Sterling Bancorp (STL) 21 Oct 212021 Q3 Earnings call transcript

Good day and welcome to the Sterling Bancorp Second [ph] Quarter ‘21 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jack Kopnisky. Please go ahead.

Hey, good morning everyone and thanks for joining our third quarter 2021 earnings call.

of Bea President, Chief Credit Rob Emlen our are Massiani, Officer; Officer today Harmon, Bank our Rowe Director me Ordonez, Financial our Luis and Joining Relations. Investor our Chief

over XX assets points release share interest equity the income margin represents XXX basis presentation of on a diluted $X.XX per earnings The results point in the quarterly which our link on our quarter We points of we excluding with Adjusted basis the of Reported provides return results. average decline reported per tangible the XXX have basis increase information a In common on detailed five year-to-date share year-over-year. of net prior adjusted $XX.X year’s quarter, the line return along on a million. and compared of website, points. quarter for quarter. a increase accretion represent and and were with adjusted net press third XX.XX% represented and and of of to earnings income our quarter adjusted XX.X% linked basis an

to over prior continue quarter up share, $XX.XX which XX% deliver X% value and meaningful was book We tangible over year. per and prior growth

key Now Webster our pending performance Financial points I merger Corporation. highlight want this to three with our regarding quarter and

First, we and had a strong deposits. quarter loans growing core overall commercial

linked compared quarter total of our $XX.X deposits increase We finance, expect over billion, $XX.X similar fourth outstanding’s public and quarter. were billion to in in XX, of finance. an $XXX loans growth estate the Total lender the September would quarter linked the real increased X.X% commercial XXXX. X.X% commercial driven a million C&I, of of or XXXX by As traditional and increase organic

loan XX to Secondly, single improve. for or due is quarter classified loans metrics Non-performing our continue collateralized, were points decreased. to criticized annualized. loans $X a slightly that while million, Net basis increased the credit charge-offs

losses credit economic provision credit the of non-performing and or macro of allowance in quarter end no quarter, with the X.XX% charge-offs, XXX.X% the in the of was As total asset for $XXX.X loans losses our improvement the level for continued stable recorded outlook. quality metrics, of of We low consistent and million, loans.

our our Webster actively the colleagues, highest creation, to risk providing XX at design received been a Webster announced we and August We -- value XXXX, continue the August integration and service primary Finally, dynamic shareholder prioritizes to for Financial receive Corporation, merger our April regulator clients, XX engaged regarding our in with time announced our record work environment XX partners have to approval adherence comprehensive a OCC plan from governance. standards on that with of and merger approval our commitment on continued this then XXXX, XXXX. best-in-class to on

proposed and We high the are approvals. very of that’s of merits the confident the I hit prepared are in regulatory remaining to merger combination short, execute the the try to receipt but points. know upon

for open the now So questions. line up let's it for

Thank question our go of McGratty Please first [Operator Chris you. KBW. take ahead. We'll from Instructions]

open. is line Your

everybody. morning, good Hey,

Chris. morning, Good

little portfolios conversations? Can to expect usage, to sounds it the more on line start slide you're with provide $XXX. to on QX. growth, more $XXX the obviously provided you just the borrower XX, reiterating wanted you bit building bit color, just I you loan guidance that little color a in Could continue momentum and give to a range the Thanks.

the full tell the all, first will most very, course, are categories. of I asset in pipelines of you, Yes, of very

of of and great hasn't focus pipelines over the there very have CRE those more the years finance, are they're Areas And related equipment like full and, on are technology that performed maybe a traditional pricing, full, last of continues are to innovation in more commercial things opportunities three finance finance, well like where that very warehouse spending is municipalities estate along and and to some and out outstanding, is real that way. couple business companies years. pressure, things all terms pretty and full, portfolios So, is some like things money. in where the not where, Lender of and full and still there. public starting a to finance, and get so equipment, traditional They're the and even C&I is group. Very that distribution finance in centers are strong. ABL really with

multifamily those, have the what limited. flat We're we those a what about pipelines more are, in little live on we we So are payoffs.

amount We have past as see so the side. you will on multifamily the have velocity on about runoff in put you equal the an of

the of businesses. and see line we're more is Metropolitan folks characteristics, starting super of more But to side New are on on this So pull finding again, type York diverse, and you thing the industries, what is, this. super,

different have in finance an of lending can of we York, public as and New like pretty types in things diverse offering nationally, and a terms So do example. more we

in seeing people trying the way, which along in capital hire in spends activity been has to across and the board and all the activity industry buildings, one issues more more we're activity So biggest the more more segments. to of trying

and this very activity of mentioned. said a equipment, I that some pay-off pipeline, of versus good very about [Indiscernible] but and pricing be of multifamily a feel of Still the out I originations where you in the to thing about number a like businesses, out the lot bit a lot multifamily businesses feel they we growth the or So good there. the pressure lag still

about I type, provide the geography of as well. talked more, great the headlines you one could If a Could that’s quarter, ask in color credit more you piece workout on a single strategy? color. little Yes, asset

a credit. concerned thing. We've about for but in while, well client we Yes. we're sustain don't this with York on we're is credit. hopefully worked still this It thing that not and New kind this Metropolitan losses really particular mid-$XX a It's out, billion this can a collateralized We and loss. of work

