions. given expansion EPS

spot given the patience of time, we've the a what's that declines, light of the had significant unique So long tunnel. there's but that we're a continuing end appears it in over NII the

Ebrahim Poonawala

that around XQ overall any prepay, And in activity signs given Understood. for expect stay we just levels? to being lower, should pickup

Thomas Cangemi

much guidance you payment you of, Well relatively versus pretty are we it it's it's as a but QX, was QX flat. give encouraging typically an been – aware don't on as pre

is So typically nice of a QX, but QX QX had prepayment. stronger amount than

and on And on consistent to think within big Obviously the marketplace level waiting it’s including there's as see. side, Obviously, wait regulation portfolios it we'll is there's our but on rent with mostly dynamics some know own, less I bar transactions think going refi other laws. think I from we potential adjustments sidelines. prepaid is picture that property been reasonable. the I the the the interesting

So year crossing successful growing very to say first the years strategies the reality our relatively about property time in existing grew deposit bringing we question good of that other comment overall were off over would Last customer the your deposit Citi the transactions our I on back and to had into $XX for encouraging it approximately of and dollar that that most money is in continued base. of every from flows. What's billion coming bring in on continue We XXXX XX% sheet. also we a focused coming are five and side, without is that sheet the on balance consistent. going And had were we balance are slow. deposit, you you

So that's a we structures very encouraging that pricings, Florida Arizona, have we metro areas. regional branch in have in do dynamic, given Ohio,

right of cost the manage the fund. opportunities lower to that institutional [ph] in the At towards money higher can cost than And So brought our assess some growth, the target money. some these and existing is deposits in retail that slightly money we having have of customer is of we same market. environment prior have side, of most retail unique campaign, on we type ability including institutional news that good hopefully The target margin money the which of off, base. is to coming from then time, XXcX that the we this the significant roll

of being those to about the able so shift short-term. to excited the some in benefit around we're deposits margin So as

Ebrahim Poonawala

to In a about million at moving this you $XXX expenses, came of annualized. run core equity that’s rate in Understood. $XXX.X

where by year, the the because of look the sale and the that for expectation the As the of guidance one, we end XXXs of more previous wealth sale low land what's given terms how go in of away the much your your by management at expenses year? business of end expenses

Thomas Cangemi

our Absolutely. on were We're where we goals. we focused of excited very are very and meeting

there. fine done One of in two getting the a things expenses, we've operating is job we our control can't

be quarter. down in to guide the the Just for I'll QX specific, $XXX

million. $XXX If that run you take that's rate,

looking our been can targeted went and at the has reduction today. the changes the real back at balance initiatives number expenses. from And announcement sheet looking very as These of XXXX particular at about going of looking to rate at efficiency at we're we accomplishments we've We've are initiatives. of we the excited lines to announced going forward. our down look run containment how XX% speak since So a businesses and headcount down of at approximately our the had We're significantly, in right our P&L looking size cost initiative ratio. to operating

we to say X,XXX XXXX reduction. XX% I'll let's just had equivalents a back today, which approximate So a X,XXX X,XXX full down of is under in time the, went June

focusing are sense So forward going we makes on here. what

prepared getting Our my efficiency high XXs, we growth balance should efficiency into about, ratio, operating and that up, once the sheet talked target type structure to as NII leverage we're the but in remarks kick to ratio. we start low XX% go

So guidance about million where very we we're We're number. comfortable our excited are. $XXX on that on

I that million to XXXX. was $XXX flat the it achievable like think and million off run seems last million, we're going to quarter in $XXX is for a short-term $XXX very

we rise We we going operating have continue hard, of publicly haven't expense a from balance yet, and reductions hopefully that to and I'm we're our sheet lot looking of other announced operating initiatives benefit the to leverage. grind at

Ebrahim Poonawala

moving core the remarks your thought any have behind process expense impact? one to not in Fiserv that? that? systems Understood. And last Is the and your impact to what's that easier just And bringing does make them there question. or M&A and any mentioned tied it are does you Like that. around Just

Thomas Cangemi

It'll of a patches the partnership make to obviously as that them, they with we that and look business going better of have the at we're in will be – docking going much we data importantly internal cloud IT, systems, because items going efficiency make together know look company us, to in easier a to more This currently. process. contract, a on the Fiserv’s going it generate and is continued chose in long-term and that. eliminate not opportunity chose be to the for that's lot they we processing the specific we've we invest road together lot on forward. other have computing are the I'm Down we'll are M&A at our to

it's of conversion start going We when end November benefit happen. at XXXX. slated the They'll the it’s And of far year. as are for, believe specific as the our is to I

us move to behind this respect further that'll the So with we of potential be forward systems. with me year cost reduction as our

an of we system. are as clients that other make or for This do company. clients at given at we other M&A look grow that look funding opportunities importantly, to non-Fiserv should onto an our opportunities. it we our look and and partnership More enhancement look other Fiserv only We transactions us base at hopefully to as more merge at

Ebrahim Poonawala

my Go questions. it. Thanks for taking

Robert Wann

Sure.

Operator

Alright.

Please from is question go Next Brock Vandervliet UBS. ahead. from

Robert Wann

morning. Good

Brock Vandervliet

quarter I'm Hey, may you of with start good at how ahead an what FHLB if looking maybe just that? on you've and just wondering of the you that could there update morning. refinancing the you and have year done remainder got you're this

Thomas Cangemi

sure. Right,

have billion. for what XXXX remaining about $X.X the we rest the So of

low-Xs, forward previous at in When in the to with continuing its that's already impact billion billion. that of $X in So at and $X I [indiscernible] type is $X.X news we we're the we number current announced this rates dealt X.XX we’ve last is billion was remaining of to quarter levels. higher quarter going with position We’ve we that repricing. that with The that with think is about good to have in a of $X.X billion with the would of dealt XXX. close say let's That markets, to the X.X% expectation The funds. cost looked at us. XXX range the rates, of raise FED November November approximately

the funding in more to seeing benefit importantly, on about funding for when XXXX you at is clearly we're getting But upper-Xs XXXX, XXXX, there to look past coming the we're think So which due you there the XXXX. past side. lower

above slightly market. much pretty that's the So

that's So opportunity. the

funding to we also that tailwind funding side. call company a pricing went for CDV forward tailwind where that company the going will the the given opportunity the that a on in the for is slight think mirror And market, CD So I'll potential be cost. on

move But the from pivot So the by bode and were. for we the this their a risk we're where last quickly company. We well liabilities given aggressive re-price We position, of Fed. year. Fed to up excited the should beta had the about lot had

