NYCB - Earnings call transcript Q1 2024 | Flagstar Financial, Inc.

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Operator

Hello, and thank you for standing by. My name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to the New York Community Bancorp, Inc.

First Quarter 2024 Earnings Conference Call. [Operator Instructions]

to Investor conference Relations. like DiMartino, to now of Director would turn over the Sal I Please ahead. go

Salvatore DiMartino

Thank you, Community joined Joseph Regina, discussion will for Financial notice joining be and Chief today's by of good morning, management for Craig President quarter Officer, of the everyone. the team led company's company's New XXXX call. by Otting, York conference Bancorp first short the on Gifford. Today's Thank results you CEO, and

that would on I at earnings like section begins our discussion everyone presentation found quarterly release remind be of the the investor and Before ir.mynycb.com. website press to Relations our can company Investor

Additionally, meaning certain may the of team the management Private Reform today comments XXXX. by Securities the of within include forward-looking statements Litigation made Act

reference results, are in today's affect us. Please about today's release may more which reconciliations we from the the risks earnings reported measures. release forward-looking to and review Please certain of for may refer safe press will Also, language disclaimer measures, rules. Such results. to and harbor for uncertainties, information forward-looking discussing our make which subject and presentation exclude safe non-GAAP items these we harbor certain when statements non-GAAP

would to I the to call over Otting. now And like Joseph? turn Ms.

Joseph Otting

Thank today. you, you Sal, thank and us good morning, joining for everybody, and

we timely the quarters. standard go you in I the notify for notification late the today's future. manner for to also into is And in future earnings in apologies not the Before my Clearly, will my prepared to remarks, operate like a offer we call. this by I'd intend

to a would new tall March and we meeting not credit had controls we to processes completed this did management X, that we the and we order. promises both And However, which we had some big indicated conduct. a had when information, we analyze made that met obtain have ensure review only and team, we being on very was for

first my together wanted I had we in three that got indicated, overarching XX on X, first really As I on I items weeks. focus March to

get formulate And accurate understand our for conduct and and The risk was because was risk around engage portfolio. they us our the very a relationships to businesses. to reevaluate and to wanted organization first important regulators and our the overall our to in review it and our framework. We forecast very credit building strategies are develop important with

done a presentation And in you'll We on think that come the components. long, a team came were has X work think these We weeks we've together. today, a amount we we long really in new slide since the through that. of last critical way think tremendous find the

turning So the to now quarter. first

designed profitability the peers. line During the bank number lay in return down to the a or of to for company regional groundwork long-term took a sustainable our with quarter, actions

liquidity we equity anchored and and of Global raise have confidence the investors significantly demonstrates that The Liberty Bay little firm Stephen Capital First the currently this at by Mnuchin, Secretary, turnaround new foremost, Secretary, Citadel capital Management, the former Reverence completed our it position, and Capital successfully equity Strategic completion underway with Partners Equities. Hudson raise a along really over Treasury led $X company. a billion strengthens the in by Capital,

X new X to the conjunction board Directors the to with members we In added and directors. size Second, All bring who bank. banking and executive team. our Board raise, the bolstered of of our management turnaround reduced capital extensive and experience we

respective fields. four More extensive to will team, the long industry deep known their each management for have and senior thinkers appointment recently, announced strong our time will and leaders independent do I them as of and knowledge a very as addition, members. challenge have appropriately In management board we backgrounds in executive

U.S. at you think one from coming either backgrounds institutions of the have worked at of very organizations the those about organizations of strong of together like or OneWest and us think that with Bank I joined Bank. from they have when are all Bank, people characteristics America, us, most

understand of of kind culture So those and high-performing all the viewed we build collectivity risk we to want that industry came as organization type very the organizations. from that were organizations and the we in

regional this the forward can do bank. and I'm we'll Board, we position before, and our feel the again. initiatives confident We've together drive reconstructed it strategic newly as solidify to done be our able we with leading

portfolios, a the an we result and and independent during we loss commercial completed both this party. as of credit including and increased diligent reserves performed by portfolio, multifamily Third, an the We from in-depth analysis process information other performed third of office review real bank by quarter. the our due estate our separately

and think by earnings Slide XXXX Now plan on it And bolstered at management for And organization performance. I'll through take beginning standards today realistic end or X, you the the as a developed we we've the we of share with we Board, operating our get Slide the you X. what the presentation with said, industry I highlights to can strategy. above

achievable forecast. and earnings capital have We

and implemented have and as we'll through on we you earlier maintain credit talent a management credit the We strengthened risk now process, rigorous walk sufficient we've risk the today. process liquidity,

regional total of bank targets assets ratio and that more is of average you those value. we walk through normalized are return transition XX% we'll to return a will XX%, a XXXX CETX long-term or a of goal later producing create and XXXX be to obviously be shareholder meaningful TCE The XXXX. today. XX% XX%, year strong, X%, a or on on a future diversified Our a will average

on bring last are knowledge the who legacy NYCB that X XX X that new quick depth highlight, people of the they to Board Page to the have Slide the people gives And company and you that important a the overview that organization. joined and gives X and Flagstar organization. On of members and the three within adjuncts the were months people page, and a X

On Slide slide Slide is a X key path to outlining profitability. our X,

As few walking that minutes a to and levers you of I'll our we feel that. spend we can way have through kind get see, there multiple us

number one, and industry a those repricing rapid X, rates on obviously, of loans or either starting rates, to interest a lot were rate forward are confronted So that the the had X through is rise a fixed of X process. with interest in now that the number resets, go come will as

will benefit, and interest so NIM. And that net obviously, income

side problem reductions this recently of workout obviously on will the our organization. into company focus resources and workout our two, to NPAs. talent We brought new the the loans. dealing of And with long-term in have bolster Number

a a we build market relationship move portfolio to begin in banking X the X to in good will for more us have robust we outstandings years. over that will to next create $XX billion billion roughly loan middle Today, forward franchise. and that basis really the three, C&I business in we Number $XX see

successful sheet. spent of dollars And successfully Just of attracted of will be that billions talent. outstanding, that right Bank grew we more areas to story And to my here. have think our at business comment, we really, my this of majority leadership. that the new in a put that when able will do Bank as of balanced loan be balance We the at look one I kind this under created space. the short a I very vast of We U.S. career order, in business a OneWest

on integrate the we'll number today, banks. On we FIS. signature we five, integrated called a is look Flagstar all XXXX, platform the three legacy to single have in fully onto Currently and NYCB Fiserv,

proposition will we to informational perspective. so very two costly one in look different obviously, And And the on platform get you're consolidating platforms from and when future. operating it's that a to an

story. And six, number efficiency tells the ratio the

this from taught efficiency U.S. us nickels. Bank, with are Most to ratio. an We out where Grundhofer came an of squeeze organization XX% Jerry

our it's And so culture, will that of will cost we our we aggressively And our standards. structure able make how industry DNA. be bring in determinations back in at and in with to look

