Flagstar Financial (FLG) 31 Jul 192019 Q2 Earnings call transcript

Company Profile

Participants

Salvatore DiMartino	Director of Investor Relations
Joseph Ficalora	President and Chief Executive Officer
Thomas Cangemi	Chief Financial Officer
Ebrahim Poonawala	Bank Of America Merrill Lynch
Steve Moss	B. Riley FBR, Inc.
Steven Duong	RBC Capital Markets
Steven Alexopoulos	JPMorgan Chase & Co.
Moshe Orenbuch	Credit Suisse
Matthew Breese	Piper Jaffray
Austin Nicholas	Stephens Inc.
Collyn Gilbert	Keefe, Bruyette & Woods, Inc.
Peter Winter	Wedbush Securities
Brock Vandervliet	UBS Financial Services, Inc.

Call transcript

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Operator

Greetings and welcome to the New York Community Bancorp Second Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I now like to turn the conference over to your host, Sal DiMartino. you. Thank

begin. may You

Salvatore DiMartino

today’s good Relations. This for And of Bancorp management and Director joining Sal of team for Community York Investor thank New call. morning, you is everyone. DiMartino, the conference Thank you all

the XXXX Pinto. with Today’s led will Robert Chief Officer, Ficalora; Operating by second Officer, Financial and Executive be and Chief Officer, performance Chief discussion Chief and Thomas company’s John of Joseph the Accounting quarter Officer, President Cangemi; Wann; together

there management, this are few turning forward-looking the harbor to Before the Securities Certain be on over need provisions we made statements to Private read. safe Litigation call a to by intended call disclaimers contain the Reform covered of XXXX. that Act comments are will of

are cause its to that to from subject differ materially a uncertainties and of actual beyond control. many the factors, to which statements company anticipates could those risks are number Such currently due results forward-looking of

both general affect and Among the are may and those income, markets; the company’s which company’s other nationally in net and factors prepayment legislation, economic in flows rates, products cash local services; its market income value and loans its changes other interest future conditions including securities; and in regulation in and the the policies. for and deposits, assets, changes changes financial demand or investment of investment trends,

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

being recorded. in time, today’s reminder, participants At are this a As call listen-mode. all is

following Instructions management’s You questions will be the that at a ask will remarks. time. given chance Q&A during to have

before I Ficalora, brief opening who of the turn over will will performance, now, the this go company’s overview Q&A. Ficalora, ahead. for And now Mr. call a provide start please discussion, the to lines to Mr.

Joseph Ficalora

and Thank you, today webcast, Sal. quarter Good thank and morning as phone for XXXX us our operating performance. to you on discuss second we on the the results and everyone joining

this months we months XXXX, XX, XX, for June from the earnings $X.XX share per common Earlier of ended X ended morning, the diluted March unchanged XXXX. reported X

We are interest which hallmark second on operating performance deposit growth, strong asset highlighted continued and with relatively margin, stable pleased very always, as net focus our during and our quarter, the quality loan has expenses, lowering a the our a metrics.

and and borrowers rate well the longevity given we market, given long-term segment of market. in in standards, positioned Furthermore, its environment, is multi-family rent-regulated interest liability-sensitive the with expertise our our the underwriting our lower for York balance landscape that the the relationships in estate believe a real and this company New sheet the City market, and changed brokers

that impacted. To rent like I would to this comment are before we new talking end, about the and quarter, how our regulations performance on financial

this and environment. our the market light guidelines we and importantly, calibrated our practices, In in active the continue to we borrowers. credit continue And we to underwriting risk an with evaluated to new of have regulations, support will more will new participant be management underwriting appropriately

in current, involved a not based been in well one lender of lends this which always in type has And who have conservative us this this been in the actively served we lending. We have cash space; on conservatism projected, years flows. XX

of compared to the some low many LTV this see our As are should additional we therefore, new you can morning, our by portfolio the And competitors. better regulations. lender information under perform provided a much of

market; of Great dislocation Recession, in be a driven. or in the driven, been always credit has the like event bank the it beneficiary multi-family Moreover, main you’re

and be grow seek there exit spreads. players market, our at other the portfolio will dislocation we opportunities take to of As this to wider advantage

moving quick performance. summary quarterly Now, to our of

December XXXX. driven increased X% at growth portfolio the to overall which during our our level basis basis, portfolio, grew finance quarter; on was XX% Our $XXX $XXX million, and C&I annualized a the by This an to second nearly increased million our strong growth which million due $XXX compared on XX, specialty including or loan multi-family portfolio, year-to-date in business.

Growth a loan billion, $X increasing multi-family $X.X a of third by billion loans the into under at was of annualized. to More or the our of importantly, which heading deposits, continue $X.X just robust billion pipeline, quarter including year, X%. rate grow, year-to-date XX% funded is

has in [ph] been The [C&D] majority growth the category. of

lower to an continue Federal pivots the will Reserve once we forward, our deposit to costs, Going environment. easy

for interest prepayments, the $XX.X X.XX%, X basis quarter, quarter to only which second million points. rose margin to margin Our declined excluding XX% been the down have during would points X basis net the X%,

will Also, CRE margin quarter, X re-pricing net items believe environment benefit combination and from additional interest forward an by portfolios. Despite by multi-family basis we short-term of the reduced it was substantial two margin that our additional impacted our going loan this rate and lower upward the which a of this, interest points.

improve the expenses rate a into $XXX less Operating run to At translate continued of quarter. during $XXX than now expenses operating million, million. our

best quality the the asset continue On strong very to and metrics industry. our remain the be in front, among

of that as dividend to of common XX quarter. be declared Lastly, common the $X.XX of this August announced will dividend of The Directors August a payable morning, XX. the share we shareholders from also cash Board record

represents an on X.X%. yield yesterday’s dividend this annualized of price, closing Based

that call the our add Before the going we will prospects very to questions, feel forward. about good I over turning

line for On that questions. I ask now note, open the to operator the your

to But all later don’t, remaining. today to week. best please time free our of call this you do or will feel we us if within the to get We

Operator

Great, thank you.

Joseph Ficalora

Operator?

Operator

a session. America. Ebrahim At time, we ahead. this Please Instructions] question Our of here will conducting be first question-and-answer thanks. go Poonawala Great, [Operator from from Bank is

Ebrahim Poonawala

Good guys. morning,

Joseph Ficalora

Ebrahim. morning, Good

Thomas Cangemi

Ebrahim. morning, Good

Ebrahim Poonawala

debt you So, went look core up of when the to X.XX%, funding, But at you terms NIM out costs the margin I guess, still two Obviously, start outlook, so just quarter-over-quarter. the at wanted items. I in deposit costs, out called Tom.

just rate afternoon. this If to about you we sort the for us core maybe your if expectations margin, cut talk of bake in can a

rates do how about higher here? costs going we lower lift both some we they deposit or and trending are those? And Are from for still think have debt

Thomas Cangemi

Right, a that in were there assuming Obviously, will in this position to so me we we clear. XXXX, rebound XXXX. let margin, a in cut to rate say happen to be which our afternoon that very anticipated start is

XXXX. my So That in margin guidance XXXX, and occur I’m updating should not QX. for QX between positively expansion

funding was on assets, re-pricing versus quarter there on go from every I up that QX. short the If and of looking in at very margin QX basis position, we cost we’re anticipate points based this throughout XXXX. the X And rebound. Based a our X term to thereafter maybe will shall

there assuming reduction. rate So is a a very outlook, positive

We’re models, for one actually X and internal our assuming December as one XXXX, in of in today.

