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Flushing Financial (FFIC)

Participants
John Buran President and Chief Executive Officer
Susan Cullen Senior Executive Vice President, Treasurer and Chief Financial Officer
Mark Fitzgibbon Sandler O'Neill
Steven Comery Gabelli
Gilbert Collyn KBW
Matthew Breese Piper Jaffray
Call transcript
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Operator

Welcome to Flushing Financial Corporation's 2018 First Quarter Earnings Conference Call. Hosting the call today are John Buran, President and Chief Executive Officer; and Susan Cullen, Senior Executive Vice President, Treasurer and Chief Financial Officer. Today's call is being recorded. [Operator Instructions] A copy of the first quarter earnings release and slide presentation that the Company will be referencing today are available on its Investor Relations website at www.flushingbank.com.

Before beginning, the Company would like to remind you that discussions during this call contain forward-looking statements made under the safe harbor provisions of the U.S. Act Reform Litigation Securities of XXXX. Private are that may statements those in subject differ to factors other contained statements. such and uncertainties any cause from risks, materially Such actual to results filings are factors U.S. included our Such with in the Securities and Exchange Commission. obligation does except forward-looking under law. any required update any Flushing Financial undertake to Corporation applicable not statements, as

considered These to assess operating be performance this to non-GAAP isolation several intended and During in measures financial measures not be accordance a review the made. non-GAAP U.S. as call, references as financial are supplemental and GAAP. substitute measures information financial or will with presented to for in prepared

For the President Executive Officer, any to to earnings reconciliation release. overview and who will I'd and Chief provide to these the information Buran, results. non-GAAP an strategy now and measures John refer GAAP measures, of please like about introduce

John Buran

to strategy, everyone, call. our with increase Good business morning effort Today Thank as competitive to earnings investor part of hope financial advantage and additional to we earnings our engagement. you. first you continuing consistent and power, provide welcome and quarter sustainable transparency XXXX into positive insight our

create and address our that in on start prepared our of CFO, time Susan service overview Starting a our large brand greater we're deck, I'll small will you, Then superior consistent at value end execute and performance create the review executing first your by customers Slide to message detail. personalized delivering of help new preeminent as by and enough Cullen, brief quality bank be deliver attention shareholder value. growth. to experience the earnings highlights, a to and multicultural on you, the with know to Our market. quarter We will the as enough Susan the we X. through our encapsulates continue community long-term vision our cover remarks our Today, permits. I questions in strategies and to followed innovative financial successfully of attract profitable

$X.XX, release, announced diluted in press As was EPS yesterday's was first GAAP $X.XX. diluted and core EPS quarter

has recall, You compensation due will expenditures seasonally the taxes. to first quarter higher the that our in year certain resulting stock Company plans of and the

the normalize core rate one for of these diluted higher Net expenses margin EPS $X.XX. if sale environment. down year-over-year net in and due was interest increased $XX.X exclude pressure competition we due by loss interest was on the to this However, driven loan quarter-over-quarter and rising funding costs to million, deposits income

sides a both we expect on the of trends repricing While, increasingly sheet. that the real of we remain drag, deposit the slower positive loan the positive placed portfolio, estate hedges do commercial our yields, emerging C&I to specifically see in our we the positive pricing new of but balance repricing pressures on growing portfolio, impact and timely of

over ratio focused loan pace contributed significantly loan of the high-single core we with government growth the deposits The growth our in reducing focus efficiency while strong, growth. growth strong and loan portfolio, to our an the the of as to low-double yields deposit loan-to-deposit loan annualized a in The business loan Importantly, deposits low-to-mid to XXXX. and and long-term. underwriting pipeline X.X% expectation of year-over-year, saw supports for We outpaced holding The strong Expansion is XXX%. expense of ratio a standards. of remains remains XX.X% us. growth growth the of remain digit solid control on delivering the on XX's

total a XX strategy origination quarter of focusing our a $XXX basis X.XX%, yield XX prior $XXX linked yielding mix. the quarter. continue production. our XX% were the C&I benefit originations efforts a comparable to points year loan on record totaled of than period higher the quarter points Loan for or than with the originations basis from and We for million, higher of greater over million

on quarterly of net consecutive net the quarter, higher portfolio. yield rates exceeded continues portfolio partially the at originations effect in margin repricing third the to loan the on the For The interest compression. loan mitigate yields strategic increases combined loan yield and of

