NYCB - Earnings call transcript Q3 2024 | Flagstar Financial, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

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 Third Quarter 2024 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Sal DiMartino, Director of Investor Relations. Please go ahead.

Salvatore DiMartino

good and Regina, you, morning, everyone. Thank for Community Bancorp you joining the York New of team for management Thank today's call.

Today's and along third by Financial discussion quarter results Kris Officer, and Gifford; will company's of our Gagnon. be Officer, Chief Craig Chairman, CEO, the with President Otting; Joseph company's Chief the Credit led

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

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

safe presentation which may subject about Such the the rules. uncertainties safe harbor forward-looking for risks today's and harbor us. and review language release press more we statements in make information and are to Please affect disclaimer may forward-looking

reference certain turn refer Also, earnings measures. we over today, measures, of these to I will when And Please Otting. Mr. to results. call non-GAAP reported non-GAAP now exclude our would discussing to for from reconciliations like certain which the release results today's items

Joseph Otting

an an the accomplished of call. quarter. and Thank third and earnings our morning, on update forecast excited we're going key We're overview today, provide quarter And our third during we about results, you, our actually the everyone, welcome what the quarter quarter course pretty strategic the Sal, initiatives. good and to of and review to X-year

of we on and is with as continue analyst management that engaged team past, progress As the the transition I've for XXXX. and mentioned investors and we in important remainder to to Board it XXXX both the community remain our

consumer, to months, on towards that some to real that business, last the becoming X the small over estate, commercial we've make goal point continue on and commercial X bank, regional significant we in of During which private banking, direction. taken and multiple focuses the quarter, banking fronts progress a diversified of our is third actions

Board to verticals we commercial Turning quickly you new last out area, over our of building with transformation complete, the space days. lending that includes with specialized this XX seasonal market This addition in lenders and them. the Under X. XX are over industry middle Slide hires infrastructure first the banking and to will the see our support

excited. we're addition, In

leader Higgins. We also as worked a Chris at hired we experience well. be a recently His company Bank, go brings of amount and will the is Chris Chris and U.S. Chief the Officer. CIO at name and new in Information forward was MUFG. as most tremendous asset key previously

One of excuse the virtually things, in most leadership I the talent company, to every the and area -- excited bank. of the continue team about very we top-tier attract me, the of organization think and I'm we're is confident to every

plan, our As both as operating bank, are in growth, our we deposit year, after far quarter solid more range. on the winning low the was this private in the in relationships. moderately new and customers the the private bank. In the deposits quarter disruption to having bank second cost Moreover, and banking private this returning really seeing average many priced, weighted we're the consecutive executing earlier are X% of retail

exit Last another in to quarter, about opportunity the talked to noncore billion I businesses. $X $X billion

reduce portfolio. and syndicated C&I the decision positions out where large the strategic we During our the to our exposures, certain some exposures made we under exit quarter, nonrelationship-based businesses within

runoff quarter loans to loans. $X.X the As or of to a billion compared result, the the C&I second declined these X%

sale peers. of XX.X%, CETX servicing And favorably the anticipate Our of broker origination we including first at closing month, MSR end impact to the matter, third-party of the MSR a is Cooper. this very Mr. of the which our business and the pro sale as forma do ratio, the to the and of compares third-party November business of

by controls, and infrastructure. And in will significant nonpersonnel And reductions speak Last made the announced investing reducing a head we've workforce results. out perform week, that, addition plan, focus to while our we we on also costs to year-end significant through meet areas Craig the track to commercial, up risk functions in are we reduction brought expenses fourth talent within count operating Also, forecast progress will we taken organization in and earnings show shortly, in still to which organization. banking as our our in our key goals private XXXX. cost and like quarter as

that these are profile, funding talked we liquidity areas the increasing and Under I one the company. Craig in of and when improved about first arrived, the

remains in to resulting liquidity over coverage extremely approximate uninsured $XX billion, an XXX% strong Our deposits. at

our also utilized to portion time. of will during over And October, liquidity a of we wholesale down excess billion We paid the our funding an $X quarter costs improve during pay borrowings. month the $X which additional billion, help in down

credit focus is Finally, on risk our and there management.

from chance You'll get a Kris hear our new Credit Chief Gagnon, Officer. to

third the of completed XX% reviewing quarter. have quarter, the second portfolio. CRE entire We complete virtually compared were the we to At the end XX% in

our proactively our appropriate loans taking allowance for problem We and including manage portfolio, action significant charge-offs continuing take loan and the to credit to to continue de-risk build losses.

area perspective resources quarter. infrastructure. key their as takeaways our X risk X talent our continue borrowers to our from the and continue biggest build Slide risk is support governance The add we that the highlights out properties. multi-family takeaway our we addition, to management for In in both third

in these paid X off or year, to at or Of the XX% approximately these remain loans, first mid-X% mid-Xs repricing date. are have current. either or instances, of the par the the from months higher. of reached over multi-family billion $X.X properties our And repricing During their most

also to We continued our exposure. CRE reduce

we quarter loan discuss, will Kris As had strong in payoffs. another

our $XX certainly CRE strategic our and over about towards roles to key us that As you will one time, to these is know, goal. of portfolio billion reduce payoffs help

along our down paying of in positive a about funding our call, in previously quarter. highlights earnings was prior with another This us the we've X/X borrowings, of as resulted our mix. discussed growth, in one Deposit growth, shift wholesale this

C&I well about trying to the execute successfully strategy, significant are on in slides. talked our positioned And growth C&I, next lastly, in discuss we've believe X I will to get which I which we

