NYCB,NYCB.PA - Earnings call transcript Q2 2021

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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 Second Quarter 2021 Results will be led by Chairman, President and CEO, Thomas Cangemi.

Before the discussion begins, I'd like to remind you that certain comments made today by the management team of New York Community may include forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995. may subject we harbor the statements rules. forward-looking make to are safe Such forward-looking harbor about and press review disclaimer Please the safe which affect investor for uncertainties release presentation language more and information risks may us. and today's in

New to CEO, would Chairman, Cangemi. Community's introduce I President York Now like and Thomas

Thomas Cangemi

everyone, Sal. our performance. XXXX second to you joining and you, Thank morning us for quarter thank Good today discuss to

is John our our Joining also Chief Lee Officer, of Mortgage. Island me Flagstar in line and Officer, our Flagstar of Robert by President the Chief on headquarter Financial Bancorp Sandro Pinto, Long joining Wann and Flagstar and President Operating from Smith, DiNello, CEO

reported you second today. quarter have results seen As may Flagstar strong already

year. results. the better-than-expected earnings importantly, this margin, We continued quarter improvement expenses, in per with very This I'm quarter, consecutive most by expansion also strong substantial net quality, credit better-than-expected of our is which for announced our second operating quarterly results in and a with the happy good solid interest our second highlighted loan share. performance growth, operating is the lower quarter

of of non-GAAP In XX% back of non-recurring best and is the EPS performance estimates. first year-over-year up million, share operating over consensus in items ahead years basis, $X.XX diluted a excluding this $XX when mostly reported XXXX. $X.XX, of diluted quarterly On XX quarter we or per were fact, in company's $X.XX merger-related XX% earnings

a diluted basis. While were share a XX% earnings per year-over-year up $X.XX share, on

basis of quarter. the to $XX increasing previous Prepayment was and to compared starting margin points to the As up quarter points to net XX basis was interest year sequentially. for our the million first compared margin, income with two second quarter, during margin XX% second added quarter the strong basis XX the of our the in X.X%, very quarter, the details points

X.X% net points increased Excluding prepayment during five the impact the liquidity to from expectations. compared prior of quarter income excess ahead to quarter, margin our the and the basis holding

current second net $XXX Our pre-provision XX% revenue of expenses merger-related million, was million, year-over-year. totaled very excluding $XX quarter, a solid up during the strong also PPNR

Another Total the decreased efficiency or the which expenses to ratio, $X was quarter. we X% during was previous the what compared previous the of XX% operating compared also highlight million improved which quarter anticipated. quarter, better than our to XX%

June Moving at XX, billion, XXXX linked-quarter $XX.X unchanged on on relatively to Total deposits. were basis. a deposits

on since this However, the making year. our significant beginning strategy the we masked the growth of progress are deposit

XX, more multifamily XX, bring gone $X.X to initiatives or bear as quarter has driven in billion at If to you my one to relationship XXXX and it initiatives XX% of loan-related top real deposits June been compared at during our March estate increased which CEO, billion was to $X.X billion. or commercial technology with over being they've annualized $XXX partnerships, Since beginning compared borrowers. $X fruit $X.X XX deposits million to billion increased look These this to balances. from December core by primarily before settling named to the the increased XX% average deposits deposits, from our our back are

year As to to as XX% increased. a total deposits result initiatives, percentage a have the current CDs second in of quarter, of deposits have of XX% these as the total declined quarter, compared while ago

level of including front, a or billion. annualized, a had strategies, Fin-tech the well as Banking to lending annualized growing expanding linked-quarter into base, or existing focus companies. first X% to elevated on portfolio as terms continue basis the deposits space X% a through borrower increased by our further of in will Total relatively as compared for good held we $XX.X a of of quarter an penetrating million increased a prepayments. loans On to investments partnerships loan multifamily quarter We variety million The of growth. $XXX year, Service on with despite the $XXX

commercial the real $X.X compared modestly, growth especially or to portfolio X% the billion portfolio its declined previous increasing While annualized grow financial estate trajectory to continues with in to quarter.

be quality, credit our and for quarter that We’ve just while industry. in the As continued best among and slightly. reported strong very to another net recoveries of the improve ranked NPAs

billion declined as closer expect the of or New the More importantly, interest York to $X.X full on to we're XX% year. while, to improvement of status, reopening losses. actively Since we Metro full or see XX% XXXX, pandemic having only paying a to borrowers our billion deferred total of loans, payment the not the with total we $X.X the COVID-XX substantially beginning move X% loans of compared $X All the any the turned total incurring notable working billion of city Region. our and this last deferrals throughout had billion of $X.X time

In the terms positive economy, to outlook of a local one. be our continues

City pandemic portion New the the market borrowers have same Rent York were non-luxury the our the performing well. and of of at multifamily rent-regulated is be extremely continue plenty as they to before collections estate market, portion real level Our liquidity.

for vigilant to signs looking of any we weakness, the are full the region months. reopening the forward remain we upcoming in of While

our Lastly, brief Flagstar transaction provide I'd with planned like on to a update Bancorp.

at technology teams been integration number services products least we of the a on process. fronts, systems significant customers. will progress informed, of decisions integration our use including if planning we platform the will the made, on weekly, and date To combined not and we selection daily making are and meet key We offer have multiple have

completion been Senior of Leadership me and had merger, stands going directly subject of been All next to to reporting In planned followed approvals. regulatory regulatory August announced necessary Since by virtually an which fourth named estimate priorities special more early to day is the evident The on joint the Management Team, merger, statement is merger of shared required Executive with sets filed, addition, who by. X,, Executive in each month. will both be support we a to filed shareholders our Sandro closing application our the I've and week the for X-K our in forward. vision companies more combined last time shareholders meeting as and we all have organization the we subject held the his strategic milestone quarter, spending both which Team is the of proxy goes last for

position the of companies Just companies becoming comes a combination. it's more But stronger, the and traditional Alliance. best a not one, are much in and at spent The significant the more of it time my opinion, value taking two is an for better merger, out everyone. creating looking both it we organization forming excited they

we metrics, you in we income Flagstar’s double-digit have. well add-on of and into accretion lending, and immediate would tangible company given each have number indirect mortgage lending cross-selling questions bigger in through leverage substantial EPS may top book opportunities, balance compelling This direct as up including significant you banking, to that, our These products, to opportunity market answer include sheet, the opportunities, of key and the both addition fee growth are will learning C&I traditional and creation, any businesses value to The amount will opportunities businesses share. as a businesses In new With by markets. and be of benefits number of mortgage multifamily branch there apparent. NYCB or happy financial to warehouse where a retail network. expanding a readily rank is scale lending, combined increase set of a the are deposit

and in results you earlier are business their stated may their also and Sandro As any answer the have both on questions call, Lee here to model.

remaining, but will you. We the week. questions. our free all very do within Thank just we the if or don't, feel to to us get today call during to the line best of either please open for time Operator, you

Operator

Thank you.

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

Our first Steve from with question question. B. Please Moss with Riley your comes Securities. proceed

Thomas Cangemi

Good morning, Steve.