So be we to margin favorable. very anticipate our outlook

far the costs anticipate quarter. cost we that are at of cost peaked importantly, the have the as funding second the concerned, and More deposit borrowing as the end

on side, So borrowing as you’ll deposit the the retail on also see in reductions and both funding the side well.

Ebrahim Poonawala

the income, go just could was concern income it amount So XQ, about, And of that’s fair reduce the of relates and income, little prepay away pretty law sustainability helpful. catch multi-family by prepay terms in also reduce – a changes XQ? prepay think in going there we is or should as that significantly I the strong rent growth driven up bit of How like in loan to a a there was one, forward? loan growth think of

Thomas Cangemi

So, obviously, dynamic. which favorable change. over XX% is an prepay, a exciting QX on QX versus was very up We were

expect coming it. portfolio the sizeable of dynamic next years, due our given X have we However, refinancing in of to the amount

next a we So year, X.XX% have $X.X for for billion coming due example, coupon. at

$X clearly rate environment. you’d accelerate? to is is accelerate If That question will happens is in all and this XXXX, which should quarter, pay not which The Do also the the X.XX% current is That billion a what stay with they pay going option XXXX year. have prepay to refi. relatively they strong. that around be

that and say you only others. concerned. purchase That pipeline is now, now. give have right X% as It’s it all of the refi, a right is me Let as statistics we ourselves between some pipeline far XX% market I’d

to So obviously, law. what’s with the in in still contemplating the respect market changes they’re rent happening

generates amount we’re our encouraging portfolio now we aspect from expect. from that, growth portfolio to gravitate is However, banks, other also loans of is But seeing a refi for coming more having within what our the prepayments. which

that XX% today marketplace. other So be higher should banks the if exit as

Ebrahim Poonawala

what… And

Joseph Ficalora

because is others We That leave very cycle sorry difficulty, market. with that during very consistent consistent – – normal what the I’m of gain periods share in happens evolution.

get that people a buyer in are the us portfolio decreasing the to come typically our financing. So market or ability have a be valued to and in

Ebrahim Poonawala

at changes seen you origination coming Got rent Tom? widening it. law are the new have And loan out yields, what any spread of the And all?

Thomas Cangemi

no some as widening. as Yeah, far value spread there’s that there’s been question economic

so out X/X, We for are [ph]. to [X type going structure year X, money. It’s to X.XX, X closer X type the for X] X, currently then tier X-year around money

$X.X right pipeline, for going in Of portfolio very growth about the is total If quarter. portfolio you of – think all a to the expectations be yield is accommodating for X.XX%, all-in money should going I obviously around our now, new billion X.XX%, the believe that so yield, X%. pipeline, that’s

having obviously, the year. billion growth will our well. couponing number of for we down latter in X% cost and bode year. a and the update on, So Obviously, we’ll new coming money $X.X out this around we’re the the about pipeline the with add expectation, not well should growth came concerned of the early X% that margin part as to funding clearly But

Ebrahim Poonawala

at you just annualized low of terms give? to that run-rate previous you updating last question for guidance do can running lower outlook that Talk Got your just million expect this for $XXX I in you it. one us of million expense may, for in $XXX that like – year, any be you are expenses guidance And XQ. if in are terms to

Thomas Cangemi

very in So, than expected. better with obviously, was pleased coming

to for quarter’s far the came $XXX we this I below that slightly improve in our mean, number. guidance, to As next hope level. previous as we’ll quarter We teet around continue million.

through on substantial the year. potentially happen much – on that And end platform. What’s how XXXX one will will we’re being be going that is going the adjustments, interesting well that depending will a for bode conversion of into driven further at from efficiencies

I say I – give into I’ll and will you XXXX. length for go – won’t

the for coming guidance, reduction numbers XX% at efficiency we’re at of ratio. low As far as type specific off substantial $XX billion. a threshold That’s probably looking

kind projected a So that the in we is what ago. low-XXs, – number is year-and-a-half of

coming Now, fruition. to it’s

Ebrahim Poonawala

And me… you mind if don’t

Thomas Cangemi

not call to for ratio. should threshold we’ll XXXX a for that XX% XXXs problem. the Low low efficiency And be it somewhere

Ebrahim Poonawala

mind there assume XX% low for side in you a because equation dollar like expense what giving is the of does that terms next low XX%, of the annual a what other there year? number Do for like the

Thomas Cangemi

million, $XXX to I would a million – more low-end as again, towards range. the that probably $XXX guestimate, of

Ebrahim Poonawala

Understood. thanks taking All questions. for my right,

Thomas Cangemi

is flat year-over-year. relatively Which

Ebrahim Poonawala

Got it. Thank you.

Thomas Cangemi

welcome. you’re Yeah,

Operator

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

Steve Moss

Good morning.

Thomas Cangemi

Morning, Steve.

Joseph Ficalora

Morning.

Steve Moss

just from we on drivers you’re growth like just seems want an It half how about of there? up expectations the I second loan to the implying do year here. acceleration and the follow think

Thomas Cangemi

billion. pipeline $X billion a money the of very is And north obviously, we mean, have I strong, pipeline. $X.X new

refi of a our own So within equity although refi, of built lot of others. portfolio. actually the their book advantage with the some they’ve XX% that own XX% with taking That’s

actual we’re be I probably over interesting very these meantime, the will there business people my until the, couple from will trend ultimately, where there’s getting refi the transactions. of view, on building opportunities that think But In value, property amount of So such marketplace. in rating will the the within again. a put be quarters some next

rates to next And billion $XX.X XX have back in billion coming. year is next have refinancing substantial the It’s $X.X lowest portfolio. our we the we at of months, going the portfolio, which over

nice that’s So say X, jump, margin that well, the to for year. around from and we put benefit let’s X.XX that’s to that’s – a X, if going next say, market, a for significant let’s

year, something they’re each many in option. And the that And how this around long of as we’ve XXXX can, X.XX%. to going their is They well they take The higher which is coupon. billion is in are early, XXXX, which not have ones as to question all They’re exercise to and but Xs. $X going anticipated. will waited exercise they very decide low prepayment generate the coming and as were to

opportunity. we’re about excited So the

they’re market. we’re lender. We’re than very given lower in-place LTVs flow an that comfortable portfolio, in of the the And cash that significantly

the have value. loans ago, they flow, to which years originated look extract or some to up they cash these X value will the up going here, Now, add to try built built X They’re portfolio. to

not there into X% we think X% going going that midyear, I So QX. to a achievable started loan some a very in have be that’s things know are discussion growth. we’re challenging assuming very going this the in that has We to achievable been net environment.

specs and look a we strong very at having Now, the pipeline. we’re

this So X% as we achievable we’ll very closer guidance And is update get the year. to yearend.

Joseph Ficalora

important it’s adverse. to the vacating been space. the the And changes think lesser the I marketplace therefore, that in have significant So are know players and

As account do attainable. same in significantly We than now projected cycle not void. were all into turns, have fill higher many, others would problems have. we the took that many that seem players Many, earnings the

to there there Therefore, And in with the to buy at on business properties because good exist who are not will will the us already available be is accommodate markets. fact kind problem owners, loans are their people. a fill who of discount, with the basis, There in regular in those intending do we that funding proximity, in property fact their void.