-- our As we diversify loan will to medium-term look I far indicated, as portfolio. as items,

estate is $XX real commercial today Our billion. portfolio around

range. also bring strategic Our the around $XX that down billion target

deeper we'll and the top think capabilities to by by And a management, capabilities. sale cards nonstrategic more jumped cash those relationships. One can syndication commercial we on cross-selling to core into that funding I be over improve it's have the three, term, drive the and by will deposits, our on Today, our income strategies. relationship-type growing number comment into derivatives, increase short I businesses. further We'll building And and in back we would then or we helpful of make fee assets. where #X, runoff like

-- of organization XX-day and that to have identified where balance within next And portfolio we at opportunity an announcing could continue a on we a billion within we do $X reviewing that. may we're that look period close have assets par be we the so. sheet week have XX- or for the process a close could and fee the We in that started the quickly at to transaction believe minus here

And So will CFO, to who fit we'll we've obviously liquidity. create and over sheet He's at newly doing opportunity a this our going strengths enjoyed balance process obviously forward. the begun already by for looking of going additional that $X which strategically that, of create assets And capital billion on to with appointed partner man with turn talents. that, to I Gifford, of Craig really tremendous I'm it project. the and

to you. I'll Craig, over And so turn it

Craig Gifford

to thanks join to Joseph, future. call you, to Thank those the of today. meeting able I in who many forward were you and the near look all

and I'll how we loan portfolio risk credit our next and forecast, our you and Over few slides, liquidity. our deposit base the our through about take think

X, and to our of preferreds. we can fully the basis our performance. of is on At very years' converted you end beginning, current financial from XXXX. diluted $X.XX you Slide expect turn $X.XX next can see at summary that expectations for outstanding see you a If of our through Growing level about X to EPS, the this our to a the

to and our close previous mentioned, that structures. from we at down reduce you through overlapping down And would we the have see mergers of -- levels. look that happening Joseph can expectations cost to our current level efficiency see As integration ratio our peer a to

capital into infusion our retention the certainly ratios levels earnings Joseph mentioned, power through earnings that next Our and years capital to see the peer were X over the recent by we capital. of bolstered that moving and

rebalancing asset of through loan we rates. as Our repricing well our see assets, as a current mix return into market improving on

as equity these items our back return this on tangible equity of the Our period. return XX% outlook XX% to on an result drive to over will on will return -- benefit capital and a tangible

that the previous of in Joseph outlined that XXXX. the that, the These will believe strategies on $X result tangible the reflect in as to range we we a finally, get book And end value all page.

this is years. the going is to statement, happen? this you our If rubber Starting interest see couple loans of meets benefit really the at to How net the income next reprice we Page our income turn the X, of will where as road. over top

Our with these rates we built follow into numbers to the respect median that rate expectations forecast.

about actually relatively the We're over reprice us have next some reflected a in billion exited interest We rate swaps right and that into that's We relatively now. numbers. that flat recently a we'll $X insensitive pay-fixed X moved position. these year years risk neutral

certainly and as a quarter. funding as two more in margin decreased more, borrowing our our well mix a result a really interest things: net Our into increase move of funding different costs. need was That shift in bit wholesale to an this our

From quarter. repricing loan improve mentioned, conditions, did taking look deep see at of of X that looking credit provision to dive over next expense, a years, the our at as expect we increase portfolio. Joseph portfolio and reserves after result loss principally the again, our a market our loan in We current a

see to normalized elevated more expectations expect impact We and market year a to level of shown here. through-the-cycle return of potentially see more an provisioning borrowers. after do rest to losses, that, level the expect conditions we But have the through our of as you we a

platform merger we be flat expectations systems, balance our activity, we relationships, see we able income our do we do focus Noninterest noninterest to customer -- relatively believe as and as Our these broader to targets, our Joseph present mix towards processes reduce in drive we that we'll actually that mentioned. that on costs. efficiencies focus upside we expect us through our are as as on but infrastructure we expense, have opportunities duplication

in Over reduction the XX% assumed our we've forecast XX% structure. cost period, and between

to If see X, you move we can you where Slide stand. currently

equity our us on converted a -- infusion at equity CETX Our March has ratio basis. fully position a in XX.X%

excluding loss deposits You as cover X.XX% few see importantly, our we reserve can more total warehouse that loan minutes and XX% first the us depth, the deposits. did are in a insured in that quarter of of increase loans. our in loans, I'll to percent to allowance brings this a a And

moment. very to low a have level peers uninsured compared deposits the We our at of

considered and the That number about property analysis the deep of we've and that refer credit the little our valuations. lot at higher did, the internal X, right-hand exposure move as a first loan of the you the deep the Slide portfolio of third-party our a as the loans of portfolio. our credit to And slide did getting as on in If level and we I'll number of what left. that portfolio covers portfolio well review percentage taken bit the information talk we on total risk dive information This a quarter. side, dive. we involved then positions in in presents And a about loan that to

it was previously And in materials. loss I credit would for our that potential say confirms disclosed the

You can the level, that we the right-hand the I'll the see X of our pages. a office a portfolio, roughly and side, office next at in our the of the percent dive cover portfolio. XX% roughly covered, of had But portfolios we multi-family on bottom and and detail deep and on on XX% high dollars multi-family portfolio

a right-hand that can the to move what deep saying of portfolio, top a in degree portfolio, did suffering you review the XX, is office certainly, billion is $X corner. billion market segment office of stress. high see of in If $X.X portfolio a you Slide office We a dive I'm

portfolio can a to Our overall office at loan you total particularly doesn't only our represent excluding billion. on large loans, And -- XX.X% we, percentage overall it at bottom the that a $X allowance owner-occupied side, of see stand loans. right-hand

average they covered balance, loan fairly left, loans, of homogenous $X On is credit balance we about because a $XX an see of or more our you our principal options have million. refinancing can and their have dive believe the size. in top differentiated see portfolio average we those million. And that you given loan The XX review, largely can those the just risk, an bottom of about deep had remainder

to information XX% dive homogenous deep coverage to million. And loan above multi-family see on in more you allowance a ratio sizes are can about largest move you X.X% loan you If right, Slide left-hand bottom that that certainly XX, think at see the total you deep that can those portfolio the end quarter, Again, loan portfolio. and we the loans can multi-family the our that the more were that were as $XX in our covered the dives at around of portfolio. sizes that largely we of basis we you see a portfolio can $X billion, our of segment the It's on in that loan million covered of portfolio of review. see side, our the $XX.X have credit we

of and other of the spite level delinquencies About our mentioned have to we've our the with in $X bullets, able had book in to that about words, of XXXX. have rates, total. date. of We about in current no had billion have and we existing elevated the an reprice of months. expectation rates. to the market last of to note at repriced. X/X repriced cover repricing $X.X repricing $X.X those XX date borrowers We've expect billion have I actually of multi-family up interest that other off portfolio that X/X good been loans the very almost you'll success In over billion paid service In seen the

some Roughly billion. we our have $X.X XX, information portfolio. on Slide non-office to move you If

can Importantly, we and really There's real very portfolio. see of book, bottom the about diverse did a in the that We X/X review concentrations. right you book. have on we this any the stresses see no credit rest don't of

at the and allowance ratio. XX the at On that X.X% the you ratio, allowance XX.X%. bank year-end. I'll see And office ratio in excuse portfolio, That's office the basis loan we're at first Page for of is high our us points end again, the range breakout from losses point compared to quarter me, is particular, out at again, The of XX a up just regional peers. basis multifamily points our allowance puts -- the XX coverage on can

liquidity. to Moving to Page you Deposits and turn liquidity, if XX.

