NYCB - Earnings call transcript Q4 2020 | Flagstar Financial, Inc.

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Sal DiMartino

Good morning, everyone. This is Sal DiMartino, Director of Investor Relations. Thank you for joining the management team of New York Community Bancorp for today's conference call. Today's discussion of the company's fourth quarter and full-year 2020 performance will be led by President and Chief Executive Officer, Thomas Cangemi; and Chief Financial Officer, John Pinto, together with Chief Operating Officer, Robert Wann. Today's release includes a reconciliation of certain GAAP and non-GAAP financial measures that may be discussed during this call. should substitute in in for GAAP. measures not to accordance financial a as our non-GAAP be addition viewed and with These results prepared certain Act the Safe will provision of conference are Also Securities to Harbor on Litigation Private statements Reform intended by forward-looking XXXX. that call covered be the made comments of contain today's from forward-looking actual results cause statements that assumptions could are Such differ subject expectations. materially and to risks, uncertainties to forward-looking statements We to such undertake no update would to today's expect not after obligation and call. any

You about may will performance Risk impact Report XX-K and including the the earnings Form its financial on filings in and today's Quarterly more on and the third find Form information Report XXXX Factors XXXX its SEC XX-Q. company's that forward-looking in Annual release statements quarter

the line it this go Mr. provide an ahead. pleasure to start to Cangemi, performance to company's for the the my discussion, before who turn Mr. is opening Q&A. overview will over call please Now Cangemi, of

Thomas Cangemi

Good Sal. you for you, thank the today. on us and morning and on Thank webcast, joining the to everyone phone

like turning introduce on take financial the call. detail, to to everyone new I'd to CFO, the our opportunity John Before Pinto, the to

Richmond was XX year years at role going in back XXXX. position for named Bancorp John end since the of and York we the County CEO. with we last and very Community President joined of closely As New know, I transition you have both I succeeding together worked Pinto that into have the me CFO as to John worked time and to

know he new the Please join job terrific the with more will well community. do John, company's me as investment Going a him spending forward, will and time be in CFO. that wishing I as analyst

XX, the the compared of on December Now results. previous earnings three up common the year-ago up we GAAP per this XX% XX% to share and diluted quarter, months to a basis $X.XX ended the XXXX, compared Earlier turning morning, for reported to over quarter.

These we an XX% full-year, tax a $XX.X certain the of share CARES the to basis, benefit the numbers and fourth per penny related Act. year included $X.XX reported per consensus for earnings on GAAP were were On provisions the over pleased quarter with year. income financial of quarter and share, per earnings million for XXXX. million XX% XXXX. up For last performance of a to compared tax our our the better estimates compared $X.XX We're basis, non-GAAP $X.XX than share, company's up the a course to full-year $XX.X

strong year on of to As and the employees. we by everyone and margin and its Despite our effects interest strong of national pandemic in and double-digit in expansion, operating growth, pre-provision continued our growth challenging increase net turn due in these revenue knows, the a volumes. a EPS customers origination net lingering results XX% last COVID-XX was impact strong challenges, year the local economy highlighted

payment quality asset loans has off the status. virtually fell. our as metrics our to continue as proven non-performing eligible Additionally, be successful, all to deferral have deferral program And assets our come very loan to to-date returned improve

the November. the to for previously of majority program the and six-month loans deferral primarily it that we've during as of deferral As our period period somewhat quarter disclosed, on to fourth Accordingly, vast three-month month is initial an our are in period. October unique off a is opposed eligible their deferral during initial come

XX.X% billion CRE XX. $X.X $X XXXX. Office the to zero. at deferred were $XX or December year multifamily loans end June compared billion million the compared to CRE million at was to Multifamily dropped deferrals outstanding while at $XX XX, $X.X of deferrals and XX, to or total compared of deferrals June of at $X.X to billion declined loan XX, June total balances million, X.X% As XX%

Despite mixed and rent deferral deferrals months remaining during about the retail the first deferrals come year. million. to two each use of off of during market Most are Estate $X to well. the of the non-luxury all Real were eligible challenges the portion the New While our fourth economic extraordinarily regulated continues quarter, York hold segment up of multifamily the market, the City

help our metrics. with Our Non-performing overall XX% eventual taxi of in deferral forward collections trends only that points $X pay vaccine economy New of in properties are York assets new region. have the total numbers us reopening borrowers representing quarter, We by and the putting Moreover, rollout basis remained levels. the our administration assets. also and and additional not and above eight continue majority rest compared These in to of are CRE million, million the multifamily declined support $XX state. City are but should evident patiently The medallion evident to look rent our third related. pre-pandemic par of quality of the asset NPAs or the Boroughs, the Five stimulus fiscal local our should the on

medallion taxi the been four assets. NPAs related loans end of million have at or total Excluding of $XX the year points basis would

margin. was the net interest Another highlight

average basis by year. repricing our cost yield the quarter funds partially points of decline driving last in funding of Excluding X.XX% to quarter, CDs declined the decline by to our basis X.XX%, down points year-over-year of to The portfolio. of XXX the compared fourth deposits XX of last overall interest prepayment improvement The funding X.XX%. as This margin quarter costs XXX compared to XX year. points fourth average income, improved was to overall reflect fourth the XX dropped costs the during the points to was net margin The cost offset to during driven CD cost basis impact of basis in quarter as continues of lower X.XX%. X.XX% to basis the points primarily

on of market low is loans Some environment. to yields and given decline securities lower this rate attributed the

potentially kept flat securities. yield With during levels past intentionally increase to interest in curve as increase see position prepare steeper in levels yield rates But you'll low we quarter, the added a our these the cash at the we're also securities year now liquidity and balances historically We as balances low. environment, the quarter-over-quarter by environment. cash fourth over for curve our appropriate rebalancing and we more in year-over-year

Moving of highlights XX% other to quarter increased net million a to major the PPNR fourth the quarter. compared it to the XX% Pre-provision year-over-year quarter. $XXX the up on revenue for on and was third basis,

based XX% growth, growth margin, For the PPNR revenue along million. by and higher income driven loan operating a lower on of with funding increased full-year, net to This was $XXX as rose expenses. interest costs, combination flat

last billion the loans multifamily lending Total now $X.X X% compared billion, year. to to Turning increased up side. to over $XX.X

growth loans, current loan market conditions than quarter which lending. refinanced fourth from was us. opposed impacted in level multifamily of portfolio as resulted by GSE favored normal away which higher the This a Financing, During to

was year. higher level by quarterly this highest of during However, income the prepayment quarter, offset the the was at which million $XX.X

origination the XX% loans finance grow volumes $XX.X $X.X outstanding over compared $X.X of specialty loans Total specialty strong. leases and to volumes. XXXX billion, portfolio as continued XXXX originations By Our finance year-end be while increased specialty or to leases XXXX course the were continue Origination up billion. for and total XXXX, were billion, totaled to finance million XX%. $XXX commitments

is XXXX As $X.X quarter for into the new multifamily including our of $X.X pipeline first billion, loan pipeline, money. is current going which loans, of billion our XX% of

billion, year. X%, to at the deposit side, we not year-end up previous $XX.X declined, the funding surprisingly, rates as CD XXXX, $XXX million or compared lowered rates were On CD balances Throughout our declined. and total market

up rates, our lower deposit including savings checking money However, was $X.X each categories, million which $XXX increasing billion; this in and carry bearing $X.X $XX.X $X.X growing of $X.X to decline accounts growth interest other market largely accounts billion to to offset billion non-interest by accounts, billion. bearing billion;

I'd since move of new to President of opined what I was comments few CEO make for means have into strategic like & New this the named York the a on you this Community. going Before company. Q&A, of direction Many as