Steve Moss

and with loan of just in Maybe quarter here, underlying morning. pricing here here the good terms starting good Hi expectations core. margin

kind of there, seeing have Just in of could you you're gone? give price where terms Tom color

Thomas Cangemi

– overall, change prepayments to book. the see you X/X basis just we're anywhere respect XX product multi we probably obviously, the a – to traditional the on still significantly need over as basis so strong and commercial, we points despite XX economic above in But the business, to the relatively seeing prepayments far can in grew on from the as throughout been getting X So as of returns points have that level that. the to

with So for back on the the portfolio for a the about have anticipating We're margin growing still that company. fact reasonable And portfolio. portfolio yield X% trajectory on to – growth we're and say type the excited at single-digit holding a year. we the growth that you coming around that about think loan would and if I mid

as funds anticipate declining still second are funds decline cost the the slightly, course move in further we of our so quarter. into Of we

X X potential we at to say looking probably expansion margin I'd basis a points between So points in as QX. basis

are continuation of more we're expenses hotel the for a will we of to side bring – importantly business lot set which with So of on the the that occurring lot ourselves sheet the liquidity, ongoing as opportunity balance going combination evaluate. up

lot as specific we to closer the liquidity. a at business decision bring going of transaction. to portfolio math, we tremendous in but a wholesale of we'll have the we're to been baked opportunity we excess as there, a not it's what haven't We look into And as merger make do the combined the liability get closing

a enjoyed that unique continuing of a we XXXX. about the now over and consolidation very focused quarters excited reductions few model of been the the even anticipate cost We margins. continue we've half opportunity though a in of they've into funds improvement margin on as we're of So the the business to almost that past year and ongoing expansion, a

Steve Moss

an kind I adverse you is see question banking expectations color of helpful. the which you – underlying for and kind That's out, one kind update see are market the the maybe where around on with if just just guidance on And fee coming mortgage here, And things your out? playing your give Sandro of Sandro, us what deck, market do in then the thoughts that.

Sandro DiNello

we've strong, done is Steve, revenue And stream. the only our in the to from the What quarter. mortgage MBA next be I do been GSEs we consistent this think market. for look, been continue also quarter, to businesses us and not you’ve guiding you. mortgage projections Yes, in Hi very for shown by what hear strong mortgage to a it's we've think a look continues to what following And way that but nice there. very, as very trying we're the build we've you found know,

about plus Lee little you going I’m long-term. So or be run let feel minus see if the rate a a more be sort to revenue is, that. good we of very we the you what and the will today over mortgage specific I think of hope XX% consistency will about bit to

Lee Smith

Steve. question, the for Thanks Sandro. Thanks Yes.

a Sandro just what more So little color giving to said.

spread, In at And at in terms able when got Steve, the mortgage up MBA trillion, model, $X.X at agencies $X.X cannot. it's the X.XX, and on constant the been several our holding sale trillion pretty originators given have the margins. diversified then XXXX you of at find trillion. look market, last weeks volumes have XXXX so Furthermore, opportunities XXXX gain the between are other primary over X.XX as we're pockets a $X.X to

And is, I that originate we by all so sales in six what mean channels.

sale behind execution such five we sale, a The a in Sachs. QX executed and have which GSE RMBS sheet in issue step us away gives deals and four in step on Chase balance to this take able on different with classes, from program. many which being planning quarter occupied, key have provides so program non-owner make sheet and bring to as and because RMBS certain we We MSR an gain our as earnings advantage, third have the on QX the can we're and to as of we flexibility. RMBS to want And product the that biggest consistency mentioned we held We Sandro and given And pull for and Goldman for mortgage in happen. levers RMBS our we're consistent, revenues, available deals JPMorgan investment balance optionality.

generating provides million second I'm I to QX, of $XXX the And of north earnings quarter million. combined guided sale. gain relevance market lot for bigger of I in in going for Flagstar we're through generate to that with is is combined the the the sheet view to growth interest in on And gain be the $X at balance generate XXX going to And to of The going million able Bank $XXX million holding portfolio, to balance That's entity, branches and, consistency opportunity want quarter, can reliability over $XXX or that more of to point And bigger RMBS provide capital. quarter. more earnings share firepower can ultimately, a we're inventory, So rate us even the have $X and customers existing million on that origination the every the hold around when per and Flagstar opportunities if a we $XXX and annualized. supporting drops, $XXX new the sheet, finally, we mortgage capital well. to expanding sale give and from HFI and New more their as the from MSRs, mortgage company. quarter, and York to Community channels program, it's guiding

Sandro DiNello

comment the to that. And of Lee, eliminated, couple quick a on was relative GSEC that maybe

Lee Smith

deliveries point mark-to-market of it, removal it goes a one, delaying XX helpful. rate of about And Yes. our at a a borrowers. the view, that bp we've from sheet given live. if point view. from a you in about to we're It's bps, seen for And equates XX to But think rate that when balance pickup mortgage higher that pipeline

elimination So impact. material prospective refi positive have not going while to is volume, a for it's its

But HFI of pickup of the volume, itself in us bumper the of helpful. more a is the as recently drop that. And in that increase removing And given the definitely a it's seen and we've around what interesting X.XX. certainly with their combined think won't of to removal an been fee, the but refi volumes of tenure I refi has it's result pipeline. drive ton fee a in

Steve Moss

for that you all great color and both quarter sides. on Thank Great.

Thomas Cangemi

Steve. you, Thank

Operator

Thank you.

UBS. next with Our proceed with Please Brock from question your Vandervliet comes question

Thomas Cangemi

Brock. Good you? are How morning,

Brock Vandervliet

doing I’m morning. good Hi, well.

Going activity back there? the within refi? phase stand you we to the do there? talk asset at activity or that about you're is out purchase shaking point multifamily, could more of really levels the generally, how this class versus And seeing And corrective much where has

Thomas Cangemi

at the pandemic relatively of this we've we'll more a for did X% But with out focus Well, the confident of levels. NYCB, of capped grew we to activity. kept the type feel infusions still our it estate, will basis, the be significantly obviously it’s year and were book, We half a don't were been trade slow we us. I'd still past a grow, few Flagstar, been County that COVID pretty $XX has put more at be as you well of growth go built in the relationships in combine that importantly with great million the I capital I second millions years, this of of story. growth pleased did for the to rate. they extremely but coming Sandro's customer out borrowers. say really held anticipation a dollars anybody very bill merged we lot to a Refi that activity, including into going done exposure it substantial believe can when of forward with a core of end, been combined we and on a of best Richmond that deals, away are warehouse, quarter, a and capital that where there our finance. on see I had that being the increase so that. infusion and These were their And of the the with type of now entity. are significant has so from we've is But growth looking customer, lot of to certain positions multi-family significant a And on we a well opportunity at to interesting has we will base. them at have think done you managed lot growth prepayment significant we always can with the call of those commercial can the as real when opportunities a when we hundreds exposure we've be us. combined Flagstar, to opportunity lack is, we're

next best is the the after at an but increase no that branch network. close not combining, the opportunity with Now until deposit throughout really we’re with is the can customers year the company this projections to transaction, grow time, fact same we opportunity for there us, they go giving that question the

excited because make markets of double-digit about be now. through and we're basis, as also a to issues So the doing can we But as going sitting a we finance it's chain loan have go think that picks up, that specialty teen $X the a not excess potential X% people and as but capital capital number. ultimately, stack where undrawn, a half, billion managing out we growth grower standalone really second about right didn't see then we there on as well, we it's and net their far are well. supply as And high down business overall business,

So we a growth that's I be, going well, be to for think, we're to excited think about combining, investors. a story this company catalyst and as it's going

Brock Vandervliet

of the moved just in XXXX the following-up discussion at to threat what's has point? on And terms the multifamily, latest exchanges, this on