that and book. needs. a we've March, see that some date of in base since stable said, infusion. sure not CD fact, You'll market importantly, stable left-hand XXX April, CD the through side for only the lower-cost top deposits. XX% product. been but March very seen in of a funding. market, capital the you premium has We And deposit funding the base seen are subsequent have our grown you transactional we've focused Bottom see very recent can to looked in and deposit roughly That our we call the left-hand It's that in side, have of deposit And end we end not stable a I'm the you've product. know to it to that's the base growth.

seeing overall money It's not traction, that it's to it's on would and we large wholesale say move I but our bringing so bank to and repricing are margin. new not our we're the Importantly, new focused of driving customers an deposit as that good book.

to turn XX. Slide you If

regional billion bank vast the that of you balance uninsured on deposits majority That's compared deposits. slide, more As We deposits. to our I our unusual see uninsured cash than $XX.X are peers. this sheet the amount insured on of deposits. mentioned of before, can quite entire have And the only have we

we our deposits. In have uninsured XXX% liquidity of fact, perspective, from over a total

portfolio we would liquidity. expect mentioned, further those as degree some Joseph And as of build transactions, in strategic to at from potential continue we We see coming liquidity building look focus transactions. to on

throughout had Slide our Certainly shareholders look to for our by -- the XX common shareholders $XXX quarter million there is of net noise provisioning the a for a elevated, net brief to first we the over and quarter adjustments we that highlights. associated to a as bit from our and accounting don't the We related was bargain as recorded quarter. XXXX a out merger-related year XXXX. driven then loss transaction. well at we gain largely in And just noise into the which the also last had million close of declining to we that loss financial the $XXX was see of of carrying see with bit previous activities, related some Signature year that

at quarter. Excluding and our provision to a to And first more that see at net base can normal in level call actually slight like I'd operations the Thank were turn the a Joseph. back level, you now income those you.

Joseph Otting

Thank Craig. you,

to get to of First Since first this is all of our your through appreciate all, opportunity with was opposed that we you, together and where very we is to of the just really important I thought details and really how it then today deck the go see reading comments get patience. future. transforming as the into context that could opening you the organization

packet to meeting discussions that like we and hope in and have. I detail of you areas clearly would what of Craig found really do I to and that look forward, and up helpful a having following you the you the are and further So useful, number and

company. an we X we is things of for And what fully going been path. currently the It's know is this do roughly about tangible We we lot on our believe banks. compares that $X.XX. on the looks management Category optimistic X.XX of this on team what for journey we upside We are as come book to are we see what at with of trading this banks all we're it. to the to what plan. This gap work. executive a is as experienced narrow a end the of I of know that One a like. diversified will in before. to strong can but at down banks deliver execute the valuation together And X.Xx converted transformation about look plan. be hard value have they look significantly that's going of a execute can like. for We very We've at And it regional environments background plan that the that, this done team that recognize kind has and this we X.Xx is strong regional

our thank finally, all to So our hard customers. and really and to I'd teammates their work of like commitment for the bank

As be overview group. give X the here slightly here as you now. we it us weeks, important can organization weeks and able forward was on you to any I've soon to with fielding has questions Craig kind for been you X.X meet appreciate, very and to an the of under from been but look possible as

And back people for operator, call now to I questions. to it over able be you for will to on you turn

Operator

[Operator from Instructions] Our come line of Ebrahim the first America. question will of Bank Poonawala with

Ebrahim Poonawala

So and around I than credit. first everything business this of you appreciate Maybe most. wrote you guess, strategy question, that both better outlined

interest tough in rate a backdrop. are We

Just deposit pressure of about when extremely which and the for the banks of that talk how now execute you nuts to deposit tough without the even on core growing of you terms is costs? bolts best us in can undue right franchise, talk

mind there's of last baked from about how here? your And don't talent challenge few amount addressing into if would that impactful you the be? is weeks? that much and been of a fair NYB also, outlook And how Like over leaving forecast

Joseph Otting

you much. Thank very

look focused is monoline rates the you market it business when they and on of CD kind question third of through then was organization the a at multifamily, Signature more into fund transaction. fold. So the and that. the bank high And first was organization, Flagstar money leg of that joining the FDIC legacy evolution they then kind raised deposits the to And assisted the with brought the relationship then where

interest-bearing, as our in been able which have to accounts. we those deposits through XX% get of transaction-related are So Craig the showed processes, and chart, noninterest-bearing to, are when actually on

identify you if checking have your you account, if they who's in matter identify with your who is usually somebody, have people, brokerage and people bank? million a ask is. $X Most mortgage most account you your And with no Ebrahim, their

have baseline we to C&I usually look important we stack into retail to to expand customer grow off to industry in and banks. can and the usually the And of in And be business, a Usually, so middle relationships. if our then be those the as there's strong to X business, the franchise specialty able market X you

if in get stack, you important And can products, syndication you will derivatives, usually relationship management, those and that the activities. be will be cash deposits,

And recruiting have. some so that space. into have in more clients really, supporting execute overall are clients our interested good building big get interest-sensitive and think focus less and we that on is what relationship. I that's in already as where space talent you'll strategy, we the that developing and upon We that And already very businesses

of want part think, Bank to say private question, have C&I the markets Greater in commercial bankers the will it into I They're Southwest, of them Southeast unique some has we most say the second been really integration would build and United really States. and dealt a around Bank. that tough your commercial able in Signature then Signature about the the Signature to the we They're people Lakes, baseline teams. Northeast, the The lucrative banking of bank. Bank I from our the We business of we have were Signature with Bank. what where a I franchise is, obtain around the our And really in

our we been have to for take and responsibility Some our effectively all them. has have fault slowed that products it of of not

clients clients But did meet I longer our Flagstar. say Signature would of of some of and with -- did are BSA not not the standards, the also legacy those some clients no

of little of decentralized uniqueness model. So to a risk fit. trying a there a had was also They bit

We have a centralized risk model.

is The So in But roughly teams basis. around do there slightly roughly I have million balance was so on lost that. less higher of group. people that we billion, than balance the current departure XXX track And left the have was a billion. today, We a $X.XXX when think $XXX left. $X deposits standard daily

couple couple take we've of not those time has a when things take of a out contrary whole stuck those But we done that did And teams frequently been left, recognize think I do will organization. the migrate the some deposits there's of to is team. they -- why

So have stepping quickly and job retaining has to they people three teams been left quite contracts And where took other done and left, were the on the really extraordinary up those. team and those whole And teams. seven calling people. reassigned was those we ten, we're an there that Those positive. seven smaller of -- team

a has to And of move think I the helped a of in that us combination deposits to able kind so be position amount of retain significant those be and forward.

