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FRC First Republic Bank

Participants
Mike Ioanilli Vice President and Director, IR
Mike Roffler President and Acting Co-CEO
Mike Selfridge Chief Banking Officer
Bob Thornton President, Private Wealth Management
Olga Tsokova Chief Accounting Officer and Acting CFO
Steven Alexopoulos JPMorgan
Bill Carcache Wolfe Research
Casey Haire Jefferies
Terry McEvoy Stephens
Tom Stephens Evercore
Andrew Liesch Piper Sandler
Chris McGratty KBW
Jared Shaw Wells Fargo Securities
Call transcript
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Operator

Greetings. And welcome to First Republic Bank’s Fourth Quarter and Full Year 2021 Earnings Conference Call. Today’s conference is being recorded.

During today’s call, the lines will be in a listen-only mode.

Following the presentation, the conference will be open for questions. now Vice turn Investor President would to call Relations. I Ioanilli, Mike and Instructions] like the to over [Operator Director of Please go ahead.

Mike Ioanilli

XXXX welcome Bank’s And First conference quarter you. call. Thank to fourth Republic

Mike Roffler, Officer; Tsokova, Officer. Banking President, Chief Speaking today Officer Thornton, will President Acting Acting Selfridge, Bob and Co-CEO; Management; Wealth and and Private Accounting Chief Mike Olga Financial be Chief

to call, may call uncertainties subject Before Mike, we statements to the assumptions. risks, that over make I that during today’s hand note please forward-looking are and

complete a over now, uncertainties all see today, the For like I’d Mike any differ the that including could discussion the filed And Roffler. statements more of materially are to turn risks available cause the forward-looking to to filings, X-K and Bank’s on FDIC actual call the results Form website. from Bank’s

Mike Roffler

you, Thank Mike.

am me year XXXX. Jim to absence. recently a best Republic. was temporary begin medical it Co-CEO, strong healthy consecutive another and return. to since Herbert, This XXXX your in First the I you was our by year of who Let Bank’s Founder and we XXth look the began sure profitability very wishes founded leave was forward for are listening sending Bank’s Jim,

organic First providing what exceptional continues growth client deliver Republic safe, we to consistent service. doing by do best,

grown earnings a to more during the checking growth our total XX%. cover and XX%. interest This per up Year-over-year, few share made year-end XX% up XX% grown assets me have in deposits increased has than than income tangible very Total more year. deposits strong note value and strong deposits XX% turn were key total a net grown outstanding have that let I financial Total book per management Now results increased grown to for strong performance. XX% year. loans led have the wealth $X billion, at XX%. XX%, of share has would revenues

has Net the only credit were million, for of of ended basis Republic consistently Non-performing the continues were be year for First less Net quality offs to credit been our at since X $XX,XXX. points a our charge excellent, loans. assets of only $X.X strong average than quarter X year basis point Importantly, charge-offs total fourth only assets. entire founding. hallmark the

capital raises client includes the culture. our our X demonstrate in strong. on very Our remains successful of Tier five ratio year’s This At capital this will leverage Olga X.XX%. service benefits year-end, XXXX. was from the This momentarily. touch results power

our is that clients is indicate Preliminary over advantage, is culture results increased during year. Promoter level level, the colleagues and Our serving to Promoter Net of result from banking survey industry Net a times is X X,XXX competitive by one our our the another. Score as that our dedicated The XXXX Score actually satisfaction each one our our measured average. client service

the Importantly, Each a sources. through differentiated Bank. XX% Highly from than service their of drives more referrals. greater client year, comes growth of percentage clients organic business lead and now repeat Bank’s two us these our growth consider

success, as our leadership people collectively their on our and Our focused a empowering of colleagues be we are dedication best. focus team, foundation the are to

continue our this me end, highlights to a our technology our other Leveraging client and XXXX, the to year. further client cover regulatory technology Let moments a in remains Republic the and enhance satisfaction model. priority. To to some few infrastructure invest top take service of First to scale drive facing strengthen of in and client we colleagues