Let it you frame way. me this for

We take a same we thrift. forward, decades from going goes and and cycles. model over level five of record side. energy as an over funding multiple XX funded deviate have the back to when track traditional spans a I asset of years successful that business business Historically, proven which it And commitment and with we'll has have business model that quality, ourselves strong unprecedented apply that

competitive by improving mix our with Fiserv, solution, management more partnership towards our to funding recent with new we'll core a cash processes attracting relationships. be However, our geared better change able deposit

side book. the on be on balance the of there sheet Focusing less loan that our liability a not of will mean focus does

what within side, of lending we opportunities similar within also from continued specialty during customers. new We'll we which as themselves to present our new resilience from base our demonstrates the current growth look finance and business. the multifamily borrower both businesses and lines the see at deal both pandemic, with On complementary business,

at This lies focus opportunity within a area for And is blank will network. Another canvas us be responsibility. of us. under another my for extreme branch our we

of done a table. other that opportunities on financial and/or sense will growth shareholders, institutions lift All out all organic options light-minded this consider from combination all be partners. or are of makes M&A We'll through through to the

was diligently to end XXXX, I'd it all remotely thanking whether of or our Lastly, who worked employees in-person. like formal throughout so my comments by

year their would proud the our results On to Our given our your questions. from ask now entire the the of I been note, more pandemic. line would I challenges commitment the had open how cannot without to to for last be performed achieved not and the that customers. company all operator organization

within very our later please all feel If get we call the best free you do Operator? the to to week. to of us don't remaining. today or will We time

Operator

you. Thank

a session. We question-and-answer conducting will [Operator now be Instructions].

of with comes The from Please question first Securities. Bank proceed Poonawala Ebrahim question. America the of your line

Ebrahim Poonawala

Tom. morning, Good

Thomas Cangemi

morning, Ebrahim. How are Good you?

Ebrahim Poonawala

Good.

expense I into sense all -- talk all, of branch will you details year, higher But if savings. as on I ready we quarter the quarter. some XXXX? expenses you in us over And give appointment. the have first congrats to know potential you next next a heard just forward outlook. the that. expenses us the of for be on But I can trend fourth But to CEO where about up look should talk to picked not just understand the talk that about and So

Thomas Cangemi

Okay, sure Ebrahim.

there's very this say movement previous commentary. again, I The expense from we're my assets the obviously, comfortable classification cost the quarter, driven us, on for of yes, managing that, some that, would So, difficult from we fourth on side. through in with time have classified a movements the

However, that cost. a come at does

significant guide basis of those significantly were costs six past I'll the medallion. medallion driven will off So stay a related over about million as fourth months, had it taxi expenses or quarter, $X.XX FDIC differential, continue. expenses, call costs, accrual The my on FDIC some elevated contribution well to the has off on tax as

for guide, So X.XX the I'd my say gives this QX us -- is estimate. well

fourth quarter, high for typically the for it's So while and QX pretty flat, much the bank. quarter

So a QX I'm and run on to But that's somewhere we're compare. X.XX again, can as QX a kind is I you around I'd about a versus of say be pretty for QX to obviously high that rate years a going I not John, but to full X.XX reasonable again quarter think close XXX-ish when in that X.XX, think X.XX, think guide annualization prepared yet is to give previous quarterly between we much XXXX. perspective, typically and

Ebrahim Poonawala

And to should expect the update to And update? we what's expect when we around how rationalization? soon branch want just should an reasonable do what timeframe, have an like, you you

Thomas Cangemi

a Obviously, real So estate for of changing last regarding world we banking, that put it branches was I total our the to to model, reshuffling. the and go look we're going all we're part on as our of side. we deficiencies think potential branches all what And that through the now branch at move we had the opportunistically. and focused the very And look structure. is business going branches see a We that XX we're of evaluated year operations. time on will our continues handful table at we

have a So major win to house. tuned, say the I major deal to a expect stay branches see a would we don't unless restructuring on

as look do conditions. at leases -- So, we and run opportunistic, we'll come rate our from on exiting far we'll time-to-time of the one, as through that the economics we depending but go be due, market

Ebrahim Poonawala

maturity. have, I cost you it. still just coming up fair you for moving a to high Got And the and amount of debt so guess, margin, coming flagged up CDs I think

Just of tell expectation and core the costs going these your just us the margin on refi for forward? terms in

Thomas Cangemi

Yes.

particular of going knows, and -- opportunities we given lows So -- we today. everyone where lot on historical I as in a where we're in XXXX, side. had retail to believe cost still funds, see the we our that in of were we're

with I as be we'll rates believe basis that's QX, a certainty historical throughout stay points in around say an would break probably to going in QX, was close historical low. So we phenomenon I our that low, at the assuming will XX be ongoing that zero. year, to

think much to redeploy excess it's liquidity say level cash given we expect balance about the of safely the as the pace how that quarter of the probably somewhere liability the points put of overall XX cost a customers two the as that I magnitude So excess points quarter, basis given QX XX on would below my And guide basis than what into to instrument. should five points sheet, third many slower CD some fair of the depending drop and given probably at XX of improvement can points be CD a could the in lower albeit obviously us go I year basis well previous the but to decline, by to and in guess basis deposit QX. cost portfolio, in first points, between book. three basis these of is two

So for think quarter the what's I margin three happens throughout on to curve. throughout yield QX. to of expansion we're XXXX, shape see And points basis now guide the the think in what table We'll the I year. with is up five the going

fourth have to in improve backend continues the We stuff nice the that gyrations quarter some in year. the

market environment to accelerate to been we'll market. look in customers extremely multifamily the and table refinancing the in probably there a The healthy pandemic. a multifamily Our will has despite nice and spread healthy come this serve be to

are basis. look a daily if and niche if asset a you their regulated rents rent happening paying player at So, people all were classes, the predominantly on a in space refinancing

we So we also higher. a better could yield see margin curve drive that hope that the

Ebrahim Poonawala

the And market, got can of on in the the just more end one competitive, multifamily if Got towards mentioned I squeeze GSE more you year. it. competitive

the us from give and growing what's Just outlook. getting of do? Do multifamily terms portfolio see in looking they're base kind borrower what your you the this of portfolio, you're feedback to

Thomas Cangemi

and interesting in on versus we We done I'd had disappeared. those of out, for tightening as in spreads fill pandemic, were they they business job their GSEs noticeable environment. underwriting through was very distancing their their coffers March, of fill and strong probably the compete loan kind in QX, Literally, protecting the a fourth money hit, QX, put many customers in very of Lot quarter business, evaluated had was rate commitments the roles to figured significant the competitive. were They in we was in QX, are up very pandemic. with January, And XXXX year. quota standards, of XXXX a taking really we books. believe they competitive a QX. and really strong to trying February, closed they a Well to The pandemic before were very out us kind origination. that taking level -- the and by very way were but QX doing QX remote and social solid then out, some did they gapped growth, And QX good say QX of

So our and we've GSEs. actually with customers great executed larger these competed against we some protect relationships of the

clearly, at elevation were them prepayment long-term of table, However, the were about can market the metrics see And credit of again, you and and And the conditions there all given the yields dollars of let this deals looking portfolio; was credit low bank. the the the we we that protect loans on as went that go activity. some of were some the it's heavy. away, the

and of spike sloping be what product go of GSEs happens up yield in appears competitive to going loans we is and issuer there. here. last away lenders, today, the back customers coffers the typically their becomes if As storybook the and curve, we less we'll the back year to they portfolio filled a as as January, to tend and more starts there's to end what five year, seven happens that higher, we go see very money today, stand it But forward

up we're at net reasonable, X%. growth like as growth like ourselves X% around X% loan right go we into I'd for is it XXXX, be tight So seems multifamily to setting now to

it's think achievable. I

the If yield is curve However, on we really lend. the think a the of in a of shape yield curve, customers due level depend activity. be will refinance, spike of these coming the there are lot to will accelerate that ready we'll

Operator

you. Thank

with Piper Please the from of Our Fitzgibbon of proceed next questions. line Sandler. question comes your Mark

Thomas Cangemi

Mark. morning, Good

Mark Fitzgibbon

Hey, guys congrats roles. you good Tom, morning. and John new your to on

Thomas Cangemi

Thank you.