We savings in are branches remain track converting customers which branch and quality conversions experience. scalability Universal and model, and to at including cutting provides Universal to XXXX the improving Banker expense by Banker a compensation our higher branches. all in costs overall complete to of service efficiency on XX% technology continue ATM's anticipate with edge our We state-of-the-art

Flushing model, branches deposit focus Banker to our a seven days campaign During customers via in on a deposits. The the Flushing the $XX deposit Universal with branches on first Video Video resulting focus quarter, to to our building of access Universal improved a.m. for Queens, conversion total the services a of p.m. Banker bringing additional allows With week from link. representative X:XX market Win to to two which have XX. market relationships live We the Banker increasing and commenced customer Banker growth. a sales marketing the with XX:XX the is in share completed we staff number conversion entitled, billion model video renovation and to

quarter million share of is the captured deposits Through successfully dollars quarter we X% of $XX in the over growth. goal Our increase or to $XXX XXXX. million XXXX, our by by first first

Chinatown Banker progress. and full to new unique Last planned a leased will Banker the on location service good showcase New XXXX and our branch fall City. week of in we with Canal making new This in open services. announced, our is corner we Video Universal the York of we're Mott model So

with relationship longstanding a in have roots York. the Flushing our New with beginning Asian community We

we community Mandarin build Cantonese, this expenses. Chinatown to in serve among serve. This allow contributed dialects will to These or the controlling us employees the location, the our area. speak to living Chinese prevalent in commitment working Our upon and markets others efforts Asian

unit the impact stock annual As of reminder, includes director awards. a quarter and employees of restricted first the grants

loans quality remains pristine. points of of seasonally ratio XX XX% end and in prior the was efficiency only gross the on result, assets. quarter. XX% portfolio elevated non-performing from the loans first increasing a assets just were of basis were our at basis XX total At quarter, non-performing As Credit points the

loan-to-value low do just the foresee increase non-performing not related the XX%. an associated loans expenses. We Given in with of

X, sheet a enhancing philosophy. new story to focus our strengthening consistent summary of expectations, our those areas, our power, provides risk Slide balance earnings customer strong key For which our commercial remain bank management and maintaining exceeding

our include advantages country. the customers staff multilingual competitive most to City the ethnically in sustainable Our Area in one the serve Metro a York New diverse regions having brand of

in deposits have on funds where These our a community, strong focus Asian $XXX cost total of we lower have a We the million of than funds. have cost over deposits.

many high branches of the deposits Asian As of business attractive you There's significant a markets the a Flushing and number already available small savings dynamics. degree very business of know, surrounding owners. have

and to originations understanding capitalizing remain relationship commercial Our deeper knowledge Combined commercial industry into estate this further while of on through multifamily the and real customers in shifts. and lender of commercial to oriented competitive customer relationships. remain Overall, transform as and Win and Flushing full our long-term we nimble on enabled environment focused business lender responsive customer a we XX% a quarter us business with preeminent mortgage has banking first transactional strength focus formerly origination purchases based the on is market comprised of needs. campaign loans, real estate focused which

coverage Our us debt The XX% throughout the of quarter was real credit phases use disciplined four loan-to-value ratio management loans XXX%. one to current estate, to risk well multifamily a serve with on proven all originations has commercial of philosophy, mixed and cycle. family of

confidence Our net minimal that remain conservative loan us over below charge the delinquencies reserves, give long-term. will offs underwriting standards, low LTV's industry averages loss and

and Our talent our well-capitalized technology which by as our enhance remain execute position cybersecurity, risk strategic ability value grow stress on our Slide loan opportunities, the management philosophy well risk, very to credit mix, long-term as profitable to to scenarios. as income strong deposits growth all are by X: funding efficiency, balance levels, investments improve power objectives, on leveraging capital we to to continue continue sheet Increase earnings in pricing shareholders deposits Company core manage well core under and and and net scalability liquidity, and interest deliver improving innovation, to increase test core all outlined