Brock Vandervliet

of end a that to opposed given borrowings period of expected. down, rates to you change where And securities a up pattern we'd securities down somewhat seems borrowings much less kind terms Is of in it where looked as of growth in you may have as are, than QX bit be pay building were past? a the as

Thomas Cangemi

would Hey XX% and Brock have be I industry size securities to below, we between well reasonable. is should we’re say long-term our like still we'd more XX% to right the

there we're very at last putting been were the on not aggressive time, we year We've ensure we risk, right put duration we're proactive that in more securities. some So opportunity on to going yet. in and when

we the third and fourth other the in way. went built up rates it quarter So and

So quarter on the the first the we in that took has advantage rally sales in market. substantial given

plan opportunistic, long-term when over the So lot paying cash, what significant we is to growth on the liquidity, the sat was ahead securities and we'll at the grow we'll be the a XX% debt model real, and was quarter we next we be quarters we fight was say I growth and makes prudent but deposit picture can portfolio, of between for big versus on total down you it total deploy margin debt the securities looked that assets. it it down we million and $XXX get of sense us. course you'll $XXX paid to a to securities so million But the probably would to XX% see to very

Brock Vandervliet

okay. it, Got Thanks Tom.

Thomas Cangemi

Sure.

Operator

from Morgan Zerbe Ken Stanley. from Our ahead. go question is Please next

Thomas Cangemi

you? how Ken, are morning Good

Ken Zerbe

terms – and how Can Peter they you fees basis, a were adding on B. Great. to Hey, just doing well. full Tom Cannell much year the Thanks. both expenses? of about talk in

Thomas Cangemi

business income where expense, million so we're long a – a the business $XX with they had private. million the own expense that we million $XX successful the a company. about net our $XX a the growing million, to it's with investment of management about And a do buyout a total looking to picture big decent $XX We've – amount company tax And obviously very took much relationship. tremendous of so watching the a relationship of opted million getting into just they're them a were so them, was very under returns, line. and at it $X they had position but now and a relationship that's we bottom firm, it consolidated to very is of insignificant tremendous long-term had number. pretty We've where contribution approximately at with level Yes, before they

look cost initiatives, many happened the was on we one when it cutting of them. our be So items This to agenda.

that We’re importantly, pleased company. But focus to we on picture for private more again. they're enjoying the world the the have big

initiatives over clearly expense needed few that the small to too in on this spent business it So years was and we of just happened some some one at evaluating to time the be items for of and look we us. a past

Ken Zerbe

you release And that understood. you, sale? given lower fee income the press in in Got expenses also Were sale. I the was mentioned the noticed lower because the quarter, of this

Thomas Cangemi

Yes.

about So again the… and I very clear was

Ken Zerbe

[Indiscernible]

Thomas Cangemi

part run one the well $X million. But as as out Yes the the we million. Back XXX million, QX. severance optimization time that rate had payments the of We're charges I of $XXX in $X branch we a it. quarter clear of was of the to was took total for

costs, another about ahead bank of us far overall over was reducing and like We’re two FTEs payroll think and costs. focused that and on, healthcare big very as pleased. picture, strategy as for entire given a that. the There's We the of lot work quarters the we're

So leverage where then year right twenty. that now million that conversion, but do, $XXX balance have a the possibility from much expanding best into go liked now. flat we're growing, the operating how as are but other In fact keep and balance not with expense sheet we that's $XXX the We're the to get things scenario grow we run that benefits we we're real we the We'll we level. assets the and capability to sheet would to clearly next there and at like [indiscernible]. further there, on update adjustment and as million to and the going saying we the case we very have are margins along see base five during year going into move to pleased

So initiative. on are we're cost where cutting excited a we about

Ken Zerbe

just Alright, is what the can banks? one good other then aggressive question, picking from pipelines competition are How it's the being are great. are Thanks. Like last you in side hear And there? they but about right non up just now? which to you the XQ, of talk the seeing that,

Thomas Cangemi

going factors are and So personally right then space on. CRE space. skill. multifamily non-banks they And has risk sizing more management still the on there real, institutions I think to and some there's number I'm competition on the a is these look importantly, credit our at that of that believe Obviously

So invested think in ultimately announcement very closing the be that not we time, credit on we've a transaction. same time, in market. said, At went through management. we're and that risk our interesting the With a we to being heavily with of the position transaction great

to relevant in continue the be we market. So

And leader New of the been multifamily the City are dynamics York look City have you in commercial estate, We politics. New on going in marketplace. what's the in York for at real market to the

some four think able just items of five the be to lot wait see. there's talk this or it to a we'll now have are. property are news on have quarter and and what uniqueness good our results that property watching controlled the But do pike. The of on I And I on lot transactions. down democratic about three regulatory adjustments for hands months. are has right a the come with the what think But potential we next to We political waiting there's that in smart sitting of see position next rent happens to framework that this we’re changes may now, and table the and at a the the

we're – is building other this. bonus and business portfolio doing we're of refi portfolios very in our business model within focused the and and because very core is from Our without it. This strong coming on both our

where still grew anticipate now. the is we was are growth multifamily for we mid-single quarter, relatively So things right digit significant that a in book for the sublime us although in time reasonable and loan growth not

Ken Zerbe

much. Alright, you perfect. very Thank

Salvatore DiMartino

Sure.

Operator

Dave Our Bank, Deutsche next question Rochester, ahead. from is from please go

Thomas Cangemi

Good morning Dave.

Dave Rochester

Hey, morning guys. good

of management So in that the the already the a perspective fee that's business, a wealth hit numbers on sale you've numbers. sustained from Is the and completely right?