John Pinto

you, Mark. Thank

Mark Fitzgibbon

that excludes Tom the on had gave, clarify on that I I NIM basis to you penalty guide question, that First point three income? five to just prepayment assume

Thomas Cangemi

We prepayment penalty Mark. guide correct, don't correct. income. That's That's

Mark Fitzgibbon

Okay.

secondly, changes Are the there curious And I also we'll like sounded it on balance new some lending comments you'd be. the Okay. what some niches And that then of see from that I'm side might those sheet. liability your consider? guess

Thomas Cangemi

a there's saying is well, well, credit excitement been level here, all an always lines of service been relationship low We've lending this out in here, Mark, fruit this of there. complementary say the the lying I'd full years, the opportunity business. So about but extremely many culturally. of for is I've

for a That's should the relates us. more wealthy we of line That's we a line tend know has I credit. emphasis. borrower, more to major believe that relationship lending, tapped customer, better a service We of the the more do. we're opportunity, lines a management We're of yet very have with that have is conversion. much we history, was relationship strong we lending. family know our no so it, credit the historically, flows example, we not Fiserv banks. that comfortable deposit we but fully a was system deposit it. an our cash For respect flows. reason not book loan been is importantly, exercise my different par that's That largest year with cost for And with who into And to not right very credit; getting have on in invoke looking flow to work conversion commercial the last easy

So Capital we there's that local bank compare compete excuses a a against. no not to commercial does our One that or to system

I low on we happen we have But So aggressively think the tweak we on bit after. a there's will relationship that may time. there. tremendous little feel comfortable side will lending tweak that to the But service side, go very lying opportunity over

hope our full are should line commitment. we the the be accounts because do the to I matter the on customers full lease and course, a we relationship. as getting that bank agreements you that the want down It amount So here to and a lease so comes on, We have operating comes of service.

at. So to I on it. my where that's I'd a funding staff basis. sick think say be there's Yes, of a I'm daily getting hearing push, going is But

is our this the the opportunity. get change To funding banking we'll opportunity model pure think on and customer the I thrift base. commercial side the within

lines did out, I'd As for that more multifamily today, we going going that But of I the far the and these as management complementary list very be to a looking bringing on in do to of business in say arise, managing clarity, have team And of we're bank finance, with say we're bringing we comfortable are people things them. are we're risk. as this things base. But that the no we on lines our with outside unique all problem and at commercial from credit as specialty these lines looking marketplace. comfortable, we're of at customer families. We it's lend to businesses, new opportunities credit importantly,

going not the residential that, we're we're it it's portfolio. rational make I setting in an to will and be a we're go a a not into market, So going lot quicker partner, assure it get that investing make looking scratch, build-out to over sense. to time, and I'm residential announcement a done we'll clearly can partnerships, you up We'll from diversification new

Mark Fitzgibbon

your will Or over much go I does hiring? sort then through? guide be X.XX to expense guess, time as incremental of And Great. you that X.XX imply of

Thomas Cangemi

come, will expense big strategic, the when something say I'd do okay. Mark. we No,

not service in I into processes, aspects blended such through maybe lines day, accretive material I I'd guide some right business, reshuffle how those people. reshuffling to So and think to think opportunity. deck, we'll -- it's go be we of the going to towards that at end lend now, to indicative look say the you, all of we'll the going we're to going looking gave be adjustment relationship I'm do generation. By going the entire we're people, more of I be it's it's going revenue the bank

some the we on of other guide say I have internally, to people customer side. a in no we base. has with would the can reshuffling utilize real a departments employee opportunity system lot And So huge that We're that the going to restructuring work -- side. of that have

we're in franchise. going catch banking environment to a find and try to keep difficult these on within revenue tight the balance, opportunities hopefully, So expenses focus also the but

So ultimately, few pick the get maybe picked but fruit to we'll needs side be here that low there, service a think, and hires to lying reemphasize this we'll I road down want it. the and I here on

Operator

Thank you.

proceed Our Chris next line McGratty your the from with Please KBW. with question questions. comes of

Thomas Cangemi

Good morning, Chris.

Chris McGratty

sheet and for the the in cash thanks start Tom, position. could morning, the balance if change maybe in with portfolio the the question. just securities you Good

Given about non-loan that, we progression think the the build how in should the of the going? quarter,

Thomas Cangemi

to John. defer going to question John this John, this I'm -- Chris, quote to

Chris McGratty

John. Yes,

John Pinto

Chris. thanks Sure,

to So securities our mentioned quarter. in some we in started as fourth and did, add did increase Tom the statements, cash opening we portfolio his

Over that portfolio the drop assets. securities XX% pretty securities to significantly below and quarters down, last couple of drifted years, of has

securities to quarter, our and advantage growth. take at over the rate of partially to in of to time, do of time, year. position, into environment term enhance borrowings wanted the on and quarter of course expect put the the loans, first the first we into that that the into depending loan some on we the at and put And half end liquidity So fourth

Chris McGratty

are primarily side, the onto funding-related, opportunities asset strategic an change drop interested for with been I'm sheet in the have Great. the I there more funding historically, leadership, to mean in acquisitions is improve? then balance Or and on notable it And the availability?

Thomas Cangemi

you a interesting combination focus I very be on I opportunities that evaluating well unique business insured deposit would amount looking that efforts. may either There opportunities, of to carefully that as business the exist. are real. have opportunities We're business. Their tell deposit to we're that type is of that a there this that's would as those out ability non-FDIC everything gathering at that or they has type say institutions of going available, are these of businesses have bank own a they liability, gather is shredding that both.

finance, a I a two our stock, multiple we can mix. get for that buyer three So of clearly, clearly anything, And not to change the will a if we've without here, you the three turn large impacts looking on over doing as like two on into see we and I multiple. transaction the we wholesale in past, of lot turn at we our get balance sheet core a deposit side back. opportunity, everything. a, to if We're call aggressive Being valuation bid multiple turn stuff. believe, multiple a on stuff as more can do at look we but of indicated We that thrift, not believe an funding dependent I the refocus the lost. deposit so decade energy, a of we

there's we done and going we're opportunities a to next whole a our banks we're very at They're there, other as deposit system opportunities. lot unique that scale looking no successful where backyard much sense. of a have razor-focused acquisitions years. yet. that be own not the well as very to in on have it question three to makes The we're bank upgrade doesn't M&A. important. in mergers environment or believe winning in we're mean going have is do I So it We two But mean

opportunity very with over join just to think time, exists. together of interesting and prosper I the it's kind we family, that systems here could So the and

technology commercial the we that. about was excited able Well criticism really there full And the not have banks. flow deposit we're we've to to go of management back some where was that So historically, pet I solution, larger the on cash no had reason technology, exciting not the relationships. of the peeves have that same because being now to as some have that's

So hard. was a a making. the we our system worked side, This have in three-year on the enthusiasm people lot project of very

about did thinking the making it one's conversion the a XXXX, in was we year middle to it's it three-year postponed after this major for of closed actually a it And August do conversion, though if So was upgrade of project. This right. in year we the COVID; company. even

excited this we're So consolidation about that. us And as on well. will help

Chris McGratty

deal your that's of on? the first Great. doing you'd I if internal could year the going the strategic given just of a everything given part And then the a in announcing in newness focus, or seat transaction, of be comfortable that kind

Thomas Cangemi

time. this I'm That's strategic is multiple about That's new the not This and put thing for clearly, orientated. to shareholders. doing egos history. quite all we long there's value business This is my right will is about comfortable said combinations. a very be doing he the for decades ego. shareholder this about very background. on We're we shareholder here. Mr. doing aside been Ficalora, alongside leadership And I've with my

Operator

Thank you.

