Investors Bancorp (ISBC) 2 Aug 202020 Q2 Earnings call transcript

Good day and welcome to the Investors Bancorp Second Quarter Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded.

We will begin this morning’s call with the company’s standard forward-looking statement disclosure. On this call, representatives of Investors Bancorp, Inc. statements and to business. forward-looking results financial some operation of make with its respect position, may other which These or those future are actual subject statements. and results performance forward-looking statements difficult forecast and some forward-looking are which materially are in to not to predict to risks, these can Bancorp’s result beyond expressed Investors are guarantees and of factors, control, of cause uncertainties from different refers you last safe and In press harbor company release, that its included to night’s the statement. disclosure That this document presentation. incorporated is into

a certain SEC. set For Operations the risks uncertainties affecting Financial Management more Risk Discussions of the of entitled Results forth see please in and Condition complete discussion and Analyst and Investors of Investors Bancorp’s section Factors, with Bancorp, filings

call like Mr. of turn to CEO and I’d Kevin Bancorp. Chairman to Please ahead. Investors the over go Cummings, Now

good of to months earnings in you, the XX, as or and $XX.X income net call. Thank or per per for the share or $X.XX night, for Investors quarter its the Last $XX ended morning, period quarter compared and company for reported $X.XX XX, per $X.XX $XX.X Bancorp’s XXXX ended the release June second million share diluted million Nick, welcome million press ended share to XXXX. March X June X-month XX, the and

months for six diluted $X.XX For to the the X months June $XX.X per ended income totaled share compared per share or June million or XX, XX, $XX.X net million XXXX. $X.XX ended

transaction, York Counties. It in $XXX nearly acquisition assets, rebranded as deposits. have our this of completed deposits added goodwill acquisition X. the conversion the to The give attributed the the Nassau million processing had April and $XXX total intangibles. grit completed the and us approximately resulted demographics that the completed and customers in of bank, transaction customers the $XXX $XX in this in $X.X the and opportunity core branches our Getting leverage and we in pandemic During data in doubled which tenacity quarter, and in to loans million approximately during company is million of Suffolk attractive New during X market. models business of million Gold closed Bank, These its market, the Coast to the in weekend in million branches deposit recognition

During compared or the result million compares on in to focused the the versus The portfolio. economic XXXX. ended XX% losses the pandemic. this of June its effort has of recorded ended $XX.X or spent loan second commercial quarter provision in first evaluating quarter of provision million has $XX.X quarter, increase of XX, forecasted economic second million of of impact credit current credit conditions X% for $X.X the revenue the an the company June to increase in that of and March XX, X This million And $XX.X XXXX, $XX.X its include Pre-provision XXXX. a direct is the and compared the bank a this for the million million of almost COVID-XX months X position is $X XXXX, a XX, and months elevated effort to ended considerable was net three XXXX. months also an the

and deferrals, were assist were this loans, governments. by The to like teams loan stress lending CRE. uncertainty. multifamily our and them the our great local them initiated out actively and economic commercial in $X.X customers million program, comprised loans, billion approximately of borrowers disclosed during at in $X.X a aggressive help we And time to of the process deferral looked We $X.X this during reaching in PPP C&I reported to customers. lockdown loan reaching out in As billion March billion XX $XXX Q, to company very in bank’s

follow-up total We request of significantly. the communications July to $XXX for with – XX lending loans, requests than we this during borrowers communicating totaled multifamily $XXX was loans customers assess pandemic. and needs with At which million in million, that’s million and our our deferrals total $XXX have and real commercial our exposures After $XX reduced their in extensive second deferrals different the weeks comprised spent in million on C&I and last XX, actively estate. to teams, have

to on performed of deferred on of detailed of or XX% commercial this million completion billion entire commercial a date. $X.X loans reviews deferrals the of loans, second anticipate We of have $XXX original approximately exposure X% loans. for in review We deferral

office entire discussions exposure which the of $XXX million. $XXX total $XXX deferred In completion $X.X $XXX XXXX, deferral requested relationship have earlier, have on would the $XXX initial further mentioned initial XX, services other good deferrals of we relationship is loans $XXX in sector, ratio amount, of of a to approximately accommodations an of deferrals, XX% $XXX for with strong average these at X desirable hotel in a of billion, portfolio second expect that portfolio service who initial loans, $X.X with to retail is in that’s exposure Based by an Of debt million, locations making food are average X $XXX in which an that period One with Manhattan. the had And with the As billion and are of result coverage second reduced of we In X.XX. million the million X-month borrowers, LTV also approximate relationships deferral operators. been sector. upon the commercial coverage in and is payment. X.XX. Both deferrals their sector, July million loans million of proven loan million. have XX% retail concentrated generational and and borrowers liquidity pre-COVID debt borrowers reduction areas our ratio approximately has amount of the million, have deferred and of June the of LTV service loans