On assembled best banker the in commercial commercial have assembled industrial within commitment space oversees senior this we growth some team this Slide industry, our reflecting area the management to the X highlights to a area. of growth. has our as and of Raffetto Ric this believe, effort, the in leadership and long-time what myself, I drive strategic

a individuals strategy. can of hiring you see, our to business are we proven group As execute on

already a good strategy. build to We loans. Slide of platform C&I approximately $XX from with X C&I have outlines billion our

existing more to platform and goal billion pricing. top banking support next have Our middle includes fee is continue this X expanding X specialized XX to the to $XX various get and industries by individuals bankers corporate more hiring experienced capabilities building market, to years across in out and and product To of income staff. back talent. to our date, we attract and Part relationship buildout drive and brought in our than

really months. the the management has brought with X team I'm how the last company over pleased far

I I'll be are results. our your We now and questions. look will financial in to forward a that Craig, reflected great turn to And building it over company future

Craig Gifford

you On point pro the that the ratio from that the forma that Joseph lower weeks. basis on the Thank an can Slide a increase recognize XX.X%. can is expect XX.X%. in capital of mortgage quarter our close We see pro ended you Joseph the RWAs the MSR sale as XX couple a financial gain forma to information. as see ratio GAAP basis the expect well small transaction. in you, reflects Joseph. for will basis on And of transaction X, CET next sheet that mentioned, our on from comes the transaction with business, balance we actual the that as sale the of increase mentioned we of The

our forma position AOCI, continues lower ratio that liquidity robust CETX you is can pro XX.X%. we securities for see than peers. our have improve. is In losses to general, And our unrealized and Adjusting

of reflect nonaccrual and will elevated forecast discuss changes more more that provided. Kris expectation detail. I'll and cover significant our through some through an information X Slides updated loans will prior present we X remain most in The relevant which an XXXX, updates XXXX, that the out from

cost And there's levels. the an cost reflect of go and higher XXXX, of also expectation loan which page. next criticized margin describe fees the quarter, this on line between a assessment through principally level switch related FDIC We a classified I'll to subservicing that and away to related deposits our

we would earnings beyond an with and that see those EPS does XXXX items level can our be ratio perspective to nonaccruals reduced a XXXX. reflect But previous expectation in from assessment impact as of from the FDIC XXXX increases, and the You get the of perspective, an of consistent we expect a expectations.

from X, margin a Slide perspective. to Turning

related I level As have income noninterest pressure on out we to interest will mentioned, a on excuse XXXX. higher of through -- nonaccruals me,

Additionally, forecast, our prior interest income. of XXXX a our there's and roughly net the reduces a from expense $XXX XXXX, noninterest in remapping change interest of in deposits, million custodial and which income increases on

So again, it's just a line switch.

our result about in of margin of margin, bottomed think commercial continue do third our real and you expect 'XX, portfolio. our We the beginning quarter. as repricing that through estate has loan If principally multi-family in 'XX a margin does improve to

You'll press see percentage. our margin in release the

increasing through quarter XXXX. margin percentage similar We and expect a fourth in then the

level charge-off third of slightly for of Our of similar, net quarter the in probably We although $XXX losses in in tapering by then a recoveries have a charge-offs, the fourth quarter. of impacted loan and million XXXX. do an expectation provision was less

year prior of the with related $X.X experience $X.X our billion Our and losses provision loans. to that is increase for 'XX expectation loan an our for from full the associated billion. charge-offs for multi-family to on That's guidance is

As Kris to majority quite continue perform loans current portfolio and will vast of on are to in point our portfolio multi-family well, the their continues be payments. nonaccrual out, that the

a $XXX expect the in impact quarter. of From for the to expense will year, transaction 'XX bit would will and of perspective, couple that had assessment, have impact That completed related noninterest perspective, by fourth a has higher noninterest we that negative These delayed FDIC of the this be but and little 'XX. that of fourth level next do and anticipated million of changes. an those close a year in the mortgage Incrementally, quarter end bit a principally portfolio. little classified a about it weeks, we expenses the on reflect criticized Regulatory of again, September. approvals in previously the a

that front. the deposit Slide we're XX having gathering success on shows the

deposit As Joseph very this of the solid said earlier on growth. is the second call, quarter

grow under up $X.X just We to deposits in X% retail billion or this quarter. continue the channel

customers many growth $XX or XX% are a returning our billion to deposits $X.X the winning had also new relationships nearly in very and quarter bankers deposit to increasing as We are good with Bank, Private billion dollars bank. the successfully

importantly, cost generally Private deposits a the cost carry Banking a -- lower more that moderately overall are More funds lower of priced.

to I'll over now metrics. to quality And call the credit Gagnon discuss and asset our Kris turn

Kris Gagnon

Craig. billion. amount to in If turn you, during We Slide Thank commercial the the just bringing third year-to-date we billion over quarter, payoffs real estate $X to had XX. $X.X

Importantly, of these and to payoffs our were related at substandard XX% were payoffs these par, approximately portfolio.

we move and quarter, Slide the third the XX% reviewed multi-family an in XX. our the the office CRE update CRE. of is If the annual of This non-office the of CRE XX% includes XX% XX% Through we portfolio to of that have total of review. portfolio, portfolio

loans had slide. to $X.X is going off the We'll remainder we within par portfolio. multi-family that the The of an and repricing billion takeaways in talk here are turn the facing forward that next XX% multi-family key we we're XX, Slide overview this about those stayed loans, bank. of the the paid at year-to-date, of repricing, If

more XX of average portfolio. on So an balance few $X to are million. X% review. is with details portfolio the Slide the a These provides Approximately loans of left multi-family

of to the we're end So getting smaller the portfolio.

