Sterling Bancorp

Q3 2021 Earnings Conference Call


spk_0: the day and welcome to the starting to bancorp second quarter twenty one earnings call today's conferences be recorded at this time over like to turn a conference order jack to penske please go ahead
spk_1: a good morning everyone
spk_2: thanks for joining us for our third quarter twenty twenty one earnings call georgia me to date or be done it is our chief financial officer we must the only are they president robert you trade offs are unable to harm and our director of investor relations leave a presentation on our website which along with ira press release provide detailed information on a quarterly and year to date results
spk_3: in the third quarter we reported adjusted earnings per share of fifty two cents and adjusted net income of ninety nine point six million dollars adjusted earnings per diluted share were in line with the league quarter and represented an increase of fifteen point six percent over the prior year
spk_4: score
spk_2: reported that you trust margin excluding the accretion income of i have three hundred and twenty five basis points represents a decline of five basis points compared to the league quarter and a fifteen basis point increase year over year the results for the quarter represent a return on adjusted common equity and thirteen point seven nine percent and return on average suitable assets of a hundred and forty four basis points we continue to deliver mean for growth and book value per share which was fifteen dollars and three cents of three percent over prior quarter and eleven percent of a prior year
spk_1: now i want to highlight three key points regarding our performances quarter and art as the merger with webster financial corp
spk_2: first we had a strong quarter growing coeur commercial loans and overall deposits as of september thirtieth twenty twenty one or total commercial loans were nineteen point seven billion dollars an increase of five hundred fifty nine million dollars or two point nine percent over the a quarter to run by or danny rose in public finance traditional see and i commercial real estate and lender finance we would expect a similar increase in our standings in the fourth quarter of twenty twenty one total deposits of twenty three point nine billion dollars increase three point four percent compared to the last quarter secondly i credit metrics continue to prove that charge asked for the corner where five million dollars worth and basis points and your eyes nonperforming loans increased slightly due to a single mom as collateralized while criticized classified loans decrease as of the end of the corner or allowance for credit losses was three hundred and nine point nine million dollars or one point four six percent of total loans and ah hundred and five the point eight percent of nonperforming loans
spk_1: we recorded no provision for credit losses in the quarter consistent with the low level of charges stable asset quality metrics and continued improvement in the macro economic outlook
spk_2: finally regarding our announced merger with webster financial corp we have been actively engage with our partners of webster to design a comprehensive immigration plan that prioritizes our commitment to value creation providing best in class or restore clients a dynamic work environment for colleagues and i continue and continue that here it's to the highest standards of risk governance we announced this merger on april nineteen twenty twenty one received approval from the o c c our primary regulator in record time on august second twenty twenty one and then receive shareholder approve on august seventeen twenty twenty one we are very confident in the merits to the proposed combination and are prepared to excuse the merger upon receipt of the remaining regulatory approvals i know that short bus said but idea of the high points on our so phone number of the line for questions
spk_0: thank you and disenchantment if you're like to ask a question please signal by pressing staff on a by one at a star want to secure for a question were pause for a small and plow everyone an opportunity to sing of requests take our first question from chris mccroskey of kbw please go ahead airline is open
spk_5: eg more nearby
spk_6: i chris
spk_7: i want to start with with alone growth the range the provided ana on slider kinda to get by hundred discover give a little bit more color it sounds inaugurate or it in the guidance and expect the the building momentum to continue you for peters trial of a more color on portfolios line usage in a bar conversations sex
spk_2: yeah i was doing tell you first saw the for the pipelines are very very full ah in most of the asset categories so in other very for with things like public finance were in a municipalities are spending more money they're very full when traditional see and i were an mbt with a focus on son of some of the innovation and technology by the finance i'm andrew ah very fall in terms of ah commercial real estate and things like warehouse and and die and distribution centers and and traditional see army related to companies along the way our lender finance continues as three years and breed outstanding so those put pipelines and portfolios or really for ah even abs always are starting to get more opportunities out there and that is a business of hasn't perform all that well the last couple years areas where there is not our things like equipment sunny and surprising pressure and equipment finance still is pretty strong arm so in a those those pipelines are a little more limited were about flat on the multifamily what we live in what we are we are pay offs we we yeah i have a buddy school month of would put on so you'll see the velocity of run off as you have in the past on the multifamily side arm the sucks on the on the way to see sides to see more and more votes or of are starting the on this with what we're fighting is in a again metropolitan new york is super super diverse in the type of industries characteristics businesses so you know and we have a free the diverse offering in terms of different types of lending we can do in in new york and things like public finance more national it as a as an example so we're see ah more tom activity in building building some more activity and capital spends more activity and ah ah in in ah are trying trying to hire more people along the way which has been that one of the biggest issues and across the board in all industries segments so we feel very good about the pipeline as feel very good about that the growth in a number of the businesses than i have i mentioned i'm still some businesses like the said equipment that the mag lag out that a lag of that out of staying in they've he still lot of activity multifamily been our pricing pressure multifamily to are aware yeah would pay off or so they were rich nations out there
spk_7: as as regular as if i could ask one more the i'm the single credit you talked about it in the quarter of these guidelines as well could you provide a little more cholera geography acetate you know workout tragic death
spk_2: yeah it's a it's a it's a ms thirty million dollar treaded in a sandwich false in new york and and were well flat allies bundestag we don't really to spain last week we advise you know kind of work with this this place for while and of losing still work this thing out but we're not concerned about losses