Thomas Cangemi

correct. Yes, that's

Dave Rochester

Okay.

John Pinto

no it was on It gain a was sale, wash.

Dave Rochester

Okay.

out So that's it. and came the $X million

it. following up your… And on Okay, then got

Thomas Cangemi

Excuse me.

Dave Rochester

all so income was fee Yes, that it. the okay. is million $X Got out,

Thomas Cangemi

Yes.

Dave Rochester

And then just NIM comments, on and following-up new you where and commercial commercial loan that on your estate this are on the then as seeing well, pricing real point multifamily at in? you brought

Thomas Cangemi

Yes.

reported billion a we about new our $X obviously rate average billion portfolio So pipelines that The $X.X money. of in which in X.XX%. is

Obviously CRE coming and in in between four portfolios the four. right quarters I of transaction, I'd in the what's as at but of seven now, somewhere that's a a seven-year and best five-year is given X.XX I the it So on we're quarter X.X As three interest that’s marketplace, high where as five-year rates say, on. the cherry well. depending still call look would at. that we'll X.X, parameters say looking it's in type the structure that X.XX, And of four quarter not product, range are, as the it's to to north probably four Pricing

vintage we are all as the than amount very interest are lower with quarters, we much multifamily, environment. of the And coming needs a means than rate $X.X That's CRE. for deal re-price or the refinance of pretty to here, going X.XX vintage the given understand the current from XXXX billion XXXX a spreads they So tremendous holding to is XXXX vintage That's about previous this X.XX slightly the approximately that although for is When up rates, have unknown. due. nicely.

paying money in in they So not to an rate significantly is the and estate, X% rate floating roll – they X%, the are them. into the close for if fixed they're and a option

the to we're are to market. they So around when come rates going to have come X%. market or And the to

to a us. that's So going be for catalyst

has be the get as single seen We all every to yet, going catalyst time to but into dealt of passes mean with XXXX in loan and I XXXX haven't closer we XXXX.

about the sheet. we're dynamic excited that So in balance

Dave Rochester

X.XX% XXXX okay. X.XX% saying and then Yes, for that And were as everything? for number I thought the heard you was that’s earlier vintage I

Thomas Cangemi

when of it's that X.XX% a CRE possible is just combine you X.XX% a to multifamily, X.XX%.

Dave Rochester

Okay.

Thomas Cangemi

$X.X we've is that we which account that’s originated the volume And yields these majority to see and anything the the those the This taking legacy billion. originated. XXXX that we not were most just opportunity So the is XXXX vintages. right are of lowest now

rate the if opportunity look this So you place. at the is current volume, market and given

As from long our the to that we’re current going not only and to market. as customers in have deal decision fall decision this rates And to don’t up financing. down only way dramatically cost the a is environment here, up, their with make is going not

obviously changes Now that for we'll significant but if deal with is that, XXXX us.

Dave Rochester

that the point and right? at $X.X it And million like now, right this pricing, sounds X% is you're $X million $X.X maybe million

Thomas Cangemi

quarter pipeline billion the rates what $X change but a is average million where the to Yes, of is We week. range is million our curve, them weekly X% literally in of which current in environment treasury pricing. new $X.XX with billion given $X.X $X.X and money. happens I the every is quote mean on the million We rate $X the depending

Tier and but have you're estate $X.XX is duration. somewhere X% say reasonable We the pricing pricing, around little real you versus million. four commercial X the X around into a bit Tier quarter would hitting five-year go And for will I to in be X.X when paper more a book,

Dave Rochester

you in softening new the money bearing Got side, were you guess there, pressures things? side the on bringing you. to And of of funding any have I competitive interest switching seen the then

Thomas Cangemi

borrowings, I'd are more say again the we because deposits, are expensive than targeting our growth, grow asset going and borrowings acquisition to environment. versus was

targeted are deposit kind the our quarter. to five-month the get to we people lower that able of a look if to to want first market, putting subsequent along, have been rate quarter we're So go in. growth money $X.XX we're program be they If a very million that's at pleased what rates, enjoy points. they basis we've in offering at very you And significant XX

we rate be relatively declining, tailwind offering this are million, four if $X.XX of the amount that we’re is. could And the reprice re-pricing potentially have now of the CDs may lot customers. next given flat year-and-a-half. $X.XX tremendous current the magnitude and million, rates It of beta catch to a to for not over where assuming we're be this minimis, risk the So but nice have because to $X.XX we next going year would offering and highest the there interest million is is have a CD de year, company a environment

CD So the we're at one year fact players million ago. versus five a $X.XX excited to about going are the $X.XX month that year that were category to customers million

Dave Rochester

And range? you then then wholesale year, were rest borrowings callable And or know paid this down? roll first can you you I now other How the that cash the the you've off role are the cash forward if to of roll of quarter to that Is still reduce saying have of much last in going cost X% through advances quarter. pay some the that you more as in right those them, low of to? where

Thomas Cangemi

loan some the low as XXX. transactions, We’ve industry and bank are as home done those interesting the low twos,

money, of we think type we left, cost anywhere attractive, coming have money, you more year due mid-to-upper-Xs. lot a some then But at if the very transactions. billion the from X.X-year X.X% And about risk is in that's portable So $X.X XX-month a what next funds. have to

on be tail levels. at funding – where these the in that indicated that now are rates went I another interest assuming the commentary side. like that’s previous And rate my So given could

Dave Rochester

some fund Can cash you bring anymore that? down of to

Thomas Cangemi

market, we So out duration druthers, try had average risk if in the significant there, cautious very had rallying balance put given want to cash to the because we we in the [indiscernible] get But probably we'd QX. a securities up. were our to

selling assets. So some of advantage we took

into being bit little in That's bought and So goal deposit up to should we again, going this of were will lot on And the we that of long-term very this and portfolio my loan say But opted an out liquid, more And we to didn't we per QX, some loan million move flows. this be quarter we of is cash securities to uptick a but very see. let's in And get X% deployed to take and we'll we’ll that $XXX quarter think importantly lot wait the guidance The call depending opportunistic. million of I carry anticipate be $XXX growth us a – to tight we're goal. market our securities growth. portfolio. X% is conditions. see whole to

think I results with the to on adjustments any City think, into they is York market still, on achievable. find I the rent out happens X% may the laws. waiting regulatory is what make New But sidelines

Dave Rochester

right? anyway, Right. Which out mid-June by we should find

Thomas Cangemi

sure time you have I next make to lot it'll we we'll of constituents June hard by not real the borrowers, news, you there because destroy Yes, are have think, where good this finalized. end know New brokers, around mean call here prevail cooler be stand the heads working a of And I real York and City.