strategic focus profitable objectives shareholder to continue these achieve value. growth on and maximize We to

the the XX% form in we announced a from benefits shareholders shared and of of with employees increase previously, As dividend. of the the in portion tax one-time our our form Tax have quarterly non-executive bonuses Reform our Act the in

of and quarter know, have in first already a XXXX, have quarter dividend since raised September XXXX. may every each the you As year our consistently since dividend we paid

evaluate to Company for savings continue the to the additional position into tax invest growth. future business to We opportunities

remain over of well and authorized Additionally, a and the profitable new execute as the dollar no shareholders million our strategic Susan this a I’ll our with objectives. the We in to Directors program or to to shares At value growth call positioned time Board results to point, repurchase quarter's to limitations. of financial share greater capitalized detail. deliver long-term discuss continue we turn

Susan Cullen

and origination you first X. $X.X on billion of focus from up commercial full Slide banking estate were quarter of Total X.X% loans start real loans XX.X% continue multi-family, X.X% or with we Thank commercial I'll to up John, on XXXX quarter-over-quarter the annualized the and business as relationship.

our originations for as total were originations. over to million continue XX% C&I diversify quarter the We $XXX total loan of portfolio

balances for loans XX% to down loan-to-value portfolio The was year of a several and annual primarily volume. X XX%. in the while XXXX. loan loan of double-digit March real total to ratio from some continue a XX, million, loans, quarters $XXX XX% primarily pipeline rising rate Slide period The but over gross our the estate have is production the in the are C&I single composition estate XX, advantages on loan as at increased yield four quarter. on interest a the we expectations on to quarter protection in pace is real funding The quarter portfolio during offer same totaled last mix. rate adjustable-rate average of rate modest X.XX% portfolio at emphasize meet low approximately growth of March growing end our to approximately up growth, rate a pipeline At the diversifications the loan Overall, continue last from environment. high an the X.XX% the ago. from our Over purchases company which our a and of and resulting commercial remains strong origination loan linked to portfolio depicts over C&I growth averaged quarterly these our loan the offer XX%

decreased. funding As borrowings percentage has grow, has and continued related to the CDs to

increased deposits when for to want and not longer tie market, X% was accounts. there XX Slide we can than to and growth access arises nearly much the as need market out primarily money consumer non-interest-bearing terms, up the ladder months. wholesale driven by longer On does advantages the X, are However, Year-over-year the year-over-year liabilities quarter-over-quarter. funding CDs money where for

with by continue We to X% growth non-interest-bearing deposits increased which core Non-interest-bearing deposits represented accounts the increase represent of on deposits. deposit million an emphasis XX% $XXX total as year-over-year. of year-over-year

continue increased with of cost the increased The average see quarter. points We pressure competition basis during to for deposits. rate funds XX

We our remain of market. to while deposit within terms in competitive disciplined continue remaining pricing

quarter X. XX points to Turning year-over-year, income XX at X% down X.X% The quarter-over-quarter. decreased margin basis first was X.XX% of XXXX $XX.X quarter-over-quarter. basis Slide interest and year-over-year net Net interest million, points for and the

loans, margin from points declined basis points Excluding year-over-year interest X.XX%, X XX income the recovered and and delinquent quarter-over-quarter. at interest prepayment net basis penalty

we XX was approximately points quarter quarter increase will driven linked basis and originations following Bank Our in on partially from million swaps into XX mitigate points have cost and the the basis increase overall rates to for order X.XX%, points steps. the basis we in increased paid $XXX of the be year-over-year an of basis cost using beneficial net Home which an have quarter-over-quarter, income. points quarter XX CDs. taken and markets the believe money funds the In Federal first by to Entered Loan forward borrowings XXXX. increase Loan funds XX of of from

comprise current quarter’s originations loans which Our totaled XX% and loans, now of over XX% adjustable portfolio. originations business of the primarily the loan commercial are rate of