which the a multifamily anticipate further we June in reduction July $XX In As result second deferral results totaling balance with $XX $XXX of million of we million due July. as July for we borrowers, for million. in with loans initial have follow-up for total which of XX, sector, office payments at billion, approximately this million, in scheduled upon to current a payment X, of received sector. of August billion X balances to $XXX reduced would Based our in received million deferral principally $X.X a been the the payments result of exposure $XXX of deferrals which balance deferral XX, have have $X.X

the by August and deferral upon million. $XXX to deferrals period of September initial X-month the those payments expect We to further be reduced completion approximately

today, the So in of we multifamily summary, and billion loan have deferrals retail sectors. approximately in $X.X office,

conditions is September borrowers, that be are with to we to limited assisting very to pleased to and to pandemic ending will of balances much $XXX current X, expect, with We we’re X-month crisis. reduced to a based deferral those we this date. at difficult, August uncertainty sometimes October and through is customers work this the through million period, continue where help our first will them forecasting very customers but initial our There our deferral results X, events their which respect are end on extent, of Overall, and X. future

CRE XX-day today. delinquent And million bucket, And to $X.X our of compared is $X.X deferral have be of quarter. is is sale. the the XX-day for in banks in as York, it bucket has is XX-day the this the the have as quarter, In multifamily current portfolio, approved today. to only for taken was $X.X We in received we are multifamily weather $XX.X a down approach has where million the a $X.X is in in a multifamily, the current $X.X the had loan addressing $XX of into storm. current the million contract With with of the one $XX.X million today. are now we quarter’s to the this significant delinquent respect XX-day not had maturity $X.X as first In written approach With portfolios we million is been loan delinquencies, the of for with there $X.X for charge-offs a recently in of in where to positioned the $XX totals million conservative increase May. exposure million, million markets, be the loan of future current well XX% value, of Our New these believe difficult was today. carrying portfolio a was during of provisions charge-off C&I which on million similar its million current delinquencies pandemic-related. reference proactive significant loans the in as the to moved appraised XX-day which and Jersey significant million issues will New to conversations. to are in million $XX.X XX-day bucket, was that value multifamily that charge-off as only and respect which

in addition, balance the to non-accrual respect small our progress our during well increase the acquisition average $XX PPP Without significant loans. the to sheet, quarter. approximately would the Based the quarter, those get addition the delinquencies X with were million loans an million, are through and into past $XXX our loans balance we positioned moved during of in loan reserves the X on origination by In Coast increased which have of million. million deferred the to in attributable With $XXX was approximately believe in $X.X and status additional credits in pandemic. this we to there transactions, which reducing loan quarters, current declined balances, Gold

liquidity accelerator are the the off April, that prudent environment. and at were with this March we at With build the that take uncertainty economic looking of manage foot was and to our the in we looking challenge – it to uncertainty

our opportunities. we a growth As our the exposures pandemic we on will economic better get handle assess to impact,

Gold XXXX stabilize, look opportunistic This all a Gold as $XXX on the grow was be the acquisition. to our to which and $X.X our loans is where the for quarter based but we to not from It billion noninterest-bearing we XX% more attributable side. Coast that on or will increased which major for rates. continues As deposits quarter, XXXX, portfolios in X%, to for beginning business deposits across deposits economy was which strong as one million Total were Coast. a lending of $XXX opposed or interest strategy of opportunities shift, million focused the million – strategy will $XX increased was of current

that with the been opportunities we opportunistic. its our billion horizon. quarter. to uncertainty stronger this storm with development, maintained as of average robust maintain hopefully, With we has culture ratio cost to to in I basis result, are and of decrease and to managed and of XXX% a team board time cash dividend dividend respect capital from in year, impact serve teams, Sandy $X.XX this the If capital, today, across still capital, the for loans. investments of a will have we loan-to-deposit risk like the XXXX to our investments we returns past XX declined declined credit handle to have an the announced ratios on the are the the PPP quarter, share made deposits that calamities shareholders. half funding with believe and to scheduled credit and second which $X.X sufficient liquidity turmoil prepared are that Great Our in Hurricane to economic be in the per XXX% at there and Recession, Cost the have in in the company may and We our look deposits costs we strong mature X.XX%. technology management and given enterprise believe the better have of customers, and and points management product