Thomas Cangemi

owners. interesting it's interesting but clearly the it it. understand is that if very real is because the had bit like I stay to What issue it answer commercial jury's they longer no here, question, an does it that’d I benefits away, and or may my of significant an strategy the city away, there is from mind, the New question marketplace. City It time, it assets for surprise out within that people's for work it's big if – a it's more in But the estate. Well, us? seems away, that may positive? little that's does the to is all a on transactions benefit it get importantly, big losing a commercial economic top tax Ultimately, both asked that But the it everyone right for now estate – yes, is, pretty obviously what momentum. not customers do real go may we but goes take it's asked, or It's York transact assuming go a may be

I York So have implications think City. New the that to will budget of

a we find they tax is to an seems take into is the there cash asset value where opportunities at are as strategies for several the as opportunities advantage look they'll are going and owners. they'll are and situations the accordingly, for But take like be to may is a lot longer, out but – taking hold they'll now buy investors. at issue falling, look tax able at XXXX, invite, they'll the So are question value as such positive they'll of, means XXXX cash as, meaningful that there there, the such these other the several not their they'll removal they'll that plan it there long-term XXXX refi, and cash known but looking out opportunities out was if out a be there, to as go refi ultimately refi, sentiment less and always out there ultimately, ones of that not no state other a the to

Brock Vandervliet

Okay. Tom. the Thanks color, for

Thomas Cangemi

Sure.

Operator

Thank you.

Our next proceed Please with Point. Compass from question. your Rochester Dave question comes with

Thomas Cangemi

Good morning, Dave.

Dave Rochester

Nice good quarter. morning Hey, guys.

Thomas Cangemi

you. Thank

Dave Rochester

the if months deposit now how sounds Flagstar's goal. is that mentioned, you basis. side? some or know some fee frame just large I on maybe a think can, customers, what deposit you've deal, expect after a it the the that some at was previously, Can the either you the example, are on shot any capture loan you're work of has can combined warehouse performance to wondering, quantitatively announcement opportunities the start great strong there since to you like deposits income enhance or since and growth pool you've to opportunities few you seeing that? additional extent on opportunity on and done more current a just Can that chances of side you mentioned you discovery been and of you the quantify the going I for

Thomas Cangemi

get wholesale accretive as with transaction to important to as have look many double-digit none of so creation. very EPS tremendous is a where working we So the forecasting from our time finish be decide we look are right? opportunities shift teams at value transaction, opportunity really we we go combined the tangible spend as with going the hard management be you announced line deal, this see benefit here. that There'll to to at to to going retail of wholesale most are the benefit attributes that's the liability when we're What's not a two those together deposits, in We're structure. entity. significant So the

interest asset-sensitive they can We’re decisions is combined, for year choose heading the make as a liability-sensitive, significant the end their our catalyst has they’re they're with where of the us. Fed positioning That's towards to rates.

risk, customer opportunities when the opportunities to on we expand in look very discussed previous base and number If model sizeable country, believe growth you as low they a we relationship, at a and the warehouse they’re it's very have really at that. that think about nicely have we if that do they well. very into warehouse, opportunity, in the managed job low question comes business the they at two And good it best strong hold some on risk grow the they can and very concentration

all that opportunity reignited will a invest having customers by be about So infusion. asides the capital

County indicated So increased we I as our CAGRs growth. we’ve done NYCB, the when emerged significantly before, on loan it Richmond

an their away as so liquidity, looking accept they it's tremendous some Service, there the They same Banking the $XX be a to in of those a we're So on of inside time, escrow opportunities the the have we much going And will is infusion at turns business And be we going combined just have also got at that opportunities this they spot the will from real to be growth deposit be to profit lot billion running warehouse. in loan of stop deposits, model. liquidity, basis. pro capital is in can a basis, turn to on forma a issue opportunity a mine.

we digital we’re just a resources my a platform our believe night, Friday, for to I win, a last as first and was nice in us If another had on our out for building allocated Service, catch more time we on importantly, one winner just one you’ve first space and over got saw the to last focused Banking quarter announcement quarter, the up build technology up as of to the trying actually share side. line of two payment second to going it's fair getting a business we the

collectively on we all get C&I call our C&I. share we'll fair market products, business So a growing we excited done on lines on that, the We're very much do share, mean market we going really about but hold local business, so is of I that of the that side, them our to there other we in C&I on in with haven't opportunity cross-selling at our the past. well don't do verticals to should be much balances

commercial where get credit I to we're to But look until now we want talk excited over give So about Dave, we'll as opportunities. they and guidance about a full is closer story any time, this a at tremendous opportunity think here. there closing, don't service growth enhancement will right over the investors time,

So we're credit risk profile. in obviously, and are on both tremendous that businesses have record very the low credit companies track

Dave Rochester

talked you volume I window just could the the you the see given help the out forecast some see balance it well, little the just about how in cap trending trends. that you actually market. just that was from Can more Okay. Appreciate book industry the like know mortgage how switching Maybe a up talk you that warehouse cash just looks more book this here, trending about gears, bit wondering lines activity in fairly warehouse quarter, just from here? held that. given drive there. drilling on I

Thomas Cangemi

the I'm super on going But on and I'm make to going both run because to that. going we and by excited Lee significant tremendous believe Sandro to stand investment, that Lee that this, business obviously, to were it’s defer business, about defer We're currently. and to Sandro They they opportunity.

Sandro DiNello

Well at point we we as from business warehouse. the the the can from look, Flagstar’s again. as – to we way in Dave. Yes. the of – much take we Hi, you if warehouse Nice business view, the independently, we as is, hear look get were run

going gives market us, the whatever we're So take. to

And it's going so, balances market when strong, be is to less little to the strong, going our lower. they're higher when bit really be are mortgage a

we have companies, and Now, meantime, talk two to the we looking big upcoming to were expand with combination previously. the who that every given lines for in can customers existing that customers we also are us at opportunity the of our too

XX% in million we've when it all beauty margin look interest now, net I some And be business, business higher, warehouse $XXX of that, And the pandemic interest the to run we because net we scenarios, for our you may or what net managed at depends margin market, we're we is income be up if one And then the that's we that and combination. went total. X is if consistent quarter-over-quarter, quarter this the or why the able we've business X% the can't income that, interest interest business, it been a the or net commercial And of given don't smaller line diversified can net before model And see on have. think and very up warehouse So opportunity any that look economic the balances whether a to the margin, our the to managed the prove balance don't any points goes you're show is. too you down, to time. in past we of or over see of But goes lower then talking and get might plus that's at you'll going reduction quarter. focused that warehouse mitigate just lower every but mortgage believe something in builder else is stable natural – where be interest on that throughout really you because able basis look and you minus a pandemic at been about Flagstar focused on or to may get higher sheet, rate to if Flagstar, very that, finance quarter. the quarter-after-quarter, because

the we weak you combination we're banking particular that or giving comfortable and about consistency if when So about that Lee on other now converted managed per to over a NYCB yourself you the a got exchange I'm in I powerful Flagstar per that that a offset very of today, is us yourself in possible. the businesses of don't results a a for you, – I you on the basis, for a think right area you he that if year. you value spoke combined the and potential NYCB to, to ask about share business, worry total asked hard company, $X recently to answer on areas. strong doing we've get mortgage look from any a total, quarter $X.XX just quarter, now, we And share said, that what we that and the a guidance that might for right, the the what when Flagstar synergies talking total quarter you share here what's of the about. $X if he's in the a you talking the comfortable share that's – just the basis had you've on share, then think a comfortable, that the just $X.XX combined that be company there, Flagstar based focus contribution believe opportunities guidance look pretty business make to you here. what And a ratio now. can well, value look basis. that's can on and possibility that's our – I mean, And the the look, outstanding. quarterly and that to $X.XX $X.XX so focus as coming commercial mortgage contribution on is, is $X I to can don't believe convert this make That's it's that But question for the get add the is And

Dave Rochester

Yes.

expenses, on are just trajectory all in Tom, into Maybe the better here? those year terms were going the the for the one I this thinking one Now about than of agree. detail. expected last quarter. you Thanks end of What

Thomas Cangemi

conservative the in at Yes. keeping We’ve approximately that here, XXX, in XXX, very level budgeted at expense been about obviously a we working was John? at came line hard

John Pinto

XXX.