our significant on core made progress and project First in have example, system for conversion important schedule. remains Republic. This For we initiative

client In continued Republic. speak the communities also and a of franchise. more to First first our this employee we support research XXXX, the our care innovation. for reflecting Taking the growth by colleagues time, we continued report in investment a focus in of expanded of about moment. XX% addition, and will In base remains credits service for our a Olga, tax development top

who We to efforts organizations. also than raised colleagues, volunteer our XX,XXX more minimum wage to contributed non-profit $XX supported We per hours our of hour. the

outcome existing Foundation, cover We commitment Republic our once focused by performance. also collaboration in enhanced which you environment of launched model expands colleagues becoming clients. neutral on First our strong needs. XXX% and client the And complements electricity financial The serving In XXXX, business remain enabled us delivering purchasing renewable initiatives. to philanthropic Thank to time first again the teamwork their carbon has our energy for our the of to all simplicity exceptional we our service. and to was for and great the our

Now, over to call I the will Selfridge. Mike turn

Mike Selfridge

Mike. you, Thank

activity with volume a update billion, record accounted begin at Loan our record billion. a volume Let the for year volume $XX quarter and portion for $XX Refinance came an acquisition. $X.X at year also lending for origination the at billion. record Multi-family XX% the both institutions. from a activities. a year was at and client with was residential create to respectively. $XX also new for for on and large activity year, ongoing residential single-family me was an Single-family billion refinance volume the opportunity of continues clients during other loans of This the

the conservative for originated XX%. during we standards. In all our The just continue underwriting loan-to-value to was maintain real year credit, estate terms loans average of

pipeline somewhat XXXX, note some with typically last the have our As and into time quite same clients originations from quarter remain up we that fourth very year. I first the strong typically active slower. seasonality, quarter and head is being strong loan would being our the loan

was it banking, business to a year. very strong Turning

they our or to businesses own clients to that following the by We influence. deepen relationships continue

line clients. were year-over-year. model level In to by strong of relationship Our leads and XXXX, excluding a Business loans than commitments strong referrals PPP based business a grew new also client loans our up base business XX% XX%. to more

higher at of utilization During fourth is lines capital call range. utilization the our XX%. the the end quarter, to increased credit This on rate of

were XX% compared or billion up Total year funding, to it In ago. terms exceptional a of was $XX an year. deposits

We and at XX% ever overall an business our continue just diversified quarter deposits deposits year-end. a the total of was represented paid The to X base. deposits of to Checking at total on rate average highest leading just basis points, represented cost funding basis deposits deposit for level funding maintain XX% deposits all year-end, of points. XX

York, new continue Our service XX preferred in provide our channel we an banking deposit months. drive our banking both important and offices to we across to gathering. open six offices, opened preferred the XXXX, another New clients plan next In offices and for over footprint two

was well over to acquiring our for a to strong place model of nearly next-generation households franchise. and client ago clients, strategy consumer results. our continues Overall, strong service for strategy well decade resonate our of growing Our growth that driving growth the households. XXXX, deliver half in continues with millennial relationships, In across a in accounted

to call Thornton. Bob turn the Now to over like I’d

Bob Thornton

very Wealth Thank another successful had you, year. management Mike.

under year-over-year. was Assets $XX net AUM strong or XX% increasing management by client $XX XX% client with nearly Of grew The with billion fourth billion, $XX this, quarter billion net came particularly inflow. from inflow. from

million, XXXX fee management prior year. for the In Wealth grew management revenue households addition, XX% this XX% year. up from $XXX nearly was past wealth

revenue, level fluctuations. of during total XX% the management grew approach. for strength ago. non-followed up that collaborative subject bankers serving continue our and exchange are also banking insurance, management This XX% These wealth market professionals revenue clients five the fees key our trust We year. accounted wealth to from less Brokerage, further XX% wealth of reflects benefits our wealth foreign for growing The of partnership to diversify our is our to our business and referrals fees, fee relationships. years and model services together A management growth our deepening a of client internal and across clients drives strong approach a needs. and both between