quarter. to Now operations the commentary CFO, of turn on more to over Burke, the our Sean I’d like for results our discussion for

quarter. Thank Net an to margin basis X.XX% interest increased quarter-over-quarter X position elevated in points you, the average cash despite Kevin. second

of $XXX Coast deposit $XXX We continued during XX% fee balances interest-bearing Total Gold quarter-over-quarter. the with totaled million previous COVID and the benefit from $XX noninterest-bearing driven points million saw declined $X.X loan The write-down, million to Deposits X% fees million decrease quarter-over-quarter, from deposits in increased of million of reduction a $XX.X $X.X quarter. of acquisition a billion quarter-over-quarter, of policies. result quarter-over-quarter. and XX was a loans. of decline lower for by $X.X $XXX million and the a swap loans or basis or and our increased income cost million MSR deposits Fed income million cuts PPP inclusive noninterest Total relief $X as quarter, loan rate up of

million X% $XX.X months totaled a to expenses decrease the costs, Coast-related or ended March June XX, the Gold for compared of X million $X.X Excluding XX. X $X.X ended XXXX, of months million

XX% reflecting X ratio months revenue COVID-XX for X and to Provision a XX% reported Both ended modest in the compared by credit significantly expense. was periods in noninterest from to for improved the a $XX.X June in efficiency ended XX Our pandemic. million $XX XX. for increase impacted March months were QX, the decrease million losses

the where in and scenarios QX, dip GDP XXXX. second remains CECL for quarter double-digit territory further a recession Our of forecast double deteriorate scenario for and economic unemployment unemployment in most included

stood at loans XX, at Asset of were Non-accrual at XX June X.XX% losses while our through quarter capital quality, position loans and end continue as XX. total a this X.XX% liquidity for allowance to June compared we loans March at environment. credit X.XX% at in strong represented to

XX% by stood XX, was Liquidity our quarter-over-quarter loan-to-deposit quarter at billion. XXX% at June ratio $X.X XXX% improved X in from QX. at well-capitalized Tier Equity approximately the Common end, down ratio level exceeding as Our

Finally, to be I deferrals information found additional would on that like loan an note last filed night. that can we X-K in

to turn over back like concluding for I’d remarks. to it Kevin Now

Thanks, Sean. Okay.

is the goodness, god, and the the have are employee hope be and at regular be We do we in optimism our source of bank we not Our thank communities. All At need hours. faithful to of branches full-service XX pandemic, thank message today, to fearful. our a at had cases. And not any. height open at

employees. protect our taking and are all We precautions to customers

and employees listened in some New it’s and challenges have return the normalcy. visited to here a XX% communities strong, for good Jersey. lead back office, the of to We to back our and to of of healthy corporate and very me close this to them see their willing to our during branch pandemic height I yesterday form

stronger as we which the we aggressive macroeconomic be helping this get the and stronger Our great XXXX’s faced to and past team. to through monitoring and adaptable industry customers our I models, optimistic stabilization our downturn. And unprecedented loan Great much If will the on stronger have customers, is credit and working our exposures uncertainty. of excited and we months navigate been our been so we but pandemic. there have in importantly, teamwork have the stronger with a their prepared when loan from calling and different retail The have in the was teams better type from to in and our more events. a was capital not We’ve Recession challenge X to is front-line than room second sustain crisis better more engaged and from can these communities economic are easy, war officers banking XXXX. much more with much changes events. half these some Investors get Bank as risk then This am attitude impact economic I climate, is also April credit continue for

And position outstanding. the monitor of learned we And to treatment are better workers virus. terrible this treat in healthcare been a Our pandemic. this and have a medical I’ve about and professionals lot

per share is million year after taking the earnings in in quarter. $XX last additional Our to provisions flat

capital Our well balance sheet as improves. are strong, to we economy positioned and and grow the are

Now, I’d to turn to it like over questions.

now Piper session. Please from comes We’ll of ahead. First Sandler. go [Operator question-and-answer begin Mark Instructions] question the Fitzgibbon

Hey, guys, good morning.