in largest the of loans have nearly and reviewed total reviewed. All of of portfolio between and all with XX% loans units the rent-regulated units been XXX% been the have

bottom of little the right of Well, I spend a bit though the on time want portfolio. side to

in -- of that the see, can important can a understand -- those if This have current reevaluate to either mature. as severe classification service rates loans is on And ability result that change of is the service those loans impaired those here amount you loans flow loans we to thing cash borrower more at those terms. window a XXXX, appropriately. loans either the their the loans service lead analysis are As to loans, months or loans enter these to or significant going that multi-family to to is insufficient the reprice the that and XX we the market advance, through of

we've portfolio loans. portfolio. Again, We think Moving XX% gotten the office on this XX. of I to the on through Slide largest reviewed

balance significant remaining the losses. on, loans. generally looked X% smaller aggressive larger been this some very we managing is proactive the in charge-offs idiosyncratic because taken portfolio. early So through loans with that We've portfolio We've were at, the this and there years

I favorably reserves remainder office think alongside those associated we're compares largely with The portfolio loans through in of issues. the which is peers. X%, the our the

our Most it's York this a portfolio. loans has XX are XX% CRE again, reviewed. of the City non-office portfolio, is reviewed which smaller into and Slide loans, that portfolio diversified very portfolio, remain been non-New are

XX provides Slide by loan allowance category. our

in compared Our allowance this X.XX% for the quarter. credit to quarter X.XX% prior losses up to

around And then asset provides some quality. perspective Slide XX further

diligently We resolution. and identifying towards have problem loans been working

And we ability windows. the this nonaccrual to on quarter, some these XX% pay to issue this about nonaccruals those credit as of actually are before portfolio. our agreement. approximately nonaccrual You to enter can related the million we back talked these of in we agreed of they is sort terms this relates had to put their loans see that to or future slide, repricing increase performing that Important of $XXX substandard note that on as as

over Craig, with So to that, it I'll back turn you.

Craig Gifford

Thank success remains efforts to liquidity of our Slide strong XX the our quite profile. X gathering over quarters. due Okay. liquidity last deposit you, the our Kris. Overall, depicts

expense which to mortgage closed related to noninterest to And stockholders the turn billion We was uninsured share, I back net deposits. Slide for of by quarter. July. Joseph, and summarizes lower the provisions XXX% million common which the a of our quarter warehouse you. of to third in loss due the was driven have mentioned, attributable or per liquidity, sale financials. $XX.X the $XXX It $X.XX XX our also call level I'll about income represents principally total of portfolio, as the

Joseph Otting

On Thanks, York move slide and Craig. banks. compares we'll XX, XX% profile. banks forward Slide being and show our think trade for and Kris, about currently final the questions. Okay we X should value. book One to turn emergence tangible and gap. C&I New it investment with at our before We of over for CB's that to able strategy regional XXX% of help XXX% then deal Category close credit issues This We for

York, across the of year, New March November all of rebranded brands, is year banking all branches consistent around last to now franchise, New of consistent overall name. Arizona, plan. I and would as like We consistent a the Financial that Monday, So Great with we execute FLG. our look -- the which on and November company in know this you suggested Florida, a between going Michigan, This and convert to then upside company you theme with forward chose retail significant and thank the we March Lake. all our branches, of we the also symbol business California, our with Flagstar Flagstar number aligns we'll recommended and Jersey organization on the which holding the begin trading brand

brand. really a banking So retail solid

finally, I'd now questions teammates each be their questions. our for you to you dedication and and customers. commitment like for of have. to determination open to happy line So can the Operator, their And we'd any answer our may thank

Operator

Our Morgan [Operator of question with line Manan first Gosalia comes Stanley. the Instructions] from

Manan Gosalia

Was guide. change curve? any moving you rate here? how the all talk sheet positioned rate and in pieces you balance from the change forward old for think of Appreciate the the new the is color on about between the the cuts Can

Craig Gifford

Yes.

liability-sensitive. slightly we're So

have from from lower securities benefit -- our We cash bit short-term will and in very do quite assets a bit portfolio. of rates. We a

the pressure portfolio. of be certainly benefit from but the on-balance perspective, So side on deposit a aspect sheet liquidity there we'll will

say I in in last our though been deposit down we've successful weeks. very would rates bringing that the X

the our our more basis brought compared rate-sensitive a those beta. So and We our move. our and to Reserve Federal higher more points on we've between have than XX deposits, liabilities, portfolios savings down XXX rates actually CDs, XX

we've in that. been So successful very tapering

see of flat quarter positive be would will the in fourth I I deposit of level the slightly quarter expect Private Private as will in the I fourth the growth think strength that to but retail the in see a the strong probably we'll The was, -- deposit and not Bank, that a third we'll deposit retail gathering but in from be bank. gathering Bank think quarter. impact still on still as lower

Manan Gosalia

And it. if have follow-up. Got I quick a can

and nonaccrual So this it quarter loans. seems last between like quarter between the difference the the X guides is main

nonaccrual those sell the you them remain market? on pricing the would open the consider you'd line? the balance Is down being loans sheet So that what's not And given causing for offered to longer? them rather selling in it

Unknown Executive

all reduce our exploring to We're opportunities nonaccrual Yes. portfolio.

