Q3 2023 Dime Community Bancshares Inc Earnings Call

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Hello, everyone and welcome to <unk>.

Speaker 1: Hello everyone and welcome to the Zion Community Bank shares third quarter earnings call. Before we begin, the company would like to remind you that discussions during this call contain forward looking statements made under the same Harvard provision of the US private securities litigation reform act of 1990 lies.

T Bancshares third quarter earnings call before we begin the company would like to remind you that discussions during this call will contain forward looking statements.

Made under the Safe Harbor provision of the U S. Private Securities Litigation Reform Act of 90 95.

Speaker 1: Such statements are subject to risks, uncertainties and other factors that may cause actual results to differ materially from those contained in any such statement, including as set forth in today's press release and the company's filings with the US Securities and Exchange Commission to which we refer.

Such statements are subject to risks uncertainties.

The factors that may cause actual results to differ materially from those contained in any such statements, including upset folks in todays press release.

And the company's filings with the U S Securities and Exchange Commission to which we refer to you.

Speaker 1: During this call references will be made to non-GAAP financial measures as supplemental measures to review and assess operating performance.

During this call references will be made to non-GAAP financial measures as supplemental measures to review and assess operating performance.

Speaker 1: These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the US GAAP.

These non-GAAP financial measures amongst independent to be considered in isolation or as a substitute for the financial information.

And presented in accordance with U S GAAP.

Speaker 1: For information about these non-GAAP measures and for reconciliation to GAAP, please refer to the state earnings release.

For information about these non-GAAP measures and for reconciliation to GAAP. Please refer to todays earnings release.

Speaker 1: I will now hand over to your host, Stuart Lupo, President and CEO , to begin. Stuart, please go ahead when you're ready.

I will now hand over to your highest Chouette Libre, President and CEO to begin Sheila. Please go ahead when you're ready.

Good morning, Thank you Carla.

Speaker 2: Good morning. Thank you, Carla. And thank you all for joining us this morning. I will first provide comments on key themes underlying our business. Avi will then provide additional details on the third quarter, and then we will open it up for questions.

Thank you all for joining us this morning.

I will first provide comments on key themes underlying our business Avi will then provide additional details on the third quarter and then we will open it up for questions.

Speaker 2: DIME continues to perform well in a year marked by the failure of three regional banks.

Continues to perform well in a year marked by the failure of three regional banks.

Speaker 2: and unprecedented inverted yield curve and significant interest rate increases by the Fed. In the third quarter, we grew core deposits of approximately $200 million. We reduced wholesale funding on our balance sheet. We increased our already strong risk-based capital.

And unprecedented inverted yield curve and significant interest rate increases by the fed in the third quarter, we grew core deposits of approximately $200 million.

We reduced wholesale funding on our balance sheet, we increased our already strong risk based capital.

Speaker 2: and we reduced our non-performing assets by 16%.

And we reduced our nonperforming assets by 16%.

Speaker 2: As we have mentioned on our previous calls, we do not have any concentrations that got the failed banks and others in trouble.

As we have mentioned on our previous calls we do not have any concentrations that got the failed banks and others in trouble.

Speaker 2: These facts, coupled with our rock-solid, bulletproof, multi-family portfolio, which represents 38% of our overall loan portfolio, gives us confidence that we will outperform in any potential recessionary environment.

These facts, coupled with a rock solid bulletproof multifamily portfolio, which represents 38% of our overall loan portfolio gives us confidence that we will outperform in any potential recessionary environment for.

Speaker 2: For the record, we have no loans on our entire multifamily portfolio that are delinquent greater than 60 days and the LTV on that portfolio is 58%.

For the record we have no loans on our entire multifamily portfolio that better delinquent greater than 60 days and the LTV on that portfolio is 58%.

Speaker 2: We continue to be vigilant and diligent around monitoring all parts of our loan portfolio. Overall, asset quality remains strong with MPAs and 90 days past due declining to only 17 basis points.

We continue to be vigilant and diligent around monitoring all parts of our loan portfolio overall asset quality remains strong with NPS at 90 days past due declined to only 17 basis points.

Speaker 2: As you would expect, we continue to closely monitor our investor office portfolio. As of September 30th, we have no delinquencies greater than 60 days in the investor office portfolio. In fact, we only have one loan over 30 days at 930, which was only $1.9 million and had an LCV less than 50%.

As you would expect we continue to closely monitor our Investor office portfolio as of September 30, we have no delinquencies greater than 60 days in the Investor Office portfolio. In fact, we only have one loan over 30 days at 930, which was only $1 $9 million and had LTV less of.

50%.

Speaker 2: We provide some additional disclosures on this portfolio as it relates to properties and geography in our recent investor presentation.

We provide some additional disclosures on this portfolio as it relates to properties in geographies geography in our recent investor presentation.

Speaker 2: Our Manhattan Investor Office portfolio is only $200 million or less than 1.5% of total assets. The LTV on our Manhattan office portfolio is 50%.

Our Manhattan Investor Office portfolio is only $201 million or less than one 5% of total assets LTV on our Manhattan office portfolio of 50%.

Speaker 2: We are comfortable with the exposure and the operators of our office portfolio are very strong. Notably, we do not have significant amount of repricing and recorring office loans for the remainder of 23 or 2024. Repricing and recorring office loans for the remainder of 2023 is only $20 million. And for 24, only $39 million.

We are comfortable with the exposure and the operators of our office portfolio, a very strong, notably we do not have significant amount of repricing or maturing office loans for the remainder of 'twenty three or 2024.