Thomas Cangemi

as payroll little better rate efficiencies. obviously run than XXXX. that, it's think by the XXX, QX predominately the I because be as versus some a think we're X.XX table, give tax, quarter QX going the by is focused please, flat, We're QX, payroll so pleased, closed relatively issues, but for quarter high well to have the you driven doing of a off the bit we'll guidance tax deal the fourth I I'll on for guidance Again, take for XXX-ish. to it's year, XXX-ish, hopefully but we're rally we

by to utilization I technology, is opportunities be to more on serve in as the conversion think some focusing up efficient the ourselves and automation previous are on when there going run, be at we of from the able year. we we being longer combine five look caught getting

at a have to that's but with We a going robotics, initiative, move we the transaction, banking on believe up on technology estimated clearly as dealing intelligence, look to opportunities, initiatives get we combined towards more industry savings artificial focusing commercial more think entities. caught us on we achieve cost model. of we we as the that will our as there'll We to look opportunities be

via are side even spending efficient side. is tech lot we great So more of the there effort make on a and opportunities we the to some tax believe ourselves

Dave Rochester

Thanks Great. right. guys. Appreciate All it.

Thomas Cangemi

Thank you, Dave.

Operator

you. Thank

Our Alexopoulos next from with JPMorgan. with comes question. Steven your proceed question Please

Thomas Cangemi

morning. Good

Steven Alexopoulos

the wide quarter? you for relationship drove such those with give fluctuations regarding more Tom, of Fiserv. the nature and a deposits from that the Can what color came morning. the on deposits in Good

Thomas Cangemi

to to we're through But just I’m working going be Mr. of go Pinto, Yes, he'll some defer clear, many initiatives the that's one of programs. to on.

to the specifically plan building Service we initiative. defer I'm to through on Banking to a a as John So program. going go

John Pinto

X that impact, and With Yes. the program, X. from to X, economic it’s both stimulus Steve, related payments,

a portion of was third came program. it large there that from So the

individual So using to is are consumers, those the out individual happens they start people, when debit what the sent them. cards

the start used down. they're As trend deposit balances to

or and initial opening in So June $X.X as little as the is of couple a either for that slow billion on the down there months his it we down decline $X what a month peaked up come after then people to very mentioned as which Tom then imagine, quarter XX. card is then we rest in is the And comments what quickly to happens over two, drop of of billion you while. and a can second starts shelf saw as were ramps an over now part use leave and the

slowly second we've down year. expect roll much So that's it what the of half the we seen, to in

little have hopefully duration it'll Banking So said, is we partners. But of deposits Service will a first force. near our in bring as to the this technology have Tom just believe from that as opportunities a many

Thomas Cangemi

more Steve. believe of we also come win, had we generated, out one still for so another we we I cost won last add, have found coming third ago, generated two other recently, night, zero also anticipated week anticipate deposit we programs on is two quarter. is board, deposits. we got more to will one I about just a the Yes, fee – to the with quarter, and as on this

is in it's looking through share, to deposits. move back We dependency what's to have Orlando back ours X we our getting ultimately our comments, XX, crossing trying going in from these to that's just we customers one a the wholesale win January and was to fingers, from from – from our as pipeline, just we bought we're base, deals. initial just our close finance June working and my million going fair our to another are $XXX really diversifying customers hard, at the and that funding and company large And want who we’re away

culture, to that's changing an We're have low-lying now taken it's lending the be it's So to doing culture about ours. and initiative, have the strategy, talked a fruit customer relationships, from you the here. my base, initially we so we're deposit your

Flagstar, comfortable people very standardized, banking it. technology, are in partnership platform is the upon have expand going with commercial to strong service the have We we a with it we're and

as and when proud business the the the relationship, and So that. getting a we're it’s wanted combination trying funding, it's we the deposit of just of positive do And loans, relationship. the to not find getting loans we lending

putting team goes initiative, to and and we and wins. handoff together. start. trajectory they learning excitement our but the close strategies And retail The our retail I I a were it's give for and them picked hard further the to it's too banking. under going deal So have want private up onto from working lending $XXX a to think good $X us we're growth much didn't billion now, just because it's nice pretty on million,

credit move more traditional has our but sheet a clearly the to working fund goal. it's going forward lines It's do looking at for that wealthy lines forward. on of bank and with are us accepted very be our we our also we're business be deposits. like and a doing been well more that for we once best they of of it's the We culture way with balance side, part the to I’ve it's culture to been in the property credits that's customers is And changing this, deposit and going board for multiple the bring business to their going model going decades, have about

wholesale. to the on time, see of we'd over So some more reduction room the like

where I we look going. are optionality combined Flagstar and we exciting think to it's combining, lots to at benefit NYCB of have try as of rates the figure out

that in want traditional it and long-term, back other I hopefully, fund then the it, we'll over reduce at balance like Flagstar onto sheet we mean, to our time, position wholesale to are point lots look funded banks. have liquidity, at We'll out our But bring bank. We of has this take commercial liabilities we dependency. our and a

Steven Alexopoulos

how customers, And bundling loan of to get that you're doing it the just size that with you billion $X kind stay with the we potential? Are is pricing loans? If do what new you of deposits one, basically growth? from

Thomas Cangemi

So our the of long-term short businesses are not just to simplistic, relatively finance. end be portfolio, very at the day, it's

You're customers over shot going at get and these over a to again.

and Let's years. two of to say life a average three half

operating what's lot So our of back share Historically, owed credit, of it's as to accounts, us, security more the move that I which willing our least changed to of culture, accounts, waived. it's they were of a transactions to deposit lines that getting relationship part come pricing, they’re they their is of us, with businesses a my from. just at requirement. extending other than it's lines have When working

nothing to a Reggie from Morgan we focusing with in if to we becomes to services want be out, money wasn't want it center request. we part C&I and This is these and NYCB, the and from the markets businesses. going of technology business your Let's the if the to bank we in up, want the us, priority to banking, we’re catalyst. relationship, it, looking a I, we it's over to JP especially expectations looking that you don't bank, they're we're have local That's the to maybe not money currently, how put if our the be cultural Flagstar at and deposit to say And the that's with the another which bringing moving historically have a company going modern to it It's just you on, positive – your at it do forward ramping – done. bank. priority to culturally, of of I'm making be has Davis, on started a going leadership, expand community, do people all relationships in that once marketplace the what from

Now, put growth that, going to at not number we're a but zero. starting on that's

fair people and our customer be opportunity. the year. field that out towards that's in I'm So about the And know next we're get going about up I to base excited we're marketplace. excited ramping the getting as we share of our very that in getting that

relationships, field that's We the but people have to a now comes mine. deposits need in focus we huge to the in share when positive be deposits. it going But to of the bring