Steve Moss

by And by the if borough your and in exposure just loan thinking coverage, update you to of debt values and how could about… wondering the markets, terms you’re service us

Thomas Cangemi

good see XX the on some the out Page out this you the New book. X-K, York an City that boroughs obviously, dynamic Steve, morning, boroughs of X the can markets. that, And break by multi-family we the disclosure. is So, and break We we other out of X-K out additional the news put breaking filed

the at LTV. at which look at exposure LTV. and is weighted there, the to is rent-regulated the is XX.XX% and at is want in XX.X% little look Staten at if Manhattan at X market, boroughs. XX.X%, we’ll it, Brooklyn Island, you Queens you Bronx call the XX%. highly which average As XX.XX% The very – – concentrated

do coverage in-place current and towards York We value. cash That’s lend any future so most was a So New the law LTV in of MCI, for there. meaningful based on that’s rent part flow XX% around have the not City that not books on we a do an that average, exposure obviously not regard. lot

when on what we’ll than us, they comfortable with that to So loans to these adequate and come due, us depending we’re take refinance potentially very collateral dollars have more and value more create.

Steve Moss

That’s costs benefits forward? CDs, I’m Okay. it the costs funding of when these And just or about margin to wondering, marginal how we terms each kind what are rate in last funding should and one question thinking here. just you then, days and helpful. of going cut think comes fed borrowings

Thomas Cangemi

feel of to So have reducing we’re funds very and our highly costs on funds, that be confident going peaked. of aggressive cost our then we

it’s also the well as borrowing CD retail So in side as the side, CDs.

took So we’re that deposit funds. because very there some aggressively knowing cost last to bank, reducing our the active of some on other sources going be looking go at of our deposit extrta be type will base. we’re out in We quarter money will

rates So I X% so effective today, rates again, we believe offerings. out our around dropped

we when adjustment the in this XXX-ish, that’s lease from high On to a average a of the significant cycle, last some time year, but September were was it X%. close

$X side, to Xs, to around to over going continues that ease be billion the on $X going CD rolling per So and in we be down roll it’s that’s subtle. coming low due $XX billion the that’s that’s very billion to have to year, and will quarter,

very So on we we’re going now of down. to that had and on the the proactive sure the beta get making be get benefit way we the we up, way that

shop. The react had be the going beta fact retail that a retail going we’re CDs So significantly very [impaired the very we list] we we’re [ph] to given were active. are that obviously to that quickly,

XX% mid market cost will In position one. to in to So on accommodate the upper our on money we’re in substantially of funds. target not we’re the the growth, targeting deposit borrowing a going drop forward

were and borrowing XXXX costs sure. to So we and going clearly in XXXX for drive at that’s deposit lower believe

Steve Moss

so. you Thank very right. All much

Thomas Cangemi

Sure.

Operator

Steven Our next go Duong Capital Markets. from question is Please RBC from ahead.

Steven Duong

Hey, morning, good guys.

Joseph Ficalora

Good morning.

Steven Duong

Good morning.

Just the if you back borrowings, to may. on get

XXXX? So much due how in in borrowings is

Thomas Cangemi

Yeah.

So we X.XX%. rate going to Bank billion about mature in from Home is of have, what the believe, average we Loan XXXX $X.X at and what’s

Steven Duong

that is X.XX%, right?

Thomas Cangemi

right. That’s Yeah.

example, like for so was was positions. back our now – some in quarter to been refinanced November three. we expected be that we’ve So And last around XXX structures

curve. based of lower expectations on forward significantly the the So

million] in quarter go rally XXX with. choose structure given XXX in XXX. the the might right depending to in on the I and So rates market are [ph] the forward curve, that we [$XXX now the last where offer probably to you say bond put where on we at

Steven Duong

Would those take just it. borrowings Got it decent make I you ever think, have prepay amount hit? it the sense, beyond sense to guys of a borrowings still make Would ever and that?

Thomas Cangemi

of relatively X%, is XXX. most is coming due lot to is of even to going out money next And in stuff at very still low cost looking historical low X% year-and-a-half. A XXXX the when to cost, the compared norms, money the again I X%,

this of So the without mature any the X% capital. just due billion consequence stuff to rest is $X at so Yeah, that’s XXXX, come to going under another XXX.

negative fund. So of that should no impact cost be for a

where how to on in the going on pricing hopefully deposit depending environment. from, And best declining be come active much it the and possible flows very of comes we’re the but rate funds source and liability a

million Assuming, very significant, running the when going because at for year-over-year We concern. level, that every XXXX, go that basis ROA. you you our as quarter you’re typically down NII containment going the we’ve one. XX don’t to be point grow QX, with still a favorable do far the much of is anticipate should comps, environment somewhere so at be cost have look EPS up if headwinds to I looking should company at $XXX NII thereafter is at not north is we down post a to they’re us, modest as winding had because

Steven Duong

strong it versus of is the coming Do pipeline like the your to is refi. pretty you new your refi know Got percentage existing? it. from customers And seems just with what getting pipeline

Thomas Cangemi

our XX% many our I increase This is players do. is or going from is we be that ourself. book said trend the as longer it’s of refi we business, coming that and before, That’s mean, I going to what I from in we’re business to is others. believe, in no That believe, are the this XX% a dramatically as focus. business, away primary shying they’re Yeah.

So opportunity. excited the about we’re

indicated, lot if underwrite we where and we are and very soon loans them. make their above what substantially of we Mr. lend, would to money, would dislocation a as conservatively As Ficalora is lend we

in approximately and be to – lender compete. targeted but that have So $XXX depending $XXX leverage at significantly higher The basis points XX to we the bay have that’s to widened right going we’ll now curve, be spreads a the spread. highest market low over at million $XXX almost we’re million the million than on

right that large most Our but the probably spread market. widen market is government. competitor that away government that maybe the competitive shop, giving we now is And they’ll Once the the realizes still, relationships clearly are we of to looking at have to will that lender agency. our unique and portfolio of lender tend lots strong versus going to opportunity go very a the portfolio the

Joseph Ficalora

growing are the for concerned time every and are that marketplace agencies the in agencies Washington the some question quite have expressed have country, no desire the throughout the about greater throughout in absorbing rather the to country. people than and is So less there share this involved for

be good So that for change will very us.

Steven Duong

potential is some for going questions had one up. last me. just And been Understood. RWA just about There like

a increase Assuming major collateral on are values? risk-weighted Let’s XX% declines? in cash not market conceivable would just Is like market rent-regulated say draconian, scenario which there say, from assets drop flows any do in properties weaken. the something

Thomas Cangemi

Yeah.

of loan that’s these at very we’ve draconian. in place. the large such a So detail. We’ve analyzed deep-dive Look, level done since input

versus probably be rates borough-specific, a dramatically to rate higher gravitate cap to here, going is they’re Bronx little Assuming, more the is different. bit cap Manhattan going

at the low look negatively, holistically to impacted it what this is But are because we more have as you leverage lender. reality change. is, as far of So

rates rates We and look ways negatively. interest our drop it’s different at and impact around cap XX% recently, value X% feel look them not market, ran basis run silly position not this a adjusting, And where going XX up is to XX% I’m rates, going value. to XXX drop if and you very run in in probably in at going capital we that just and simple, But a we be analysis. you that shop significant, we to cap points probably that’s that

basis interest XX is you the basis If rate raise probably in points DSCR. points X

the do simple LTV. math, manageable So Manhattan is you you’re running it’s when XX%

Steven Duong

Understood.