Our next your Vandervliet question of comes with the proceed with from line Please UBS. Brock questions.

Thomas Cangemi

I guess we Brock. morning, lost Brock. Good

Operator

your on mute? is phone Brock,

Brock Vandervliet

always That helps. about Sorry that.

And if versus wondered of very to clear. just to what's here, side? could I little struggling changed which bit expenses. the kind little the I was expense understand morning. a guess flat very want good we I'm go -- expenses with or basically guide the with on So I growth

Thomas Cangemi

question. some year, But previous that we the the affiliated -- is, that higher rate by banks And now FDIC are no have is change with now loans had the the run we there this way, Brock in last that are think, I is Well, than criticized. costs year. slightly one-timers

the that of far the get and risk. assessment COVID, managing way, books. to we went We those an into mention as CARES by substandard with dealing go Act Very through loans and a went apply the bucket through as that have have comfortable reevaluate comfortable, we very risk, loan special FDIC And to that they credits.

to is that. there cost However, a

So filling starts start $XX elevation stabilize we leases, got million $XX that get a FDIC hope storefronts, as watch to into I'd there, to loans units between back these loans asset. and say and/or the that from tenants a into their by million you back out on minimum. -- quarter, to then get second what and class them getting And be back to first, of these

bank, acquisition. year-over-year at yet as much to made a be I operating expenses, that's reiterate function down very the ratio $XXX better to in But a built worth management, become fives. our the systems, grown see we low have we're an But clearly to to stiffy efficiency I to bigger that we have when time, office we were numbers. is million benefit knocked that in rate, a bank, the think the run going margin monitoring efficient back that we the driving bank fives, still trying investment risk we back tremendous So low expenses because our it I'll really that not think we're company. we -- going back in through what's same stronger we're on ratio efficiency been to And perspective, the always we've

we can local put this So reinvestment I out, a change with it's see has the they're money time have if guide list-outs but very because that done, Don't leverage gatherers because arises, aggressively. is system what enough opportunity But reasonable. is out, be we be I the some been I the banks to confident into back we expect office system, deposit and check time to think don't think the base. when major maybe going And after is, were there will to going is it probably to conversion expense to my opportunities, it's within platform small or some guide go that some here there to that organization. the from meaningful that reshuffle the

Brock Vandervliet

that see Got and depending is are so landlords costs is the the the did at that has to end QX, And it driving just could for you back that We look for competitiveness like XXXs, fact some in steepened rent is aftermath GSE or what that GSEs materially It it. on it given big? or of materially. looking costs, way just dynamic? pretty revisit the -- of any it what's control I is that can act example, including the driving your, interest

Thomas Cangemi

riding factors, XX with start competitive coupon mean rate sub years, rate obviously, over let's and take can is if over right. it. rate, high of it you Number I get rate, a X%

So works, end you process say closing a size think this you're let's about and to was if QX up of QX. in going deal, how QX,

rate environment you right. to look So the COVID the really throughout at scenario, need

upgrade and was that were great we to end were business guys So that the back I with paperless business the underwriting, our GSEs how QX, in out first to portfolio competitive. then the what out back originate, for were our of distracted, XXXX, was higher XXXX. to QX the company fine-tuned was we of And go major of the in spreads, think because figuring we quarter our remote some a we They and It it happened remote origination did threw XXXX. gate, I COVID. the still was do with of in have ability

so the have system, We Gen New all it's remote.

real think market a larger said, into customers at looked a the QX but activity. great the generally are on capitalize QX, in and of not people that's our QX. and and lot then rates low right there's general originations, in we business daily a I And open -- on purchase are doing real, there's low, rates sale basis So QX, again no were for

So a let's business. way, lose competed that shelf it's with with we ensure the by on lock And the GSEs. the those money to in some don't of competitive we've And great customers long and the rate. put

we And to size some six through flat transactions. squeaked competition had fierce large of have to some up my guys we would three our And flow we middle from the out to in the because QX to in shareholders growth it was close. year, QX. the we've months give it anywhere down and So in year at the end of talking

good away. were speak when going you And it was have seems that quarter my sizeable So news But today deals a that we not on I is daily that a pleased. QX. in the to lending very fierce basis, people

have a nice a nice money pipeline. new have pipeline; We we

fill a of year. back of should be lot last the we GSE And And had the to end fresh they So year, their the position of the at sold again. in growth. coffers started they and

So new let's year seven can with risk seven XXX it's if not the and And basis but be do because up, basis, will spreads losses good I government. we to points credit de-minimis, competed tick the to nothing on zero. five year money competitive, be hope but business I always that get product are will We've five, here. rates start think can there and the or are XXX a on money, healthy. adjusted the XXX issuer If

Operator

you. Thank

question. proceed from the of Steven J.P. Please Alexopoulos Our question your line comes next with of Morgan.

Steven Alexopoulos

Hey, good everybody. morning

Thomas Cangemi

morning. are you? Steven, Good morning. Good how

Steven Alexopoulos

Good. needing have deal Tom. no are might accretive Tom, It regarding to move to I the you a vision an value funding the base like that said, improve the you With be to you still sounds deal a your the Thanks, to wanted company. needle. out tangible need to of gate? currency, book M&A longer of start committed premium

Thomas Cangemi

Well, that at as looked creation. holistically value we

So the transactions we change market products transaction an type and commercial consider be I new to historically conditions, do operations, creating down we'll is value earn I and to think fundamentally, one. to the a going look transaction to to not the tangible a a put no still mean, book work where as for going this the I franchise accretive is number that we our on depending we it I new we approach, -- highly say taking discussed environment could preserved. we table, de-minimis, does be and enterprise, back value. we tangible to and is the fruit within if two prong to low lending where into book at transactions there's could That's opportunities. of on flexible. take at But of we're We're say try that. own would tremendous be within end book opportunity. bank premium will But day, will the value of mean, is M&A lying the priority like that open I drive there's you, the be the the best idea to try really will are diversity that so on

best good to to from call partner, have the ideas. them to when do you I table. -- table, it if of open partners. have become on the can end call you everyone who's you create we'll depends the at So have the a partnerships, It The right, the targets interesting side bring done don't on the the people are don't value. build the transactions be sits over day, targets, partner, partners. other build them opportunity depends we because real earnings We and power of We at partners we our around I

the where the there. lot no shareholder deals, to that's premium transactions as technology especially run the we here is we that's of than low opportunity. other reality for build approach. on before, have that we There look a And it's M&A Nothing's I think our change. had this large opportunity some the changed at a marketplace, I company out make driven in said been some and leadership going sense, the shareholders, with

shareholders. focused right So we're for our thing on the very doing

Steven Alexopoulos

deferrals, affiliates I now like of IOs? insurance current Okay, that deferrals that of are those loans into billion that now that's any bucket to types look are if billion of at the paid-off, in IOs rolled are on helpful. of of were what X% $X.X loans And and then or the $X the