growth very quarter. had risk as So had deposits, but we've wholesale for the during we in there's big good always it out we've actually like that more had isn't pretty a -- deposits some and Craig pointed on slide, the

that And April And private into we strong retail franchise see growth really, and through well. continue bank. to in growth it's the the as in carrying

it's that, would up. that you anticipate perhaps down, where So actually rolling would been rolling be

Craig Gifford

hundred the adviser that -- deposit left couple departures. with couple advisers of As mentioned, million been associated departures press -- very of with sorry, of group the hundred billion a yes, the there's dollars since of Joseph little I'm

of All a in trickle. just that weeks occurred X last the weeks, positive. it's and the Very first of couple over been

Joseph Otting

like of is of those Ebrahim, banks. the teams for most other have small -- one things left

clients of those these be can't banks. And serviced small some by just

into of delink complicated may the all treasury that to integrated very and and relationship. fully But bank, they it's services part move the the management So you if they're systems the have.

the a things small So some retain of that able banks to my and significant guess but can is we'll move split relationships those activities. and been deposits we've with over portion have of

understand, is our said, been customers I the integration process for we understand and transparent integrate those it can we opening into fault, that sure of and clients, I and as the meeting Alessandro the responsive time how account a some make private things those people, more banking calling, this bank. trying to the And needs, can more making calling to spent be of to on credit have lot we've with

Ebrahim Poonawala

can That's great I have follow-up. And color. one quick if

you've the cities all multi-family. the dive to and New do on appreciate deep review. terms York I around the this I was began, stabilized done in concern So office there's lot there of a all and deep of When dive more book. And appreciate multi-family

us for your how and that it should like your City about the in to love a longest loss the minimal. felt we covered sense, time, think hear of New loss multi-family bank, would like the York the content? should view thoughts be in give terms And I I've stabilize content Just the on book rents

Joseph Otting

Well, I legislative the know the that then a perhaps and they Court against changes. things. all couple about would that we of mean expectation move And the Supreme haven't. XXXX

years the that kind space. speak, do we big expense tax the pretty XX% the HVAC risen. the during And exposures. of work some just problems may the what XX% in I lot hit vacancies. buy what more very But So the negative army, the point is a really X -- that the the are in portfolio there's large than solid to will on how multi-families operating on to few of is abatements. to have we'll higher of work doing this They new consequences have. rate mean, resets, People jurisdictions other tell that revenue or it's been low do was know expenses we're of you have site, side. We at now so with the of interest it a have there's people what very remainder on we side on hiring say, quarter. particular We've where ago, as the revenue system, looked

yes, look I think that part Craig one past that you due. of important our past pages, one the that shows the the of parts due XX, days about portfolio at one past stage if XX is due the chart Chart to the the shows XX On

going while, portfolio not page, things due. resiliency of clients Anyway, that is where amazing one has finding exhibited past that he our the are Ebrahim,

lose supporting those property properties they want by over below the So X:X. those where they resources properties. service and -- for properties, we debt long-time is because family owned properties XXX% coverage see the that properties to just from the are And amongst don't families, are those These perhaps the is frequently loan-to-value.

while And of they have motivating at we And to people negotiating can to that Page tax potential way. liabilities was I manage us those referencing with to don't what their in time Ebrahim, make they table guarantees, have on be kind instances, the -- are sure is X.

XX% third The second end and is bottom quarter, XX At Category to item $XXX were past was me, then or we from up first bottom up $XX due. X is, total billion the of XX%. XX days item the from the the billion were to XX% versus loans excuse --

borrowers do feel from the to given our there's the of loss has So probability make we portfolio, up standpoint the held continue very well while default and default, portfolio payments.

Operator

Your comes of Dave next Rochester Point. with line question Compass from the

David Rochester

in of together this impressive. all short time. such getting on Congrats period a It's very

that is then So Just portion what higher billion following I What's color on forward? whatnot about and CDs. and the billion managing that with this going versus that. up the could where teams the remaining? And $X teams many how stand your just bank all on how or remaining you appreciate with of mix rate DDA bank at if that's point you deposits. lockups comments that on $X of interest-bearing you're at in and the of relationship the remaining talk are private those

Joseph Otting

the XXX left bank with Yes. teams today. There's about

And X cliff roughly there vest equity RSRs But say, they years X left. there's of unique have the and a model, I supportive you we third at if a is So single XXX which in if I after you're a is of a then that an was one money also servicing they're would point kind customers XXX thing. cash beginning, contact year space, vesting. actually that said place I'm model. in like Dave, year, in on their clients cash payment really your -- would the had payment but And and that of after and for

not you're you're to going be If your frustrated. able to clients, support

institution, you will don't an And you that those you're think stay give tools. not to at going

really I can the got a can if here, have because care fix their fix we think clients And successful really to career -- that, so ability that. can it's to execute. and we of we've take people And have we

I don't think And one at not don't I care you're lockups money then thing, on... customers to bank. of take that able have there's are if your but and know So franchise, do that's you the the your out keep you any number would

Craig Gifford

$XXX $X.X only numbers around To about some put of mix that the CDs. billion, deposit that is million of

So because not -- it's the it's structure. not stable maturity because the business, of term relationships of in

David Rochester

that is of DDA? piece What bearing? Noninterest

Craig Gifford

transactional front accounts. me, but in of it is I don't the number have bulk of that

David Rochester

Got you service the terms you. do in of on all issues ironing the the side? think of out timing What

Joseph Otting

personal meet with -- We've We called over bankers. have of and good it. And back with honest of commercial Signature what them bankers, were but assigned, the some meet initiatives. my It's approval working just the then to credit of And been through. Most you. first to levels we're that kind process. levels working approval really all of we one continue -- that and got are be private I'll their We been of through them worked kind Bank. were with we've through been we they're

We've assigned get work to approved. through how a particular person credits

part, for kind people a out. of We've most of ironing at of point. the So those this we're trickle down gone basically think things leaving to I kind

are people engaged be are So and part to really they that think that the here I organization. of want

Operator

comes Piper with question Your of the next line Fitzgibbon Mark Sandler. from

Mark Fitzgibbon

balance us your I share wondered what in could if you assuming size for sheet with you're modeling? the

Craig Gifford

can. Yes, we

the sheet that in balance assuming not are numbers and any Pages our modeling the in represents size. X significant reduction on X We

sheet reduction increase right balance looking target. and about are Joseph moves transactions, number at of but don't We'll and, strategic make and we mentioned, that right principal as have for our balance a importantly, As returns. shareholder a are our for we the sheet business our thinking strategic

Mark Fitzgibbon

had that of secondly, your the do roll-up XXXX? plan then more baked recently conceivable? think on that's And independent CNBC that Okay. lead through a deals. be think you Is FDIC I your suggested director as used any into When vehicle for could company