delinquent our We these the enhance third exceeded strategies minimal the but loan loans. costs in on consecutive portfolio, liability provided net net and we quarter, yield swaps have to the For prepayment quarterly loan earnings mitigate continue swaps from on period of penalties The the a balance interest yields rise. the effect the interest as funding and on originations to of will the continue margin believe sheet. rates actively manage evaluate sense to current recovered

the life on first opportunities driving mix. by pressured we executing and million The million. of Slide quarter reported of to of focus deteriorate interest XXXX $XXX,XXX outlined loan strong income While of income net and we Core one noninterest pricing value noninterest on noninterest net will margin steps, $X.X core loss for so insurance will fair income sell we income adjustments. coupled core loan, will the $X.X partly interest driven noninterest excludes the year-over-year likely XX, net gains leveraging On we loss portfolio declined opportunity and was on income to while on was to delinquent continue proceeds remain commercial with maintain the by continue our sale which the quality. sees on credit believe

to seasonality have expense. Moving we in Slide XX, noninterest our

$X.X first totaled the the the of included first of expense fourth of Reform awards; $X grants of Overall, in to of X% stock XX% and XXXX, XXXX the for effects and first the in and consulting The in to not quarter anticipate of of impact approximately the Restricted employee quarter rate. remainder to efficiency of fourth million and annual unit of quarter the Act. XXXX expected in bonuses the quarter expenses was expense the are compared be the the of in XXXX approximately $X.X XXXX. expenses stock compensation quarter because of With in million the restricted XX% the other the to year's remainder that lower non-executive year, of XXXX. first director in quarter increase XXXX. Tax non-recurring first quarter compared XX% quarterly granted run will included $X.X we first X% million of from ratio million in annual XXXX, approximately There XXXX quarter and the of

operations our continuous to the focused long-term mid-XXs, efficiency our and previously gains. ratio John for opportunities on an in new improvement efficiency in goals to we mentioned, maintain As low remain

anticipate XX% effective tax for rate XX% taxes, to approximately be Regarding we to XXXX.

to credit Now XX. Slide turning on quality

credit Our metrics remained this excellent quarter.

seller totaled charge-offs based our the of of upon history XX% historical for are did we loan-to-value should delinquencies highlights we underlying of with originated one value non-performing values The record appraised adjust delinquency reminder, credits loan-to-value loans estate and at and average increases. real only non-performing a As process. $XX.X conservative not early XX% the quality collateral be upon in this our The the the of origination, percentage underwriting based credit our by Slide year. discipline and XX loans a the down methodology. effects loans remains strengths. million, as quarter-over-quarter, of Non-performing as of strong X% XX-day year-over-year of our core minimal is

only XX three can years you are the than for As there XXXX. loans delinquent days see, vintage greater after

XX. to Moving Slide

Our the and losses credit been year-over-year the allowance to We for flat loan first to at due The loan reserve increasing of recorded loan the been to quarter proportionate provision required, allowance the to coverage provision continue XXX% ratio. growth quarters our due future a With million growth growth. Net of expected over portion remains loan quality portfolio. basis growth of of XX maintain loans would building. has recording our anticipate for we an of that in losses XXXX given first in improving $X.X quarter for of that $XX,XXX ratio points. loan offset the XXXX, gross in recoveries with adequate to have

it we have some As back to With our turn closing that, for loan we more I'll closely appropriate loss ensure monitor that credit reserve. an very always, John quality comments. to

John Buran

be for The customer Slide opportunity our in provides is our base why community financial we the market we to up, significant XX experience consistent have continues market City a and services vision growth. IPO strategic at our been held and leveraging well focused return positioned company Wrapping customer reiterate, us. maximizing our remain our every for and And you exceeding in have a Susan. our attractive by to shareholder total with our remain multicultural a you, leadership that has over in continued execute represent since believe shareholder relationships. five shareholder with return To proven commitment XXXX, for preeminent point agent profitable a superior strong total been seasoned last Thank XX%. touch team our years markets strategy the and expectations know summary of we stock New value. foundation Those that of strong customers record drive track to We providing and profitable Flushing continued a growth. conclusion, strong York on area In for XXXX%. banking has and customers, a a to and

time as now I'll Operator, it turn take over will questions We to permits. you.