Good morning.

hear. I really good I – your It’s to like optimism. Kevin,

saw sort again? on to curious, deferrals drop again a to of willing start making them was all bit did get you in had, I ready payments question genuinely quarter. fair start it or I’m of your payments this making a just First to behalf necessitate pretty borrowers nudging or good that

Domenick. Mark. Hey, It’s

Hey, Domenick.

put ask for asked at looked reserve willing we exchange in customers we on cases, a deferrals. the it get – yeah, We we I a getting tougher the to guarantee But service bit In cash little loans. to for put deferral, even which I a did think the statements. them deferral. We’ve in some second were I know, put would coverage. policy the their to second P&L place in come off income/expense, most think part or a for debt up a made

I to part, deferral policy were scrutinize a did time. little a request than the our as for little come to is be deferral the clearly, we more the so, bit said, willing second and off. But to most And customers first tougher

are multifamily at same on particularly then And Okay. properties that vein, going payments, rent recently? how is

multifamily the north Yes. Mark, dissimilar we’ve I the think rest market. XX%. is In this we’re would space, I been collections mean, information. I of we rents see open the are with in noticing say too what that of average what to not of

again, is commercial been real stronger number On about that real I multifamily, say would estate. commercial But XX%. estate that, on it’s than the side,

then, margin And sense curious, Because us the for the the deployment? you obviously weighing know can is I’m excess on Sean, give bit. that of a liquidity a Okay. I timing

our by that nicely quarter XX, the by come could end, you Yeah, quarter. down Mark, average you cash during June that saw see from had the balance position

So have come already. next it balance the the of And expecting of back come think average by that level we’ll off a to end normalized we’re from range And in kind of large then a position number, perspective. cash the quarter. million the has quarter, to we following to a degree, cash end be $XXX

think the come expectation? quarter, for a basis up excluding year, back core benefit maybe in the reasonable point, the as the margin will about half that points of X from the then, at And PPP is X, you margin some a that

Mark, expecting to be comment year-end. that. a if with But up to agree slightly what are margin I is, I bias through stable with I know completely our would don’t would we

Okay, you. great. Thank

ahead. Fargo. of comes question Next go from Shaw Jared Wells Please

mute? on you are Jared, Hey,

there? you you on Are are Shaw, Mr. mute?

next back. maybe go you. hear Hey, Nick, to caller can’t come the can we and We

Laurie is Compass ahead. from Point. Please question of next go Hunsicker The

morning. good Thanks, hi. Yeah,

morning. Good

morning. Good

the the including the the expected of around half are margin you in that? forgiveness on core comments us back then remind year, regarding Just to any be? the for million $XXX And are what fees your PPP you can

So $XXX answer only million the Laurie, is we have yes. of PPP But, loans.

I XX% XX% that as So And within over to to then X-year cure we the going a really remainder and expectation year’s of our period, that expecting margin a come our is, a around in on PPP is whole. it not impactful think balance, period. that is are

again, for So without, couple X impact or probably with using kind of do years, X modeling that we’re assumption out when stripped least at But it a of averages about very points that’s margin. even we our it purposes. is if to margin that you basis or Laurie, on the negligible,

Okay.

And PPP book, fees around a the do so, they’re million that better you for $XX number? have or

fees That $X were million. approximately

potential. the off they’re $X revenue. next of I’ll is paid say their that So all interest it’d be if week, million

helpful. That’s Okay.

color for of there? should then, the I you branch mean, And any can you give Okay. the closed. about expenses? be back or we how is any about Gold rationalization thinking year, Are thinking half Thanks. us

Laurie, banking branch consumers customers it’s looking at better services. business rationalization. mobile taken Domenick. of Yeah, we online hold Obviously, and and are have

to see giving us our some we opportunity at look to overlap. an have that’s where may So branches

some for there’s rationalization XXXX. examining that we’re branch yeah, So,

wasted time, if we way Laurie, – we don’t we’ve change as over a of discussion tears business comment, we this a sweat, last pandemic, we and months. the a this made lot had result last X of if effort a we do week,

behaviors where we as spades we of I paying move us in our this a forward horizon and pandemic. a this there’s we as situation. customer in products. that’s Chief a think made with Marketing changes position Officer, significant our XXXX to the and XXXX and technology And result change in Luckily, last significant through in new over and for as work on So off we’re investments going the be

Okay.

August appreciate just active deferrals the number your loan X? Okay. And you really as $X.X like of I XX, that September and were about far we thinking on all to more as detail. X high-level billion or that have get we then June If modifications, as closer what to is looking as

very level. way high Laurie, about the is think, at Kevin number million. it at I think the gave a to And $XXX about just

million all said working in expecting we’re this with. have deferrals we’ll that when and is, we’ll what that is done, about So be $XXX

that million hotels? the Okay. of And so chunk the obviously of included big $XXX or

Absolutely.