Thomas Cangemi

CapEx, upside And most by due Manhattan the lowest that because was that the always way, has potential. the

event. from can we mixed-use out And Page of statistics put way, the you have lot our loans characteristic. on as are where So see our XX we concerned that’s our X-K of report a by super

just of if doesn’t on it’s ground building the mean floor, have ground is the a floor lot so We that is not that rent-regulated. rent-regulated, opportunity the

Steven Duong

guys. Thanks, helpful. Really Great.

Thomas Cangemi

Sure.

Operator

Alexopoulos from next question ahead. Please JPMorgan. is Our go Steven from

Steven Alexopoulos

good everybody. morning, Hey,

Thomas Cangemi

Good morning.

Joseph Ficalora

morning. Good

Steven Alexopoulos

kind multi-family appraisals on the How you much refinanced for loans first values the new when the So loans in average? of you issuing are or quarter? have did

Joseph Ficalora

depends actual the The of reality that. that timing It always market. the proportionate is we’re on to

the the decades We going to the this in for recognize product a decrease much ability have much, there’s change be We’ve and in market lent values. this as on valuation, lower product. at value to evolves of

loan we loans we of all has the existing are to them that be on repayable, repayable. based So our structure how do

they lower of be loans will All future a but may valued building. be on repayable, our likewise

goes of do be value, be, a flows the proportionately loan do when lower lent the example, on at the they are safe. we that to still a default, collapses, over and we whatever value So for we if building loan to and existing cash building and somebody going may the

risk to decades our in manage demonstrated us is The for doing success by of so. ability

on a records. be based every loan actual new So at the will proper value

us greater that us So is fact good as period greatest always there and greater the despite marketplace. very share, Change return ability. for the confident in is change we’re this that marketplace the given in a

Thomas Cangemi

always what the obviously the to this. like caution reality shift is way bear it’s abundance of it a just mind, when that that in is But an be Steven, change. market will there’s ought

customer our weighted XXX%. average may to that XX% go that We importantly will be that LTV low level. just have event those own to for more in writing we in paper the our example And

just debt criteria. charge going slightly pay. because is we’re going to it. to the We’re – them for have coverage say, XX% LTV will a to let’s service They loan, on And below that

So spreads, I model, business prepared it’s starting. think, spread, to spread prepared benefit economic already think, there again, be will highest we in from the I remarks, Joe’s highest

probably our X% transactions purchased, indicating pipeline business the of the haven’t evenly As is rest start all which place, take refi. is to

On view the purchase rates reset. see ultimate further, to start you’ll occur, spreads start government the up to as to My that will the which is cap eventually catch start the widen well.

So we’re excited about the opportunity, we’re aggressive not going super to or change to conservative. be

as known We’re we’ll be the conservative and space, approach. to our continue A lender in super on

Steven Alexopoulos

And credit very rent obviously the then, multi-family multi-family Tom, the is specific at increase did But in good the I is know what all on given change quality reserve reserve again the for multi-family? you and quarter.

Thomas Cangemi

embedded you losses, points we XX of historical have in XX and that basis reserve have then in loss at which you’re So qualitative. our X again, basis we point the about historical points portfolio look of at if allocation, basis a embedded [indiscernible] is looking total

very we because I assume we that have book, made we make to from mean, adjustments qualitatively, adjustments you low and question rent regulation time, list no also So time its changes. right. a we GAAP, follow

that’s have XX points. basis in So portfolio, our we

Steven Alexopoulos

prepayment versus income, been I call was okay. earlier peers. know penalty very And for XX, it resilient a the the then focus it’s

come so down has I life X.X come in the much? noticed has I average that the weighted think, a years quite a on bit, book? multi-family think, down Why I

Thomas Cangemi

that’s like I not to X.XX% around going we sitting market quarter. to because at X% sidelines going billion they’re is to not X%. XXXX, are the have opportunistic $X.X about I X%. pay All we’re this on in X%, indicated so going market, say They’re pay People the

the have believe we given will XXXX have And the strong all they to market. relatively prepay At on that be up continuing activity, credits in time auction that come sidelines, are XXXX coming low-threes. are they those be to rolled as period. the wait to So to same and we

not going the they’re to X%. X%, is pay not they’re pay around So which market, to to X%, going going pay they’re

portfolio, that so have is the ourselves fact we are So portfolio that of point, within – refi of by a X are to some X%. X choices significant be substantial would with being points indicated or some more are our lock pent-up refinancing not in you because X% demand there side, increase customers but the They to have their accustomed the may or on always made you’re an financing. knowledge X

Joseph Ficalora

I Steven. think good go news – the is ahead,

Steven Alexopoulos

ahead, I just on Go Joe. want final to one NIM. No, no.

Joseph Ficalora

was everybody chasing the we has just flows. they our effected the did, in refinance, say over dollars in not look the already lend, so to I going don’t to managing today. they the buildings as don’t dollars They it at Yeah. in when way have have value they’re to opportunity lend of cash competitors We that many after that exist. their

is fund market, portfolio So ability of the that to our cycle has the the reality acquisition the as every has demonstrated.

dollars rentals. that from Our people they they actual their us therefore, get additional the on actually and can buildings value in have manage,

Steven Alexopoulos

Okay.

cutting The one margin. funding your will one off Just take rates final on the pressure fed obviously cost.

the Thanks. Tom, right, hope the think the expand that NIM curve to let’s curve what see of banks the all rates. fed of ideally for I more sustainably? the is the as of intermediate holds, level the need part about think steepness cuts

Thomas Cangemi

another have Well, I the QX QX. that’s a end quarter-to-quarter by between cut into I’m running likely again, today every my adjustment and XXXX, going more model margin at very year. quarter, the and XXXX, and And at the conservative assuming up starting – of

we’ll very pace. bullish, such in So a we’re low come

peak. Our yields at of funds overall costs and at were bottom were asset

believe was the that in very QX. clear, we peak was positive So environment I and

the much lower it scenario. coming will borrowing have was showing coming was So rate deposit of forward the down, is a benefit down. curve The

a borrowing adjusting that lower to neutral sticks at stance. in ease fed the So proactive rest the aggressively that very funding through side. We’ll be goes to the going retail our on And and/or franchise of lock we’re year. as the cost on

very highly margin, feel than confident we lender. different but So that a LIBOR others, it’s based not we’re our

We’re landing curve. in the belly of the

we’re a So very EPS. going thereafter, year-over-year meaningful going expansion and every comp to to to it’s quarter and benefit see margin be

XXXX in the the versus earnings curve, sizable will sheet a steepen growth, that that conservative You’re assuming are this It’s looking the I share only very if mean, fed per is we so XXXX by curve in in numbers from very – a new at conservative us. balance for increase better scenario. numbers get way

Steven Alexopoulos

for Thanks the Okay. color.

Thomas Cangemi

Sure.

Operator

here question Moshe ahead. go Credit next Suisse. from from Our Orenbuch Please

Moshe Orenbuch

Most Thanks. been… have Great. my of questions

Thomas Cangemi

morning. Good

Joseph Ficalora

Good morning.