Thomas Cangemi

absolutely. So

the So a going GSEs. lot on into to of back to IO point XX-year about IO GSEs to go structure. also again, the went A these I'm the loans go that could

that and we was literally loans the the having acknowledging of same normal. that city's on to act back back payments reopen off to you question the as the time, no came unique time that is somewhat fabulous. that we're Manhattan the Manhattan of market. have boroughs to the difficult phenomenon at that the getting So went all was But And most at first called this phenomenon, this a when looked CARES Act the record,

in doing well. you is If Queens, extremely at particular and the look Bronx, Brooklyn,

less For concentration of a of of are these the us, that I'd say more title that's regulation. have the rent assets ones

to retail fresh happen market they Island apartments, office, you have So difficulties sure. wouldn't storefronts that more Manhattan, some that they the in Brooklyn, in more for are to Bronx and have Long type will have

billion the retail it's we $XXX cash office And the at XX%, all multi, you portfolio, million still $X.X when a you look is of CRE cash about boroughs, you coverage on one office for say, look about about these the is ratio on say and of be is for of impact north LTV $XXX the debt So that side service and you at if $X.X the a on the and apply area see the CRE, blended a I'll flow Manhattan, just five one. $XXX basis, approximately XX%. basis, multifamily of and flow about that on as I'd a I and million, million, billion, specific is and commercial have XX%

on if it to so. GSEs and the go service could they also pay they the So choose they and their to can leave bank do

again, and others utilizing paid working monthly we're those of have the to of that basis. So some getting and that, through up types Act on there's a lease CARES

non-pay XX% fact given dive when the of we and I I the at the of all that pretty As have importantly, But the out more loans And data, percentage issue, for have look in I niche our is here that loans what regulation, force -- they're continue paying, impressive, the resilient potential, is ones collecting, regulation are the less rent being we're going higher a because rent of we pandemic. think I dominant into portfolio, that which mined you no said, that that, status, there's for they're market that have are niche. which to it's ones business. right, the a and IO the find the portfolio XXX%

Steven Alexopoulos

preserving more opening one squeeze NYCB? in, said we as table. could on view local banking maybe comments, age, what's I for years you've model brand in if your consolidating And had the your you maybe versus And this in was Thanks. about digital the think Great. on under everything everything

Thomas Cangemi

there, deep really getting you're Steven, so.

branches XXX we of have the to you running Arizona, day, to New tell look, area Florida, end given South Ohio, York, New on the of I'll franchise, that Florida, down South our down Jersey. Okay. at

we But brand. have concept, unique very also right. multiple a brand have We a

the market. transaction the all of on So the the depends it on partner, size depends and

for well, the Florida that's again, a going down going be York what it the to complicated. New a transaction best logical logical, right? what's very we're transaction, What's to makes is to comes shareholders, So right and if easy, little be And disciplined. for sense? we're shareholders, more it's But a

However, in multiple markets. we have multiple brands

doesn't have Ohio Bank, well you to to wedded now, right reality platform, we to Ohio, is going used we South down down right back value does are Florida, Savings most creation. there, a what's AmTrust have that to East AmTrust, the If create if something The that's very regional Ohio shareholders do that it's mean anything. we AmTrust, go we're in for we be to makes to rebranded

So to opportunities. all we're open

Steven Alexopoulos

Okay, the great. and all for Thanks color congrats.

Thomas Cangemi

it investment you transaction. By the go, to will the will on rebranding way, before one Steven, an got you I do tell make to we're a we

Operator

you. Thank

line Steve with from comes of question your Securities. next with Moss Our the Riley proceed Please question. B.

Steve Moss

by the credit versus a extension here? an on how costs to wondering, the perhaps downgrades Good of bit morning. portfolio start is for loan little much quarter maybe the I driven credit could If

Thomas Cangemi

repeat You're credit saying, said? you you cost the

Steve Moss

drivers credit The Thanks. cost, of yes.

Thomas Cangemi

That's right.

on go the we as we I believe So actual driven to charges have all is medallion. XXX% medallion

John Pinto

medallion charge-offs. the Primarily driven on

did criticized quarter provision, we in provisions. with little trend was a mentioned. classified and but prices better, that environment The has got lower macro bit XXXX booked been bit the increases and lower better. the quarter than third each the have the the Tom did get which in On little assets Housing we a

Tom want make sure don't risk perspective, of there, earlier, ensure CECL see a from qualitative we mentioned to covered. those we the we we from as huge wanted a increases. loss We cover perspective, to but So potential that were

Thomas Cangemi

that it paying we're I the isolate a portfolio, I of to XX% is kind watch handful attention It I said really that literally John multifamily time. every to is; XX% right. Usually we'll difficult the isolated we'll borough closely Manhattan. It's we That's seeing is would follow-up commentary. on office last quarter and few with split at retail. it's out that on CRE very Manhattan. -- what all-in a Manhattan, right. where mean, and broken but we're mean, interesting back was of $XXX loans, just risk of what it's I having it of quarters see are look you I And mention, million the to million $XXX about down substandard special it's And about if said,

the And as it's -- So when about in good the typically the The called multi historical the believe on ones number you when that I believe is think LTV the XX%, Historically, I that transaction, CRE LTV, we've CRE is leverage situation, look we classified that what at a migrate around we on into do about that XX%. well. is is what's I portfolio -- overall Queens. have the on a on And a hand the had Manhattan this. we lowest have portfolio.

it plenty yes, to slightly And continue the So but needs out one and these a IO you also to help. that's an cash something us when bit loans, higher for they flow more for reason, little apply obvious for structure one it, no than on that to to knocking keys. willing through and the well door some working most majority the They as but one's real do, the but for the and returning work are vast sale. environment. they're very and all it And They're as part, who're we're buy we're sponsors strong working don't, but have XX only. value, And to embedded these difficult a on they're payment their for the interest opportunity get And there's if more any the into unique the to Believe way folks eventual are have a not at we the risk there's real this we out. is paying they're they're not assets, of through These where CMBS will status, me, pool; we loving lot tend getting to paying strength all, taxes liquidation. city. and upon lend. people

year take as that hopefully for we on that's right. Manhattan, that the sooner no happen, us. of the outlook the now about, starts and kind but it. And rather area later, So should there's can encouraging be ring centered it's the this reopening end than hopefully we'll to place, by guarantee hopefully talk of razor-focused we're believe I to an that stabilizing,

Steve Moss

of And if ask Right. kind what period interest-only just you IO mods, curious And is. those the on additional just any collateral? for

Thomas Cangemi

just and Typically go came a requested, months. offered ones pay, CARES the do, bit they to P&I need they Act continue, little back so that they've what six ones that through the we we and the help

And of these comes April So which them, we'll on the a around. take I of are April look May, going that's, to agency and another take guys again, the too. think lot cusp reopening as place, to and on the starts hard at May

So comments, that. before, in is protect fierce our business, to said like know want my competitor. I a you agency And we the opening

of they could these from six type purchases. floor of very because payments assets a it a there we'll months that lot So considered tremendous these these these the to the money of ground loans they're actually from lease a go think things buy would good of asset these all -- make go now. spot going out their some and sideways, amount where to can assets event, special on mention in call of even loans love cusp the the in there, protect up particular. But There's a in of though asset, I are

right So working now through we're it.

Steve Moss

What yields the of securities in purchasing on the of quarter, question squeeze helpful. kind what here are these for yields? can that's days? last purchases one Okay, And if kind stuff you're in I just just the curious,

Thomas Cangemi

stand upon. got, It's go dismal. The you yield when John, as you've to

John Pinto

at good for at, mean, mid-ones X.XX we if looking I is the which type quality range in you're what structured in look the you're agency Yes, paper, paper.