Dave Rochester

you back I reach still you half, by just year, stability Maybe XQ, back talked would half. next to of it I the is some pressure expect through for terms one imagine the bit – about last NIM expansion one, go XQ, Yes. effectively kind in get of little a

Thomas Cangemi

of question QX But is QX, visibility the can second at and no the de very The I is that we at that or of margin were looking minimis. guess in come on expansion XXXX Yes. a where depending market sooner, year depression at the and bright is the deploy question half we cash conditions and NII beginning like.

three So QX. bips we were guiding down for

Dave Rochester

Great. thanks Yes. right, guys. All

Thomas Cangemi

Sure.

Operator

ahead. Please go is Morgan. Steven question next from Our from JP Alexopoulos

Steven Alexopoulos

Hey, good morning, Tom.

Thomas Cangemi

Steve. morning, Good

Steven Alexopoulos

if like Cree. reserve City think in a quarter, release growth drove higher finance the would the there What York specialty New the than would growth we I’d strong be it start, the I look quarter? content risk to the really in and loan So at

Thomas Cangemi

portfolio We where the that NYCB of number asset the it's on portfolio, allocation from. has started class construction left construction had portfolio. the higher the dramatically coming a loans risk have on we That's highest was than we the in anything its that is that so release

conservatively very this a the had late growth, solid it's just seasonality not bit on envisioning had probably catering every a is we've now see. pay, XX% business, look C&I XX%, selective – running the there. in at, is of a grow on XX%, little I'm probably On of we're for it's XX%, XX% clear, at I We to XX our we'll we year but strong XX% the should positive this book we never say XX%, we deal XX%, ‘XXs, book, at we we're turned C&I Steven. but very right see I’ll side be CAG what the XX% QX, down a been of growth,

not and market is been model. selective. we’re and relationships, you if is getting deposit transactions we’re senior best that's super the household would solid that strategy, just all be with this So selectively, a name business know relationship, the very know the that's When deposit secured it deals the would companies, have by we in I’m participating you nice

shop it is what buy-up a Boards the a they've So on of Directors job it's a a process, credit selecting it’s credits goes by phenomenal and done part. these most and other Board this approved for here, we Board have to

got coupon now, very XX%. we're is capital the of tremendous return around So about excited on it's the the right growth, returns, about invested X.XX%

and well doing team we're we in we this with losses. when same And for grow. So started continuing that zero zero with that's decades from business its been multiple the have business to

in excited flows can some multifamily. to alternative put So besides class least we these cash we’re of asset that work at

Steven Alexopoulos

you hold because steady were obviously really sharp I peers to do drop XQ? the a a to have being to that on prepayment and So able And in big market. wanted are penalty most what's quarter, in Why able expecting so. you not the income, see this peers going explore decline your versus reported here you

Thomas Cangemi

amount. portfolio largest I ways, dollar not that we’re in I'm Again on the but portfolio country different say that our total player not would drop, with a the for expecting

XX tough but time-to-time still So, prepayment. we is that of due the reported encouraging not be getting consistent different from you we with have money that high because should prepayment I from of number particular is benefits this, benefits which always for But a QX a given it's number. lumpy of size it’s dynamics the But we’ll is said, vintages, forward. move lot on dramatically prepayment to a close will the coupon going number we lot was – have that is a have book. number, decimal Like its coming book the that so role, that have

QX So into and April numbers I think and bad. sitting doesn’t too here May you going look start out we're the with year

pretty confident conditions, we're do going very of given transactions, rapidly lack prepay finalize market change the the in property unfortunately which things that So is could to going be want expect but New City back the risk consistent, way do July potential by given borrowers more may regarding to take marketplace, what given as into changes to hey themselves we regulation. low understanding York on complete and a of t

Steven Alexopoulos

Right.

Thomas Cangemi

we don't portfolio we it. for a that never of to guide for we control again, Steven, we it's prepaid, the we're analyst out that but for previous benefit it pleased break we compared But guide that number quarter. So yield kind don't of the it to decent book, a understand

Steven Alexopoulos

quite bit Right. are really And pressure, rent are regulations of of thinking building through seeing causing valuations? what the Tom what are on you there you there? but are a seeing slowing which volumes, Understand a

Thomas Cangemi

we that flow. you cash Steven, the embedded do, opportunity we customers again, a think we’re on lender to about lending see what are I would upside cash if so flow

discount players. So we're clearly, market when the lender, flow cash not a you

potential, LTVs going we the competition, of the years why other that's the based out, financing only opportunities underwrite of of agency okay, they on lower along we or look flow instead and to they structure cash and our five at or that choose valuation alike. our types work companies So opportunity insurance are are the than and dramatically of upside

portfolio improvements to cash on get impacts. So IAI risk-weighted, out But is to I but still have in-place to that flow. issue a think based and previous impact we big go we're flows and XX% year's cash current the portfolio, increases to MCI could major obviously, capital the have there and could back the those underwritten

don't we’re weighting I view. at always we with we're where insulate risk eligibility, really the underwriting which for conservative historical, So a the the target on look more learning potential, XX% is it, other – get institutions

Steven Alexopoulos

the Tom, you. sale squeeze if in. What transaction date Cannell more did B. I one Got And Peter could of the occurred?

Thomas Cangemi

middle throughout the was of It quarter.

that given But and into long-term end place So equity complete actually company conditions, the I we are year. is in to the – a of news and their it they last we against market markets, there was pleased on current anticipated was that relationship. a good able going run this good of we're and very private lot we're nervousness to good think they're successfully a at but

best go, was parties. to both are it We disappointed very see think them for I but

Steven Alexopoulos

So expense there's and through… flowing still a impact fee

Thomas Cangemi

impact for it’s No, so in there’s no netted out QX. zero,

Steven Alexopoulos

it. Got

much. Thank you very Okay.