Moshe Orenbuch

the answered. six changes next of how could in morning. over over of Go to competitive in out you I Speakers] Have over just like of to the happens been rent environment the the months talk Maybe steps [Multiple and see response next what months bit terms play the you ahead. little a think year? three Good Yeah. each the and next next

Joseph Ficalora

not it’s have lent. are and accommodate the only people the Well, will will dollars afraid, in particular reality more away. The And of evident. fall to it more fact that excess is, over capacity that their become Yes. property people

cash value significant with going has flows. consistent to forma be being for going to is pro lend there So existing all be news within by this losses the taken income is The we in the always government cycle change the is That particular of good stream that by is act changed of an excess the lenders. marketplace driven product. turn us,

fact the we manner, not impacted same in prospectively. So are being when we in refinance

upon the that likewise dependent lending We consistently flows. cash conservatively the decades, done and very we’ve very for existing do will

table be proportionate So that property the the the to provides. for will income stream loans new the dollars actual that on are our

new won’t performance a lender period from of over demonstrated market that loans defaulting. many be during of lent periods have represent have are we market. treat a this track adversity adversity. they will the fact in and our we be will the So ahead people the loans record, providing in that The and They will has

of the dislocation satisfaction. so our grow prospectively be able nicely. this frankly we’ll market confident significantly be is we portfolio perform to will advantage, we better works our and to that reality are quite that able market our And highly the the very to to than So great

Thomas Cangemi

the to may between then because competition. a – of that value, X Joe’s one money agency play extract scenarios more customers becomes take changes. of just thing a will year, Moshe, obvious would these loan out, look traditional to we commentary obviously year and one as is that’s – that’s I possibly versus a unique bit of and little that try that X the player and go that high probability well But to because the potentially add XX as

Joseph Ficalora

wind to XX they higher go up yields. years, that X is reality we and getting And when

is prospect this of for our good So margins. definitely

Moshe Orenbuch

the market Got not like realize it’s mark day basis? them you. day to stuff factor just to have And what’s to decline on they a this right? in to that mean, value, causes I that

Joseph Ficalora

default, recognize a are the as It’s income payments, property Yeah. not And payments, at simple, stop you it’s going whether loans very regards the when have with make the to starts that to making that is not want continue an owners; to very they clear. met. pretty into don’t to pay that sustainable. they don’t for be people a high like rate that value making decision their do are particularly to to value, going they They analysis, the recognize expectations which

can expose be literally the to they owner or that have they that going do carrying believe, lender people value themselves into they are justify decision make to future. a whether the that the excess not So dollars

for conservative we distinguishably based be time be to So not better bad us. why is period therefore time It’s competitors. market that’s methods. and our out change. adjusted. outperform. we actually a will It’s upon the time turns every most has than for the every greatly to decade, the This out gained they us significant that are turns news to We’ve the is market The good have share default, in our going

Moshe Orenbuch

much. very Thanks

Joseph Ficalora

Sure.

Operator

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

Thomas Cangemi

Good morning.

Matthew Breese

morning. Good

that you NIM have model you in times XXXX the Tom, quarter even conservative expanding. mentioned Just, your very that running several every

expansion in exactly some your you assuming that what of model, can what’s idea your you’re look us ended NIM give Could for could us? If like? book

Thomas Cangemi

at I’m the it of from and margins, X then peak the X will end scenario, bottom year ratings, say costs end And is not what give going one one detail bottom I going QX. maybe weight bottom yield. off call you today, affected XXXX so we the the has to have coming into asset of guidance. my funding adjustments, of

conservative. out other are growth going So growth, very we as going it’s and to running is growth, repricing multi-family that’s far to I’m nicely, assets that when very as early. X% repriced portfolio that play

current be to is now probably is but X% are confident I very the number XXXX. achievable think highly pipeline I higher, given we feel that right X%, for at

There’s there is been able X% to be grow NYCB this that publicly of a to lot discussion out going not year.

I think, current that’s and still given pipeline the assessment even at starting mid-year. X%

growth of think the growth, the real. confident is feel wider. I spreads We So are

to probably now. that’s relatively XXX, the a in spread it where may go So again, market our XXX conservative, so is right we’re model, about assuming

the to are the our you so probably affected the I indicated, up And that think a on the open fund, up already. think I so market very down, fact lot, I be funding probably today followed again the lower rates my to dropping costs, open statement. proactive is are I previous going rates we’re across liquid back And go XXX, coming CD, CD, XXX,

we money was risk beta two beta. on chart, year Our off the in row, a lost high last of years high a because NII,

start to the give way have go to credit on rates You lower. down, us

see beta retail will we adjustment. the level lower. decade. CD we’ll We’ll of be proactive the borrowings. at a rollout, we in way repricing that place same the the benefit billion They highest of is probably had on $XX And some priced be franchise. it by just And the positive impact, is that level

when very fed right stance. now transition the So it’s our cheaper a of borrowing neutral lot about this the the so and curve is than easing mindful forward is cost,

Matthew Breese

Right.

focus can that. we maybe in on So

and cost of fed the color of liabilities, liabilities there expect or So some reduction the the high-single-digit, of you get helpful. be the point interest cuts more, cost would low-single-digit just when basis of if what that bearing and cadence interest would if bearing one we

Thomas Cangemi

at you retail would a adjustment say, to looking you move going probably I Yeah, XX% our franchise. about to basis if point XX think of that we’re the put

if move next more at bring – so it could The it’s now the of XXX X%. XXX, XXX, is to average. right going I down that close we’re write not be take some So to on down XXX

retail off a used process, on at balance the finance sheet. retail are and looking You’re we coming sheet. we reducing proactive the funding the growing deposit XX view proactive very to of threshold And balance very our

proactive cost fund, to of us. the it’s to we’re meaningful reducing very very So to going on be be going

was QX both And as on I of as our indicated, of the believe peak side the funds, cost the well I wholesale retail as that side.

Matthew Breese

Okay. Understood.

Thomas Cangemi

And I’m to not dynamics. going very to very early, going very comparison, we’re give these that have you it’s look XXXX a but at too optimistic when unique we’re guidance,

can don’t – there, guidance win refuse this that to how model, will one X%, XXXX you significant these due with through see EPS No everybody take be to Looking comp the will are have refi. out coming period pay option go X%. year-over-year, the will and at account coupons you even into react, low the that

opportunity, that we that about excited thought last we’re rates this talked So year, higher. about we and been

X.X% So you may lose now. about

But next way XXXX We’re Xs. going X.XX% coming the as low also still high coming the which Xs, that’s the refinance. on I XXXX meaningful, due. believe, option to the than customers talking pay will from more there’s to be it’s coming better in days to point

Matthew Breese

Understood.

higher. something underwrite your of cap some cap us in you would market use peers protect rate you themselves them that something this cap in mentioned done appraisers multi-family? X% you’d call simply Have rates color or XXX some your to have what give would you it and rate if the what of the Joe, to market, competitors give not over Okay. you taken rate around could similar terms cap versus have just lent and

Joseph Ficalora

that higher to impact interesting result change have market are the thing makes values we will are a use is sorry, lower cap and the us recognizing that in end use to ability key the rates I our for that the I’m and rates refi. position to – we understand the we in we is cap that think fact what and how

in during as gain are for fact to reason So come cheap, to going would be refinancing refi. change in real. those in not to we effectively opportunity going to to to substantial have rate such they of dollars buy us and very only come down. of refi that is and and the the use ability is is realization periods owner the the even this, dollars the the why that itself They marketplace Values their utilize

Thomas Cangemi

cap about time So when rates. we

something the between different Manhattan versus mean, You think [indiscernible] the looking basis XXX of I rent-regulated predominantly so the that out the differential the about points Bronx gate, Manhattan coming fact market, out Bronx. about at right in are that, you’re very and of

So clearly the marketplace has embedded.