Joseph Otting

of line plan. currency, I background credit It's management is first into visions with my What obviously, good the would of our good -- line I into a What what looks not baked risk being in entities. of infrastructure the defense that be. short we We'll should position like. good in our in third a no be to and to in house means the And defense term and defense clean it position get order. are and in by line comptroller other be have -- of acquiring up second

the guide as focus is and with partner we our to our with at Fed. infrastructure us here. really, build They're us the to And to OCC the regulators us important partners and work

to We're have us We've really committee it place. it do we management put the think in because the wants to at think it job. and We work to of that organization. us. formed this a lot to We want we're formed deliver We regulate We're doing not committed actions we in on to anybody KPMG organization because a committee. do a for important. risk do bank, the their we it's to person focused it. to it's else want because a coordinated in And hiring taken that. some we're structure doing where a It's we important

Craig Gifford

included of And financial that build infrastructure tell the forecast. I would financial the you is in and that impact needs

for efficiency business the reinvested we infrastructure. will opportunities developing see management be So out the some drive that risk will in would of that of

Mark Fitzgibbon

you franchise? Great. of the far-flung of selling a down opportunity kind any there And see branch Are just consider would of where to lastly, part an branch you shrink part sort then areas the franchise? of

Joseph Otting

this think point. don't I at not so,

and to bank like operated that I how could good is strong could anything, being available. focused initiative. on the we mortgages more as more they better doing at a we think business branches in of bank. of out like and originating originating really has get Reggie the at obviously branch If mortgages be out small would the lending well. We are the have really products retail the deposits

how So do a network. offer we're into strong our I what we we job. really through done enhance branch more think They've

We powerful can branch a of upon we grow the and network, have deposit base very think that. out we

Operator

Your of McGratty next question Chris comes from KBW. with line the

Christopher McGratty

share over the next looking the just are to X where X run you years? to Can you ratio loan-to-deposit

Craig Gifford

Yes.

look will significantly see the beyond that that and at -- I wholesale least we to it transition move on wholesale don't months. would the next a ratio wholesale might out next our the increase ratio funding in perhaps reliance continue think on-balance But us lower bit. looks loan-to-deposit position, current -- deposits on you mix get at months expect and in I'm as to funding that reduce a XX and balance an that deposits sorry, liquidity as see I sheet XX our our we sheet as over

Christopher McGratty

elevated there? remain will It

Craig Gifford

would ratio perhaps as transactions particularly reduction we strategic the as value, at Well, and would we might that strategic shareholder operational capital demand. see releasing of through intended as some ultimately, look efficiency liquidity loan-to-deposit loans be transactions, some just by reduce well that drive to

Joseph Otting

the where where Right. the Chris, is at have the, within we scale overarching have of say, company really one strategies I'd to we and look relationships.

And product. that sheet. for the Some the hold of and in just lot for the businesses would where Those us a there's buyers be balance businesses -- of don't would that complicated to the probably customer, future. know using we kind be on singularly difficult market they're to is today

give liquidity liquidity. ability to our would would borrowings or we transactions, to increase on that so as said, either And execute Craig the that reduce us wholesale as use

Christopher McGratty

parts. class what balance might it's Great. And to strategic you CRT with two $X you that where point that reduce at And I talked be a be considering The asset is? the my also would details. a guess as announce also, Can decisions share about risk-weighted follow-up, assets? billion transaction like you you sheet be

Joseph Otting

don't to go Yes. in or in make it Chris, I day are a people announced I But X. aware it want details. wanted sure we into of to case

are of right that. appropriate not move that forward do this at to think we But deciding transaction. to at I doorstep it's going whether we're the point, with

Craig Gifford

gains demand our a significant potential. Importantly, that have accretive capital or wouldn't losses would immediate on our or and capital reduce transaction be to it would either our ratios, earnings effect

Operator

Your next Gosalia Morgan with question comes Manan from Stanley. of the line

Unknown Analyst

that to a have about in better long-term to selling Wilsons rating to for Brian in last were the debt the Manan. question you order see is with This talk you Can is, your complying proposed for related rating? what rules year? do And agencies approach need

Craig Gifford

last the one. to move I'll

could demonstrate We earnings positive towards there the the to are performance our think lead risk. in to certainly understanding medium-term path to a our reliable credit a a see or upgrade way our the outlook for see and us and understanding to that an potential repeatable immediate of need They ability as financial frame. don't demonstrate opportunities of I question. time that second term. The that business in

long-term we'd our we as of evaluate terms In there. any continue -- decisions benefit really structured debt will think we will position long-term rules, from to have to capital balance increase haven't how and made ratios, on where be continue our -- funding stand benefit we our but capital a position I sheet

Unknown Analyst

give you choose the commercial then as follow-up, comes time And the estate real down a grow to might Okay. are likely of versus real it concentration, some maintain to what to types you bringing deemphasize? Great. more or can when that you estate commercial just over more details on

Joseph Otting

Well, the portfolio. the concentration clearly, biggest the is sector in of multi-family

say from exposure billion We've your the particular move it of desire risk significant pretty in dive the would office any a deep marketplace. to on in $X.X billion our $X.X of would reduce reduce done exposure that I portfolio. So numbers, have perspective, be you to our the would area. to a

clearly, stress to going I been how there, the the work in fundamental in is think future. change there's are to a people be and what so space And going used

to book office, it see down see level, so -- where and say the first would an if the $XX was would reductions like office exposure you would to would to I have difficult multi-family our to it's reduce -- there. be eventually, just end but get definitely into that if billion I go I the and It's on then we

Craig Gifford

the to as more sales. it's to manage be likely say I'd relationships transactions portfolio how and we opposed through our But

Joseph Otting

a like C in either then still do for to those. use if you to B it. your we'll with gather relationship, loan here goal I a part you relationship can transactions is good Yes. and want something have credit, want we'll balance that Option bring of and do sheet, A, where going deposits a mean you you're it do do big us the Option around is Right. the to deposits, or you our we just we do we to want won't like, if our and if it's a back future.

Operator

comes question with from of Gerlinger next line Citi. Ben Your the

Benjamin Gerlinger

your I good of your of individual -- CRE book. information know gave independent of or excuse categories a some the amount on you me,

levels? with multi-family just appropriate Is mean, roughly an just reserve an reviewed for kind you're did quarter. a the curious, make start largest your sure I some area non-office intention series because, there to the Just to complete do -- you X/X, for Or of you're XXX%?