spk_8: that particular press
spk_7: that's right thank you very much
spk_2: are you chris
spk_0: we'll move onto our next question from matter brace of stevens corporate please go ahead or line is open
spk_9: a good morning
spk_10: a china last quarter you'd mentioned on know on the loan side perhaps getting more competitive on loan you generate volume could just talk a little bit about where new loan yields are coming on and what the alternate an adjustment was setting you to produce a little bit more
spk_2: yeah it's a great integrate great question you always remember what what we said last quarter his successor which is awesome so if we did a little more competitive and you can see that as as adjustment in the margins on on lung yield so we you know that most of that competition is in the real estate size our where we got more a bit more competitive
spk_3: not as much and public finance ah not as much in lender funny and sad and frankly not as much as in in seen as a thing through it's it's more in the commercial real estate side advantage he probably looked at about twenty five basis points decline in be more comfy
spk_2: the and that real estate side of the state so low yields are coming in and that you have can a high to so to can amid three sitting in those areas
spk_10: okay greg up getting i wanted to the touch and way it over the last i would say couple years we've seen several banking as a service and technology partnerships
spk_2: could you just touch on how much balance sheet impact those partnerships have had your was they produce in the way of deposits and loans has been a fee income and maybe gives a sense for the opportunity on on those businesses as you know you and you and webster merge yeah we think it's a really great business frankly these are the day you know so so so far we have about a as they saw in the bag news service and actually online there's probably a half a billion dollars worth of deposits ah
spk_3: and today to two days we really are insists the paid on an annual basis to be able to resume anywhere from us as a billion two billion dollars for the deposits in that and was what what what we're trying to do is for trying to create optionality in different states have been the ah
spk_2: vertical or channels so begging as a service is one really good viable channel we feel really good about that potential channel to originate that can a half a billion two billion dollars worth of of bar of the pause it's a relatively very low cost the pauses on an annual basis as you know in all that all the prices all compress today but over time we think it's a low cost long term sticky ah funding mechanism and you eaten a match southwest in a traditional brings deposits deposits you originally from the commercial teams deposits the come from the many size can a wholesale deposits ah you know we messed up with a vaccine as a as a service out there as deposits in the technology partnerships were doing so
spk_11: i mean we feel very confident and the amount of opportunities the we have to drive partnerships ah is continue to increase our pipeline of opportunities that we scream ah are is very high
spk_2: we are been very select of also so we we love been careful about making sure that the technology companies and their partners on this has the mix new mechanism and structure to be able to conform to the risk management the places we require them to go through so we've been a little more
spk_12: the specific about those types of things to make sure that these are long term relationships not one shot and you know we have to fix something they did so we now have the platform and and own place ah were you know where we're now bringing in real deposits and that
spk_10: freshly would expect the to end the year somewhere around seven hundred and fifty the billion dollars in total deposits he will be online deposits granted appreciate that the other one i had was in the release you know that you sold a twenty three point seven million dollar commercial real estate
spk_13: ah loan reddit substandard creatures give us a sense for what types of commercial real estate these were really multifamily mix use office and what the clear price was vs when your when it was under it i think everybody's trying to get a sense for impose coverage i wish impacts and your city real estate and it's just not that many examples
spk_14: sean answer the question yes us about twenty seven man and clean lines my see raided substandard as we noted and a mixed bag of credits in the multifamily space in the next he stays we took one point two million in charge us on that and again that it's in line with what we did in price orders we we view this is a strategic move a certain types of lines and the poor says yes levy potentially to see a long process to either returning surpassed putting or and more like princess to work out subsidized and assets will be see better veteran of the assets the just proactively managing down that risk i'm an ex citizens
spk_2: credits and that met the only thing i would end of that there were some reserves beyond the charges that the mentioned to the by the way to think about that sale is that really with somebody else will do that and they'll just one more icing on the deal i wasn't necessarily of these were bad deals or that they read get ourselves that really good had terrible yeah see ours okay so a big just think that it was an alternative investors are you know with the word deal on your that's why we didn't get far off
spk_15: yeah i have a to lose in so you overall i think we would say that that is general the prices are better than what we would have expected guides recycle like that they're trying and ninety five
spk_16: yeah no one oh fine grained that range out there there are there's so there are many years is itself who are higher than are you can mix and match some of these days but bless the dead the prices have been better than we would have expected through a cycle like this
spk_10: great okay that's what for me
spk_2: given all the recent news there is some anxiety around timing of the closures just just curious if you feel comfortable
spk_10: i'm with the for que timeframe for causing the deal at there's been any updates from ah from the remaining regulators on on timing
spk_17: as the second tell young on them as is what you know we're very confident that you know we're going to close the oh and were one hundred percent ready for this the timing is in i'm trying to figure out the timing like everybody else on this
spk_0: understood great that's all i had a pretty to my questions
spk_2: yeah thank you at paris or a no further questions already audio at this time i like to turn a conference back for an additional remarks a we really appreciate everybody is that time i know especially the have a ton of calls today yeah you're just remind everybody in a week with this company's performed really well over over the years as a bona fide your to your bases suggested dps is up twelve when a half percent and onstage both values up of almost fifty percent so on and on a clear basis for a past five years and in a we're very confident in in the readiness and the opportunity to merge
spk_0: do merger vehicles with that webster with the gas you know the combine organization organs is gonna be a really great koreanization i performing or is a similar

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