That's much. you great. Thank very

Chris. you, Thank

ahead. We'll move Breese on our Please from Incorporated. go Stevens question to next Matthew of

is open. Your line

you'd Hey mentioned morning. side just about yields on more so yields good more? a competitive on you loan little produce quarter, getting on Jack, on was could ultimate the where talk loan you new Could perhaps a coming are Hey, volume. and that you loan bit to could bit little adjustment generate the the last what

question. great, that's that's Yes, great a a

what You is quarter, we awesome. always remember last said which

a get competitive yield. little margin you can adjustment see in So loans and we did on the that more

And where real as a And in So we -- public that not side, most they we it thing. looked in it's basis through think as estate at bit as of of in decline side estate much more C&I, much finance. more, point estate side competition a not in is as real XX real more this finance, commercial in probably it, being competitive. the Not frankly lender competitive got the of much the that in more about in it.

loan kind and to threes yields mid areas. So high of in and those of coming are in kind twos

Okay, great.

for sheet technology say I the we've touch impact banking thing loans? there of partnerships several other know, deposits touch as on much have The balance the any maybe on couple service you they the would wanted and how and a fee have just you over as seen been businesses, in way had, opportunity to Could Has what those a a you merge? Webster and give partnerships. and on last, income, produced those years, of was I sense us

basis a banking it's the we a end a we a to as we have deposits on to actually there funding, what billion dollars at in be billion in to types of deposits. we're think and that. And date worth to is Frankly, optionality so, of trying able so Yes, dollars really of anywhere to business. about, anticipate on really from an are verticals different channels. online, or And based annual half of a trying do far, a worth great to half create the the probably we're day, billion originate but today, service,

about funding that match a side, out originate all deposits a it's a a you is long you And kind worth we're time, billion they really good and cost potential teams, all is money an from relatively, really with compressed deposits deposits partnerships there, that annual on pricing banking the deposits, a kind think we dollars We service channel sticky But kind to deposits, banking as we all know [ph] to basis, today. come in term mechanism. the deposits billion the viable wholesale the one low service feel of channel, that low deposits. with that branch doing. commercial match over cost traditional So half of technology very that the from of as originate good of that as

have partnerships we feel of very and continuing to amount confident that to we opportunities the is So increase. drive

high. of -- Our opportunities we are that very pipeline screen is

being very also. selective are We

this we, and So about on risk that making sure be been have require partners the careful we've we them the conform management and technology to to to mechanism structure able through. go devices, the to companies

relationships, to we we've So things to shot that a long of have specific these about make did. those one sure they more types not are been fix little term and something

real We're, So the now deposits. $XXX the bringing billion somewhere the end including all frankly we're would in we in we're deposits online place. year, platform to total in expect deposits now have around and

Great, I that. appreciate

Could million these was release, sold you when underwritten. clearing give just it know price you multifamily one $XX.X us commercial estate sense what other you what office use you're, substandard. in The they was was and commercial for the I types were had when you rated estate real real note of versus mixed loan the that a a

I there's that on post valuation think City New and just everybody sense real COVID get examples. York many a not trying to impacts for estate,

in credits space. rated look and took and in on so charge-offs again, bag quarters. the just it's a the mixed to path, portfolio a return that, what and license be [ph] work We Cleveland see We mixed X.X we noted, in a million XX for with or the used it's prior question. about for certain did in Thanks of Sure. strategic out. where million the either must potentially substandard multifamily long as view in we to loans Yes, line move of long process process in this is types we a it a to space

for those owners assets better the we see down and those managing risk that proactively exiting credits. we're kind where just of of So assets,

add reserves thing some mentioned. there I the only were would the Matt, beyond Bea is charge-offs And that that

that or but else will -- just deal, they'll really it about that they somebody that were these way bad the pricing were the on the more if deals okay. DSCRs, and want that that, think sale that terrible to had So stuff is necessarily do really, wasn't

alternative was why deal, off. the get it on that think yield more for are investors just par and look a -- didn't to that So that's going we

general, in through there's that, Yes, there par. prices have than like would I prices expected these that, have many kind a than the think out so would There I sell that. expected think things. we would you for a higher XXX going of than have range been the can deals, match we are you can of overall, in this. cycle better there. are better say what XX, some are like mix we are but the through cycle and But, They And

Great.

me. Okay. Last one for

news, timing some the there of deal recent all Given closures. around anxiety is

if feel if regulators closing updates comfortable remaining and timing? any timeframe there's the with the curious Just for on, from you on deal the XQ been

timing on that out The close is deal like else this figure that everybody going on when very can we're timing we're to tell this. is we're you the confident to trying XXX% for I ready Yes, this. Matt

all appreciate my taking Great. questions. Understood. I I had. That's

you. Yes, thank

And I'd questions back for conference the turn over appears like to remarks. audio any time. this no additional the further there it are at

know, the I of ton a have We time. really especially appreciate calls analysts today. everybody's

book On Just basis, to almost performed CAGR this up up XX%. over company years. EPS year value the is has and we XX.X% tangible suggested a everybody, five remind is well really

great are we So CAGR provider. confident the the to value with going do for organization past organization -- high a we're basis organization, Webster opportunity five and very in to to going be a great combined a on think merger really and performing years, and merge, readiness a it's the equals the a of

a Have Thanks. care. it. day. great appreciate So, Take

Ladies Thank you and concludes conference participation. gentlemen, for your this today's call.

You now disconnect. may