We were looking at to payoffs. work with a working them borrowers are discounted out. We

We that as cases, we've In some will that, better market explore looked the an selling we if to ourselves there's working to do opposed sell. so opportunity far, see at as out them them. to think we can

those avenues to we're portfolio. taking reduce the some that of So are the

Operator

line of next Ebrahim Our from comes Bank America. the Poonawala with question of

Ebrahim Poonawala

to I just the comments. on follow-up wanted credit

the nonaccrual you did provisioning that through to talk your 'XX. change 'XX, 'XX, profile like 'XX, So -- quarter-over-quarter look trying just the of to into not it I'm as -- and you loans, maturity outlook looks the XX% showed get

higher meaningful it impact that that points us to because XX getting this today limited? into loans supplies have of these talk rate the reserves? So should or analysis? I'm been conclude negative that or lower that where a to up fairly 'XX X-year like credit ring-fenced to are in is put repricing that, sensitivity, tied in coming risk to being at point, been Or terms the quality risk through we here nonaccrual? for repricing, are the So is for is And have either all has loans where already of of even from XX basis be from on in credit

Craig Gifford

Ebrahim, down point, points. rates basis the then, the rate come Because roughly X-year interesting, of they've about quarter, so the XX XX right? at XX But end points. to profile third at since is had backed the up basis

reserving, in in rate quite So seen a will transient. portfolio were million improvement rates And $XXX cautious credit similar in in the is I at rates. the intermediate decline the to recognizing a modeling, that repricing that as we to we've levels improvement decrease our risk say But is result about expect these continue loans. in can of would reflecting the the importantly, a in probably be rates relevant favorable it of the that profile improvement -- rates that intermediate-term the credit if continue for it's in the of that I term. point as that level But particularly

mentioned, into is look Kris do relatively 'XX, As if for a out I still standpoint, from time 'XX you the projections the that provisioning frame in provisioning the expect line.

tapering that we'll the year. of charge-offs of the think through higher I and first level rest a see quarter the in

Kris or pointed maturity out profile profile the the of on reset the Slide XX, portfolio.

that reflecting middle So and our reprice to those expect we through are effectively the would classified we XXXX. of loans in out criticized loans,

But from repricing provisioning grading from the guide move we those loans a a that if So And look as like that's as still then you that have into regrade reflects that, perspective. be profile impact they analyze reflected which now. the to we then chart, you out window months would that perspective, at begin from we that. XX of beyond reset feel a loan

Ebrahim Poonawala

question. one That follow-up for helpful. just was Maybe Joseph, And you.

relative book. tangible rate I from talked where the stock about to you think

the you've we think the hires 'XX change big relative earnings to lack investor that lot seen we've of senior an expected Like from of concern we standpoint the quarter. 'XX, saw a is visibility. last but in outlook announced, what I just

the Appreciate is 'XX same.

in bank. business, a terms that how Just senior of all on the the XX% tough you're a hires talk measure us ROE. own even to Banking to is we can bringing to

the loan goal, look starting what's in direction have should So we we fourth low-cost the we I'm measure that even as proof start 'XX? moving just And quarter best right trying in to and deposit seeing regard? and of the growth understand we these see teams that way is growth, should accelerated to are points come

Joseph Otting

like is billion get I billion south are how estate. We're Ebrahim, into somewhere rebalancing balance the sitting our goal the in and sheet goals And low our first to think range. that $XX with we it starts $XX commercial there. of slightly real

combination -- around billion And payoffs, so doing are of we're a $X through arrived somewhere since quarter. which a averaging that we've roughly

is that's billion. obviously, So X $XX billion times $X

So in there period. X-year we a naturally get

like billion going So $XX in into In that C&I is is to that $XX rebalancing would is our with book which about our occurring goal. billion. today, XXXX, range get we the

joined career space of And in spent company our of vast so grew the who have the this it. have and most of us, up C&I in majority kind

who and in us, added years. And so are talented really we've have some who XX have experienced, highly operated space people, of gone for, XX out this to

relationships direct those we involvement that bring in CFOs we and bank. with So and companies CEOs

if So on And to see, organization and the is that your is right do the question, hiring we as look you the portfolio, of to out people very makeup into commercial the rebound other our that the come type these corporate away, commercial solicitation and are avenue and of we're ability at answer bankers. banking people the do to relationships. limited corporate C&I opportunity of

So lot of or credits, it we that area. X a have or in these credits like into where X exposure going syndicated bank isn't we're large

a pretty growth us the opportunities. which market, of somewhat some entrant segment are new We of should that into significant present

Craig Gifford

and banking and get a of growth over And multi-family similar loan late out into sheet in balance a about $XXX a as quarter look you of per and and projections, and the billion if we've X commercial pretty a perspective. runoff between resets projected next experience increases real basis, XXXX, projecting The the level on C&I repayments, if from that we you estate the reprices portfolio in -- something had $X pretty commercial think we're million that years.

for into in in expecting a We're that bring and about starting deposits. 'XX. loans increase late as X-for-X will that deposit roughly 'XX growth XXXX, and pretty through it basis Roughly, also deposits our bankers those significantly think

supportive expecting group we're in bring So are commercial that deposits does that loan banking funding in that profile. that,

Operator

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

David Rochester

mentioned billion to Sorry, billion if this. that assessed I you $X noncore. $X had I as you but would heard missed assets earlier, the of

You seen that at given looking just quarter on C&I was stand wondering front? here? still to then where as that that? thinking the for increase are well. the you the and core/noncore about that and that business are guys runoff from now, talked on just trying last you How I you analyze we've And guys about could

Joseph Otting

of level now like. and C&I our in levels of are are comfort aspects relationship Yes. prior the of we we to We've business than in to we done a while of have exposure, in is company But reduce viewpoint our was in the in wanted the loans, virtually are we businesses, our were all that are either some viewpoint that in to the company the tabled review some businesses had the was. we new cycle today, been some because market There certain businesses generating the those -- our that what arrival. larger of or the the industry where where hold overall

And so for brought and those whole down in then credits. brought we participants levels the

a it's reducing hold and say in levels. the favor more just cycles bank light diversified for where credit portfolio. then other I'd hold in industries So positions reevaluating, historically combination a are we we took very and certain The the is of

David Rochester

see just today? some to the runoff? given where Is billion do now? of the Great. you where $X And Or $X $X $X that billion it billion ], is billion [ to