Yes.

Absolutely.

Yes.

a combined, netting I just balance dollar if So that then, And on balance it’s think you can food do you’ve and us not, because number. help out, dollar a about, on service follow-up… your Or hotels got can small hotels your restaurants? a you if have really and

Laurie, It’s hotels. mean, predominantly an overwhelmingly I – but don’t amount, in the of I we is favor it’s have think exact it dollar hotel.

Okay.

Okay.

you back get can to that number. We on

think I that. million in mind, less it’s like than $XX much than my exposure, it’s – less restaurant like it’s

will get that. to offline back we So on you

just then And quick one Okay. last question.

can on $X.X do LTV as follow office, Your billion of that? Or with on you up that have an I you well.

have with We can information. that here, we right don’t you back it but Laurie, get to

Okay, leave there. I’ll thanks. it

Thank you.

from Our Gilbert, Please next ahead. go question comes Collyn KBW.

second mean, If I and this start $XXX what in your or were we so Sean, with even and expenses, you like expecting think I relative run drop kind to saw guys quarter’s appreciate, quarter. it expenses, kind could too, you But quarter, the expenses below. just something we I this in a million to And of comments rates Dom. if of material about

had the the the to XXXX. expense back movement side? the talk half compares guide I about given of how kind original back your that just OpEx year there will full in of think, the come year you what of on and maybe And Can is a you for $XXX guidance? Sean, what million

out. guide, largest were look, And turns that this high Yeah, would when is think just I expenses have the people are normally OpEx type of that on We experience the of as pandemic. we are it out and generating loans. just driver don’t officers loan traveling we the

of the from benefiting side. expenses that And lack so, I on think we’re

increase look the Collyn, of anything, to base at going that from don’t half now. back necessarily year, the As expenses have we It’s we we’re the through meaningfully planned.

not the that it’s say that be that we’re going number. guide to So million, providing to think I that safe we’re at $XXX at

go buffer back in the half probably $XXX I’d is the of that, docket the now. for nothing just we the the south year have off the going something reasonable throw meaningfully. of about some planned too, We’re expenses in level I more to that’s back-half in on bit little of million was as thinking the but Collyn, a that. unknown through going of probably of range right to year, be

Okay.

then, And mentioned your helpful. the loan then terms of the liquidity – terms just And as growth in will of you you cash like you’re kind follow-up loan of then, the that what That’s you Okay. new of then within what have end that in the think origination yields? just Sean. or be? guys through that your year, to seeing And current and Can tie to I loan pipeline of terms a well. usage in

some loans and with Collyn, recently were coming into multifamily. certainly, XXXX so on the and that’s not during see I to a greater up that degree. March, more it’s say came we’ve and a intended timeframe. cautious pipelines strategic happened lending lot we opened – to and were into May And our of quarter. lending And We Then the residential first would reduce hit. reduced did pandemic closed plan a just the our April

As a decent spread which to and we that multifamily could to – we recognized on interest residential which started put credit margin. would spreads would at net be contribute and widen,

loans. and build about $X.X have if a pipeline for now pipelines residential right you of at looking billion, we’re to those include $XXX now, started so million And

where I $XXX answer that be. the that’s the $X.X loan I for Coast about you declined long-winded a CRE is about loan an pipeline. million took off mean, billion table tell to about million. a growth is PPP know I’m in not $XXX if I I is to going actually and Gold And took moment, pipeline. really C&I So sure

could we that neutral for and and hoping get that back the rest stable of sheet this balance I’m So keep year. the

the said would as that, year. I having we at the into end mean mark, that around stay head of the that billion $XX would So

Okay.

of maybe NIM are funding that down? the CD Can helpful. one, of then sort I fits had And rates so you thinking terms of kind guess, – would more of outlook that deposits bit for that the too, CDs Sean, maturing on right, you’re That’s I be on in would And just your and the expand are as talk to just that tranche you indicating. a your starts mentioned your where so than new assuming – NIM. comment about and what is noninterest Okay. – on guys the you are composition of a But bearing? the and or side? what coming big little

that we’re account tied The it’s things Domenick. deposits a The And I Hey, our in – like requires money out what That’s Yeah. product the cost on a there, advertising. XX and number checking that points have certain mean, coming of of Collyn, deposits now, we – market activities that. is that’s to cost core online at account and basis right now.