Operator

first you. Our go will Sandler session. now Please with ahead. Fitzgibbon question-and-answer and begin Thank Ladies from Instructions] O'Neill. the comes gentlemen, question Mark [Operator we

Mark Fitzgibbon

Good morning.

John Buran

Hello, Mark.

Susan Cullen

Good morning.

Mark Fitzgibbon

you wondered any rate the for net outlook whether not the for us I that your with or interest if Susan, the margin remainder year? could and hikes share of assumes

Susan Cullen

margin And We four continued remainder bottled XX somewhere net decline interest the year for between we the interest during the see points. basis hikes rate out assuming X and of of year. margin net the of the do

Mark Fitzgibbon

and per X quarter? XX

Susan Cullen

the total year. No, end in the of by

Mark Fitzgibbon

you. Got

Okay.

Susan Cullen

I'm sorry.

Mark Fitzgibbon

problem. I'm rates product, hitting on think activity? with No year will the sort you five if whether curious that level some trigger And more you multifamily think X% of prepayment

John Buran

think frankly, the been concentrating little bit more. we although see on diversifying more, will We portfolio a we've

there's – also and opportunities going business the in real that the So us. are in commercial C&I we there for forward estate both more think more

be the portfolio an for to So even important where we’d like while multifamily so. to more will continue area us, diversify

Mark Fitzgibbon

and I and to year. loans deposits over breakeven share that maybe your level level? of if then Chinatown next us of will the in with it location, get could And sort deposits you Okay. for loans wondered to expectations take New what And

John Buran

of our there one expect So can two years. branches. we be and usually $XX in think million around And of we for – I somewhere

Mark Fitzgibbon

Thank you.

John Buran

obviously resets. the the multifamily all are area, five-year the Just and loan one commercial real comment estate about more

are portfolio. have we more rollover we ongoing as a and that loans risen continuing process and favorable more on rates, so place the basis So taking more seeing have within rates

Mark Fitzgibbon

Thank you.

Operator

Steven Please with go ahead. Gabelli. comes The Comery next question from

Steven Comery

for guys, Hey, thanks taking my question.

John Buran

Hey, Steve.

Steven Comery

portfolio about the want a that risk outside paid you change of Just we talked of the sector? guys I quick is ask anything getting weren’t before while about real that there more materially it you construction for renovations, you're ago guys in in there's quarter, makes in know was really this thinking to that this, kind said, interested up you that portfolio

John Buran

be basis a it's time. portfolio its the but for than really, point little may to total not a which of the points us. Not of it's we XX at of proportion this opportunistically think still very growth small overall less – a going see of We portfolio focus area in major bit

Steven Comery

sort And long-term. Yes, kind Okay. how about do I over think of the we as guys couple then Is of about that target that? should of talked sort ratio mid-XXs had have for to goals interpret of any I over or we should much. that you of years the sort figured low XXXX efficiency you and timeline. next mean,

John Buran

think I margin happening net really our a to was ratio side. interest part what's respect So on efficiency going with of on the

the as trends, portfolio these increases. place taking in repricing, rate portfolio the increases loan consistent see of So we with C&I the

We expect pressures. of NIM the a out leveling to see

branch upon then upon future we to to respect based we're actions efficiency with ratio. defraying we'll in expect So that be able that bring our based the taking that and Over down the time, network. costs

Steven Comery

the X% expense noninterest XXXX just then above to its the guidance, X% And on levels. Okay.

the expecting comments. QX I changed mean a was in QX on comments. sort I your less I there expectorations? than Has based little anything are of there think guys that

Susan Cullen

about for raises is our and the part. component what's that so of most non-G&A, been driving biggest those G&A the XX% No, have that's salaries

Steven Comery

Okay.

there, So guys salary you delta does had the main announced? that increase sort of the

John Buran

Yes.

right. all Okay,

Thanks. good. Sounds

Susan Cullen

you. Thank

Operator

The KBW. ahead. next with comes Collyn from Please go question Gilbert

Collyn Gilbert

guys. morning, Good

Susan Cullen

Collyn. morning, Good

John Buran

morning, Collyn. Good

Collyn Gilbert

you question that’s to the that this I’m first the that from mentioned the just fourth? so or Anyway, XX, NIM, downsize assuming is from level that from the on Susan quarter

Susan Cullen

Yes.