Thomas Cangemi

you liquidity we if in balance, Yes. have zero. the billion you cash of tremendous obviously think And amount about, had there's $X

into as loan going our book, as to security. deployed hopefully that's be So well

at be had million basis we point. finances -- have even still going we to So liquidity X.XX deployment forward that advantage put the a restructured about curve, taking market matter XX we that we wholesale this a the excess lot and in if $XXX my over a guide, do of conservative some money time on structure of million cash. excess margin $XXX quarter, in of But the have as out of very of I'm have long,

[ph] is XXXX, lock-in something a that's And which next instead to going look XXX. that we long I probably So then in of comes think overnight. money about slug big the of

And float macro a that we we fixed out the far And in rates just So on multifamily too restructure that the first, will remove hedge stay if on billion is it. the on time the think low XXXX, we that, I for interesting our going $X have that's basis that beginning longer, so XXXX. side, on is to XX what's against to another of going really points margin not for XX have we're to money.

hedge and as that's But going behind a in everything also be something happen my us. and not is is to view XX to probably strong economy that's margin. that in So months interest beneficial the that'll that could rising XXXX, grind and we Depending it we the hedged some we be reason, may on we're are margin. for through honest, were keep for also rates, there upside and rates

Operator

you. Thank

from of Morgan comes Ken question with proceed question. line Zerbe next Our the with Please Stanley.

Ken Zerbe

good Great, morning.

you Just in what the of given imply to do hit of do your terms for of that if have tax if administration, in minimize versus get increase, taxes, overall the or we that change in strategy? terms you kind rate? tax anything And can the a tax that does

Thomas Cangemi

go a question. Obviously, pretty simple we possible. if That's that's up, more So taxes. rates pay

which of XX%, a on going ours taxes that be tax means from dollar? that be and were that about you where talk managing took it no level anything? more to let's to want XXXX that question phenomenon, but I say profitability. XXXX from not going is impact much a the it's less help a down bank phenomenon, it us Right, would we're dollar if XX% now a think our but they point on very focused structure, on, XX%, for John, higher I would to very such add as proactive to higher we to

Ken Zerbe

rate? in increase goes XX% I percentage it my should to more been what the increase, is that's clear tax question. effective XX%, a with Thanks. your if X% have from Yes,

John Pinto

X%, be right. Yes, it just would the below

So any mid-Xs. that's It would up. probably that the be would planning would items go in excluding it we do. other tax And

Thomas Cangemi

right. Right,

Ken Zerbe

clear And there other items do? just me that But help to planning with be is strategies? it. any Got you those tax can

John Pinto

right. in on that mean much the played see haven't I federal past; in we Yes, you our side currently, the can rate

it normally, the we So at future. look But as in we'll the we've we that's at. do would in past, something normally not looked

Thomas Cangemi

we get it more is don't raise do Let's it if to then it. hope do happens we we is is taxes XXXX will XXXX where they probably probable with what and

Ken Zerbe

it That’s is that hearing in but the XXXX. middle thank the not now could right, in what right we're of be you. All pandemic, right

Operator

you. Thank

next with comes Dave Our Rochester Point. question the from proceed your line of with Compass questions. Please

Thomas Cangemi

morning, Good Dave.

Dave Rochester

all. to Congrats morning. good Hey,

Thomas Cangemi

Thank you.

Dave Rochester

you've per Tom, I rest or just expansion well, looking the mentioned given XQ NIM XQ as now that beyond pays year, wondering quarter, at five for was of your three expectations on good to and you're the for rates? if you think this what bps

Thomas Cangemi

guidance give long Maybe I no don't time, on the margin, NIM for yearly so.

Dave Rochester

Give try? a

Thomas Cangemi

it the you we it curve we're little here. rates; showing And significantly, QX I some when expansion of outperform If customers. we're of a shape a get interest in expect. bump-up running pretty tell bit what models be on yield think the many that'll we run environment. could curve. that a quarter know a meanwhile, fourth conservatively; try. the We I depend I this the But it's going had margin the spikes flat of up much will you But excitement attention the lots with in

two I we about it lost faster, if we'll the think liquidity, get on excess it we've BPS probably put back. out

opportunities as the at there. as peer portfolio start we've we significantly lowest if we're And our it the and a the kept have here ourselves know, don't from the we the you group, balance which position of has to side going in to funding I is below longer look XX%, a to And you median bit peer probably redeploy to go it group. little take think securities in that's sheet. anticipate bump As out

now; high impact favorably goes zero cash we'd return of say coming it to XX%. that to let's work. right to the But So very off of like on cash. the And hopefully, XX% a is money that's position to from maybe some going margin, put

Dave Rochester

Yes, okay. where yields multifamily And the now maybe new side, on you loan seeing are --? on money and then

Thomas Cangemi

Yes.

believe, I yield, So what the John, new X.XX at that, pipeline money was pipeline?

John Pinto

-- pipeline money New

Thomas Cangemi

with Bear me.

John Pinto

X.XX. Yes,

Thomas Cangemi

somewhat the Yes, tight off had coming seeing But hovering been prolific again getting duration be we've has so And that and question that's it's modeling X% tighter than then been we it's guarantee on I the That and to was healthy to important. of last expansion. originated agencies end, size happen. that have, we holding if a you more a yield no so back more in we the lending of X.XX% the payoff interesting margin X% we But a the is still does on Xs, around steepens again low shorter. we’re depending X.XX% desire scenario high, the could though little still low in the we're and what side. X%. Xs spread, go XXXX bit a X% at. happens of conservative X.XX%, X.XX%; that the X.XX% payoff competing spread on between if There's deal spike that But we we're liked. see think look apply net, quarterly to it's the to that nice if modeling curve was The

Dave Rochester

think Yes, decline? need before to the okay. How to you GSE long-end much competitiveness does you do up move start the

Thomas Cangemi

year I at especially I significantly choosing years starts looking would here. really move move XX time [ph] the to XX think XX the spend when with

of we're nice had no fourth on questions a evaluating view that's been spread But the opportunities has and think it Brock move in rates that that just may end, back stay twos bank getting I synthetically economically, go that sense on to with to make are portfolio swap and time to upfront. we opportunities. customers program considering between to table. that in move XXs, is and going the higher customers think and if as them get evaluating That's is to internally, spend where synthetically the I quarter, the realize have are substantial We expectation back specific that portfolio lenders and a said the something customers the will between something from do you deficit the given view some some will keep continues, far going a fees as lenders year not as the preventative that a spending, swap seven space. that to GSEs five edge

Dave Rochester

borrowings Yes, the okay. Where were you guys for think adding the you quarter? is do rate And what now?

Thomas Cangemi

money funding. we rate on is funding around which to is to years year cheap look spread, bring XX to opportunity the it's if three on it XX an XX points, X.X X.X so anywhere which we will cheap. year that say interest basis And overall rebalance side, risk I'd by taking from can't pretty

Dave Rochester

that dropping mentioned, million just expense the And in rate this $XX of year be you should in FDIC that expenses, million to XXXX, right. run additional Okay. switching to out extra $XX that

Thomas Cangemi

the costs I [Indiscernible] and insurance. to we're us as moving assets doing. and caution key. be pent-up are I today it think abundance being itself. And And work, should go all there's demand a it some foot the bucket City see that, if traffic And think people that's released. the into depends is on an you'll that, on on bad extend biggest New as of classified start pandemic money how we York FDIC back that consequence reopen, And the and

Dave Rochester

appreciate the thoughts on there the your sense. that outlook, I growth And makes loan multifamily then on Yes, side.

thoughts the X% there, your of said portfolio? on to X% what are you think rest I the

Thomas Cangemi

we stabilizing had look side, substantial on areas just a X%. last a year market flat be but that think other the little may matter at to something I we CRE, or let's on a just is down reduction say X% it's CRE bit of CRE the that

billion what's finance, amount specialty we're to $X see outstanding -- tick up is think I to nice that's the outstanding close going and given billion, committed on a $X.X committed

John Pinto

$X.X billion.