Craig Gifford

it the bit term repositioning at of see the anticipating third this point. more We're significant in think some near portfolio was in significant the I on will I a be rescaling credits, but any less not than quarter. it could

Operator

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

Mark Fitzgibbon

projections made I'm -- some I you parts quarter, next a understand I kinds here, your variability see certainly lot years. a confidence couple there's the a did to outlook much changes guess than over And get of you for but of of to moving in sense to likely to whether we're the This sizable pretty sense more old in have ones coming trying get in periods? you how these similar and projections for trying

Craig Gifford

that continue Yes. financials, into improve This we in-depth each have review leaders. and second of quarter performance of business line of I our the an on into now the instituted say month credit financial into my is level company. the portfolio, our the the in-depth the profile with visibility and the of senior review Joseph performance at would expense each we to

month, we and more every get more So visibility.

where perspective. the with had the mortgage associated pretty in remap been a in the that's interest at fees is the expense this and those benefit net line, confidence comparing margin -- actually Again, the where me, in line a cost -- that noninterest projections of as line, have a margin degree in the if I of of income good the which of the because benefit an income deposits. there's is We one excuse projected noise in bit the point. the -- that a previously has from recorded

ongoing obviously, to go. still and from our more significant that expense seeing is, area a basis, other take perspective. The expense a will we're improve action profile year, million have an last pretty $XXX noninterest a what roughly we week did We on

So processes, which frame. identify 'XX cost early efficiency continue to 'XX this continue will to as opportunities, get time improve our underway technology improvements in are forecast and we that and further capabilities many of and result into we we expects those our as will business

is the some an that in change perspective. earnings the -- pressure business that it assessment encompass provide to FDIC things and the in most -- the resulted that insurance increased expect its complex in profile related are formula, us, but does probably premiums. that forecast significant That's is rate that related will and It's for -- something The a I FDIC from way an the determines the 'XX. go through to

Mark Fitzgibbon

the of sheet of then you What 'XX Craig, balance Okay. the follow-up. end just size one end assuming I'm on of at the in modeling. And terms maybe your curious, quick and are 'XX?

Craig Gifford

and We're runoff traction real as as relatively loans the multi-family we marketplace. C&I from and to and a commercial see essentially bankers get come C&I the that We're assuming assuming begins estate a flat those on the repay estate into real balance in loans will loans transition sheet.

projecting of a through sheet are sheet a sheet balance seeing degree not lot 'XX. balance of So growth We're growth. of growth in projecting 'XX, balance commercial but a space banking the we lot in

Operator

line Bernard comes Our Deutsche question with next Gizycki of from Von the Bank.

Bernard Von Gizycki

is company structure. the revamping Question on

good and bringing You've level changing on hires job on done the management new senior the a Board.

C&I. previous in then in function? on further identified, C&I any within building how Can announced? given And far with control talk left highlighted risk deficiencies hasn't out are You head the progress just go revamping regards count lastly to what management, risk just your then inning your like you same optimization to you other And that been are you topic, to with platform?

Joseph Otting

Yes.

the time obviously, at fourth long in Board we the Peter, to Board and do who fill a hopefully So that member, the position, Board, that will is anticipate Flagstar be announced leaving quarter. level, we

So the that at Board what I executive spot kind is kind of would the team. of call management remaining the

And now. the rebuild the deployed of fully management. with addition that executive are Higgins, of We Chris completes the

we've level prepare that category, world, our to XX risk upgraded XX people finance and positions financials. The where in we've people infrastructure both hired Craig's next down, under us to help

rounding we say to to look that we're you I is the built you anticipate build mentioned, what's hires into that is We have roughly them. would in plan then what at when C&I, first confidence from X I'd will base out. our We in areas say. specific hires And XX go XXX the

hiring do. to not a all at But we're those once. we amount fair of hiring So people have

to Now revenue. going to grow start the we're

the will seeing in a the it we'll And have the revenue, revenue, the so revenue be and expense expense. then

talented really Phelps, how infrastructure, Obviously, of That we've vast for added risk includes people, far OCC we've I a and worked who highly and of relatively the majority some Bryan Hubbard. the X their at think story the On careers. good that's in come direction the months. Menefee Bob

So from senior X people us. and very the helped OCC, it

of One things in is building third adhere category as or first have the really of And enhanced we're line second a to doing knows, organization. the you you company Those the out standards bank, in that defenses. have the not here were to. everybody and and

obviously, I And direction being the of in feel we we with But people going understand background believe I community I that the all worked do since that we're that. arrived. mean the the I closely really about regard. controller, the my good of importance regulatory that and

say, I really good bridge as at build about, model. the so this. a line where management input we I And infrastructure, think and are our guidance built with would strong appreciate And in into regulators. our we that's the our the But We risk as first in built building we to we're we the of business units, risk out the cost defense internal feel look organization, and we've also audit. their

Bernard Von Gizycki

Great. Okay.

a as follow-up. maybe Just

And in business down of initial borrowings? of So from What deposit $X you those your sales the level billion paid liquidity from assets of paid $X billion and are utilizing as And you normalized noted here? an you October. think down pace we how borrowings, the nearly can coming you that a growth. targeting down of

Craig Gifford

Yes.

mortgage if related servicing billion liquidity So quarter, the at to the -- we sale overall the reduction $X sales. look will of a about third you business have in

holding will deposit growth. loan relatively liquidity leave have here, deposits for to that we'll match From growth been think the with provide those that. and So I we excess

a bit replace on which I reduce those dollar-for-dollar funding principally as are we our won't broker have basis. due, expect -- broker will in use of deposit will CDs, a We deposits, come liquidity we don't XXXX those excess it that to deposits broker

wholesale in borrowings wouldn't rest in material that of $X the 'XX. with of of commercial the of our some down. would Actually look we But then million. come then to So customer funding expect a we'll the and some 'XX deposit broker we'll loan the our the as 'XX, And then see in be space, repay continue maybe wholesale, particularly I Private Banking bank. it deposits, grow and rest to home