note prior For banker billion example, would over of management, XX% AUM year. from preferred increase that wealth in $X XXXX, the I an of to our

leading over addition, integrated our into These Republic model of wealth collaborative compounded continue highly deposits and makes wealth billion to In successful have destination past management First Wealth banking at colleagues we successfully other represent deposits management attractive XX% our grown our management and hired, over for of now referred Bank. It Bank over and total of to the the deposits. annual years. referral and colleagues deposits XX% that sweeps a culture. producers, our integrate rate three very wealth new managers is an once $X

pleased XX welcome wealth in another to XXXX highly Overall, are teams nearly we Friday. Republic continued under are XXXX also New new looking we to forward in the last First we and have very manager management to reached $XXX XXXX. in assets have During York in just success and regarded are we to welcomed delighted billion team

over Now Olga I’d call turn like to to the Tsokova.

Olga Tsokova

you, Thank Bob.

offer and year the for for results the review XXXX. quarter, some also guidance me and Let

This cost this, With five the Liquidity less our during preferred assets perpetual we than XXXX X.X%. quarter. $X.X were is quarter. X during net or includes average $XXX in strong, also strong. Our X.X% million of the fourth XX% assets quality High through capital fourth of liquid position remains average raises. weighted stock Tier issued capital stock remains over total of billion added new capital preferred

excellent. quality credit Our remains

the For net fourth quarter, $XX,XXX. only charge were offs

million, strong Our entirely provision by loan quarter for was $XX for almost driven our the losses growth. credit

quarter Our XXXX, year for margin for line guidance. net interest and with the X.XX% fourth our was X.XX% full in the

in to was the primarily a assets. income up due very strong year-over-year. interest net XX% Importantly, This growth is robust earning

year full fourth fourth also XX.X% for XXXX, line The was guidance. results with ratio for the in two XX.X% quarter quarter efficiency Our included our unusual items. the and

innovation our past was credit activities, This for rate. a technology first development tax years. made and few research over effective The enhancements and lowered tax our the which reflect

share. expenses. compensation pre-payment quarter we is only of another was net advances basis Also included effect This these approximately two to in expense. of previously The $X.XX executive and was the in second mostly cost ratio $X fourth one disclosed, other a increased billion October XXX offsetting items FHLB the per decrease earnings points. by The of $XX one-time the efficiency as prepaid million

quarter Our was the rate XX.X% for fourth tax for XXXX. the effective year and full XX.X%

Loan be expected in full Now, provide guidance growth to let XXXX. the mid-teens. for me is the some year

is X.XX% the interest net Our range margin X.XX%. be expected of in to to

cash, high operate our range. lower be to currently we to is range expect of XX% this XX%. the expected of ratio near in to end of Efficiency level Given the

tax to efficiency seasonal quarter strong in taxes rate to it year the reminder, higher, of year. our and taxes, was the typically a Overall, due is the is be to XX% XX%. quarter ratio range impact expected and a respect to first As full benefits. With income of very payroll

Mike turn the to will Roffler. call I over Now back

Mike Roffler

Thank It strong ever. you, and great is The as Bank’s model was a Mike, Bob, year. and as Olga. service quarter

many Our XXXX. into heading remains entire driven results This client service has for strategy. years great and consistent remarkably team momentum have our on approach focused executing we

questions. be we’d take happy to Now your

Operator

Instructions] [Operator question So from with Alexopoulos JPMorgan. Steven our first

Steven Alexopoulos

Hey. Good morning, everyone.

Mike Roffler

Good morning, Steve. Hi.