Operator

from KBW. Please Our Gilbert ahead. next question is Collyn from go

Collyn Gilbert

morning, Good Tom. Thanks.

Thomas Cangemi

Collyn. are How morning, Good you?

Collyn Gilbert

I’m good, thanks.

sorry, the quarter roll-off? the some – book, borrowers your… Just mindsets a want And on yields just to know then the into And indicated, on, sense behavior the kind were? this loan of you are. depositors, what have role of to what corresponding drill get I of where of what the the actual Do dollars I'm you the

Thomas Cangemi

XXX Yes, so were origination so approximately basis points that, had benefit. we paid I’ll we – you about for off quarter, of give XX the it's had over XXX,

see that because good basis of but number, QX back numbers higher points. that's XXXX, we'd like XX going was to a Now, unfortunately, to

points. So and basis QX was XX

be up coming ago, but three and given yield negative years with X was the current it's within roll, the that news in So good is could stronger, trend where basis QX consistent XXX. is moving average the that a points right the to direction

it positive versus continue current going So change, trend, points inverted basis as impact XX what were the may where we going interest far margin a that we to we but us the given be outlook. and off, to That for it's paid we originate rate be could forward to the given to XX and meaningful as experience think from having points what go-forward basis be change been are delta today, rates to very environment. that's that anywhere substantially

Collyn Gilbert

yield… And Okay. that

Thomas Cangemi

right, know our at so as of you XXX move, on how activity but $X.X occurs, depending to now it’s billion ship coming right big a pipeline is much It's on. volume a and

Collyn Gilbert

it. Got

Okay.

have rates those to of especially do blended the curious, I rate a multifamily – the So blended is XXX specifically, or you was XXX those? that for

Thomas Cangemi

me. front that, of don't can to in with could I you have I back probably follow

Collyn Gilbert

Okay.

to… just again, – Just

Thomas Cangemi

days cost on to would XX higher. to multifamily been think average is picture probably that's big a I X% of coming and average commercial XX on

Collyn Gilbert

was X%? that it coming multifamily you The was said on

Thomas Cangemi

the XX a in about – low-Xs, lag. you’re you if quarter, Last always still day

where the will real number declining to tried booking, and hard it’s quality X.XX But quarter. – because environment rates close credit. asset again to close the a at save given the me, rapidly. was so that for are the closing very underwritten strongly at X.XX are, accommodate your have on in up that an you priced actual a could mean focused looking have that and it been are multi X.XX side very I rate we ends that we So just agreement struck of rates number, the with have I the from was X.X you you customer

there rates, So rate that be be right to going put where we let's to is – very the the size one, with choose in it we’re selective, way. credit

Collyn Gilbert

sensitivity trying No, back to the here. sort right. I to understand guess, on again kind you’re of just trying to of just question prepaid, Steven’s borrowers

what and – was multifamily So was the multifamily XXX the you rate do book? onboard rate roll-off specific was what on the then have

Thomas Cangemi

say probably in XXXs. would I

Collyn Gilbert

Okay.

Thomas Cangemi

and that in second. that, wrap can We see

Collyn Gilbert

Okay.

Thomas Cangemi

I think that’s about XXX...

Collyn Gilbert

just Peter so so the assume right? Cannell fee clear drop in income, then B. to should move, $XX like we be on million Okay. And

Thomas Cangemi

that items how and to of offset the into that more we structure XXXX. private Again, and to in that to are, our The $XXX feel to a been million expense number, operating we will $XX at this actually yes, you're to and part what short-term, are also grow going happen Yes. as we – look at be it $XX this to that million were they we of are of ongoing million year, initiative non-interest long-term invest going are but and over targeting last proud and income ways run company down, we're leverage will and very in $XX growing the balance – renewal, is off income compensation sheet expense going different strategy. this the part and institution and there and will obviously which get the be to their alternative we dramatically our they're grow importantly other has fee of was to to going is XX-XX the XXX the there, should out we of million

Collyn Gilbert

here? the on just or should be And growth just unfriendly I don't from you outlook capital but of stays to thinking curve about your book, How the dynamics in targets then a within or kind to holding, if is whatever. get know we Okay. and securities the allow your target capital. question repurchase the for loan X% share appetite

Thomas Cangemi

So truly always excess we believe our given profile, risk capital. we have

portion our as with that the acquisition want for to part that's join So I company strong and been analysis, that a deal pay and and a large priority. utilize the as authorization, continue call when is excess we'll repurchase substantial that our to balance when dividend shareholders, team which significant you priority going But million $XXX a the to always left, be M&A opportunity over But time, is growing million a we very warning very sheet, we've the look strong levels we're the capital were active offer our we'll which confident opportunity, with we not who of dividend close time capital we us, and still very over the we balance strategy. our at could our a capital The expectation maintain have very dividend amount, is which sheet $XX behind a it we be our through back grow to have to targets – have think payout unique, that pay to forward. as we excess we earnings. about our for shareholders a of

on to So acquired as stocks have yield, that part of the investment some their large it's owners family. always institutional, that understand smaller their in opportunity large banks the to say been sizable uptick these their they become very cash get of books, NYCB on flow, of of some helpful and we've a the

grow in lots the continue was the don't if as felt fast and as on be is very environment. we're for and evaluate that year, in conditions, do excess to we the have buybacks to got market think we and dividend going be on the and proactive. will we mode, on we volatile important, growth, out there at QX, But within approve given the consolidate us are different no go buybacks but come focusing we're appropriate that opportunities question, very we table opportunities we other be forward. focused we'll to QX, a But question potentially obviously accommodated marketplace, no markets looking to Fed depending last So, a things would very growth we'll was very on the capital, there's we're utilized one

Collyn Gilbert

Okay.

preliminary final to Just one quickly give guidance Any question on you can Cecil? sort tied of that.