Thomas Cangemi

$X billion outstanding.

a nice I there spread think there's of takedowns.

takedowns go seen in we the more We see to year. haven't we hope takedowns QX; the as into

XX% built CAGR. CAGR their we year had that chart So the they've since with been business off -- the last have

worst So years year. we probably I expect to nice XX%. growth, one previous probably pandemic, was do the it's of our was hopefully, That what consistent when the

there. a curve, XX change shot with retaining you to ensuring think an done fair is go we're to And before about XX%, look want then brokers, that have data there more agency. be competitive. at these you we're conservative that to a And guys business. have lot our yield a portfolio, retain if amazing in think And to at good take we with working mining XX I going on a the to multifamily, So we'll the the they the leave business the we're customers job

to bit big we be We're to Now more IO be market. on hybrid depending was as a to absolutely. very that But customer relationship. try a the did we selective those IO. time do a depository IO a relationship But we're That's of in time, IO relationship deposit make substantial decisions large long-term because on relationship. QX to viewed We we the there; and going little not a have lender.

it and on this very becomes bit side weighting we category. little agency a One pricing the of different competed. the And lose against our strong because was we customers a risk weighting risk

great a relationship great deposits with and it's tons of loan, However, it.

So we competitor this a environment. have to in be fiercest

Dave Rochester

Okay. well? deposits, assuming continue And securities growth you the should continue as you thinking to are that guys then grow that

Thomas Cangemi

guess expand the want may on it. to on Go ahead, I John John? side, security and

John Pinto

from the hopefully maybe grow it depending what position we in is keep a the flat deposit we but given bit it Yes, first of would and the and here, not dramatically cash little expect growth then pretty would from expect quarter, securities, growth. there, on

Dave Rochester

then And one just maybe Great. --

Thomas Cangemi

it’s Dave, going not to on push, to the difference. zero is traditional be be cost it's to the deposit. close push, of That's which retail business side, deposit the going

Dave Rochester

fees. just maybe one and good on sounds that last one then Yes,

first You in maybe your for fee What's in or quarter. the for half the a had step-up outlook growth fourth there good XXXX?

Thomas Cangemi

quarter. Yes, the increase we're We're fees. it's a assuming big pretty not assuming now to right fourth flat to

forecasting -- conservative a we're expect -- more don't increase; the a of it fourth. had third the we're big being we're pandemic We the conserve right there. number. But around fees the quarter have than could fourth be lot quarter that during We waived what

John Pinto

canvas, you're of So don't point lot the that's we opportunity eventually, products where Dave blank fee that the lies. goes the income, back have a if of to bringing

about sell with we going blank large structure branches have M&A where opportunity to system. where that through a the of you new we can branches. paint These branch tremendous When going a and that's are We products a lot back. the very business legacy products don't partnerships, think is canvas that

XXXXs some that So of businesses could that commercial to businesses that community of don't we cases in lot a we of really bank have that within normal are the lines the have have. these lines goodwill

Operator

Thank you.

comes Winter question with the Wedbush your question. next Our from Peter line proceed Securities. Please of with

Peter Winter

do think you generate this going Good. think growth to what what of Tom growth in the deposit year? deposit on go terms could focus to to? this ratio you deposit you're do And with loan

Thomas Cangemi

$XX.X low towards it's right. not to emphasis comes push culture, public the business at and to have, last an have on And want. that relationship, not able loan is reiterate to we the versus I'm here the concept we technology nurtured a look going with XX% a in to shown be quarterly to going it be be customer a for as passionate lying relationship going year. and of We culture to get single bring to that want new to mind, we deposit going we update fruit. side much This really when If time, lying opportunity win as uniquely relationship. I it, as At different deposit needs deposit the the And obviously potential to full we is base. should the should side. has be every basis, going in billion go get been Yes, plan, lending same a push these it more business, we you be a originations on processes, we the existing this. the at look to we're low did guys well service passionate so that because to to

like get But I XXX, we about XXX. guy if a we then I'm So win. XX%,

relationship that know, of we customers the us lot within volume evaluate as over can because if all stay a a and short. we found the they relationship you portfolios, win there's other business. book, feed, that have move of do are to, you we tend a your it's What that manager, as lot good good you relatively with with when a not it's to So is if accounts and portfolio difficult portable

volume times portfolio comes it's of my the truly And opportunistic clear day. eight seven, of get more has mouth we this out are. think year we where term at So the been And a the the about I duration do, we by the and culture we and liability that's is think cultural. least

So I'm get we'll numbers numbers reality, if growth do time. not get that, don't going right. we We're and there. to are going to fine are over see it you the tune that you to fantasy, give give you'll till it I'm And that going we

Peter Winter

fair. ask take to the acquisition And diversification then could maybe on market and fee M&A Okay. That's the front, on bolt-on just if thoughts a I some income that add way? share

Thomas Cangemi

five Yes. we'd earnings like funding obviously, fee of company. a augment to Like I take trying want accretive overnight. we do the we profile transaction We years. like the to can like at to we'd in income to happen that don't something products, big this of to change picture opportunities. the then a looking I start we that And accelerate partnership all branches. the do do with we all to But look mean like can will to we the opportunity, it driving has do if also products said, change transactions; down we to at mix, solid array seven we're that these can

So my opening We're like shareholder very said, I on on are comments, focused. the options table. all

comes it we of have when a very diverse have with franchise, to We franchise geographic, lot it. things we do unique a a and could

both So seeing of as M&A. opportunities. we're the great on We're on about opportunities side as strategic deposit well lot a excited

Peter Winter

for Got John it, the Congrats, Tom and all right. promotions.

Thomas Cangemi

Peter. you, Thank

John Pinto

Peter. you, Thank

Operator

Thank you.

comes Markets. next Capital question. the from Please of Our line question with your with Steven RBC proceed Duong

Thomas Cangemi

morning, Good Steve.

Steven Duong

Good morning. Good morning, guys.

CDs between growing one In your on and the is focused as the you're now side borrowings recognizing roll-off, core a that other? meantime, funding here, preference deposits. the on there Just or

Thomas Cangemi

billion in both, points. basis sure. A rolling-off $XX.X combination at XX we mean, have of XX months I

X.XX%, two some have platform, quarter, market the not to points XX hide going billion basis the account instrument, or at of CD the customers a $X markets in at just basis This to retail XX we two and are between into points. basis XX money points they go may

market a the there may rising month or So of a assuming they'll the one-year the pretty but take XX versus an other. while top in rather much to not have cost be on lowest CD opportunistic want environment rate if CD go funds there for short on and we're of them wholesale we'd cost that they each hide a is to end, and the

So money saw more market for are sure. rather that type right. we'd bring operating as either the of cost, accounts account, CDs customer that the -- an obviously in you transition lower went viewed other if base hybrid But into deposit where and funds so

Steven Duong

And Yes. quarter? how this in much borrowings is rolling-off

Thomas Cangemi

coupon. billion million in at very fourth points, rolling-off believe decent year, the average XXX QX so $XX amount $XXX it's $X have for at the of of a But at have then small we XXX quarter quarter, about We about X.XX%. the million I on And in X.XX%. year XXX sized a next basis

Steven Duong

on thinking deposit guess, how the that. growth long-term, strategy got the Appreciate the with then about that, core on just, And doing it. in side? origination the are your it, you I Got brokers

Thomas Cangemi

But our We've brokers. historically of going not sauce not have relationships great announce -- that. a to we’re process. had about conversations. was with I'm already secret we to And, going