Steven Alexopoulos

of great a turnover is that for clearly Mike, was came then all right? recently, of resigning. are is you medical call market the the company. the since public of given leave year impact the on With the I might Jim start, this management forward, wanted to the needs so performance out this XXXX company said, And concern hosting, how and to first news take Gaye moving news

So, can light you offer some use weeks concerns? hopefully, that you left two to this she on since give news any been additional market why a resigning, call it’s on broke the could company? Now Gaye

Mike Roffler

years in at about appreciate the made comment firm. Gaye thanks our resign contributions comments the we this the to we We that chose out than the talked announcement filing, she January, certainly for all in that further question understand our any over it the there. really and and can’t Steve, time. we from Really and feelings early

Steven Alexopoulos

pursue said, at Okay. action whether a entitle her would one-time I resignation company, her are the know it’s if executive from the charge I was was that to some you opportunity to there or left she in another to just to severance, know related which firm? to answer you Mike, whether quarter, don’t able comp tied an

Mike Roffler

and to about. So pursue is resigned I’d I going we’ve like think, what other what a fantastic sort to little is, a in opportunities, and and say to service team culture she we really place are really did clients every What we a disclosed talk is, to client each focused focused what have have on would delivering of and we terrific day. are we on

of the for what And any has years remain ahead, incredibly so prospects resonating this one. an about spite Board in model example business and is with year that another exist have is and and might of right? Directors team of our is The culture the over the we optimistic leadership business prevailed challenges Our clients. model the

ready very is the of it’s in executive challenges And Our and on all us keep to a looking we clients brand markets kind are rest is observation, with things, and collectively these so Jim baton he and us team running of dealt are with that we’ve thinks very strong in resonating has the the front helped confident and and forward. this up the an be challenge about temporary leave, about Board is just of ready and opportunities the pick with forward. and for the

Steven Alexopoulos

So, to the disruption to given follow what’s been up there to at Mike, that, client tied business the has been service impact announcements? maybe changes? management any on right, employee or morale, the these And

Mike Roffler

and Clients So you part quickly what know is team we very the focused colleagues, forward answer And that Bob Friday. very mentioned our a may the on and second is surprise, active. over is here serving service being New last simple everyone is Business to strong. move terrific gets been you remain have starting York to impacted. your very there what, joined Client but said, that us year no. in clients. some off not very

Steven Alexopoulos

just what tell That’s can the Ferry you we Korn best Do expect have terms that CEO process in will question, Okay. now search. us Thanks. great. guess, process a be you been might the would And when they’ve of hired, has for started completed? final assume that I

Mike Roffler

identify focused No. I the candidate Yeah. Thanks business search assistance think very with a priorities. Ferry’s culture candidate to is mean the the Board one the rush, the be CEO of model. conducting client top to on for to and focus for It’s finding their carry question, a role. for Korn Steve. because I best there’s going strong don’t best a is the

I versus speed. focus think that’s the

Steven Alexopoulos

right? known see I’ve this before at from But, a notable the never is that great that, which message The Yeah. Yeah. having is should that year led Okay. this First to another what having so is service, that almost because Mike, there’s everybody point your to that impact still things it’s not any XXXX, morale speculation, client uncertainty, there’s and great to that you stability nothing key is Republic XXXX, is, seen the company, there’s in much for derail at right?

Mike Roffler

and terrific active are Morale very opportunities very clients us ahead and absolutely the That’s correct. is now. of and engaged right are strong it’s

Steven Alexopoulos

Thanks Great. my Okay. taking for questions.

Operator

We will question Wolfe next Research. Carcache our from with Bill take

Bill Carcache

Thank morning. you. Good

how of give if the costing versus management of the some last growing the a employees you your On that the the little higher color across versus was compensation you’ve associated how year? bit onboard And just with including inflationary? that costs, you on you businesses, increase out side could of wealth it’s more Board, could is teams are on to brought you much much simply fact much base how pass today the employee

Mike Roffler

question. a good it’s So

practices. talk and more think deposits, hiring tied I related levels our the in fees management wealth I of are compensation of to and increases Bob kind production sort growth of about

to the don’t greater the think tied that’s largely are hires from inflation meaningful think of I’d I for is increase. but an much company, to part It’s new onboarding a there production people levels. say what standpoint, and competition I

Bob Thornton

this And -- on is Thornton. teams Bob

not hiring teams the last We in the or year recently. years versus appreciably not -- cost prior are is of more changed