Operator

the Our Barclays. next line Jared question of from comes Shaw with

Jared David Shaw

Just deposits. back deposit circling the trends. cuts? you we should beta, How being the be give Could on talked on XXX% of the end at And deposit early retail on the thinking the rate quarter? few beta us spot then the about next a the some rate a about beta than over greater of cost you

Craig Gifford

Yes.

is savings if our you even at on rate That months about XX% was X spot X months our [ call So X%. ago. ago, ] it,

further. more on to XX decline from than to decrease a that that Obviously, an bit Modeling here points. brought interest-bearing expect modeling beta. see of that. deposit will product, And a fourth as down over significant we premium I continue quarter the be So overall would basis rates it in more perspective, XX

a again, there. And -- Banking accounts that's it has see more we perspective, from a base because Private more moderate deposit of DDA noninterest-bearing type

premium And that's expect what more at generally, has been not moderated would I rates we when rate. our So going a deposits been that's forward. those that on bring most at

Jared David Shaw

How been go see here as reserve for then going the you Okay. is for be And Or start to we losses? All higher this with thinking level level reserve that forward? . expectation follow-up. right. the higher Have provisioning should multi-family the we with to expect that? should about a reserving

Craig Gifford

it's reserve and quarter gets the expectations expect repricing as of of around level well the the inform the 'XX in we how charge-offs. see reserve go 'XX, next that down the significantly with see the see Well, will first level I classified or don't against as levels. a for of consistent we through get quarter coming the and portfolio X. fourth balance the particularly and portfolio a quarter to that lot we'll perform think a the criticized as into I level where borrowers as the But we that repricing, pretty reserve beyond and

Operator

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

Benjamin Gerlinger

couple because of remapping. here you in years about forward talked the the Just Craig, or wanted guide to your believe, something I clarify

a just and at couple the change, look and you the if -- was NII remapping remapping kind change of excuse of So of items. associated fees then ECR me, with

revenue sure So I kind [indiscernible]. Is to make to down is what wanted net convey? that's that million. of the $X you net-net, just change associated like wanted

Craig Gifford

do in $XXX the simple, To million the to To And there's the keep and on it has 'XX. 'XX, it 'XX, difference. that for keep income through Escrow associated from guide credit previously earnings and had subservice Escrow contemplated that's a out revenue 'XX in than simple, of expect interest net deposit, with noninterest increased level level income. moves that nonaccruals I we higher what of Incrementally, pressure deposits. -- that the an has

Benjamin Gerlinger

Got you.

expense an increased guide guys from an $XXX perspective, ECR me, at excuse you then And Okay. from million. --

$XXX roughly better really you [indiscernible] that FDIC, the of just that you So a lower is can you just of is once is like the review. -- I million rates, little guidance Which for a on think assume bit related do temporary, have credit kind items. could probably

And tax noticed that I difference here. taxed. what doesn't so It's deductible. is. the get of kind the That's footnote not

think just change, just guidance your kind to I'm didn't of trying you're So elongating that but expense. really like

Craig Gifford

the that's FDIC respect that's with because related a Particularly Yes, And pretty is correct. to the moves piece fairly the mostly being to FDIC years, around. rate FDIC, of and the piece is move and quite X over a the sizable. bit. rate because the large that the taxes it tax pretty to percentage The line is next around nondeductible, sizable assessment represents tax bottom causes

rate. footnote, that just So the explaining tax

Benjamin Gerlinger

Got you.

couple be so a you'd to when the they that long a move need to green perspective, get if the little light. more But of kind of to recently you And weeks green how lower think do rate a in ago, you where light just change. back of were about to probably you bit rates were

due but based just would I'm you of look it oscillate on like can't on straight XX rates? trying need it a perspective is these think to just credit about things timing things months -- you look You better which quarter-to-quarter the the would themselves. to rates before think better,

Craig Gifford

can't have the order do challenge to able rates around. for the other us have a to We once move upgrade is in to pretty substantially be that move loans. them downgrade, And we Right.

of pressure I be that will expect through do so a And 'XX. couple out continues for years. it

Operator

Christopher next Janney comes the from Our Montgomery question Scott. line of with Marinac

Christopher Marinac

this loans you are here? of trend from their if kind or clarify to the wanted Just what is substandard quarter see falling and mention special

Unknown Executive

the fourth expect through, bit continue things financial to thus at still to increase see loans will seen the and window. quarter, moving information repricing not But a In have pace would and a far. our have at mention we -- we to special the into that I Yes. we've substandard of get that as

increase and mention. I substandard So trend special the in be for think an would

Christopher Marinac

the had Okay. know mean, I end you as right? you've just also of given new said. schedule, And the from inflow, repricing they are in I you the Is that higher but outflow? at payoffs, September, pushed the loans

Unknown Executive

correct. That's

Christopher Marinac

today? X% at then more of we it Got example, cost for a would Fed be at how wherever for going general look And a relative funds to the company than the go? Okay. is look it. if now, cost at that the forward, Fed to of funds discount year would you that of on is from if Like funds funds

Craig Gifford

question. thinking of I'm your math about the

our be in today that is discount average cost at would total. think on be funds I would answer that the of it -- same the roughly

about funding If funding other noninterest-bearing you think is our about and profile the of is priced either priced. profile, our half or very half short-term longer-term

of kind beta can you the that. component see a we'll that of very expect price that of on I Fed moves as the So do math to high that, short-term

savings So wholesale something course, of year. deposits And point this a at our of is virtually, our all funding priced move under immediately.