Collyn Gilbert

into what start Okay, the I guess doing under yield yield. pressure. book a around expectation tying maybe there loan in I on. that been have I we’d that you it��s What’s that, of shifting thought to when know just It okay. and leads seems that, better mean NII, it’s coming you’ve loan dynamic describing the higher, right. I of the so fact – And see some kind loan that blended – yields mix the then what just the it’s would in like you’re narrative that the still is but mix. even

last to this dollars just thinking at few about about how dollars income you they’ve Do higher point in the to general. some inflect under I curious year? then also just net been and now pressure So that know the you’re expect quarters. interest for

John Buran

Yes.

I the should to the some of end start we see toward year, movement there. think

have to going things – continue there is couple We a of on.

about swaps. have First $XXX closed that loans on we of – $XXX million million the of by

protection. XX% then So C&I proportion million they And provide reprice. about our somewhere re-pricing around loans some protection. provide of A year good about the the $XXX portfolio some

penalties. I this significantly think in the for wild They lower than were card in particular was quarter the past. us prepayment been had the they

they in So you in. the yields you This the that and depending the in see increases how then progression see can natural think is of that come portfolio. in activity. on increases the I the upon origination pipeline year-over-year increasing And

the So again exceed, had quarters the yield. three origination exceed the portfolio yields we loans consecutive

the little accelerate. I So of those And a that pressure the end we continue year see on upward think to yields. toward

Collyn Gilbert

start so Okay, be just NIM is what and okay. the given mean John your to not that there – comments should start higher in before. you I in I’m said XXXX. guidance for in, kind really coming asking just expectation I you And know what XXXX, said of but then

John Buran

at depend I activity going to Fed. So that’s the think upon the

liability obviously. us, trends side I sensitive will underlying said accelerate. for loan the still on But We’re continue to the as

the on we is established versus matter think the of movement of on pretty know I loan So what terms in the let well a – portfolio. the quickness see Fed movement it’s of

helpful know that’s So you. I to

Collyn Gilbert

Where – these by presume is then bank. good good. at seeing obviously that’s the customers mean loans coming you able seeing opportunity to really said some I And loan Yes, demand. to But into are guys you you grow some are from? where just guys okay. that it’s competitors, the because coming as you I you new taken on be loan growth, Okay, good are? rate the are of being really

John Buran

Well.

it’s the focus is our think I key diversification.

it us opportunities. gives So

in multifamily. the and the think proportion I up didn’t good have a and small particular commercial going economic for estate ability very, we’re this of economic activity. in But the – that the So in diversify quarter, there to York is large so to with on very, made area. we New real participation C&I, very very And still activity

beneficiaries coming we’re So we the of just that finance on it. We’ve got Last board equipment we commitment finance mentioned officers year some went area. the the went new we in into business. loan – C&I into

pick up there. we little bit more So a

portfolio. its So C&I diversification, and discontinued us. opportunities in to And become leveraging the focus available both as they in real they I estate continued as then commercial multifamily think on

just which really So strength is our have us to loan types, the enabled enabled year, growth – good what that every every which I us to several volume us we different product is ability gives and get do think about build in quarter. to loan

The to had other us starting quite that for some for time. is mixed area, use comeback we deemphasized which our areas

protection with Now, these premiums products that still emphasize even rate pretty, versus interest and price general. about estate, the that volumes. either multifamily C&I. is that I all space, premiums, we’re use, which have talking is mixed some starting to or commercial real additional that come competitively onboard in pretty would And

a now. over with four multi-family our Although, handle we’re doing

Collyn Gilbert

Okay.

expenses. And think outlook give I similar where on you or guidance Okay, you go. appreciate some perhaps gave the just helpful. the you Can color will Susan, non-interest that’s on