Bill Carcache

you on Understood. that those initiatives? attributable your mentioned increase systems schedule, color but remains what’s was system give And you on conversion Can part in core some initiatives. expenses behind of to also information the

Bob Thornton

-- in right? I this more time we’ve our or nothing’s versus service the efficient processing. like, allows more initiatives, say emotional aspect, overall of more helping what would terms time client continue colleagues We delivery, them, it to is, in and become invest So changed for from franchise client

mobile, ways efficient help always to and more colleagues conversion core be obviously And their and we on clients are continue working so, are time. our just the in with investing we

Bill Carcache

it. Got

So, is really those relative I production to expense of all outlook suggest the that pressure your putting guess, sort that for expectations, together then just pressures and message sort efficiencies operating it’s don’t expect driven? despite that of you the unchanged then on upward persist, expenses does that to the

Olga Tsokova

that, guidance our just our is in our comment expect we this with line would we what expenses embedded that revenues grow I we the growth provided. to and have Yeah. of in

Bill Carcache

That’s loan for great. acceleration quarter? one in in If anything my I I Thanks. And the -- is for guess, next-gen Thanks that’s me. that you growth it squeeze taking one notable the questions. is very this saw last there could behind much

Mike Roffler

No. unusual Nothing there, well as mentioned, a and that’s has in I over strategy place been for that decade. a

you are our lines know, refinance both household debt So with we and and product as continued very our looking momentum, solid credits of have professional pleased momentum very forward. our

Bill Carcache

you. Thank Great.

Operator

from Haire take Casey will next We with Jefferies. question our

Casey Haire

what on are guide, Thanks. NIM, cash hikes everyone. Thanks. on NIM well excess curious am -- the of question slightly I as up is Good balance the morning, the as liquidity up liquidity rate quarter? into kind baked deployment, Follow

Olga Tsokova

yield cash during elevated still So us of moves and fund we XXXX guided the we levels and three curve. be range. end slightly fed anticipate flatter in our And expect our lower this puts to

Bob Thornton

that bit, Yeah. add to I a little just Casey. might

us okay talk strong about levels think, heard are our carry I growth. given the deposit right? this cash in We you’ve past, elevated to

at the incredibly interest but net strong at going basis. while, on are income might the and basis last lower quarters. opportunity on net it strategic if more our on to been it reality range focused foremost And is we and first the several we interest growth investments for it’s be. of deploy are client in for what a growth our margin look reported you end are yes, We client than activity, additive income been The here an a has or of and

Casey Haire

Yeah.

For sure.

front seeing still of pretty to that this on forecast. Okay. do are strong year-over-year, from it’s momentum I XX% XXXX? the in deposit moderate know growth, kind expect that pacing you you in And or But to to difficult

Mike Roffler

consumer terms a incredible in It’s number was I’d it deposit it Casey. of a growth split overall. probably, two-thirds was general an in in industry And business third factors, the new system, of Mike. good between average household acquisition, look, and Obviously, there’s Yeah. and a year balances say, Hey, dynamics stimulus-driven, has consumer, increase given the stopped. stimulus the excess and business, just deposits

will XX%. years. deposits to support that about over demonstrate we good we’ve optimistic our and growth So been loan continue that households new But ability are generate from the probably moderate to to deposit growth able to very

Casey Haire

the we that sort permanent, would of this decline Okay. nice Great. FHLBs, little from obviously anticipate of shift the how much very -- under pretty to And Are a do just one you that X%. positive on last XX% sheet, base? me, of historically, from dramatic this, the funding because balance mix be being a

Bob Thornton

FHLB builds all Yeah. of Mike the repaid, given in banks I the I question, Casey. for No. Selfridge said. use strong do it base, that sort from like FHLB. benefited off, liquidity you’ve Thanks their deposit mean as we’ve that, what the have mean, We duration extremely a to be the so strong and while, right cards and sort a for it in including us. banking a given think But match system liquidity like of that’s increase the little will I now seen, the as in will again. how is feel it time there where doesn’t