Steven Alexopoulos

go in like to that of advantage the are the just take income the Are Thanks. option, move prepayment with more very obviously moved? And strong given loans to now see prepaying finally, Tom, you. what of where so longer-term the was quarter. portion in government rates and staying you have guys, you funding? Got starting

Thomas Cangemi

Obviously great total we a have our million was $X from million in portfolio. $XX best It’s question. and

from million when portfolio one-ups, we time-to-time. But and package, a out that’s but XX%, see securitized we of to to on something So have I'd like higher. the left the when around that don't we we couple dust $XXX still it large control, XX%, one-ups, say, you that's a I'd get about the business, comes a take did multi-family had probably

Unfortunately company. better. financing, offering government’s think very what's the should the combined I attractive about you, do tell is interesting we I'll

And all offering half, and offer alternative may a lose some those strong to seems the their long-term be focused them the a to portfolios, business. relationships, we that makes to when sell which of to be decisions don't keep ensure we make time-to-time, you to from relationships customer quarter, to swap be program, the instrument We decide they going that we're it of will it is trades is to you very allow for pool an is fight went – us want lot and butter offer will competitive product like the get bread another But of it activity, we out tell able capital markets going to a where loan business. into the business that the can larger portfolio. choice. package up government losing that what it and it. and as to we second But that but through the some to we government I on the large being

go make the overall as very borrowers were be losses decisions. is the offset the that to can some future, other a but in Flagstar ways of these they mining on table, get so activity to some aggressive up these been competitive short I'll rate, that portfolio, that somewhat we’re the to to you the this the we have we’re capital sometime to looking we and going focused government take So to if has ever with But of as we're merged at some go government. book, rates tell markets to

that to derivative can financial into the option retain going embed We’re our customers the is it and with to book opportunity structure an with clearly same us. a loan be the having work for business, there

that all been them it's pound room what gorilla and done I – So the pretty well. installments, the U.S. is, it the always We've and prepays it's grown is it it's in government, we've been book, XXX historically, quarter of the back slower back on but, are and of it we're seems growth. in focused strong QXs usually we’d prepay, to holidays, obviously because two mean ramp up usually it generally general, QX in

the feel the confident basis, of not including end are today mid a with year, the still into I So current standalone single-digits where the growth Fiserv. going can we we grow on book

Steven Alexopoulos

helpful for Tom. very my That’s Yes. color, Thanks taking questions.

Thomas Cangemi

Thank you, Steve. Sure.

Operator

Thank you.

Please from Our Marinac proceed Janney your comes Scott. Montgomery question with next Christopher with question.

Thomas Cangemi

Good morning, Chris.

Christopher Marinac

the Hey, I Thanks. want additional horizon? Tom, you? deploy the something before you share much that's pass has are is merger to near-term on about how And can earnings? after the buyback ask the closed How timing. time that to

Thomas Cangemi

to the billion of right a fair our $X.X both than that conservative transaction very and capital, outside strong, we our it's dividend, think current on very additional of generate we is for look including generate numbers know alternatives. rate that closing which the capital significant is our Flagstar opportunity when in an assumption transaction, opportunity, of all we're combines, now midst we'll On – to will sides. run that's market think standby. had if a capital potential it solicitation the going company Obviously, at obviously, I I we’re expected capital and are I we're proxy actually And current once assuming closes, to combined near-term on on in better anticipate a say, those the basis. horizon.

depending can over and but much dividend very market how conditions, on at on As opportunity opportunity, a story day, the as this capital not the And of buyback opportunity at a have a real grow from move time-to-time, We to interesting, sounds end a you depending to opportunities it pay to look Look, generated. growing always well I at has growth is into is time, company been depending dividend. double-digits, the think over put this we the and to money as that a market strong growth collectively we the because the conditions. buyback that grow. on know bank want great

cost ton As when conservative in they through. fully very million capital. generate illustrated, $XXX go together embedded of saves after Sandro We're a of expecting this assumptions, excess put we all deal

capital that’s $X.X includes our on generation. grow a as continuing strong amount billion us that a of dividend, a significant it's that So to And so our market well current conditions, capital we very of would lot have and/or paying dividend. access depending buyback excess as either stock, paying

Christopher Marinac

Right.

rise ratios but payout the as should the absolute So distribution could you… improve,

Thomas Cangemi

Yes, absolutely.

probably going right offer together time there's going significant base, best all capped now and alternatives, at business. And we them great and also the relationships. more gets they of then terms, opportunities, that go opportunities were the the customer their infused Sandro look and capital offer book any out, as that and looking have we're to runway They when collectively current we into lot growth. too at after relationships They to customer can in warehouse, small but So now. base on modeling will of build the they some a world, believe to offer I larger speak we're just that on have we spent

on going business we options to the priority. the the is into for table. the subject conditions, the us. priority, be company priority. the put growing that's Reinvesting all So But a building It's and back to platform will market better

Christopher Marinac

XXXX on what's into the how Great. of the of And XXXX. get versus last system half question, we'll done pushed by the is just integration Tom first side, year-end much

Thomas Cangemi

better platform, The DNA This our conversion. ask Fiserv, transaction. it can't for is is this you great. the Look, beauty core Fiserv is of largest a

partners. here. a We done. our hands they’re largest they're anticipate with all deck their where collectively Now on They’re far work been of Sandro’s by has partners lot customer

second the We systems. early We're shooting in for half of will year. next the convert

we next great made, meantime, leadership that deal year. by we've quarter, the converted We've the the my closed to we in that. midyear we early assuming have a able In the decisions made fourth public. We about So established should system of be lot talked team.

building company entity me, stand reports important an It's is not combining blended culture This culture we Flagstar, a sides six of that direct of lot not to set and We alliance. one. I XX to time here, two fabric is the My both by it's a where the throughout NYCB. culturally super make and Just powerful this reports It's integrating the and merger. my spend traditional their seven a the and be franchises. to the leadership direct This alliance set, It's organization. the And it's culture. integrates. leadership. been be of a us And going them. combined my that's will has strengths clear,

be We'll headquarters. looking excited going just have out today. to We'll to of doesn't lines have going that lot for within that's want it. we're be businesses. should stopping verticals, There consolidation not It we're have the it. a are at bank we acquisitions. unique could of well in on There's opportunities there. we're in have lines that. other of. as be as We There's Sandro's marketplace. on of been And to marketplace So there. significant build businesses fallout out we It what We're system our about and to and to dual advantage are capitalize take that

line, with is on this close I Sandro's couple to the deal. excited been we're but we're good of because We're excellent, blend to and So cultures the Sandro add having excited a a we've to partnership. Maybe comments team to very he's and know partner excited wants them.

we're forward coming to looking And so here. together

Sandro DiNello

integration about the have I really big that Teams the Well, a Tom at is relationship the moving pace. think and are well. question I both said, together And nice along a is integration, think Fiserv the was as working that, plus. we

system side, to I then about the to converted particularly – – think getting basic nothing be going it's So it's if you mortgage Flagstar that think where the business there. core and needs stay convert difficult. won't system the And at. It's

want this deal with. oversimplify when you as don't systems you over it, we different it. to at look So that have view – there's XXX I to Because

have we think don't an on undertaking, comfortable then the with I be progress business legal impact as that negative integration very, but eventually very any one we're that And into conversion. the will it's I'm there a the will and to issues the making. day get operations full So

Christopher Marinac

appreciate it. We

Operator

Thank you.