Now the we're of matter closings. change to a it's going getting internally, process at ahead the

loan the of our a with volume before operating require docs. require, took Now, we loan the docs and we lot accounts

lot waive $XX their and the customers million, less get up the waiving do you open of million to the get get to and So account instead the to relationship table them you want When and $XXX the they closing it. the a guys at they've in you table. you of front relationship going

people. technology we we to that's to a So out the And that's process going same the see to and the fine-tuning and at probably invested what with it's help. here. about repositioning build-out the time, And get that's we've have and needle this in loan dealing customers that will goal move need

Steven Duong

that was capabilities you the that able now have you it to didn't you before do And that case do? weren't the because and

Thomas Cangemi

throughout biggest major it's under We Fiserv that Fiserv. of right? platform with No, Fiserv the pandemic, our the partnered middle all systems would core just did August the in processing the in bank conversion plug system. I had no, for absolutely the say entire into We've not. D&A's two-fold, of the

a We So partnership as the saw Fiserv. have the low with commercial very side strong on we score, well. co-collaborated

there Fiserv solutions management flow cash commercial July. same the product. It's used the product is that a in throughout entire not product program that So was was country. the we that Fiserv a that's have And

fairly So that opportunity not not that believe excuse compatible. a our is we this an is is system new

where the I get, have I think them, is and of starting at traditional August, So there's the will the to on And we're way, matter And right? a them, even top at on the getting focusing the the funding. So have is should since franchise level this be all getting a solution. going down push now from level, a we with the good board by but away staff. It's year. we push. And just the very the This the a way when is thrift year old, the it's onboarding board, this training solution. only not we customers

Operator

Thank you.

proceed with of from Inc. comes question line next Our Stephens, the Please your Breese question. with Matthew

Matthew Breese

criticized curious the this versus release, in I just classified what balances don't saw think I last? and quarter was loan the

Thomas Cangemi

$XXX I'll of John. I we a I the go And think payments. just being discussed, for lot a total about IO of through I them most of a is $XXX we XX% that Manhattan to market, and months, them the in six I'll -- to had -- multifamily. detail. when again. customers The we think had that looking of that, still these We went continue go And I of customers capacity million at structure for at these million some had, XX% one as I XX% which CRE. through But LTVs. total book in of disclosed substandard I LTVs of a on substandard think one the we that put making -- give I'll for CRE most identified we for these went portfolio, in multi these of believe through I

We period them. like where these because into they're and said, month May the April, will of we're we comes area Manhattan the boroughs. at roll we markets, the and that get see six when so as I more due other working the reevaluate of is coming And focus clearly, out loans of them not see Manhattan with much

Matthew Breese

it. Got

Okay, as structure month so six well. it's a

Thomas Cangemi

the six IO, yes, Yes, well. as month also taxes and all then

Matthew Breese

all paying us. They're

Thomas Cangemi

They're right. us. paying That's all

Matthew Breese

I on just mentioned, color you'd thing a explanation. more wanted bit little One

what XXXX You roll-off. just the to mentioned that XX Can bps? and by does me, why it was size the hedge benefit was, you for the that it on in potential how remind put them

Thomas Cangemi

and Yes, fixed -- it on hedge. did our floating portfolio we that notional last against total hedge was $X layer from loan to a that our billion swapped

So matures of XXXX. it was in a that we three-year swap so that February did,

right or their get pricing loans now which another three-month we are rate not a our So on go LIBOR like essence off books. back that, fixed do those see into transaction if we to will in reup

back the fixed you'll $X see big loans. of a up on to billion that rate normal those So pick

John Pinto

an That intraday would categorize as risk hedge?

Thomas Cangemi

Right.

Matthew Breese

verticals, new you. have you you you a thank that's right, make message is new one And clear. place into just wanted I add then expenses. something the regards do? of rate. what was loud to may me, NIE just going last you $XXX feel run to that to for the I hear the like in in good -- All in sure expenses, terms a in hires, place, and million ratio to or sub a And feel annual That's that like that that's X% can good the go, you you

Thomas Cangemi

we comfortable today, we I I on a feel obviously, we're mean, FDIC efficiency with it's think strong a estimate for strive ratio. those elevated numbers. are fair I where very

the us. resources product the the we it's But where But mix expenses, to as happen, the forward, I REO we're had not some the relationship the partners, towards lending in not context customer low the we're is internally despite medallion needle, not And change efficiency pieces going pull going the relationship harvest this will met to we're low fruit push talked hard to a bringing here. towards change well goals game as be is going on going year we reemphasize to took put going will work really a were, as down are harvested the lenders, harvesting slight into with to to what we're going the right. some I that on lying change we And had our reup gathers with action. they think product ratio, FDIC to the our last in on service of move as road. to vendor that And And [indiscernible] systems as pick medallion going try reallocating And mix, to lying the as now people, with some the was somehow, the we've I our going the we it system side. we uptick. identified related that we're a did cost, conversion going key lot team. But team work going us serious about. of to we've to very extremely that deposit I'm in work system to fruit same for want competitors think helps the always together in brokers,

family the makes lot a sense. join more through, will So doing it

Operator

Thank you.

Christopher comes your Please proceed with Marinac Montgomery Scott. question of Janney final from Our with line question. the

Christopher Marinac

thanks I of you New stack Tom assess John. to possible my hires markets And kind to is and ask the specialists would this in Tom question that alluded for team? other Hey, up kind a deposit them strategy besides well be these to, taking a that about in just wanted of individually York?

Thomas Cangemi

effort Jersey, Florida, York, And when way. here Ohio, done Absolutely. paint try looking to will it that canvas new true And type Island, And Long create service on spent like in major think getting the to our And typically value proactive going come question it's flow give on be backyard, full We're seen at are are going people the going and we've these have through be going ultimately, But platform successful a time, effort New utilize correct. shot to to most And solutions the spent change very products. in we've by competitors well. not a be of our a as to to methodical management the I cash growth; we opportunities, think over New I the we're conversion, and with products a we it. portable. no partnership. these indicated, that to expense system. just commercial will be very and systems I banking happen at the it's our it the restructuring we've

CREs, at banking with a within it's all customer multifamily want the of have typical some and And customers deposits. we we wealthy products done looking always we customer's that's working the of of type matter the We've working with what and relationships, Now, that. of changing the have base, that opportunities no for existing why business. the lines with of and within another perhaps they're these current a bank, reason don't can't brokers, book with credit why do

to mindful opportunistic, not will But have difficult to do that. on we're hopefully the evaluate time. run that's have bring their right which acquisitions never So a now put up table. has challenging difficult, can acquisitions the where be sense that, unique But it I the within M&A scratch. be then work, has it's the successful, business think through their we that's our you residential system you traditional we people service it thrift card to a And acquisitions going from branch a not a M&A to And partnerships Everyone when right of full for of not this. Like with table, makes a would a themselves very could perspective. people make to partnership never traditional about if partner, convert to because those said, seen to organically going call and marketplace are hear statement table wealth not opportunity be we that over thrift platform, and loan on expertise I'm partnerships may to transactions partner to it common it's the types on like a book the thrift from a I've change credit goals. the I have done scratch, open we're willing products. going want model, a doing right;

Christopher Marinac

these just; It's issue, Great. a happening. specialists focus And now there. it's not is out are which

So thanks.

Thomas Cangemi

It's right, right. It's great.

Thomas Cangemi

I think the that's last question.

So morning us again thank you again to XXXX. April, time join with chatting the NYCB. end the to the XX, in for Thank this when all. you ended three of of discuss taking in our look months we'll We for you forward performance and interest your March

Operator

conclude does That today's you. Thank conference.

participation your lines have for at disconnect and you may You this time. Thank your great a day.

Flagstar Financial (FLG) 27 Jan 212020 Q4 Earnings call transcript