and product the honestly, just points XX as product being see out And at XX-month days, higher a of few out X-month market. there towards about it talking the XX the there been we at a basis have basis points. quite those numbers We last end

$X the to to it’s comment CDs. coming somewhat. about we So wanted back maturing But $XXX It’s close to I mean, see significant. billion, down I that Kevin’s go million.

end of, the year at through of weighted If you with let’s look it the average the call X.XX-ish. cost it,

so And the fourth should that coming help third into quarter. and NIM

the mean, X/X%. rates But to continue potential and that benefit. to mitigate clearly, a on have As could is a loan there’s that shrink, burden our light being X us. To been as any between it where mean, we I side, the we’re cash balances resi X/X% X to C&I go. seeing extent is, in lot on going far going These dependent on I on projections from anywhere NIM where

so incremental as NIM continue maintain. which somewhere points, – to balances obviously, we that’s to XXX around, spreads being offset go any basis into it, we’re head that to So XX if be of will here north we and additive the at by let’s cost the of quarter, cash think basis points, you and call about looking third XX funds fourth

sense on and mortgage question Do Dom. Thanks just as nicely business near-term a banking. this longer you that lot I out have activity Okay. a just the then market seeing That’s in line think then either quarter. take the guess, term? And here. through of structural you last you building can that, one to It of where activity color. great was how up that you see for just just sort

Collyn, pricing the had this at is at let’s mortgage pipeline I banking north X/X% mean, XX XX-year where compare business, on it of to a – about just meeting to has looked agencies. $XXX this to slated me. about months, about X the It’s was the X.X. We and say, mean, amazing and last morning sold morning. right be our that we you The spread XX% to we’ve is this, points, can million, now, of I I mean, sold our – be to over been mortgages that X when historically, of which price a Fannie

of in just business. there could it’s trying over So X an actively terms go to question XX-month I to – to from where north To the mean, out a answer gone of X mortgage we’re banking and not X/X%. us, have say. X.X down hard for period, this having come to coupons it’s we’re your

own base and just our commissions We’re customer some trying our generate loan for officers. manage to

any thing of So going build that type in. the it’s make or to investment not we’re up significant

impact environment mortgage of and rewards the the We’re reaping of current on the having interest just it’s kind banking. rate

leave there. it super Thanks That’s everyone. I great. helpful. That’s will Okay.

you. Thank

Matthew question Next Inc. comes Please ahead. Stephens go Breese, from

the talk very terms strong all commercial deferral portfolio? deferrals, as there? the appreciate cure for residential of And in on encouraging. trends Could book detail expectations just the you or about the rates are I

as So it’s something the as side. has that it we’ve point. the Matt, been very on on Actually, at. commercial strong residential not side good looked that’s a It’s

had loans So And at $XXX approximately we $XXX side, look the $XXX on were in right. have that totaled when that approximately million. the due residential deferred. Of million, coming cured, July, of million we XX% that were those

deferral. $XXX second for So that’s have And about asked million. a XX%

not strong you the can been on see So as it’s side, the side. on commercial has resi as it

consumer residential strenuous deferrals issuing Is it for commercial customers? additional the is process as for or as

to that trying Matt, happening commercial that. follow to level provide guidelines the the strenuous. And can Fannie’s Fannie there, detail the as not customers are type the is guidelines push don’t It of or on we we side. What’s on is

our little think these Even a abiding Fannie abide the guidelines. in guess, I a portfolio, loans Fannie hamstrung. by reputation and don’t would I have guidelines probably hurt But to us perspective. technically, by we’re are though we from not So just

Understood.

expect you and And there’s the and last Okay. and the trends, reserve you quarter. more what talk of just of tone back year? Can for And body you about expect the language we think for adequacy the reduction seen deferral and what is certainly, provision? this quarters in whether a the the then comments we’ve Should level half these overall X outlook considering provision? positive

commentary some of Matt, my macroeconomics. Well, on the

truck to down that, and that the comfortable on very and You on could the it deal got inputs truck based the forecast. the months. million range. future I to guidance in other up it’s with be to the We a meeting be things with little forecast that I very, $XX range, give life new CECL couple difficult asked to can the on course in model based think our the over think difficult It’s changing feel of day, our – not regulators are million to now. and by a the we you to in we today. of And reserve our loan $XX that may mandates, and the where it’s very of that are, next in drive a really But control

years, everything happened multifamily then and adding of the that maybe push and towards one And more a we’ve stress, about to on a that really and heard portfolio. resi last Has – C&I. just we’ve is balanced given The Okay. the you have But sort you talk of multifamily bank any – that’s approach less to the you and little going relationship-driven any banking. few back changed? Has of C&I contemplated in more business seen residential times last picture. my bigger