XX.XX% embedded average we had flow. for current LTVs – a company for So are weighted there. conservative These is and LTVs. lowest out that if cash that’s has Manhattan, current view LTV, very that XX.X% a The the Queens. Queens, you about Manhattan think are of

a cash upside lending actuality we may at So banks you upside. be on towards the see potential. can very rates, cap the have based conservative other We view we probably on lend LTV, the LTVs so disclose that flow XX% for that, take don’t

to what improvement. of borrower on and choice they’re going dollar, less that’s the ultimately major a for not them take view rentals. giving as lender finding advance the capital it to funding conservative We improves We’re when

to rent not current and that’s changes. rentals fast going Now are the improve as given obviously, the

of an DSCR. rates go point, Interest XX% value, going to XX%, if up you probably the lot points. rate banging basis about you’re going cap indicated a and value. it’s basis be adjusted have a we It’s points basis embedded to probably However, cost I XX in X up in XXX

we us come So capacity we’ve that financing. portfolio, stressed will the up it this next and significantly confident feel what a these round customers and important. to stress get highly have we of back that That’s

Matthew Breese

like qualitative it maybe of that’s rates guess, trying allowance, XX% factors I change in given dynamics And some your to going I’m XXX value. basis with hit there? potentially points, a Okay. square you that can an much doesn’t to the there was seem color those cap or the up provide

Thomas Cangemi

don’t allowance hypothetical your First you okay. this scenarios, scenario, adjust is the hypothetical of all, a

comes so they still that that some of refinance it – due. market, finance the when options new purchased, believe, gap is purchase the that loan at we – nothing, something will you when to make based when acceptance, that appraisal. refinances will because don’t the on So we But you that have a [indiscernible] its don’t do before stuff new is

where very stay risk-weighted XX% indicated us. in they a to comfortable with to if that, be from we’re going So I before they and happen position XXX%, with

time, customers in will that we’re based charge dislocations slightly dislocation, them pay let’s regulatory If as are in monthly and capital them were is because its we as marketplace work them take basis. our far through we’ll our other And over what’s on figure be changing bills significant XX% on improvements. inherent how have get how buy if comfortable they advantage charge based the for spread, interest, cash indicated, mandate positioned an of to their suits – asset capital lend in on on We and they a and will this And estate. in a dislocations, the than and higher types real we’ll risk-weighted. say value, an to that the they’ll to be flow will come as LTV, just the that’s there highest there default as paid out banks to improvements IRR investor well

Matthew Breese

Understood.

Okay.

Joseph Ficalora

to of positive XXXX. charge-offs yeah, four June year if the a over a of don’t of period of the XX, other course take This have in versus that every – in charge-offs, have I typical to actually the our shows at. want I thing also lenders. one look XX as Page it presentation, we fact. a just actually is we entry zeroes XX/XX/XX a

Matthew Breese

I changes, in an the this changes into would regulation fact something I in be thought changes rent significant take might quality there quality. something just your to industry. the were account therefore, that historically you factors. causes perhaps understand qualitative be credit factors that And

Thomas Cangemi

model, growth do our obviously still incur We GAAP. it’s in

of asset may in that more CECL risk going this Other be philosophy is the institutions. to a as The than down longer. CECL far having we’re road. will bit have risk. general been change as little will a we’ll that, that. no adjust in we’ll when our that, a And QX somewhat has have do the We credit happens with So the bit the little with major for less many obviously, impact market, extension along comes to, in

Matthew Breese

Understood.

Okay.

Thomas Cangemi

the The on. new it’s it’s going due but put new relatively loans, come only loans current all to the originations, short,

to that we’re move goal new the We those portfolios, we’re on, come you’re low loans to have place in probably from about multi-family like potential up. for cash and underwrite much from depending given not go account other potential, leverage conservatively qualitative lender. book, have take that could loans the our adjustments XX market and in conditions time. very basis But because around that view When will how the points a in time we loans into new upon giving any upside more going come on rentals flow possibly

as to not looking place others clearly as impacted carefully be should that So at in are upside potential.

Matthew Breese

had. Understood. for my I questions. all taking That’s Thanks

Operator

from is next Austin Our ahead. from Stephens. question go Nicholas Please

Thomas Cangemi

Good morning.

Austin Nicholas

just good about assets risk-weighted the mention typical weighted put broadly I rates? guess appreciate underwriting the were what of debt think you you risk And incremental specifically the risk-weighted question really and appropriately made I LTVs, first the kind morning. then on cap may into the maybe just guys, multi-family then comments and what adjusting more guidelines, or I Hey, second the the the changes market, assets, assets, I be talk from the about But guess, the service thinking underwriting think of on your kind dive word just of is value. guidelines, book. I

Thomas Cangemi

Yeah.

the So absolute tight, changing but LTV. obviously, our very are not LTVs

little very on potential looking flow. benefit think, cash when a property. I the depending giving upside you’re They’re holistically future at volume the in of

XX% mixed-use – rent-regulated, value We’re market properties, luxury type we rental. we have have not properties XX% have non-luxury lender, a so

because at of potential it law. rental these changes the these an in forward with going abundance of you’re actual changes, look You question – at going

to that as it appraisal very you’re abundance when So place an there’s will you evaluate of caution no on the well, look cash we a have based question a simple credit, flows. in going at

rate a market value value what it, their the going and question buyer have hurdle does a transactions a and going cash what willing that The is put is repayment. big flow to be on when of adjust of for to

to be ago, estate is and higher be going two it going not anymore regulation guess returns invest. and because these going be zero there going real is to returns buy than significantly term to to someone’s is over of the So changes. rent zero of not years long the – My to early have was some

Joseph Ficalora

it’s important lo period wide that fact. prospectively X,XXX been and years, during charged we think that difference a and XX points. we’ve And during for it’s bank this XX I reason to points we’ve between basis and to XXX years basis XX behold, continue same have the about exist. now, off will not index It’s opinion, is years believe XXX to in know that of period charge-off points. basis others The public glaring. interest differential us a

Austin Nicholas

you’re seeing maybe this then your spoke of business. you I of just from kind environment, of demand speak out to maybe play maybe about government comments kind the that the next attractiveness regulations what in for And rent guaranteed Understood. changes? And longer-term any customers these government years? expect to product guess, after of over and kind And that and then the how guaranteed you’d that couple of

Thomas Cangemi

a and lock more I dominant a you such tend for comment, kicks get but to as a pressure a that period have just more will been real would think look end longer takes view if I But improvement, bit you’ll at agency curve day has some on in the low time cash rates the in space. reality the in, a to of force longer flow multi-family time. of that on Joe of statement longer in being be in little Washington, the to their active as far mission

average So X years. X X lender, into of of year or year We makes may X lease type to traditionally X a money couple and year life in year XX a years. come play. XX at That

mean if but source be go be to of a couple a in customer more the going market, bit potentially to a more, we’re risk. little we’re but agencies, We’re want to doesn’t be duration years going to going to that of operating

take of more like just time law? feel their a changing It’s bit cash little this rent the fact that based they function a flow may on