Craig Gifford

So with started they're we or we the but not largest, are to because coverage count only because large either as factors decisioning Joseph it's different owned get with opposed more the they're owned there, family-owned -- less and investments. generally loans, And privately pointed more as institutionally out.

about a a you're is Additionally, opposed obviously, as I $X of million risk mentioned, million challenge when credit the $XXX refinance credit. to talking more as

could look that continue we believe impact we have portfolio. improving the credit standard about look be closer $XX to for approach at continue and current as borrower But our and to more threshold in We a our the through at in levels the reserving processes environment, levels. million continue performance see our we take say would appropriate portfolio that next reserves a as now. portfolio right cut standardized balances And will loan to smaller over the that to I'd of at we look a

Joseph Otting

what or phase loans relationship, borrowers. any is it's $XX is be look going one And process. June we'll large of there's by by a XX, of And we're that kind instead to that other and then next we're of also at whether borrowers mean thing. more the we at billion the where looking consolidation large The through

report So we'll statistics time next you able of give we some to kind that. as be well, to around when

reserves make to against the way portfolio. we to sure comfortable obviously, our of and kind down the So are with, waterfalling ratings the the risk we're portfolio that

Benjamin Gerlinger

Or more of -- year, in loss predicated gave here you. really elevated materially it and and provision follow to on? just year? building? of a higher 'XX to earlier the loan wanes you a that to of Got loss an of is as -- it is a be sort this next... -- the quickly. you know I'm forward what Is might anticipate pretty for throughout 'XX similar things of rest this it Just the allowance kind get year so you guidance push sense provisioning I up And for why this there going trying have some marketing just

Craig Gifford

I Well, think good a it's question.

model particularly put debt what -- will stress that to we ratios rate experience will borrowers for know experience on some that's that levels, we've of there loss way higher that stress. classes is also had reserving for think really But interest the service purposes. be borrowers. and at credit good relevant repricing seen some we We've I coverage obviously

ratios stress. begin be a get how curve of could borrowers and as until current borrowers to see And broader the in react comes those service we population environments, coverage market we that until those that -- insight see reset more level, -- into rate we debt down, there'll additional

are upon considered and change. high could could expectations we've about current curve is put rate marketing we Our The on And based that Fed the our talking as future that longer longer higher conditions. conditions, conditions current and together. the impact and an forecast have those and

Operator

Marinac Your line next Janney of from Scott. with Christopher come the question will Montgomery

Christopher Marinac

net for build. our all taking Thanks wanted on reserve and down information. of I the drill questions to

net should next we change the us and charge-offs guide type of gave should reserves that this over what So anticipate we provision or you year look at how year, time?

Craig Gifford

Yes.

million build, of reserve But ultimately build this the a come whether underlying will credit of to quarters. and then So say, reserve quarter. I And should charge-offs as it in a had rate our out And reflect charge-offs, portfolio. reserving, an anticipate outlook, that couple get more charge-off see run we'll it's we or we that, because beyond loss. a back next of over think think loss ramping normalized and between we distinguish about I they the dramatically don't elevated credit the charge-offs we we level all $XX of

Christopher Marinac

Great.

loans Or those the that bank kind of those of leave would and that be some of And are loans some altogether? value the be taking charge-offs impairment? new that taken, just some reset would would of are

Craig Gifford

talked this us have over we of office when office to loans couple where a to And the it's are as had the the to stressed So chose loans. that was we come office got quarter is couple that principally property. of point it loans market pretty about stressed to the take charge-offs the investors and and a

I that loans. look at of I don't point on and them couple a know office them likely that think this a loss we just -- But it's but we've is at believe taken those.

Operator

next Bank. with Your will question Bernard of come from line the von Gizycki Deutsche

Bernard Von Gizycki

to So policies, included you develop with also regards noted significant programs have in the being infrastructure I to I the standards. you XX-K, would it's think, that today. enhanced the assumed costly. X risk comply revamping be of anticipating a systems would noted Category in management forecast with bank, But Craig, the and expenses

over expect it you optimistic in call, expected seen on time? about So today's sounds Can just pressures efficiencies your and you X. these down, help reconcile which on expenses are you're driving forecast Page cost

Craig Gifford

on Page can forward. see look you you a if So X, walk

As are I costs mentioned, can't it's XX% year and fixed about some those very we that do by there and reduction. lot there between are are of manageable. roughly that other portions Obviously, XX% are a that

it drive three small about think the a had organization bit as there's bought banks of opportunity full wasn't efficiency organization, If infrastructure. out of three bank little and sets took we that of a free you -- a large that our only bank to

we partially to more opportunities been while certainly -- able we There's there. of take advantage the come. And to

in of we before. experience looks that risk have are management but a building costs We've team number we have for strong of existing a base, mentioned, pretty scale have this management the functions. employee Joseph And As that. a like what brought we what feel and members good that done

pretty risk our we contemplated we've and I for costs the in build, these numbers. as are the there's think associated around about the forecast that a what degree And future, think high so of predictability with management

Bernard Von Gizycki

And just the follow-up another Okay. then from XX-K.

of reported a status included noted by auditors. material your of You identified in weaknesses items remediation number the the

internally expanding just the analysis, Just few independent of assessing tools reliance infrequency noted qualifications. reporting, use reducing of the staffing and credit the items created on a included

the Could manual does entirely no help spreadsheets, It working like situation was just sound reporting explain you or the on department defined you had guidelines. inherited.

So inherited. helpful understand any you to would be the just that color situation here

Craig Gifford

Yes.

in and developing have the think indicator was degree, the that that and visibility to wasn't the as the probably much just provisioning. situation the that biggest a situation I in the market office impacts market on multi-family there that, of to small would

So that and big in XX-K ultimately through the passed reserve. a quarter in fourth the

to this management I a demonstrated here along speak. good team, the that really we've think what so job catch staff, to is done existing have with up,

Now still has and those a our we of on of lot to here. new are work pretty go, improvement Again, internal many continue us action infrastructure to plans.

And into action so we bringing our plans experience we're knowledge jumping how can into existing and further improve those. and

of have we a weeks, to the over last as done least for ways go. lot stand some We're So not deficiencies we've at but to of X the today. previous X we up make to done, a work

Joseph Otting

special the talent out that President, Yes. he's all look wanted brought Bank XX and have come the Jim work was at And us, NPLs, ran add we as the forecasting commercial is that real joined Simmons, estate is right approval project working I but and the on processes, so infrastructure of now, head we company to additional the thing the adding who for into the Jim to would and Jim well. for from at experienced into years other assistant U.S. staff we're called that charge-offs in and very Officer the

available to The heavy our is need information lift together. right way. more beat formulate up, bringing to that but for expertise We the in see us. recognize information just need We that's we the don't So think just and that we as us. talents that to a the

Operator

Your next of line Jefferies. come will Haire question Casey the from with

Casey Haire

quality. credit on Follow-up

some review office, exposures of loan traditional multifamily troubled in the the following CRE. more of So your and book,

for guys of declines what some... across wondering build as kind you reserves? Just Just came you price looking

Craig Gifford

for XX-ish that Yes, process But reserving the multi-family. in that's contemplated in we've would declines I depends range and XX% you we're the modeled office on it. it -- the book. price our tell way

because XX% puts pretty If that's see you our we why think about close. stressed us that pretty LTVs, origination LTVs offices

our LTVs in On were the XX% book, multi-family the origination range.

the origination coverage service coverage plus level. X.X in ratio debt Our was

as of in reset for which depending sort down service cover why where X they're curve we because the able would in overall hovering being So service. X.X much the is level to rate service, we they're if that range. XXs, a high are about XX%, XXs is cover what ratio modeled, rate you that but ratio, and to they money they're we're And they're which of when the much LTVs not in as perhaps think owners, low the current on potentially think making to resets we and defaults resets, for book, about puts multi-family not in as that able loan-to-value as those the debt the the lot is coverage like debt seeing debt if