Casey Haire

you. good. Very Thank

Operator

will We to Stephens. with go McEvoy Terry next

Terry McEvoy

the that but Good release there Maybe maybe employees longstanding everyone. a press an any the important departures at filing, recent weeks that outlook? other Thanks. employee were didn’t morning, Hi. in X-K and to Bank an or were question, warrant first

Bob Thornton

this, say would like No. to you interest. like because I something that. something mentioned No. about of Nothing

of where to their a no retire, get in to employees periodically, to when there’s that, just they happened, very have side. disruption. they including transition, And right, on like books management business like this the So, relationship comment on point longstanding

you and approach business, clients typically because the to We the it’s our our discuss with there’s to happens, the with thoughtful and people another a colleagues have and because worked with we this. thoughtfulness disruption, the appreciate clients very it contact who’ve growth leads no and which frankly, a business we transition usually it that when approach deeply in point

Mike Roffler

managers add And clients. in meet to grooming to next-generation been that one the seven of and relationship goes manager Terry, for relationship has point our years that I almost just next-generation the needs would, those place program next-generation that’s

so grooming depth adds from of lot a and combination within, And of that both hiring I there’s think, to the a the and franchise.

Terry McEvoy

Yeah. appreciate then… that. And I

Bob Thornton

clear be -- turn to your -- question, no to other first just be Just turnover. to no

Terry McEvoy

as both. question Great. you provide deck And of Thank follow-up, then XXth. what a September on in my maybe sensitivity, interest is you, rate the is,

incorporating that increase underlying X.X% last at that sheet future guess, change or just the could know behind in projections, balance and three maybe NII? talk months. dynamics about the And I that’s growth is, has changed all in question it Q, So, my I about did you the growth over talks

Mike Roffler

quarter-to-quarter, of because Yeah. from disclosures don’t how stable a No. and The and -- lot are. we largely those change consistent that’s

the we this numbers much the and stability, that A time we years very, much have comments the through notwithstanding the margin, reducing of margin fed year-end financial system, rates you and if back the liquidity better that’s our will of time, pandemic, when frankly, efficiency about of over always pretty very consistency got ratio, our in at all the go case. our quickly, never right? our deviate has So if interest bit. two you and in changed, didn’t you over especially The metrics, because here go XX-K been think net the in right? Bank a on So few efficiency

XX% few you protection That our rate The as XX% are portfolio you per one to already to deposits growth a when floating, starts rise, that gives you coupled the help XX% annum, so, re-pricing And it, and growth. dynamics of in that, to a year. probably that’s said with half then, highlight in XX% at nearly some checking. XX% leads to portfolio loan with

your of pricing. And lead especially lag what so, that again, you to can consistency, deposit some as does

so growing provide sheet, with growing a balance also in, all that’s income. and importantly, guidance, our factored interest And we when net

Terry McEvoy

you, Great. Thank Mike.

Operator

Pancari next go John to with We Evercore. will

Tom Stephens

This John is on for Tom Stephens Hi. Good morning. Pancari.

underlying guidance guys debt? C&I, and talk loan growth that of the growth expect for cap dynamics mortgage to on some you your want Just XXXX. call about Can specifically you about talk

Mike Selfridge

guidance. Selfridge. mid-teens It’s Mike Hi. provided We

the from year. having our in with a continued into share, for the Roffler, alluded interest it are you positioning There that, our for are rates. given of, cap headwinds client up single-family, our increase guidance. strong terms year Mike growth in our bit to it’s call to XXXX, going the And that I in natural refinance, relates very positioning we pipeline both We to active. last is said expected market comfortable But and expect multi-family market and would loyalty to very been on so as point do some modest the line,

increase the the utilization rate, and our looking very saw in in You given the good activity in sector positioning banking forward. looks XXXX business

Tom Stephens

Great. good I just you expenses. FHLB Could And Thank you pointed talk then and line you. for rate you guys for a $XX other that. quickly, that forward just know the expense going item? out run pre-payment about Thank million

Olga Tsokova

had outstanding dates obviously, we at with quarter. prepays. amount amount when of we If a we last sometime Once advances, small yeah, prepay some this past levels, a maturity elevated had So look like in quarter next XXXX. will our have -- FHLB while pre-payment we be significant we the costs in

kind So maturity the is this of next those. of

that So elevated don’t so quarter we obviously forward. this was we expect don’t level, expect -- going

Tom Stephens

you for questions. my Okay. Thank taking

Operator

will Sandler. Andrew We question with Piper our next Liesch from take

Andrew Liesch

questions. everyone. morning, for taking Good Thanks the Hi.