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

Thomas Cangemi

Peter. morning, Good

Peter Winter

space? the about value Good And lending standard, with I seem credit fact, to are doing home just it's with with it is, affect wondering, buildings how the from I Flagstar, combining reason the thinking level morning. ask potential credit the office be longer Tom, great. from work of and is But new office would mean was I term? opportunities portfolio does a like going permanent you in some

Thomas Cangemi

question. interesting how find That's going in to pans be New Great that out Yes. to out York all City.

You borrowers, strong low know We've to so collateral have we some we who the lent that leverage. is very are.

substantial a only lead back the – far If as that and believe reevaluated moving we're paying seeing peaked into ongoing about a rating. you talk think about category interest getting the discussion. loans cash payment. as full criticized moving we decline criticized drop higher are with we now their along flow we're as very they're office to the that, We to in that February so may encouraging, That's assets assets on

large with We office So that the going on directly our deal customers trend continue. side. is to

maybe be in that loss a enough room $XXX out there classified I LTV And the that around that situation. XX%, not we The think and just under there XX%. have I to enough the that's in have think some there's to a book sitting there's bank. about we equity position was million is going in that's

have to office They be think ample and their yes, capacity changes space. how comfortable. And in feel about employees we pay. So the to there's liquidity going

they're strong to with continuing New in they're building in cash the event they're focused leasing at many they're are That's our very stay and a As far could York be in which needs day, actual very end the running we're cash to moving at what their on those on having and feel looking future But out out that we customers, flow, of the on, they evaluate that of as my flows. discussions expectations to the their concerned, the we're I've city. up customers fine, continue comfortable of going City. is confident had going we that, and

I losses envision can't customers to I predominant leverage. but And low to of I York not when I'm New make our lender. so So exposure, New that, strong don't – the leverage for it's our portfolio, the sponsorship City the there. think office we're York and any statement City, significant for best with backing, all a very understand it's you think about space a in important low

Peter Winter

And time, decline do would you given portfolio the dynamics? think that's a it that just changes over the in

Thomas Cangemi

But could be about the to bit. – I our in mean, to a going new expand markets is very ground. the commercial. and look, bank be going We're into best little we're think on Sandro's commercial remember, active customers into We're It to marketplace. to to going backyard. going that decline going We're we're

they they're So the in we'll Arizona. ground that serve. in ground on Lee – Florida, come Florida, markets be and the the in to in ground other in We're Michigan going be

verticals and leaders think That's opportunities And who in how are I to the business do having conservative Sandro's opportunities. do future team solid is have those for for is we're going going to we lining to And culturally the bring conservative growth. culturally. right the we So underwriting. bank, we're That's lending to conservative. best going

Peter Winter

again Okay. quarter if But drivers what core again, margin and Excellent. the first the outlook on I follow the And know the you're third you third quarter? margin just for in the looking just of some clarify one for of then was could the questions. can to I up that

Thomas Cangemi

to from be is X We're about points. going consistent quarter. think the I the basis driver previous

is we on initiatives reasonable technology again, in that And but that was here cost continue came us, X cost. guidance helps the ultimately, liquidity. deposits X as to the QX. are drive the setting an we of day, to at end think have X-ish. We range have I my to At to in these of think zero QX, X we X. up in excess that I bring down opportunity So And for say that let's up

borrowings coming that will some whole due be some have but a coming bonds We due, reduced. not of lot –

it's ex-Flagstar macro we are about billion that of opportunity points portfolio. combine not that significant necessary $X have saved with predominantly the macro to we a XXX Flagstar Next fixed year, against They on probably in amount have hedge asset-sensitive. derivatives when and to sheet we hedge basis of the balance the

we'll earnings about $XX So significant a pick coming there. up benefit pretax It's million of to the margin.

seems have model. like XXXX the ongoing expansion the albeit from of with into margin going business XXXX, we'll it consolidation an So throughout

the funds So it on to going and lower yields of short-term, the driving in cost what's it's reasonable holding multi-family be side.

Peter Winter

Tom. thanks Okay,

Operator

you. Thank

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

Thomas Cangemi

Good Steven. morning,

Steven Duong

of about have second a we morning, February. much the it Good swaps of $X year? in Can rolling billion Tom, And we us you NII? I see off to should in guys. boost gives quarter how think next that remind

Thomas Cangemi

would and – anticipate I combining with just think we clearly, I asset-sensitive. Flagstar, be say I said last will to So on you with – the question, company the

be that that likely it will more derivative having So removed. than on

year. picking a X% So $X pretax. It's into of points about on benefit, million savings billion probably we'll basis X%, It's XXX off. $XX going next take about that

it's think February, in John? I –

John Pinto

Yes, February.

Thomas Cangemi

next of February Yes. year.

not combine the our one many have right. assuming So merger when benefits franchise, the it we're forecast comes that mid-QX math, comes in XXXX to which off, when going to indicated we is of

a margin into wholesale and expecting we We're the going expansion, large upon. transaction, that optionality make book right. have we'll to decisions have can when we're So go we finance

Flagstar respect of of at company business within best use the opportunities we combine. to and funding substantial nicely ensure their escrow liquidity value their ourselves maximize in We could a for look amount that have as on the set opportunities very coming next we the year ourselves will and from base that client and

bank. dependent excited home our going and we're have a on We want plus company. the optionality a opportunity going about we're So to traditional good basis towards we more we'll some on the position for finance to finance to how move margin, on always very very were bank stand-alone to the

Steven Duong

That's great to hear.

talked half of Or on could a another to nice on. mainly deposits component first So Is there? there to your that in just you growing about have just Banking then is Service. Tom, tailwind you – the if credit that focus a year next maybe, And it? as coming

Thomas Cangemi

right the So the out been credit opportunity. rolled fees looking haven't we the and short-term, But deposits has yet. long-term. now, in we're component at That and

is we some I not believe there income a These So positive. on a we we interesting opportunities. believe, huge very we but last had opportunity, I fee – opportunities, that's were won notified night, are

until it technology one benefits. time, at But banking benefits. have discuss There's And that our get we out. market. we being two as think the when we do as consumer there that this coming think, other build QX, a more we there clearly, tremendous I'm be it are useful ultimately opportunity marketplace go to very more as through well and out a which to where offer platform. closer access in So to in banking on the underserved. digital technology, build out, But not think products of We are finality. to which focus that banked individuals other significant we out not we're opportunities we're opportunities plans or and we intend you one build some there the be out we'll – platform, would looking on, for Over this have initiatives, host able utilizing get something our undisturbed are that there. almost credit can could We fee under going enhancements depository, customer call we whole revenue/depository there's to to and

priority. So leadership but the important. no it role CEO, it's a point a to question it's out I called as to

catch to going that up. named in have be We're Digital. Head We've particular hiring area. a We of to

are We have the some initiatives good pipeline. very that in

three way, spending there. time attractive how to evaluating a blockchain, there's services our including in By going in and play other this look there, well lot opportunities of the financial opportunity we're the we're we this digital the space. build year, at all wins that going have if as or out think very and to year, it we are should that goes I four alternatives we're

Steven Duong

if more, maybe is And squeeze just one interesting. in to Sandro. could Interesting, I this

business do the business? that your in for ebbs you're on how and and share it obviously, long with you environment. business, Just rate the the warehouse differentiate interest in But grow haul, the market when flows