Casey Haire

banks. Got it. X guys Slide And you on then X, position outlined your relative Cat versus

a $X with aside billion balance your you metrics you -- Craig, a is mentioned here on guys It growth C&I like based opportunity a of in not sheet I $XX term. on flat are think, billion forecast the But think sale. I sounds balance from CRE the flat C&I, longer concentration. sheet, One the potential is

how CRE evolve in the flat wondering on does the Just sheet? concentration years coming a balance

Craig Gifford

are use to growing the opportunities. cycle we work that have want, and broader maturity balance capital evolves these I credits to next that sheet, think able the deploy retain it through then X the sheet we allow to and the we're run focused refinance over to into relationships and business as credits the we where balance reset X years off business more have

Joseph Otting

remain then sales, to sheet of It attributes winding just Yes. And balance going information. had And In out have we to our the it isn't asset flat. saying the obviously we're sheet. other down the of the size baseline point case, could is businesses balance like of to impacts flat.

that's path So now, the to we're the in sitting be would it down baseline like the $XX just from looking way of clearly, CRE case, billion But portfolio. if here X a it's years sat. we

Operator

line Barclays. with question next will of Your come Shaw George the from

Jared David Shaw

just thinking expectations. Shaw. should we liquidity you're HQLA about actually that but and a quick be the sheet How of on seeing here? of is question in It on some balance Jared liquidity guidance light

Craig Gifford

Yes.

is now ample. balance right on sheet So liquidity

we a term, I the we bit in extent good portion that out, to would transactions, at pointed in on have on we the than uninsured more I As mentioned, expect as least what balance continuing quite a today be would balance liquidity. sheet sheet I deposits, have liquidity do that that, of near

to substantially. be grow don't liquid expect the short-term liquidity. portfolio securities will I really It pretty

it. we're at I As our balance risk mix. neutral now. I very we're risk like want neutral, we we'll look liquidity out, not a But mentioned, to duration take interest the of rate pretty interest right sure extend pretty far rate the I'm so

Jared David Shaw

the accretion modeling at just intangible then look loan And you in the expense was that have questions. the And we two amortization? including when Do Okay. then guide, what quarter? is quick

Craig Gifford

guide including expense I The is amortization, intangible don't loan the accretion. have

Operator

from with JPMorgan. Your will of Steven next Alexopoulos come the line question

Sun Lee

at actually comment Janet flat basically it level. to fair that balance can billion deposits are color assumed to deposits on here Back the remainder what your your the overall of staying that through Alexopoulos. outlook, earlier, should say how This is for bottom NII your mix for $XX XXXX from noninterest-bearing deposit in share for to sheet Lee flattish your out? assumed on change what Steve for And is XXXX? is you And -- is

Craig Gifford

expect to forecasting do pretty see and mentioned, expand deposit customers mix flat that as see, a expect as of funding. Joseph demand many standpoint. a our more we we'll to assumed been We've type date. these from we We've relationships, into with conservative deeper We relationships transactional

on we for so speak. in mix, we optimistic so base And an terms to that our in outlook our funding but model the there's haven't that, opportunity presented, upside of included

Sun Lee

you your then end give CRE going your a loan few towards normalized 'XX? loans down coming Can what's do range And a at you Okay. expect of $XX next that? on detailed years. And to in the are more as overall us be XXXX? XXXX to billion loan the over you growth time where And for of a level balance more line and forward

Craig Gifford

loan forecasting. year that potential, more change in as really as that will portfolio we hit about include think have the we forecast next and as that about hit plans mentioned, does of maturities me, them $X a to are the the as million think years. X over the -- But not excuse outlook. mix I strategic included resets -- a These we've the will So opposed

the And multifamily office, about -- about million kind that the so a think of you of bulk that's or is multi-family. and of year either that is $X.X

adjust what about it's the next relatively of kind flat. a we the concentrations opportunity think as over here. opposed growth sales. balance the years think we kept to as So portfolio growth, -- loan is about haven't sizes the X loan in book modeled to as that be And would substantial sheet natural opportunity We we --

Sun Lee

happened And got a Okay. charge-offs last my in given of office loans off you had or in the refinanced that the How much on XQ due multifamily came these Besides CRE 'XX? modifications how much couple and question first to of extensions? about or you what rent-regulated and can And credit. quarter, talk loans? these paid

Craig Gifford

there, in current XX% two Well, There's delinquencies. reset first as of something dates of $X I the or been rate really relatively it's has time those going we've has say and that that the date performance no the and XX off X/X that I'm strong. perform. that first to had to much had reset mentioned that reset reached over on paid hasn't quarter any really, is essentially and months, refinanced probably but that levels. had mean haven't at we the not has loans has I quarter billion delinquencies our last to similar. have one out And performance

quarter So different of any first characteristics hard the on too But the want weren't speak to that. don't I XX the previous overall than months.

Operator

the of D.A. Peter line will with Next Winter from Davidson. question come

Peter Winter

Can this an the quarter? loans, and you on the criticized trends classified update provide

Craig Gifford

Yes.

just I'm criticized over but So rating about and $X changes, a here. classifieds, of billion taking did look have we a little quick

-- and that $XXX from classifieds I'm two the at as -- million from about of quarter-to-quarter criticized looking -- we're wrong sorry. those resizing increased loans So about billion And number, $X increased the classifieds were But we not increase. to get when those reprice it was interest think the impact about $X billion the dates. near them in all the a they about rate curve how Not do reprice of term. in overall, changes quarter-to-quarter.

Peter Winter

ask share just quarter. then in And it. at pretty much people got count, Got first if look it the most wrong I -- the if could average just I

should we -- quarter? do we and count think how Just share average about third the second how the in

Craig Gifford

got Yes. we're is the in way basis wrong. story because converted stock. in say the people I confusing this It's presenting it fully a for on math deck won't that necessarily part a preferred

that portion So did preferred. of in had a the being good March that transaction we

XXX today. in those in present basis, and will billion, over materials, on So an $X that we shares the million as-converted second an details would that And shares we that's the quarter. be have but of the expectation convert

all were throughout so information has as fully period. those of shares And if forecast our been presented the converted

Operator

question Breese comes next line from Your Matthew the with of Stephens.

Matthew Breese

curious beyond you're hoping identified you then you quarter, discussed and billion, areas that sale profitability. talk of in year-end Category on to the and going assets which the the between concentration areas about guidance And the last a today. XXXX focused one-off by the where gap the nonstrategic. where deem $X was in and could potential is amount are peers, rest that you nonstrategic significant the addition, CRE with I concentration bank you with of you X get CRE I'm line see and need capital

Joseph Otting

$X So Matthew, a obviously, comment the in we're to position not on billion.

to -- choosing have I transaction. are indicated, close the being that option of we as So

that the we'll XX hours. on So working over be XX, next

business relatively As of through, trying sitting with but our have we a trying within within go for business, and short numerous and have where determination, the have understand to here to as we've have meetings far going the understand through, the business, we been Craig of make like understand I process, the owners company been business -- really we and that had it sit time to got relationships. both a down the is kind down period and the company and

we're bit the that our put together in strategic not. we quarter. to to for opportunity company. to better which some of are which a identification has little back, really we'll when the assets second get plan time position so where us kind to go of going we'll through build kind given through determination a After the you process And of more and then make and a And be come give for that strategic we've had are and