Mike Roffler

Good morning.

Andrew Liesch

say, was on basis of point with or XXX benefits, a the that true-up salaries just in ratio hit bonuses? the the much On severance versus, and efficiency to how so

Mike Roffler

July those in items, what the unamortized in the this, two that and terms contractual it one I what would -- the call, was are of expense, includes, line contract. there into and is were So paid continuing would entered we say contract RSU because vest be was the be second the to under arrangement with and severance I’d a that

Andrew Liesch

it. Got

That’s Okay. helpful.

return am the take am more out your entertainment of that? of cost, trying to just that. client events I from next notably prepayment percentage points and that take from XX% out ratio $XX I out or could guidance of efficiency getting Is the that travel close rise a the to figure higher just I efficiency title an ratio if million more year? So why penalties, of X and than a a and is

Olga Tsokova

delay about in start So in still for XXXX, things and you to our When back think was what the will and XXXX guidance offices hosting we our correct. events. investing the planned in slowdown bit and are client a with you Omicron franchise, go we same XXXX? don’t to see time, continue obviously, in this But is embedded at quite

Mike Roffler

So, Andrew, am relative way -- you long-term, sort a in thing, consistency over results. line, to I quarter quarter are model we in ratio ago see and -- think about of to our period are over just of a efficiency if of again, think about time the you all that, that long did our a manifestation overall and the is The consistency year third that, relative right? business you other fourth that

Andrew Liesch

it. Got

have a bringing good the on is sound it seems the mean like just in growth Okay. still somewhat on is from refi, pretty growth clients. Thank you. a anything years, last some headwinds I pipeline, like there especially put slowdown And this that few does could cause or then that on that outlook? on there the loan you over mid-teens guidance. Certainly, new are there but conservatism

Mike Roffler

No. environments, what XX% at of gone XXXX. never the And yeah, years, I’d we when look our is opportunities over below I would feel note, Refi single-family XXXX we say the generally realistic in to even ahead, it’s have being XX and with. it’s last rising comfortable one rate originations.

for purchase I still between where markets, given to you deliver competition, and active our the note it’s a still And on our a purchase and purchase excel we very a relates and side very an the ability it mix market. area will in refi the execute as would that’s percentage, so active of to terms clients. much see very

Bob Thornton

low add now, The is, have other when been CPRs elevated. thing rates right been pretty I’d have

that environment, so have elevated the you incredibly now. strong it will are little rise. we last of a there down seeing that remains that the slow the years activity And volume is as bit especially produced impact right in of some said growth rates couple That

Andrew Liesch

it. Got

taking for my Thanks Okay. questions.

Operator

McGratty question next our from take Chris will with KBW. We

Chris McGratty

or start provide to I quarter?. morning. Good compared you production bond what comment and Thanks. you was a Hey. yields providing last the in book new on just if could are wondering

Mike Selfridge

me side to But estate coming right is the points, probably Let basis with commercial about call in basis multi-family XXX cap over lending originations investment XX-basis-point Olga minus side. Mike are points, range. single-family the start in the about or and turn on of real XXX XXX credit probably lines prime basis points, around

Mike Roffler

is And municipals on sort around investment of recent X.XX%, activity have seen some up in to the the HQLA we’ve the of side, been low-Xs X%.

Chris McGratty

actions would the preferred us Mike? Thanks forward, all Okay. with just going for help could the that. with run to quarter, Maybe you in be the follow-up rate

Mike Roffler

could that say sorry, Sorry, again. you

Just like on…

Chris McGratty

run rate quarter? in for movement dividend preferred the new the because the of Just the

Olga Tsokova

Yeah. This in the was it million $XX and first was to quarter. be expected

Chris McGratty

Got it. Thanks.