Susan Cullen

income, compared value adjustments talk equally on fair income would our it core non-interest I unfortunately have to and last our going non-interest think to can’t going flowing control about through gains be – what market we I’m pretty was is that. the insurance being to we flat core because if year, life

what fee So expect play very with be no initiatives on we new any would you’ve seen have income, to so prior it in the to consistent years. we

Collyn Gilbert

Okay.

that Okay, quarter. CLOs in I And something What in release. then press think on on helpful. that the were amortization was accelerated question last just indicate premium you happened would specifically the that there that’s the one

Susan Cullen

comparison some some out In quarter quarter premium And income. recognized had to the obviously associated It’s quarter. had them the to the we was with call that’s fourth first fourth that the interest and that of there. CLOs

Collyn Gilbert

was I’m And sorry, what the amount dollar to Okay. tied that?

Susan Cullen

have I minute of right one front that that me, in CLO. don’t for this Collyn

Collyn Gilbert

it mean, was with both this. With prepay I bigger contributor the prepay this. and it, Okay. presume mentioned you I I than know

Susan Cullen

were And for mentioned, million. $X.X fourth quarter XXXX prepayments our down as John of about the by

Collyn Gilbert

Okay, okay. leave you. I there. right. Thank it will All

Susan Cullen

Thank you.

Operator

[Operator Piper Matthew Instructions] The next question Breese comes ahead. Please go with Jaffray. from

Matthew Breese

everybody. morning, Good

Susan Cullen

Good morning, Matt.

Matthew Breese

that. was deposit and versus I Deposit betas behind are commentary. high level get the there to might and And and some big be picture yields just hoping market. and betas why your competition mismatch loan drivers loan in what some

John Buran

I think flat is the basic a curve. yield

think I So that’s the core issue.

we’re I odd for the in differential augers XX two fact let’s basis Now point the that – a don’t fairly some XX. to that us. it about the But ten talking moved X% face year just to well know,

I space. of driving particularly seeing pricing in terms we’re that think is a lot what multifamily So, of the in

heating bit as terms pressure. In we’ve a I some little on in of they side, think the seen market are betas up deposit the

that I year with think give Although last think this that but out from on XX irrational went the fact than deposit I that – see I multi-family the are pricing clearly it’s it’s of their think the think it not a banks more couple pricing are was we X% side. there competitive And I move the that But year Fed start from handle. pause three in really the to the upcoming to latest that everybody should a move – with and regard. the Fed still

some of loan the longer yields on due see to movement expectation positive end that in rate is that curve. So movement my we’ll interest the

Matthew Breese

date any the Understood. away? of side Do to the is multi-family benefits due you tax lack reform on movement priced being to think of

John Buran

think I No, don’t so. really

I think flat it’s curve. yield a

that yield into mark. to decided trends, And competitors curve, all multi-family. particular that entrants market. the one I two then have trying of grow think I flat first we out But trend a a is new see $XX I the two stay there; to relatively positive. that’s it’s think think billion there’s one below has I lot not And of the yield

a little bit as well. So that helps

So on of up more might us we open the have that do combined little in quarters. other in more to coming end movement little that date curve to market the bit, a have a better. some with cause opportunities – been yield the longer might then bit multi-family a again, be But that little bit to

Matthew Breese

Right.

of capital more desire bit to current modeling just sort at And to share management. repurchasing should repurchases. in little consistent levels you think gears Do Okay. we switching Any continue sort of stock. that a

Susan Cullen

opportunistic We’re repurchase of an shares.

look will as business the it to tangible when into the to look and at earning our first redeploy interest decisions we Again, there. Obviously and relation is our at capital, grow market net moves. to from make So value assets. book comes choice our we

Matthew Breese

it. Got

That’s all Thank you. I have. Okay.

Susan Cullen

you. Thank

Operator

turn conference any for This I to concludes question-and-answer our will closing session. Buran remarks. over like John the back to

John Buran

Well, forward our you want Financial earnings very appreciate We to next support on Thank thank first to much. Corporation. quarter Flushing call. for talking quarter. of look you today to joining your us everybody again I thank you. XXXX I

Susan Cullen

Thank you.

Operator

Thank concluded. you attending now presentation. is today’s for conference The

You may now disconnect.