So over I same think discount time. the remain that roughly you'll see roughly -- that

Unknown Executive

more will coming change help which to should of little a mix board, customers C&I well. transaction The that as with wholesale. more on move With mix will bit the accounts,

Operator

of the McGratty come will with line Chris question next from KBW. Our

Christopher McGratty

where it would low-XXs? ratio, of loan-to-deposit longer you be term, about is it kind to The like

Craig Gifford

I'd actually a it bit be like to higher. see

over I balance course think X flat to the We'll see overall that years. the gather of we'll continue a continue next and deposits to gather sheet customer relatively deposits.

I would seen see X continued last quarters. loan-to-deposit be it in improve, And the a won't so ratio, we've would significance of that decrease in that the it the expect but we'll that

Christopher McGratty

housekeeping a couple And of items just Great. the for then quarter. fourth Okay.

preferreds just converted? that help guide. are the that and fourth the teasing in Just the share you one-timers Could also the for [ once ] the all through expenses -- fees are and start the the quarter count

Craig Gifford

Yes.

share much that will term is -- pretty has public Virtually, all count in basis. on been the of an share the the count and that's quarter of ongoing So expect convert down. The third I be near quarter, preferred settled will did the in the reflective of convert end information. expectation

transaction some exit. do with the business mortgage the associated From I fourth expect that a one-timer perspective, we'll charges in quarter, see

think and severance the that in took those have $XXX that of bit also a and We'll associated then last range. impairments with All in, be asset some action it. the severance we week. million some will have charges we'll I So

Operator

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

Matthew Breese

a loan could we portfolio little first talk hoping was bit I about yields.

and repricing So a of CRE positive loan yields down have consecutive for despite narrative dynamics kind multi-family. been within repricing quarters X

I much start actually quarter this was see do loan when much how And yields? expand? yields we to have? begin can to there impact So nonaccruals accretion think How guess did you within loan

Craig Gifford

lot. decreasing much -- into would on go accretion nonaccruals. quarter built margin Yes, maybe yields million point tapers of the off that $XX the over the There quarters. impact majority or that at from about intermediate the If rates from a that's perspective, a up average billion you about about that It's have we've next X.X%. we away. this -- $X year from not loan the But think a the into is is from will and X In term that coming rate of that our an level, moves got see not repricing can forecast, at a do that down. we reprice,

to that X.X% from from see -- reprice X.X% level. a repricing level they as perspective, the the in we up come those So loans

we've driving I had see think And in X a turn do then we'll as what basis turn see bit. last the we into than on what's the that And the quarterly fourth increase. get incremental quarters, then that's a positive. we less quarter 'XX, that that So we'll see nonaccruals

Matthew Breese

it. Got

then back. And to wanted I just go Okay.

I'm to around noted the and 'XX look that more to to assets times bank flat from you balance than Can to billion billion and bit you'll NII you're guide, expect today. for at going take cons $XXX of sheet it $XXX now. category hesitant to there's implies 'XX and that that as like guidance I It billion. you understand. route, You curious, to feels pros it of the be about forward the a little we designation? couple just down the relates the in that then $XXX billion if a below earning If currently go go sub-$XXX talk and

Unknown Executive

regulatory quarters when you get compliant billion you start place $XXX compliant. if become have from to your X that, to the you with way get $XX have perspective, And still $XXX regarding Category if through you in level, billion, be are a X. below So billion, that put you to the you work close then to plan to a anticipated

below get billion, have that you have the because don't you doesn't just $XXX standards. mean So to enhanced

we get like approach model that out our business where isn't take said can to our to infrastructure the billion grow below it build and appropriate in target and to risk was the So what allow $XXX and we've company, taken then expand. the

And you wouldn't so frankly, it quite shrink to where And isn't desire. standards. you probably be those to isn't $XX ours. a goal It billion point have of get the subject or a to more to

Matthew Breese

Is could assets to my earning Understood. correct thinking trend in that $X billion billion $XX here?

Craig Gifford

Yes. cash of actually from But out that's perspective. reasonable coming there's a a that that I chunk think

deposits. that broker pay debt cash to or So, down pay it's down to deploying but we're earning, either

the -- portfolio, expect loan decreasing cash -- there's be So cash I as component. the as the much don't to

Operator

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

Jon Arfstrom

peak nonperformers? I a in don't in a an economy or easy think the guys but when see we'll state, the of kind question, you do know, is stays hard question this if steady if

Craig Gifford

comes into the the it X course a next we'll of nonperforming. portfolio think that I over repricing the into of that component years, have moves the to continue

becomes question of we see we'll And the how think I through able portfolio level nonperformers. the 'XX. action will of so, continued a And to new nonperforming to existing additions be then quickly

are and pretty in of the because classification suggest Many them when or would category criteria there reality that perform characteristics to we stringent the that on default. The looking a repricing them from are majority is they a see reprice. the continuing that focus at nonaccrual our assumption out that of even expect standpoint we to that a the in of loans do vast

-- the as nonperforming we'll to will course those They loans the being their that principal X to so portfolio I And that loans reprice. balances. see amortizing of new But the added years performing. think continue next over loans are are

Jon Arfstrom

like material it in this do is didn't to review? increasing quarter. Anything unusual the be, up it last you the a how at of go expect decreasing about this Obviously, quarter or rate terms increases? saying you But are