Joseph Ficalora

they manufacture in And in the There should no business world the is they do. Buicks. fact, not U.S. market. no be with compete does of There the below way is the aggressively lending Motors General escaping the to that government

by recently, The cycle aggressive are in the they Others that failing most were They and not evolved And in most they’re failed they after but failed the many reality them, the the marketplace. is before September. appropriate lender. certainly lender them by September. failed

So may or that may not occur. change

pursuit the Washington if will we occurs, to Clearly, it beneficiaries. active change that is one an change. And in a be of make

Thomas Cangemi

right. Right,

Austin Nicholas

– Understood. growth expect a what on maybe for there? helpful. percentage that next versus more And your the of of from then just being That’s maybe can come kind break you just for on you then finance, X% multi-family specifically maybe growth outlook number and optimistic talked year. you about specialty guess, for that, down I maybe us within

Thomas Cangemi

years. to in So [ph] a came Again, It’s the X% not years. XXXX. no We to year going transition. a volatile again, [XX] over of growth line. previous Understand very just many $XX many, this Remember, was billion were selling assets we get had billion. we I’m stable specific year $XX that for on

We But right that came slowdown net that. up change with it exceed we threshold in activity, was change in we of achieve we’re potential feel in X%. now X% we to can in law the and purchase can contemplated light going this in it’s world. We growth. probably what X% grow couldn’t rent-regulatory loan for – And a

XXXX. achieve So for we that we’ll feel confident highly

That XXXX, And move probably towards right? I that they’ll customers CAGRs. type with in to problems XX% think think about, got XX% to New in [theory] by XXXX of City market, probably there’s on markets to I opportunities, especially we’ll multi-family financial of are think exchanges, Jersey the outside deal But more contiguous area you way, to we very move will is When that to the going grow will CRE. maybe be XX% [ph] York metro reality out we’re – that and our other and with. markets area New assets their the – other familiar our of some

houses. is which think where some well, to that But they’re customers we they very what know to will apartment way in going invest move investing try into, additional about to

continue of And going borrowers. so, we’re part with being a to

– So X% for so big not again, number I is historically a us. think

decades, percentile past will Our deal CAGRs XX we over we in growth, the when in with acquisition had we growth funding. our multiple grow strategy the the when XX,

up changes that we opportunity get happen mix liabilities, So an obviously, we can the if to significantly. move and number to acquire the

very multi-family is to it’s us. growth Historically, loan around mid-single net CAGR acquisition, an always been of absent XX% conservative loan X% But growth. like for

Austin Nicholas

also view then, in And just guess, the changes question. one Understood. on you just comments strategic you any New Any… environment, strategic in and then your about think I may last York rate there, just as City multi-family changes can maybe the make again the some market? then and one M&A,

Thomas Cangemi

So just, I’ll just M&A New proactive. We very currency not York comment go on into to. on and, back currency front, Joe, I will we’ll have multi-family. dead. is say M&A have the would back, always we our When the be

multiple We said it times probably.

doing the We’re not tangible deal. book in interested value little

open hopefully, to business, price. stock higher So a at we’re

funding creation, time book utilize, value. and the We to value create have of over had tangible to benefit getting that offset immediate tangible wholesale however great liabilities book currency build to some value to we

It our immediately to of which Shareholders, going that proactive, but one to have it we’re value. are primary That’s create in large very very be be to M&A position beneficial. a logical be we make has goals in has and we sense. immediate shareholders, to

Joseph Ficalora

accretively in put I to a that demonstrated very acquire have in to no successfully. banks capacity think perform very fact actually the and we marketplace the is there escape

not of reflect sheet, of consistency price the performance. Our the does our consistency our balance

ultimately behold appropriately. And it and will lo readjust

at not as levels the performed in as performing good We are past. we

than We’re performing at market the levels continuously. better

that more market, to highly should do and stronger So a to premium deals. lo move accretive the we significant trading in be at behold, that utilize currency direction we to and literally as

Thomas Cangemi

very current think of – to that look forward of bode EPS should XXXX given the year-over-year the evaluation going well we’re we’ll comments. versus that forward. It’s going for given have exciting believing] And significant a on Joe’s neutrality, our [bias shape [ph] to add to the I XXXX, look curve, I growth, comps. at anticipation would

of razor side. institution, the update Well, the end which work expenses benefit on obviously So the being can an and there every and we’ll operating there we’re is movement we’re it. we towards more investors we’ll excited is about adjustment liability there’s if on from focused greatly operating quarter. a control, short sensitive what our to go curve, But

Austin Nicholas

my Got it. Thanks for question. taking

Joseph Ficalora

Sure.

Operator

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

Collyn Gilbert

morning, guys. Good Thanks.

Joseph Ficalora

Collyn. morning, Good

Thomas Cangemi

morning. Good

Collyn Gilbert

So outlook, just the on growth quickly quarter I loan is X% slower. Tom, third seasonably the for year, know

a the third we slowdown of should reacceleration? that quarter and still then seasonal kind in So anticipate

Thomas Cangemi

no. No,

Collyn Gilbert

No?

Thomas Cangemi

is year dynamic adjustment rent the we because always had Jewish obviously, Collyn, the regulatory been So, the would be of different. There’s I Jewish say to is holidays these this somewhat all going changes. there. real a holidays, reality But

So pipeline. our that $X the $X.X billion obviously, billion of having We pipeline. pulled money typically a pipeline is new

So you’d quarter quarter. and going assume in that to the both the growth, third fourth continue to we’re see

now and achievable own our portfolio, and that how double we’re about we’re see you out refinances, Again, XX% more going on not that. that growth. do excited refinancing they’ve value. taking math. but they’re I So what much traded dollars, right to I’m going X% is think can is But we Depending book highly of say to the simple some

going to portfolio. to that And the is add

there portfolio. I going from adds other be is think to more

We excited about increase. only XX% about see today. we’re the coming That number that of So will opportunity.

to mindful what happens very of think purchase. going I be indication on We’re is an the what of transactions. property don’t this X% on

there fuel come that probably at purchase growth future prices. model be will And XXXX, lower Eventually, into back. will also

we’re cash wouldn’t hurt dislocation on rate willingness to to flow on and occur customer’s money on cash be and based going put our to of cash basis. a And indicated return. on, on it’s Ficalora it it going and to put it Mr. As work, will leverage lend A,

a to going going current be to we’re rate the I returns don’t But conservative and of very what to have today. answer conservative ideally, the lender. it’s

Collyn Gilbert

then… helpful. That’s And Okay.

Thomas Cangemi

we’re growth very But change optimistic XXXX XXXX I’d margin. definitely say, love about in – We’re about feel XXXX side. that for what on change we real confident – in a it’s optimistic only to soon, but I the very see the is can

up go happen going into on every than versus then see will in call. and XXXX margin expansion thereafter It you’ll the will quarter last discussion XXXX. Our margin sooner my XXXX

if model, looking you’re and that your run you’re through do at comp – EPS you So dynamic it significant looking up.