Sandro DiNello

regardless you in business. in the best me for what Flagstar it's we at And that XX years. Well, you line that providing We've the been I'll think of I of marketplace. service same business about and asked give business in about, the answer do the warehouse

we we're And the us. know best to so don't And always what we doing. price. have like customers be And

we've And think that's of to our seen on business, line grown into we've our eight noted ability over that focus when as grow – business. And commitments, I to Flagstar Tom country why and you the behind grown billion. so a very in years earlier, And $XXX – I balance think our Chase. that to we that once was from I Lee you've actually. now ago, at in number And million see positions two small a $XX got

we the that has be So in to a economic powder providing that and with allowed customers I when a able provide, someone the there keep think were to customers this that what conditions we be always not of be that to there And to there up. into that is there have relationships there lender. dry got were enough need before. lenders their no warehouse that the ability we we were of And to pick needed, us the service support lot gain model pandemic, that are, didn't we matter when

frankly. And to the itself it's that. about And going one work. all equation, I the it's we're we're be So continue lenders top country. of warehouse the to And continue to in to to think service do going proven

Thomas Cangemi

of advanced the customers. I helpful some we and certain our we MSR And a if add, loans offer I bigger buy can warehouse obviously, lending understand mean, ancillary We warehouse could that the of service services, customers. be just being mortgage And from big to also originator, lending, lending business.

Sandro a one-stop So the equation regard. shop I think we're part that's that just in And alluded service that all to. of

Sandro DiNello

business, for one right. and and in People the people that's get been come people this lending warehouse country, business. come the that leave one there's into Flagstar. XX go, providing there that's We company, But years

Steven Duong

gentlemen. color, great That’s appreciate I to hear. the

Operator

Thank you.

Ebrahim question. Poonawala with your with comes question of next from Please America. Bank Our proceed

Thomas Cangemi

Good morning, Ebrahim.

Ebrahim Poonawala

a in look reset When you Good seen you could terms to I source few take been PPNR decline you forward on out $XXX give your one, about but around you gain sales. morning. And the power a PPNR quarter, the this a to PPNR or more as go missed just XXXX said just if million earnings look because power talked of in room Flagstar’s follow-ups, to company. I Sandro, shakes at we I think of uncertainty big and of a sorry about I'm see in Do relative this, still talk that if big into combined beyond? XQ, we've that's the where

Sandro DiNello

Well, capital, think our we've really, well. leveraged if really I at look you capital,

company. was the Flagstar's the return And so XXX%. of taking we Ebrahim, get And base XXXX do that. through we capital you XXXX, maximize from look that can in shareholder we the we're advantage return have at and total

think reason a – right. I us because that that the that gives number, stacks give value that do the see the And they is pretty up creation. market on we can focus confidence confidence end for get market a How number to is, anybody. against we well almost

can line the the you and growth of you to the go And to get in got And move way able your right, where order bottom to to in possible, capital where by way so get you you be to consistency it be. the margins the smartest investing left, got whatever to to move in need earnings. that's

can't I the much than so release our – three the we given the months. never months. three And about we've about next next And historically other have spoken very future in guidance

asked I've means at anything. So the but I'm than any you to that, go to history going and farther not look history

think future. with pretty you growth comfortable opportunity the yourself for the in get can I

Ebrahim Poonawala

folks leadership this deal to should if And talking the question, about to you to is teams bringing on we Tom, on Reggie already some so, prior hiring more And expect this Or you event? under a of Understood. bring commercial be are onboarding them Davis, next a XXXX separate going the of year? to even flows? early that of talked is lenders from any

Thomas Cangemi

about What's way interesting listing, Hey, active. advantage. it's the Ebrahim, to extremely consolidation we’re our

about obviously We out we culturally, our talked very in opportunities there's people, having We but doing, leadership the lot combined lot to what tremendous out we're for talked we even NYCB. the at That's business here So of is market but Obviously, been managers, now. sorting that want culturally, the on that the We're managers, do. think a Reggie businesses, right a getting opportunity. the never what individuals down branch marketplaces. has the busy, doing there's roles going having about company. there lines integrating to do the out in and field, we Flagstar company after to did

in together has Reggie front of So very substantial task We're very working well. a him.

and excited retail calling We’re side. about people on only the us not both just also side one the the mortgage side, C&I but on

space, the people to think this getting Smith’s that business want I fact here. lot just gravitate to billion And south there's company going I on the of mortgage of excitement now. we're a think $XX will I in Lee think bigger that be

at we knocking, with is we opportunities here? great. blank is to talent start. page. standing always called announced excited opportunity. about talked a started And paint deal, the we're we'll be we is are Picasso, the about businesses. the by when – Starting good What which from going we Initially we're We looking it So these And zero a and

retail and a share share the know lot that going to and truly book the don't We there I do products work, believes out plan. a competitive have with offering it. processes to strong. as and trust is going clients. people have to indicated, get being loan on the and And Reggie with and get and our And we're We we're side. of with Sandro And the that's loyalty

we've look a a it's building We'll and on for think company. a year be it's focused to about accomplished, day we better talk back very opportunity every and now going but going from company. I this something growth interesting what be accomplish and to

Ebrahim Poonawala

questions. my taking for Thanks good. Sounds

Thomas Cangemi

Thank you, Ebrahim.

Operator

Thank you.

from comes question question. Breese with Stephens. next Our with Matthew your Please proceed

Matthew Breese

morning. Good

Thomas Cangemi

firms? change you Did

Matthew Breese

Stephens Yes, I’m at now.

Thomas Cangemi

Sandler. said Piper But

Matthew Breese

for appreciate you old. will floating rate if much able without I sense be be how And to reprice us Must loan with Tom, it. combined give and floors, hikes? have that portfolio could you Fed with of the and a

Thomas Cangemi

a been end in franchise. has looked fixed a beginning it for Flash the the been to could lender, John That's I deals rate of had add front the all rate at floating don't of They've at floating tied of instrument. some But have time. of question. We've maybe day, insight. their number a great specific the the and me, always

it's can individual tool basis. combining on base. have on will by a the an we with in activity We're have to rate lender. derivatives put shed customer a to basis, the fixed-rate an tools capital but lender the combined And manage We to markets adjustment our culturally, going on for utilize that

think be most depending balance. collectively, math. really not think I'm specific do then floating Obviously, quick good side the will balanced. So – I well on what it's line But the rate the on grows I And be a determine of to to it. can for faster you part, going

At offering as the a do the for that'll very the We we Capital. on floating side, I we very opportunities team their plan which there instrument, side lose customer We multi-family a large on our partners, that partnerships broker because versus government but rate. And have looked we're that on side same fixed is base. them on some go have don't strong market and your customer the perhaps on difficult alternatives, specific the per with capitalize can rate and have book, when Reading because of working lot has opportunity. alternatives derivative that to the also it's we government have working very with relationship for the contracts at of offer a to we'll multi change with we customer predominantly we you strong really time, we as the capital combine and base. don't getting with

partner can we on together So opportunities.

verticals have more have lending So we're here. time, our the and traditional offer through going customer blended verticals to over we and have products hopefully we a that just portfolio, new base different than

opportunities. look to will at to we conservative commercial are and we Going look the going commercial back traditional opportunities and transitioning to banking, at – bank, we're

and of in go lending tremendous look Sandro’s to hallmarks on as have sure. business. business culturally, lenders. that side, attributes part been conservative historically for the our As conservative we And of at have our our we teams to team Any

Matthew Breese

Okay. points. I'm core if you're quarter. that's, five liquidity And then basis margin calling like And what turning this then to maybe to curious three for was hoping guide bit for again, adjusted liquidity. a I plus the of a for excess definition

this So there's but $X.X of cash quarter, billion the the didn't $X.X on billion last quarter, sheet I there balance was see same adjustments.