Unknown Executive

wasn't run our before. about to sort We've unique we to just same smaller. grind We of this the The substandards financials We pace No, through there still at process. had particularly through. gotten It's bigger of anything quarter. continue saw that the loans. level new

it. process. an there So annual at of smaller a just lot widgets, through we're getting We're of much looking This of loans change. more -- wasn't that sort is but a

they're financial review continue into As this We'll Craig and year. new window. said, reviews the have as to refinance will loans getting each these do

that say there's anything I unique. So wouldn't

Joseph Otting

was the but add data. that this their is us went whether standard The they data to would in financial a Kris financial the provide the And sent annual is we said lax is, thing an company. one more perhaps into that the expectation I process, on it would borrowers about past, the

I second as there's then process. and coverage new of And loan-to-value think service the debt all, standard opposed around a loan-to-value rating of underwriting to using for risk

that so itself, and around rigor secondary in repayment. And primary social more your there's

Unknown Executive

borrowers But in will the relative in more were forward. Yes. I financial is of third, into in that provided in agree the of and risk to that aggressive and past. changes of opposed with significantly I second a did institute XX% And evaluate as our service said, how be the quarter than coverage focus going we with on standard terms debt we loan-to-value. very that, process higher on to information. Joseph. our Joseph second financial the quarter, getting which continued And ratio, as information, started We think

Jon Arfstrom

others. Okay. X then That And helps. just

I company isn't in You normalized you And the for lot benchmarking but reserve like the think this presentation. question, percentage know what do 'XX in more look an the 'XX? of guys do a easy into -- normalized and should

Craig Gifford

From a overall reserve percentage? provisioning or

Jon Arfstrom

reserves. Overall reserves. Overall

Craig Gifford

Yes.

portfolio of a portfolio think the as it idiosyncratic and portfolio. pretty I and depends more transition balanced performs on into is we portfolio kind our how C&I-based

levels real reserve see than lower that the will be levels I think what substantially the estate on you'll are. C&I existing the commercial portfolio

impact, And portfolio will an depend so have will that it really performance. the but on

Unknown Executive

is very important. mix Portfolio

Jon Arfstrom

The mix.

Okay.

You said the mix.

about And is hate the margin output the part Slide natural -- in that of to your the that then the you comments just of but some that. ask the confidence that I Okay. and this and of margin formula, maturity the X easy it I trajectory? margin from just lift thinking high repricing? schedule understand way, have then CRE on Is

Craig Gifford

the -- have it's that multi-family than loans actually of of repricing the the they the is C&I with of C&I would a build bulk the real a bit because reprice. margin the Yes, real combination a the -- as and overall but estate tempered multi-family the estate loans that percentage portfolio, expect lower we commercial commercial slightly spread

from lift the in repricing it's growth the with C&I balanced the the So portfolio.

Operator

will of line with Steve question Moss from Raymond the final Our James. come

Stephen Moss

in Just to pick roll into out of the dynamics and here. curious multi-family that's the if maybe bucket as see if follow-up terms this analyze that? criticized? setup stretch driver we'll something and forward something wanted step during XX-month to increase reprice of The quarter. XXXX nonperformers in this the substandard And XXXX? second just on given just quarter the drove special up the else related And -- was look this on what the I'm up about -- the quarter forward that there's you Or

Craig Gifford

XX% through speak. Well, window, combination another this of of quarter coming portfolio portfolio. to into the and more moved getting a is XX-month the quarter to of XX% so We from the

little into that will when for do, fourth graded. if through quarter, to the substandards, window, well goes into pathway $X.X quarters portion window. quarter a into about come a each billion much. will the And is more to the billion move full we that forward, where -- do, loans portion get have the repricing that about window are catch-up But remains but some Moving get not in It's the beyond then move quarter review. X gotten portfolio we in of more bit the next a it And repricings forward, and past that $X then what for drive we've you quarter some have evaluation. the XXXX that comes they once moving

Stephen Moss

I one seems to in the here terms market just of months. past know the And Okay. improved of have couple then secondary -- in follow-up here

possibility? up the an multi-family I'm Just prepays there's you curious just there's weeks, potential curious, for any the in of any I for in acceleration if we've shifting know here but back couple just think had rates? it last given portfolio, if the

Joseph Otting

a there I as when a rates. of Craig rates, flurry bit, back comment have, One a mentioned, in somewhat of would was locking of lot obviously, up people

out now what spur people slightly, we're to But they've the to move. of Fed a is and take for back rebalance those loans next are because amount think and I refinancing. increased, finding our up And objective would of should financing. elsewhere coming loans, waiting are pocket that be people see get them fair to

So have, at number, in or marked you sale. We transaction. are transactions the a was discussion under we have that at for X transaction. the X we this found price month do agreed-upon sales the office one what that were other And close of held large in there probably to our We to it point. large as of November large expect transaction number for noticed, we moved transactions

even interest, is the space there the So in for office investors.

assets losses. market, slight the then And for even interest in a that selling space. up. -- for multi-family that do But overall kind side, the we're has And think in we where have that a looking those renewed them, at some we space people we're taking pick there some and rent-regulated of of on been of will

next with group we So workout couple and the that doing team, customers we is bring dialogue. new of a as organized having head group quarters, a has outreach optimistic to did of that are our who on

of taking activity an team see that of fruits that's do We the SWAT kind assigned we'll that on. We forward. going have think

Operator

the Otting that, back to remarks. call with Joseph And for closing I'll turn

Joseph Otting

and to Okay. Craig your would available, or interest much like you your time have join company. in Thank you the very for to usually morning. I us appreciate the this dialogue questions questions. further if taking are We and readily

and contact Sal, us If time to he'll you for do, arrange talk. please

forward and to the us as being this to the Community just Financial Bank banner. like closeout under look And is York time next company Flagstar New holding for the I'd meeting say, at we

So thank you very much.

Operator

you Thank That you disconnect. may will now for today's call. conclude and joining, all

Flagstar Financial (FLG) 25 Oct 242024 Q3 Earnings call transcript