Collyn Gilbert

Got it.

shifts What longer thinking paper? about to Okay. maybe behavior duration mentioned had your you adding borrower is the your of that be into would XX-year And, for How incorporating structures. that some Tom, all’s you book? appetite

Thomas Cangemi

comes. Well, offer we time will someone we’ve always opportunistic I be wants to if and competitor offered time not no, X-year we’ll as XX, side. it X. obviously, we’re And mean, XX-year on a but, wait think we from I deal, a a see. But,

customer that base. So we’ll gauge gauge business. our We’ll

on base it’s accommodate years, New in go the business be us, what that. than because will can will customer to want for couple probably we and But created then and more X-X we a they agency. locking less they’ve

times customers, for of We have be in an there dislocation. appetite our to especially

So terms before we’ve before. to them for adjusted it We’ve to value. be accommodated create done

We’re going this same do the have environment. in to to

Collyn Gilbert

Okay.

what funding Okay, that’s off be is to you Fed dollar helpful. drops. automatically Fed then when to of going indexed can us And that’s of amount reprice the that’s just actual going funds, just the tell one final question,

Joseph Ficalora

got say or CD would the $X $X on it billion I side Yeah, that, to billion.

Thomas Cangemi

the $X here. $X borrowings out side billion more the the About and right of or CD forward gate are billion, on

highest day the not it’s to is that, and and every They anymore so to quarter reprice. off] So $X have XXX what’d [ph] more [two adjustment, now. I right XXX And billion that’s be getting that have rate aren’t between than significant candid we exciting on getting $X think floor a the XXX, one. billion definitely banking

XXX was year. So that last

So adjustment. CDs and say that’s that’s – dynamic then anticipated today’s or type today there, is duration XXX The a X.XX. customers offering clearly shorter we’re The come very is have as I’d rate and their for are at liquid they to to the X.XX highest CDs. CD that’s exciting roll they X and surely adjusted rate

Collyn Gilbert

great. Okay. guys. That’s I’ll Thanks, leave it there.

Joseph Ficalora

Sure.

Thomas Cangemi

Thank you.

Operator

Please Our question Winter Securities. go next from ahead. is Wedbush from Peter

Peter Winter

Good morning.

Joseph Ficalora

Peter. morning, Good

Thomas Cangemi

morning. Good

Peter Winter

I You I’m had in was XXXX expenses. should that mentioned the that guys have you works. guys done flat the under And initiatives expenses a very wondering, the nice expense on versus you still XXXX. just be job impression some just

Thomas Cangemi

$XXX a put what major will in through And XXXs. run Peter, rate, of system further up this that with we’re very low conversion occurring at We re-evaluate we efficiencies it that, could done. year. proud and look efficiencies the at that we’ve potential say came company’s So, the after XXXX. down going would of And we to the end dynamic million of systems Tom. we’re a I it’s

substantial. But and XX and I’d the That’s operating adjustment conservatively, our XX% that’s – that’s a big overall say expense comp months, over adjustment. structure structure, past

our We’re the should point, company. X%. return-on-asset we’re razor returns. I points a not a looking basis off given selling very We focused basis said at XX before, XX controlling be expenses, on current Like

years, put is XXXX. the to the the moving that get in given feel OpEx highly dynamic that We strategy plus goal of us. we’re and we’ve tightening, place will into The right our going few in back X% over focus direction Fed be that confident ROA. to a past of

We’re being conservative.

in again. expected, came to in we control we like can We than hopefully came We quarter; because better beat this that.

the same guidance short-term giving I’m level. a in QX. you So be around to It’s going

be a that may You QX conversion given should will in better. interesting, come little the bit Definitely occur.

in the We time successful this efficiency is at And true opportunity. going XXXX of And will meaningful low for over coming it in a but point certain XX%. next I for XX% – getting past the It’s XXXX Are of should being to adjustment significant there ratio where kind already be the get done. as ratio company. years. be we’ll XXs? we then in what – for look is X.XX, high efficiency low possible, drop the two XXXX, which from the a guided

Peter Winter

giving And low a on Okay. that’s number the point, on ratio that that Tom, efficiency then, XXs? for full-year you’re XXXX, just

Thomas Cangemi

XXs yeah, Obviously, expand. yeah. margins for Low Yeah, XXXX. year full

told lot end assuming today, the We’re call short-term of interest from it we year. to the we’re at adjustments one to line, that on every one have rate; margin the see quarter, right? a getting these two I of top going expand the

XXXX. But, clearly, it. adjust happen that’s my for in doesn’t I it may If forecast

getting the not OpEx. the benefit, of so you’re much reduction So of lot a on

NII You’re from going the getting finally up. it

of about one in out drop XX quarters think the of analysts came I morning our this NII. talked the

is good end the news we’re that. to the But of coming

that’s profitability the to the of going And We’re of bank. going drive quarter to increase what’s every NII. see

Joseph Ficalora

All right.

Peter Winter

for growth could So progression margin below ratio XQ? do the efficiency NII and the drop think XXXX, that outlook the loan keeping growth by in you and XX

Thomas Cangemi

Yeah.

the think to XXXX. happen it’s that. that if than I picture thing view, QX. is, be I’m steepen, a to giving curve it’s Yeah, going possible potentially of I conservative The is the by big the end mean, lower

a obviously a environment. at thing. difficult interest But positive I’m that’s rate relatively looking So

margin forecast. XX%. up expenses giving simple to going quarter, have every based XXs, XX% you’re comps are flat, growth, substantial specific I’m And forecast, asset forecast, let’s do it’s efficiency projected math, for you of the relatively that XXXX say, a going to And on a the low if you obviously, EPS find and number but ratio,

I range. of think it’s the towards more low end that

Peter Winter

Thanks, That’s great. Tom.

Thomas Cangemi

Sure.

Operator

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

Brock Vandervliet

thanks Hey, for…

Joseph Ficalora

Good morning.

Thomas Cangemi

morning. Good

Brock Vandervliet

are plus this transaction market sponsors this billion I apparently taking units, tax unusual story to you New Large the react Journal perhaps. for rent stabilized transaction to units shifting morning. $X rent thought. from The There’s capture York units. XX question. Thanks Very morning. rate if stabilized, just a actually could a for I Good in it break wondered to

rent think valuations? landlords more tax stabilized you a of and capture do bit popular becomes a where thing, type actually people that the solution But shift and to break for to of

Joseph Ficalora

going building right, to everywhere. unique going it’s circumstances the not it always be where that to think work. I by may building, work but works, There circumstances – not it’s that’s doesn’t

Thomas Cangemi

status, out have be exempting by best going that’s estate And from credit non-luxury, there then which tax fact to right that themselves different many at luxury. them. possibility. on in at But now tax opportunities utilized the play for look real remember, you is substantial billionaires you will They’re look be the the actually that

dynamic. is non-luxury let’s in rent that an $X,XXX, So the the which much $X,XXX, say, rents, on so not so may average different interesting is be stabilized,

out. looking to much leverage They I estate math. leverage, how rate But question the be are takes in when before truly is money. to heard marketplace We that works at put is for that them return real make what of to I like going They this low conservative. leverage, believe simple so opportunity super they where will happen we’re with willing banks be as it do indicated will to the be of investors;

going ratio because It’s putting some [ph] about NII far NII at that more And on conservatively forward. be capital blended, And NII [cash] should – as as a look is flow, to erosion it the be going NOI. rate it. may what in for cash now, there of is

it. important caution to abundance to lender. of understand happen and the have be you look that’s risk the given low change as So That marketplace a viewed with at an we to it in

Brock Vandervliet

much. very Thanks Great.

Joseph Ficalora

You’re welcome.

Operator

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

Joseph Ficalora

three you at Thank to ended forward the presented. of next the And now months you. XX, look the XXXX performance is Thank And quarter. end you. been with six certainly, again the speaking for and we September

Operator

This concludes today’s teleconference.

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

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