Operator

next take will Jared we question from with Securities. Fargo Shaw And Wells our

Jared Shaw

Thanks higher the I guess, we the should saw similar Good that back year-over-year quarter. first -- just taking morning. Should pipeline, -- we the, the year? expect lower we up on is or that the up that into you into to it’s to my rate -- questions. we mentioned what that, Maybe Hi. for more of earlier level annual recover to in this going growth that that saw the quarter

Mike Roffler

X% On that -- by I quarter-on-quarter. you loans referencing assume are grew

Jared Shaw

at origination level I looking year-over-year Well, the X% guess, up versus… was I

Mike Roffler

Yes.

Jared Shaw

…which XX%. close to

Bob Thornton

Yeah.

fourth do and recall the very slowdown was XXXX that how out Let an then was there quarter add there the client figure April, if a people to was of year, happened, and mean, I to activity, some appraisals of stay-at-home May, acceleration. home in first sort last pretty obviously orders, big me context. visits of because had March, you what

normal. typical year path But maybe of year more was probably originations This So the different. last Mike… is

Mike Roffler

Yeah.

just steer bit particular, the annual XXXX of I’d was a little I that pandemic. a $XX occurred origination which in if bunching single-family at was there more think, look quarter-over-quarter, number, Jared, towards given up in record the unusual of XX%. you billion,

Bob Thornton

Right.

Mike Roffler

in Significantly and CRE multi-family, call lines single-family, of capital credit.

Jared Shaw

the That’s Thanks. When look Okay. the down. all capital though to at additional now looking of two-year bolstering right. in desire good two feel that or past years the to the capital continues cushion TCE color. And growth really there strong. two capital, see could we that All at do obviously, you years ratios whole to regulatory trend -- then, some get are or of capital, you right again? you look

Bob Thornton

Thanks, pleased and the past, offerings five Jared, and XXXX similar really are markets, capital. depending upon the that at in we opportunities. we did question. I really we both look we the for And the are and bolstering opportunistic the mean to with Bank’s

So right but immediate we now or that one running an and remain the so we we room feel we will go this into are gives good us standpoint. think and opportunistic, nothing other, really we and from where

Jared Shaw

there talent, were the finally And on management any Ferry few developing I a have itself really other yourself just front, expect we a one, does Olga Korn internal from next search on to And in-house I hiring should and change the Okay. signal over besides potentially then, company second, the and always has for CEO been guess, that be prided promotions, last of me, for for CEO guess, the the permanent sort weeks? outside?

Mike Roffler

internally. promotions question, the there first of been So have in terms

take responsibility, carrier have each more to advance we additional their terrific internally that these continued We and change. responsibilities promotions take in team as on a a face team, year have deep of this the on has and people

that. the that of I’ve a and Bank here as the predecessor, think necessarily terms CFO as the was hired I as Board working my change I before am at is is signals the years, it we’ve of don’t of I In Mike product succession, Deputy CFO. in my approach. Willis thorough But a been Newton, succession a with -- process been conducting a Selfridge part XX search process, the for, as

Board on one decade place and the the is team outstanding. so has this a better it’s the their biggest been part priorities and been in of for of And focused

now the forward. is last the part so they CEO and are successor on this of to right cultural focused carry model business our business and And the fit

Jared Shaw

questions. the color Appreciate taking Great. and the

Operator

I And question-and-answer Roffler, Mr. turn the additional this to will any back that concludes call at closing for remarks. session. you today’s time, or

Mike Roffler

was XXXX for with just questions. with, year growth to across Thank terrific close a Board. strong the you the everybody I like

pipeline are us. front robust We in client and with a great satisfaction opportunities of XXXX all-time at starting loan high, an

We everyone. the forward about Have year are great to the and very a day optimistic future looking are ahead.

Operator

you This your today’s participation. concludes Thank for call.

now disconnect. You may