I Matt. so, don’t think

at think $X have on I about come the well-diversified mean run you multifamily, at we on on billion think $X look on C&I CRE. a to loans, and when they’ve I multifamily continue resi, ratios portfolio. down. mean, billion $X.X billion of I $X.X – – we I billion we

the see not perspective, because our So also in their compare it. a that’s come better quite our business. are percentage And banks the mean, our that to I we that have pieces – your the banks it’s deposit pretty it’s a It’s group, in bank is to C&I percentage that they we’re data and different the you from deposits. to think. put noninterest-bearing one returns again, on of I frankly, C&I, grow the we only I sheet. have than when pre-COVID, those it, continue banks portfolio who X greater their management the that nationwide loan mean that balanced loan a versus book, we with deposits of they of going are, C&I try that fees peer balance comes performing with in cash and are to greater in

pretty those better better X a tell can on bit have the the that shift despite little Northeast. equity And here, in and fact a we return clearly on we so we’re factors, when I they at look strategy a the me assets return here that if

That’s Thanks had. Understood. taking for I all questions. my Yeah.

from Next ahead. Shaw, go comes Fargo. Jared Wells Please question

you Can try I’ll Yes. hear again. me? this

There Jared. are. Hey, you

are. There you

Thanks.

talked So on the Are PPP the I the of headwind I to the headwind that just few think thinking guess looking from be magnitude guess, of should guys recover it trying mean, about. $XXX that discussion million sort much, on we the I quarter too I the of by quarters to that is year? thinking back growth million in you about pipeline how this over Or loan core wanted – end down number with here? smaller at we the is of growth balances? $XXX with the of next the loan to circle

Yeah.

where pretty it. that’s be. assessment we that can want all million, think If I would I recover think we to about good a feel $XXX fair we of

lower circling, deterioration, for is backdrop with – the outsized without that any would mathematically growth in see guess, Okay. then that economic back – to loan with provision mean, lead significantly the and in provision without that models, that economic I I quarter growth? And fourth change would third then – don’t a guess the provision. I we If

so to Jared, go response to there’s sit use Kevin’s determine back I it’s to that here driven just presume just difficult completely of but the again, say. to economy. so I here, a process up to provision is and determine mean, to our just your It’s that I’d even with CECL because us for hard run is by hard growth. try just models better loan to earlier. to some for forecast, the say. mean, economy and And it’s what you, And difficult. I you models us to to the sit and forecasting difficult is, try it’s are know for need come try

guess using more It Moody’s were it baseline seems Got it. economic like way you’re the seemed a little maybe discussing than I the there’s the like adverse an assuming? with of model, baseline? the you you are it, that straight-line scenario

Yeah.

specific weights and using scenario. we’re a of the assigning X combination are the models, So them, to X we the of

version we So what... of have the and assigned Moody’s, to SX weights SX

And baseline.

baseline. And

Okay.

non-paying Act difficult going like and would the market, going earlier, in we in to up, that general not dealing non-accruals. conditions really anywhere And million deferral period $XXX don’t loans with, significant because $XXX debt say, from a come and unique group. CARES might it’s hotel the change restructurings, stock amazing troubled to said off something customers. without situation Jared, market I once that we’re in It’s of with things account. a some discussions might the this it’s second to be real ends into We TDRs, treating that we’re in the and have here, that million be be world take

and hopefully with them, while a a going before we’re City into traveling to better it’d second customers in be be to working position, to flight, to out going we deferral. because before pre-pandemic. people talking already were it’s and And people tell New post York way while plans reaching the on are we’re go them So a proactively we’re be go to a the

there’s So you making some we’re uncertainty, of those the I things together, best but when all still put a tough situation. think

quick million actually, properties – color. just balance? guess, of are great those one on in those $XXX mentioned, the incorporated That’s how I that many – relationships X Yeah. you in

each Each York Yeah, have New in locations X. City. X have X.

appreciate Thanks. Great. I the color.

Steven from Please Duong, comes question RBC go ahead. Markets. Capital Next

guys. morning, good Hi,

Good morning.