Thomas Cangemi

good give on becoming to for modeling Citibank. but a and been that the I going we be were working mean, back place. this all things I tell be in going very number, like a you for probably required a one to not We‘re a that we've to CCAR bank, will us the when we're this having of will

a we believe was no that company. So to models that average we'll able seasonal very over life in losses, we’re average of we impact be place short history switch a low de a very backlog get our our have in to very the and strategy. minimis a given – And confident to of

Collyn Gilbert

leave will I That's Thanks, there. Okay. great. Tom. it

Thomas Cangemi

Sure.

Operator

from Jaffray. is Piper Breese Please Matthew question from ahead. go next Our

Thomas Cangemi

Matt. morning, Good

Matthew Breese

just was I clarification. Yes, some for hoping

you off But that cost the sub. sounds it fees noted $XX sale, million, relating substantially $XX to B. saves will loss in the in fees around million Peter Cannell coming the $XX the offset like by be On million in expenses. release

in XX-XX? will come out? is – is there’s So it that there addition Or anything there

Thomas Cangemi

driven our to rolled for cost initiatives. bottom are collectively. internal base, a selling off take now all have, strategies to go forth. back the just our our to party of impact by this we optimization, products looked customer we three additional be being that's going at to that and or financial strategy, going related in to own some some that line We’re we've class positive I one we people at This done have P&L, branch importantly, not quarter, more mean will it's the obviously the And looked company, book the is

$X million taking for So $XX and income yes, for that you’re million net reducing dollar tax are before around you've off of that under particular business off you just and dollar of million. taken line The expenses. $XX is of

these we all income quarter, strategies take benefit net will you the when However, year. the of have into for a

Matthew Breese

can a branch? strategies? number relocations And about XX talk we closures exact Understood. there of consolidation, you noted, branch the other little is was think I the or the what So and bit

Thomas Cangemi

Closures.

Matthew Breese

okay. Closures, what And that? from is the saves cost

Thomas Cangemi

Approximately $X million, $X million a year.

Matthew Breese

Okay.

Thomas Cangemi

not coming – think we so attrition highly there. feel at will And most real confident looking those bank, we to we're of deposits the any be

Matthew Breese

Okay. products, cost your financial what's of there? saves from selling the then folks And the outsourcing

Thomas Cangemi

Approximately around to $X the $X.X it’s million. same, million

Matthew Breese

Okay.

Thomas Cangemi

give so And like XXX,XXX, – the up a XXX,XXX revenue a up number. yield not gave is big the again is year, less it's than

Matthew Breese

included these wondering in just are XX-XX items from And XX… if a the standalone? really B. I'm Cannell Peter it's like

Thomas Cangemi

separate. that's That's separate,

Matthew Breese

Okay.

So it's really…

Thomas Cangemi

you when particular a these and take put have you're Yes. healthcare strategy, we expenses are like day expenses, to At impact the the three a we’ll line bottom – that it will payroll-related looking that at positive of in end with and costs significant. announcement the a call dealing QX

initiative M&A XX%, headcounts our So going get said cost like savings. since XX% FTE back our that we there before, announced to equivalents down, we've I got you are down XXXX, transactions

a it's of exiting just down not tremendous, a embarked rate upon on when now we’re had that’s actual $XXX run XX% million cost given we but headcount lines profile, on not this to journey and we million, $XXX we're expenditures. So our savings, only businesses running XX%

tailwind leverage pleased said grow as continue sheet be the in XXXX excited balance to going this operating see positive we in and up grow, the we and a as we least margins, company, We XX to could very we're a should NII, at So the very to the be be we're quarters declining it term. margins which for of where very through about. NII short starts are, – XX open visibility we story had is so

Matthew Breese

Right.

just specialty the little second bit And the about was quarter the finance segment. more portfolio of grew that. I the then a this learn to loan hoping that most Okay.

So the asset-based give in of dealer... are a us of lending $X.X much could verticals, three billion the how you the breakdown the

Thomas Cangemi

Yes.

of So XX%, $X.XXX that's outstanding and ABL is million LC, X.X, dealer $X.X $XXX financing is about is including LC. and the finance XX% total about billion, X.X million the $X.X billion, XX% $XXX the so under billion just and just portfolio is were $X.X yes so – of about the about about, which billion, is equipment our so including

look we the So – probably the for right each we were all side, XX% a XX% equipment finance. bit bucket, on in, to equipment been have long-term about now, at finance it's trying allocated more little over

Matthew Breese

syndicated? how book And is much of that

Thomas Cangemi

All of that.

deal. We we are short at in Board a work credit what the We down those I we buy we not credits transactions the previously, turn like we actively picking – our for that do said of look see. drive is bank, best the of and XX% involved

downgrades. had a we We pay, we a delinquency, a late credit haven't had haven't had haven’t

bringing on We we're very a are where in small laser asset we deposits, deal, just high in secured a significant driving because deal. piece senior take participating not profile quality, of syndications that focused we’re not we’re

Matthew Breese

loan deal? book? of size in average the that average size what's of the And what's a And the

Thomas Cangemi

would I we to that, don’t I want XX missed that there. me. in coupon the the to XX But give don’t I probably have back get front of by XXX, to say about that is got you to I follow-up, between information can

Matthew Breese

than is vertical predominant any more that is And there others?

Thomas Cangemi

when very paper we’re lot it's No, from we avoided economy But we on them. a of GDP Like regarding about a going oil we tried stay cognizant we we what profile, credits. to any issues said, we risk oil areas I XX% throughout out. and the the avoid of of had We've widespread the away be down see turned and could and see. what's what of we markets

that have bringing that's deal, we’re commission based have a we paper not flexibility, driving we So don't employees. and of on headcount

do a great the a small and razor we focus job for the bank they of group raise, in see the smart deals have pick best choose can We participate. on and they’ll

Matthew Breese

Understood.

Okay.

Thomas Cangemi

Sure.