Matthew Breese

where concentration, the anticipate And being then XXXX? year-end on CRE by that do you

Joseph Otting

Matthew? what, I What do think

Matthew Breese

concentration. The estate commercial real

Joseph Otting

C&I I talent an the probably C&I experience, real think in estate potential probably based XX% in we CRE. company. We only draw consumer around mean, and of XX%, that I see ideal in world, commercial the not the into you're really in -- I type to the think XX% probably growth concentration will the my somewhere related, upon but XX% your probably some

Matthew Breese

And to your on debt, exercised? capital. and then you wanted then want on that's did XXXX in those Okay. to warrants longer-term thinking incorporated How I outlook. item? the whether on And TLAC-related being Or touch are touch I that about timing is a

Craig Gifford

from raise this price. incorporated debt do TLAC, of included of do classification, include $X anything portion haven't a exercise the come exercise include capital respect allocation They we that the capital here warrant a With from to of an The warrants. the billion of haven't we the March numbers any not the an in the but amount outlook. answer in capital we to include is significant on warrants, that would long-term

that. from So there's upside potential

Matthew Breese

team? is Okay. how specialized how deposits mortgage solutions And at then last to sticky bank ] [ are me is then one to going for legacy forward? much that business in you prior the signature And important

Craig Gifford

more it, they're But associated and -- that banking billion up are big varies model move Well, the business call $X and with not is activities mortgage signature and cash and either It's or related our part signature numbers, than so is to billion. focus interest it $X a big advisers, round Escrow because business of principal broader roughly in so It's on flows -- us. on I them down that. mortgage for the of more on speak. some the relationships so think They're less I'd mortgage to the aspect. about number

Operator

Moss James. Your Raymond next line of question comes from with Steve the

Stephen Moss

set next provision therefore of the be loans to with back coupon stay credit X% think about could multi-family regard you the going X primarily I to provision up months? elevated credit here. expectation through larger on XX go we resets over just Maybe resetting guys And year? a driven if be influencing X hear seem we Should next we being to the costs. at as rates to XX on to by X a over the more years to that X% your

Craig Gifford

over $X review I credit rates. as the market mentioned, years, that resets it's based it X if certainly, Well, forecasts I XXXX, next have we whole on about out focused over the our the where you I billion interest mean, think get $X -- in could, from are each into book matures the that we next billion. year

sort a of bubble out to got as take stuff bit a of you've you So XXXX. X-year

think there's rates long. other we might high long, think high if that that rates issues So the that that for foretell but if economy would see you that stay as I see

Stephen Moss

Okay. structures sounds to borrowers subsidies, it's of tax in pay. like expectation number for other of And you It government are aggressive or who these a some of have benefits the in just then programs. more ability whether terms

to curious regard curious that. programs government other much are coverage influencing just And with your there of going credit cost with kind I'll one how thing stop as forward? maybe on -- the there, Just expectations to

Craig Gifford

So -- really I'd support or government on risk have hasn't our say credit we influenced reserving. that view

of the if aspects, is simply how to just but really aspects, been, I significant they path small to owners, speaking historical invested, exit basis has continue tax if not government investment think basis they've to more were hold what what them the what were the have we ownership types debt. they or support and potential versus implications whether the to a and for their

Joseph Otting

us Yes. seeking they And until into Steve, NOI advise they that of the thing these properties have abatement. it. And I come until -- on we we would and our that add are get tax owners not there models is put the will their do

very And been were the some positive recent have get there surprises to so for were -- completed, that they and which properties. those able

Stephen Moss

Right.

appreciate that. for two And just Okay. me. I more

In on was interest-only of payment debt on when you I coverage terms portfolio previous Craig, for that, But or the on management current disclosing coverage current terms that service of loans? think full payment Is ratio terms. P&I it even was -- X.X. service mentioned the

Craig Gifford

that. gave current based I rates full current points basis it, payment call on existing terms So their and payment lower upon contractual -- P&I, on you current it's, terms the on XX was than number

Stephen Moss

for Okay. the And me, last expires as March? to lockup when one in here the for just curious investors

Craig Gifford

don't to the I know that answer question.

Operator

of Arfstrom RBC Our from line Markets. Capital Jon the next with question will come

Jon Arfstrom

you. Craig, second think of the how maybe X, numbers a maybe loss from One I a your you breakeven, we for message a 'XX, suggest from loss modest on quarter we of in know. profitability here don't there? Slide term? about But sending Are build to Should each should for cadence expect then earnings near different the there? very you and for

Craig Gifford

I No, the you're message. think seeing

Jon Arfstrom

Okay.

And then, enough? now, helpful. know you you all on And is know based billion dive. any now? on Joseph, too So the deep much, Or surprises you, what $X bigger is you for given right. you for raised much That's right it major picture, what that

Joseph Otting

it due to it think When be was had the went billion. number we it smaller we $X We No. was concluded, process, a needed north initially, diligence through then appropriate. and of

have CETX how we the right sufficient the the I So of capital business think that our execute and you are grows, where When like and that's feel look at number. we to we baseline kind liquidity today plan. and

Jon Arfstrom

from real And your Okay. the... of no point and view surprises

Joseph Otting

organization. you at when surprises, relationships I mean I Well, wish the the regulatory better say were

and some we're as ready lot be a by organization, regulated on in OCC. that's regards, that work have the we we, do, of to an -- We to us were not

understand that we And we've our a up, up but lot hired so catching who to standards And do the get looks have of we're to to what people like. committed doing that.

was or regulatory environment infrastructure. didn't have the proper visualize the that before part of that I could And we work that end problem game think people had have we

where is that kind say we up financial and every would I significance the business So do in bank over what their doesn't their one. we're unit look forecasting units, number with constantly like and own monthly personal of in XX-quarter has statements, reviews of to company. business Craig two, exist grew I them, is going this with and basis. That a those Number out

done. accurate implemented. I can a get we performance a think isn't that That then that businesses. do be the lot And That thing. short change culturally, get through that relatively when driving a a will the influence will much we long-term those will and I job, think, more by thing, of company

Craig Gifford

make more nimble. Will us

Joseph Otting

a where to And thing the when need business to between we units company tension the infrastructure part the other paying and they'll of little be the are is I and infrastructure money spend lines being that and just can create add for the allocated, would it.

questioning So -- there's enhances, financial and amount. that disciplines. pushback of I the a There's bit think, little dollar our

Operator

I for turn to closing over Joseph any remarks. call back will Otting the now

Joseph Otting

We're the information lot to work. of and do first call you to We important will able company the this execute recognize day with journey and was an is Board all a and to It But for for share the to Well, Okay. thank it's one the the management of think that that achievable you. team all, be excited joining us ahead. able we also be this about on. going plan take today.

and able address particular support in Craig said, have. And any to look us. do forward as information to And we so and some that your follow-up confidence people appreciate be calls to having questions

So thank you very much.

Operator

That today's will you joining. Thank all for conclude call.

may You now disconnect.

Flagstar Financial (FLG) 1 May 242024 Q1 Earnings call transcript