Steve. Hi,

Hey.

areas? are any Just other that’s your pockets there on your showing footprint, than more stress

perspective? what from Stress

to seeing what I credit guess like you’re guess, from – more just – a I from generally? opposed perspective, as unusual

perspective? from And a geographic

Yeah. Yeah.

asset more that, on has shopping see area impacted I motels. class. I see accommodation deferrals that you can’t really could in say one Steve, other. that think centers, hotels, in than the particular It X-K, less geographic the our and feels then also CRE more office and And and where been there’s retail the focused you right,

I geography. by it’s more So than by think industry is it

Got it. me. just one last for And then a

business? just team, doing? been? you they treasury out has are they win How are Your management successful guys how trying to – are it looking And still still

The team? treasury management

Your products, you know...

we Obviously, mean, win have we’re trying there significant right business. aggressively out to I now. Yeah. not a position cash

side, and is market and care trying in current own with cost taken do the that our of, what at customer they think is wholesale bring to make trying in sure base it’s are funds the I I out we’re wouldn’t which that is. line be team the management of most there say least treasury where But would involved. deposits on to aggressively is

a anecdotally, that one that we sizable of business, I’ve management can a not-for-profits, to are like and Well, the offering procedures cash up it’s business. on the one And one’s out out X and we million. other not-for-profits the dealing for calls, some been loan And swaps the we college a England, to part product a pricing $XX in and particular banks, we’ve large in of is whether $XX really, had but with X issue the deposits million a Massachusetts, loan. of taken credit on return Steve, and get situation, those customer, of and reasonable of New one very a things big line won national up a the other that. million won, we $X it’s the where us on loan, it’s And

there. out we’re business the think I So

to Both gotten that encouraging also get mean. in hired with that recently were X And business we’re more calls. why well-experienced on talked process, lot we bankers. – guys groups officers. a these helpful loan significant so out build that Our we’ve to And through people of that We’ve that’s I about back. we team development continued PPP previous experienced

our and And any our opportunistic yield. tools advantage lock but available rates move opportunity with of we’re average down rates. been that change And at of for And use cash Like to We the be strategy before. – to of of swaps, also going some striving that’s of what and us our we of XX% some like to we I flow looking anticipate do to the using some down offices. this at certainly less optimistic been further and have products is and normalcy and back those we’ve to as gets our out we’re the core funding credit become staff negative situations deposits. not good going multifamily Fed where liability-sensitive are don’t up position position to funding getting residential, take to to want in to corporate strategy we’re more question really back and our back said, going generate to that

it. I color. appreciate the guys. you, Thank Got

you. Thank

Next ahead. question follow-up is from Collyn KBW. Gilbert a of Please go

the on quarter the have segment? in guys, broke merger where just those do Sean, question. Hi a – housekeeping within out quick really how each charges, you

can Collyn. But it’s categories. One is breakout, processing. the X data I primarily you get

the some on banker fees, legal there’s Collyn, but that’s get then I termination, So cost to breakout. back and you, I fees. can side, think the bulk, on fee, Fiserv also actually professional the

Okay.

All you. That’s great. Okay. right, thank

question-and-answer our concludes session. This

over the back closing Now, turn remarks. any for to conference I’d management like to

Thanks, Okay. Nick.

has thank The days an is but your as been very leadership may weeks today. but strange, who working the customers at people up various have our stepped Executive not-for-profits, long, are employees adventure. participation the the me rush day it been months for for generally past This need. I’d and to and by, help all, our and adrenaline just X as great like with an of of to have fly in sound – bank Team, every First I’m team be team to our proud you the

build you not values look with the not through disagreements faithful And the and other want us and in country is time. may all this guidelines. crisis. each in Character, Cooperation We optimistic. this quote As the to it will core values fearful, carry through Community. of this and first reveal character of famous they I the And healthy all need core the to these Washington, I follow it. need crisis and adversity and world and dark character, values, be help but please hopeful know stay we XCs: Commitment, our and and states, CDC stay to healthy do

it’s mask So stay and good say, wear from to a away crowds.

hands. your wash And

your And right. wash hands,

Let’s I help remember, And to pray participation. that the for bless. much each during normalcy day the you Thanks, and safe each is let’s very cure to your and make Have always of version continue on to strong, thank be can virus. other They’re crisis God step pray together. a best each be this great for tonight started have visiting of other to It’s past the journey another to the to this the summer. starting we the we seasons. ourselves moments and hockey and this road inspire for the your journey be out magical in over and Enjoy the with baseball look week. today. season, forward a again, very and dreadful work for participation Be day and for your as some Enjoy you. back basketball look other our daily destination.

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

now disconnect. may You