Matthew Breese

market just us M&A couple of strategy for a deal My size remind you Can on geography give appetite the mentioned last just the update quite, your you deal and flow? conversation times activity and us metrics. And an for M&A. in

Thomas Cangemi

about we’re excited disciplined, very we've we're opportunities. – the most But So been right. importantly,

our down take going So tangible we're not value. to book

to tangible dilution. value So we at is to of book have look creation benchmark anything have going a a

meaningful see mean the but never, have our our transactions a of and the we’re the making acquisitions. and M&A announcement our philosophy. our in opportunity never in we very business backs. $X in We So has to looking on earn of we're an say don't that do of obviously scale, growth and cognizant to hallmark be mergers large XX out very there is what's lots call seen to has I strategy, want all not of we're and not from which back, growth been any that, billion earn small, reality that’s DNA of in that’s part focused

an lines run the to asset value. of in quality razor the our And funding tangible biased could bring a shops, bringing So we're which book so our are any however, with focus towards of years, perhaps very on transactions bringing funding. be our that, we is We're are deposit on are going any our we've as quality assets. to impact partner M&A past also a not to long in we’re reality of discounting in in off continue that the we away to focused don't not take the But asset two business, in a of quality, focused is we miss do obviously, base accretive right strategy and position grown helping on line that fund in our finding growth we businesses.

Matthew Breese

Understood. Right.

for my questions. that's Okay, Thanks taking I had. all

Thomas Cangemi

Sure.

Operator

Partners. go Our next Marinac from from ahead. FIG Christopher is Please question

Thomas Cangemi

morning. Good

Christopher Marinac

Tom. morning, Good Thanks.

towards year mix CDs or ask the where to want evolve a about funding Just Do funding. think about continues you stable? time to stay as more this

Thomas Cangemi

It could – mix, rates. competition high more has interesting from a think, I be there of given pulling where been away lot

that news of some are on good focused down. very the players So the their bringing rates Internet

one shorter, looking the financial franchise, offered we small institutions, there. have very they’re I and and when that at customers to inversion trading are the products been brick let's presence think have are you on by say at I two So willing have where so going an are, mortar to much what treasuries you year think a basis that's go we on, look Internet

So importantly, really I targeting customer the seen think haven't the as fact that base base. non-customer the competition is we come more veining, should bode for well But yet. through our us

I XX% the like So so new commentary of years customers, been it's said on my X.X money. only previous XX% has every our dollar is bought into from

But income hope the flows to it the which will going long-term money, and demand-type our the leased been down are So nation. has duration. think presence pivot from I into it and focused in And into cost helpful money to that like end we the new strategy. towards is, are we where shorter and be the major deposit since base, have that’s the some the seems reality the throughout commercial we over estate real on bringing the today, more we fourth now rent and back could think buildings long-term coming of personnel more that like hope that I be these Fed tap seems a more get more money quarter, of deposit customer flows

we’re our fund helpful for as sheet. be going to us will balance we So – that

we side. partner look a so, on the M&A And at find to

would coming the markets. an going best the is retail two to to less is for year the to mid another event which lower, obvious, was we it's XXXX, possible and of will in continue and addition you’re that's be looking that that's And more was us. we much the rates it be may material of in book fact funding refinance the when than balance wholesale In higher last be may go attractive lower go sources, our grow mid-Xs this ago – positive years future the structure cost to current But becomes environment that of wholesale sheet So have we're wholesale the with the deposits. Fed we it and several due. at quarters it into up back

So lower. it's maybe low not as towards if are a going painful potentially buy twos with score and rates

Christopher Marinac

Great. the folks than more work in you you That's incenting the on past just branches had curious helpful. there? in Are

Thomas Cangemi

we’re putting that money will going coming rates we we've as advertised to I side opportunities York We South are New regional to regional grow. nominal, a have down get CD recently say Ohio payments flows now tax about we’ve I have competitive continuing right in in the in think retail-focused, out these in all mean, the be – is the would I adding other bank are payable, that as in the in a that of still to lot stand be deposit market, going again more Metro, unique alike. pricing, in their and I so regarding well reality April. But Arizona, be position Again, deposit weeks we not it's we're X.X we very pricing coming people on Florida, presence think than We're the just not lowest, lease growth the line. offer rate and some to be we're going deposit to in, highest right ago money our and to going now going are reduced to and the to

growth, reducing So we're we to we we’re cost out money funds of going off if the can higher cash, go some sit into not on portfolio, institutional cost retail roll excess our money on what's strategic benefit on as ourselves that depending real so by of make save not on we'll the on some balance let getting the going QX we the to cost them on to of decisions type going sheet, we’re some on margin higher have take, the side. money and

Christopher Marinac

Thanks very Tom. Great. much.

Thomas Cangemi

Sure.

Operator

Moss FBR. next head. from is Riley from Our Please B. Steve go question

Steve Moss

morning. Good

the of how quarter of and mid-single the well, be of kind at front. there the the wondering maybe, growth for we into as terms our down on range the just Origination digits quarter, low loan end get down was pipeline you were second or could digit year-over-year going in Just mid-single do

Thomas Cangemi

Yes.

billion $X.X of billion that you money, guess I at and $X if encouraging, of new that's look the money if growth. its new that's new pipelines So that

is on know high, billion refi, we them coming $X the typically depending XX%. we have So much we on we how which retain retain typically on on,

we the getting banks. money think multifamily where So to a of you the thereof, practices that. the what's we're in lot think about about we do that I lender statement, and think spent property money but risk the if by we year, ensure that, past be encouraged transaction other a lot encouraging lack rent credit regulated to to about there’s are And management from we’re with the growth the on are in I business premier most

been So – XXX we a cap have has cap don't lifted. that

lot of on and think spend on position will we're comfortable some position have managing and very money to our that's I going And here. other a going have up that banks we're get take So to positive, the to there management of our to a opportunity. capital catch credit risk think advantage forward I OpEx

go that us is of where view, other what the we ran think without on could to business, I capacity driven view was We're So can to the my raise for transactions, the business last it's it do has need focused Last it's – the regulated years rate, in be. they of we of happening, internal been their two and the exercise transactions bank and But as past reasons, to but we're probably in news in restriction a other getting importantly, market what very to far not more year banks a as be the we their place good are can stock what's level on business the be painful property the decade, from preferred being premier more only capital. for money task, good because the put and lender in not – behind they we rich to value. with that raised on are their stabilizing capital be marketplace. property own various a and

Steve Moss

Okay.

