New York Community Bancorp, Inc. (NYSE:NYCB) Q4 2022 Earnings Call Transcript

Thomas Cangemi: We haven’t had had this conversation yet, but we’re very focused on conservative underwriting, and that’s how we look at our book. These are — we don’t have a huge portfolio relevant to the total balance sheet. But what loans we do have, they’re relationship sponsorship type transactions that we’re very comfortable that historically in the past, we have seen customers by checks. We’ve had a couple of handful over the past six to nine months, and these are very large families that are comfortable on keeping their coveted asset classes in their families business.

Peter Winter: Got it. Thanks, Tom. Congratulations on closing this deal.

Thomas Cangemi: Thank you, Peter. It’s been a journey, but we’re looking to the future, we’re super excited.

Operator: Thank you. Our next questions come from the line of Matthew Breese with Stephens. Please proceed with your questions.

Thomas Cangemi: Good morning Matt.

Matthew Breese: Good morning. Just to clarify, the $10 million a month of accretable yields — is that just for the first quarter of — I’m assuming the fourth quarter of this year, the first quarter of 2023. And if it’s not, could you give us some sense for the cadence of accretable yield in 2023? Usually, it’s pretty front-end loaded. I just want to get a sense for the cadence there?

John Pinto: Yes, I mean it can be front-end loaded, no doubt, but that’s the average. That’s what I would assume for 2023. You will have, like I said, when you have some deep discounts and you do have some payoffs, you can’t have some spikes here and there. But no, I don’t expect it to be dramatically different than that in 2023. CD runoff will start in really in 2024, which will benefit.

Matthew Breese: Okay. And then just on the core NIM components, can you give us the year-end spot rate on interest-bearing deposits? And then what are incremental multifamily and commercial real estate yields coming on at today?

Thomas Cangemi: I’ll go to the yield. So, Matt, we’re looking at, like I indicated, we’re pushing towards 225-ish at the five-year, we’re trying to have around 6% on a traditional five-year deal. Commercial is probably another 50 bps above that. We’re not really doing a long-term financing. And if we do long-term financing, we’re really pushing our capital markets group to sit down with the customer and structure something synthetically, which does change the economics for the bank as well as for the customer. So, we’re giving them more choices I indicated a lot of our customers that aren’t doing a whole lot. They have an option and the option was a very expensive option. We gave them a third option, which is a SOFR option, which is 250 off of SOFR and SOFR has been rising.

So, it’s not as attractive as it was six months ago, but it’s an alternative, and we’re seeing probably half of our customers on the multifamily side opt into that choice, which we like that prefer for interest rate risk balance sheet management perspective, but a much higher coupon. I think I indicated that the commercial side, what’s repricing. But in 2023, we have about another $2.5 billion, around $388 million on the multi-side, and if you take in over the next two years, it’s about — but just about $6 billion on multibit $375 coupon and market yields are around 6%, assuming they all go into a five-year structure, not doing a whole lot of seven-year tenure, reluctant to do that as we look at the marketplace and in general, I think people are sitting on the sidelines right now.