hoping little of definition I So bit there. for a a was

Thomas Cangemi

margin. going overall I'm – that this put cash just we you Mr. number anticipate I is to will defer gave we tell the So depends to It Pinto. on the out. that where I

more for hoping in I'm liquidity, QX. QX excess have We growth and

of subject for years rates into an margin number going another close it's we But going to expansion. are. the ongoing where record being We hopefully margin transaction irregardless margin obviously, XXXX by quarter we at It's this And expansion that's a anticipate approval. the interest transaction. So to continuing further now, fourth rise. to be myriad track Flagstar look with now to clearly transaction, early regulatory have by a

want expand the the of John, you on some So questions side. to margins upon if

John Pinto

ending balance average it's It's process, deposit balance. right. deposit really an quickly, thought not an Just

look the relationship. at if that So quarter so second our $X.X from $X.X quarter, partner bearing there, of non-interest we our first to from then change deposits the technology that's up you average billion right and the in first went million that's really

that quickly down and $X we run one And billion the deposits. but all it's piece higher. you we we down it at quarter as peak within didn't a if almost the that's from very those know quickly of realize a the was when So at this quarter-over-quarter look and carved peak quarter when we did we very did perspective, looked our that it duration really out the little, because and margin happened it first that so

So of a average And wholesale one on, win funds, that Service, same a also that that's we the And talked which we from another perspective, a it fee believe deposit that's carved have during why as balance Banking amount cost out be other markets zero up, bank believe growth. have would to and for there. should hits, it opportunity be picked sizeable that have initiatives. an we really time. the out the large we using hits for on because very it alternative we we of about income be an have coming I attractive than it's If we as going we significant. these flow, another and

the we We very that we're strategies. So by alternatives, have technology lending alternatives, or of initiatives just technology. opportunities excited table that we're not potentially working at about in direction ultimately deposit bring the to seeing existing the funding utilization over other looking partners opportunities, believe bringing We it's to right deposit believe the and with only bank. for partnerships, with the with opportunities, with partners, time opportunities our on

get things excited some stay we're tuned. getting We here, we soon to marketplace hope done So but close to about it. update the as

Matthew Breese

Okay.

your attacking you what expanding the to comment? capabilities on mentioned financial plan little and what on you offering bit markets You blockchain or just that adding I are a services curious envisioning was more

Thomas Cangemi

banking changes be the So is a in be I'm how spending will we're believes you services company believe. going going a heading. to that Lee industry and of it's to tell And – I I the We're to very where benefit where lot what going I specifically said. diversified financial blockchain services. Sandro I to time careful will think understanding be

opportunity. actively So on us of how are at both that as value very for create looking side, much as efficiency we can the well business

not to So that tell I'm I be specific, here. will going it's you but

how attention basis. working can We’re benefit on it, on at very a beyond we're us looking paying to hard combined it

and customer We potential have businesses large opportunity. efficiencies via that blockchain could significant the very generate

specific, I'm say, we be So stay going about I tuned are excited are to we today. just but will not when and

Matthew Breese

me the combined helpful? stepped rates forward? tax run you is if be rate, Okay. have would bit tax good then up Last it one for What a this a a going quarter. little is rate And

John Pinto

don't move where apportionment. state based going a Maybe put slight believe looking We through of on we rate. tax there'll the benefit be We're it's combined together from still the the to dramatically two potential are. we when

If is you look at the it reason second reasons higher. was two the why – quarter,

And York they to Our tax from increased New X.X% of merger-related also State non-deductible that X.XX%. primarily expenses are type the rate expenses were. given the

good basis, our hit we taxes to run a a a we're that tax it doing significantly us expect rate combined rate that On We increase. for lot So XX% on is have a a run did say, still for would under I work standalone be the of We're don't though. basis. to than deferred one-time different revalue perspective. on just

Matthew Breese

questions. had. I I taking all That's Okay. appreciate you. Thank my

John Pinto

Thank you, Matt.

Operator

you. Thank

Leshner [ph] next Please KBW. proceed comes with Our with Andrew your from question question.

Thomas Cangemi

Good Andrew. morning,

Unidentified Analyst

Andrew how McGratty. for Hey, It’s it’s on Chris going on.

York a and clean of guys just outlook looks what potential in foresee deferral had areas you able and quarter from terms here Thanks. down and you're forward? wondering like was your So on I your going very City bring further. credit deferrals overall what any outlook to New problem you

Thomas Cangemi

about the drop it's were down billion beginning the quarter billion. the at Great our a in question. two That's second end and of to remarks, to Obviously, in half to, I the loans believe at prepared the that quarter. of we a Yes. talked the subject interest-only, $X

that customers see of Act, to this to of closer of year. drop, CARES any all there's our believe continue to relief. of You'll most be – of I believe we going be the at form and end which the out end the as will get of We

deferral, last we're in as an far we've been which and is zero clients to have been ongoing good of benefits with game. of within work has full very That reopening particular, great. borough. been – in And favorable Manhattan, on them, very the seeing our We ours significant as was strategy Manhattan but it's customers with waiting

are Manhattan, that customers were which is that exposed to about our classified. So of XX% loans the considered

classified note credit past think seeing peaked. We we we as expenses also back think go here bode that for We're is well the the decline and assets at important these assets the decline. to February. that of start this peak I assets. trends in think most into will That statement

of benefit on the that. the expense FDIC get also You

to be portfolio, as talked credit favorable it's strong we as story. that's very very his about a Sandro a costs, side, operating story, credit event but So loans been manage our good on deferral the well. zero going on has another

credit last the get was to we're but sides, will there. strong significant very I So borough momentum both seeing that on a on Manhattan reopening. say the

as doing and are work. to The as employees the fine city's reopening other their now rolled see but that come the boroughs January, employees have more back vaccine out we we early and have –

when a supply lot see comes rental. it You of the issues and to demand

up strong. some work to but very the think office lot to starts of on a traffic pick meeting very that'll follow our been employees retail, They're pleased. the in So and do customers. There's We've I and as Manhattan.

open it You're it's going I'm not to CDC but going hopefully, make follow Look, have, I is. see to to theaters guidelines, encouraging to healthcare up. is going We're the the a prediction. think delta what in New tremendous results the assets direction. city right moving And see customers to seeing our to and we're be good York well it's regarding And very are fare close the quality pandemic. the pleased that.

Unidentified Analyst

there back the moved for then held-for-investment of can. loans your you portfolio? more one any the you if And out color. P Thank Great. held-for-sale just into I why reason Was

John Pinto

Thanks.

cash to Our was $XX holding excess the market down We million. comfortable holding were comfortable just were PPP very was given those the we those we loans had, and with and where long-term. loans very

we to move back held-for-investment. decided into So them

Unidentified Analyst

Okay, thank you.

Operator

I'd questions to to There over this Thank further floor time. are turn management. no at you. like the back

Thomas Cangemi

planned the Thank updates your on and to taking months look chatting morning provide the will for October, of ended you. us September for XXXX you Flagstar. and performance three further the you again our XX, nine the discuss at in merger. when and for time and again to end We with forward this join NYCB we Thank interest

Operator

This conference. concludes today's

for You lines you your Thank time. may your wonderful this Have day. at disconnect a participation.

Flagstar Financial (FLG) 28 Jul 212021 Q2 Earnings call transcript