Thomas Cangemi

If still it's we get growth. through refi it other portfolios,

Steve Moss

That's plans helpful. further rationalization coming just And up? are then any wondering there branch

Thomas Cangemi

X.X to years, we’ve time-to-time. Yes, and particular does the make true at to a overtime, the deep-dive we look exit the batch X.X within in so what past years, cost back, were this from get earn we it there try yes, the hard took sense now we on earn back versus first what's

is may DNA where looking consolidation environment the – overlap of – part to financial of comes perhaps, branch a think view. I when come at makes what institutions, there that the but sense joined we with on that's and acquisitions on perhaps point at some event other we that we look in to some our it

it, the money these fact So $XXX a we branch the do a realistically reasons focused leg street we’re is environment have it across and that exit, $XX where first given de what of you we two one very back. as the it was one of was XX to have first and was back we’re and – with are on going really deal the costs like the that's to year XX, compelling and in and earn the did, real and earn the minimis analysis think losing exit has lot driven, that it current million financial to we – our and will are was million, a it was

Steve Moss

Alright, very much. thank you

Thomas Cangemi

Sure.

Operator

from from ahead. UBS. Brock Our Vandervliet go next question Please is

Thomas Cangemi

Brock, you’re back.

Brock Vandervliet

Yes.

the… my Sorry on just follow-up

Thomas Cangemi

problem. No

Brock Vandervliet

FHLB mentioned do year? how year, next that mid next Xs the it's that you On upper the to that – much what's you passing, of have for roles

Thomas Cangemi

at XXXX, then might to be we about about well as X.XX go $X.X billion It’s may in X.XX. And a X.XX. at its

trades right now. below that's So encouraging that because we're doing

like long to in our And you some that obviously a way long overall to the growth with. get we pressure take retail through we away deal going the would term borrowings of internal So that's that's with wholesale M&A. deposits have mixed replace out, our to with

Brock Vandervliet

Yes.

Thomas Cangemi

I the to will over less long-term long-term. on funding wholesale think the reliant be be strategy

Brock Vandervliet

Alright.

NPA what's million loan that the there? $XX and follow-up a on Just outlook loss expectation

Thomas Cangemi

of soon problem, Legacy to Bank it. it's one-off, probably work quarter of customers Again, this decades. We're a a turbulent himself he our apparel porter relationship, up a a multi was in customer I got never on miss his just went and one bankrupt. The It is little had to goes tell. non-fashion too very long-term had caught back name payment doing guess never our guy fourth a a Atlantic wholesale has

went had a have just we the and our evaluating people bankrupt him in a order that inventory. out we So difficult there position. put collateral, large We're of counting very

cash any think day have in don't to We old at have the million we total. collateral, receivables, material we we it's going have $XX the it's inventory, but the again, end of be the but loss,

exposure. the So that's

Brock Vandervliet

of And of the box in the knock terms Okay. Fiserv would that M&A? out a transition anything there is deal regarding

Thomas Cangemi

if to all one have Not get on be lots done the chose at the GL with excited. we have is in many about long deal platform opportunity. you years about consolidation, partnering, our they This chose we're the through be our we're current to patches online, years We will And to bones think deal excited and We're the super we to term, for systems, of patches we're of on unique all. platform conversion [indiscernible] that this the of our opportunity one going table, going going loans, No then Fiserv, a here we're with growth. us. multiple year. systems,

relationships our happen be utilized that think in other institutions. not and very may the to of consolidate benefits for go should End that because the tremendous have when be good cost we initiatives saving – company XXXX eventually XXXX this that some partner we savings But will cost opportunities. we historically we cloud we've we get story. So into can get further this

with many M&A it conversion as them. Fiserv, we to on typically contracts, So sheet historically are balance part But the way for easier of on by and our going that's – have much that the get preferential strategy well. the they the arrangements make we with if institutions growing opportunity, are

Brock Vandervliet

I it. follow-up. Got the appreciate

Thomas Cangemi

Sure.

Operator

here Our is James. Raymond William next from Please go Wallace ahead. question from

William Wallace

Thanks.

Robert Wann

Good morning.

William Wallace

of Tom, of I'm want beat I of some a morning Good make your to dead to expense. sort But around commentary sorry understand horse the sure kind I here.

or you're for So at you're at get the second million quarter, year second million guiding a the $XXX in the you're $XXX $XXX run you're to you million quarter? to you're where the be think in so rate. you Are that saying going going

John Pinto

$XXX simple four first mind you you had quarter hit Yes million math the times XXX one million. time, bear $X in to charge. the have But

an folks it's I times being think reduce see raised have expense XXXX P&L I’d expenses. going quarter the grow, I I’m at opportunities and giving look possible, on the of our guidance expenses to to to forward. see two over I'm – kind analyst, And going you one branch to take we I'm anticipate in multiply I is out that the onetime expenses the four we're company's saying million. to $XXX as out, wouldn't, get up expenses by you closer the trying If back time. don't growing. XXXX, I to you scenario. I'm base because focus XXXX and you our XXX I one but one the when a severance don't if further on

benefits can the operating is in now asset the again get EPS NNI on then place, So have leverage the meaningful we we have story and growth some [ph] up to growth.

William Wallace

Okay. tax? then at like rate, did you Thank helpful. you. looks your XX% expectations XX%, on That's just on were tax And change housekeeping think, you suggesting you're I

John Pinto

Yes run XX% quarter quarter in a in is to for would end XX% We’ll between probably I fair. but conservatively XXXX. XX.XX%, somewhere XX% a

William Wallace

very Thanks much.

John Pinto

Sure.

Operator

to management like This to turn session. the concludes the for I'd back question-and-answer closing comments. any floor

Salvatore DiMartino

when interest taking to performance months to for end us NYCB. forward again XXXX join look you for with we this June the three you the will chatting for and and time the ended discuss XX, Thank again our your at July six We morning in of

Operator

today's teleconference. This concludes

again this at you lines Thank your your disconnect may for You time. participation.

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