Repricing of maturing office owns for remainder of 2023 is only $20 million and for 'twenty for only $39 million.

Speaker 2: We are cognizant of the challenging revenue environment and continue to manage expenses prudently. Our focus is on being as efficient as possible. Core expenses, which included a full quarter's impact of our private banking group hires, were down on a link quarter base.

We are cognizant of the challenging revenue environment and continue to manage expenses prudently. Our focus is on being as efficient as possible core expenses, which included a full quarter's impact of our private banking group hires were down on a linked quarter basis. There are a number of projects that we're working on that will result in expense.

Speaker 2: There are a number of projects that we are working on that will result in expense containment.

<unk> containment.

For future years for example, we recently outsourced our datacenter.

Speaker 2: for future years. For example, we recently outsourced our data center.

Speaker 2: Importantly, on a link quarter basis, are non-intersparing deposits increase. This marks the first increase since the current rate tightening cycle began and portends well for our future earnings potential. Ovi will provide more details on the margin in his remark.

Importantly on a linked quarter basis, our noninterest bearing deposits increase this marks the first increase since the current rate tightening cycle began and portends well for our future earnings potential.

<unk> will provide more details on the margin in his remarks.

Speaker 2: DIME has been very active on the hiring front in 2023, and the third quarter was no different. We were able to recruit a high-caliber banker to lead our healthcare vertical. We continue to spend meaningful amount of time on the recruiting front and believe we have the potential to add more talented bankers in the future. We do believe there will be some more fallout from larger local institutions, as well as an opportunity to bring over individual clients who seek a locally managed relationship base.

<unk> has been very active active and on the hiring front in 2023 and the third quarter was no different we were able to recruit a high caliber bankers to lead our health care vertical we continue to spend meaningful meaningful amount of time on the recruiting front and believe we have the potential to add more talented bankers in the future we do believe.

There will be some more fallout from larger local institutions as well as an opportunity to bring over individual clients.

Who seek a locally managed relationship base.

Speaker 2: bank with access to key decision makers at all times. That coupled with our strong technology makes us very attractive to new customers and new bankers.

With access to key decision makers at all time.

That coupled with our strong technology makes us very attractive to two new customers in new bankers.

Speaker 2: With respect to our positioning on lending, our strategy is to ensure we continue to support our key clients through any operating environment.

Operator: Hello, everyone, and welcome to the Dime Community Bancshares, third quarter earnings call. Before we begin, the company would like to remind you that discussions during this call contain forward-looking statements made under the same part of the provision of the US private securities litigation reformats of 1995. Such statements are subject to risks, uncertainties and other factors that may cause actual results to get them materially, from those contained in any such statement, including asset for in today's press release, and the company's filing with the US securities and exchange commission to which we refer you.

With respect to our positioning our lending our strategy is to ensure we continue to support our key clients through any operating environment.

Speaker 2: We will continue to prudently add franchise-enhancing full-service business relationships. The addition of the healthcare vertical is consistent with our strategy of growing business loans. Our loan pipelines, while down from a year ago, given the much higher rate environment, are intentionally heavily weighted toward business loans. Approximately 60% of our loan pipeline is in business loans with a weighted average rate on the entire loan pipeline of 7.9%.

We will continue to prudently add franchise enhancing full service business relationship. The addition of the health care vertical is consistent with our strategy of growing business loans.

Our loan pipelines, while down from a year ago, given the much higher rate environment are intentionally heavily weighted toward business loans.

Approximately 60, 60% of our loan pipeline is in business loans with a weighted average rate on the entire loan pipeline of seven 9%.

Speaker 2: We expect loans to remain relatively stable between now and the end of the year, with growth in business loans offsetting planned declines in our investor decree and multifamily portfolios.

We expect loans remained relatively stable between now and the end of the year.

Operator: During this call, references will be made to non-gap financial measures as supplemental measures to review and assess operating performance. These non-gap financial measures are not intended to be considered in isolation, or as a substitute for the financial information prepared and presented in accordance with the US gap. For information about these non-gap measures and for reconciliation to gap, please refer to today's earnings release.

This growth in business loan offsetting planned declines in our investor Cree and multifamily portfolios.

Speaker 2: Since my appointment as CEO and in my day-to-day meetings with customers, it's apparent to me that Donnie's brand and reputation in the marketplace has never been stronger. Our technology platform is better and more agile than many larger local banks, and our customer service is second to none. Anecdotally, we are winning back some clients who left for biggest banks during the March Madness as they realized service and personal culture are important.

Since my appointment as CEO and in my day to day meetings with customers is apparent to be the dice brand and reputation of marketplace has been never been stronger or.

Our technology platform is better and more agile than many of the larger local banks and our customer service is second to none.

Anecdotally, we are winning back some clients, who left where biggest banks during the March madness as they realize as they realized service and personal culture are important.

Stuart Lubow: I will now hand over to your host, Stuart Lubow, President and CEO, to begin. Stuart, please go ahead when you're ready. Good morning. Thank you, Carla, and thank you all for joining us this morning. I will first provide comments on key themes underlying our business. Abby will then provide additional details on the third quarter, and then we will open it up for questions. Don continues to perform well in a year marked by the failure of three regional banks, and unprecedented inverted yield curve, and significant interest rate increases by the Fed.

Speaker 2: A big client went for our firm in the third quarter was New York Jets. Dime is now the official private bank of the Jets. The partnership is providing us tremendous visibility and has been well received by our clients and employees across the board. And demonstrates that Dime can bank big brand name institutions.

A big client win for our firm in the third quarter was New York Jets Dime is now the official private bank or the jets. The partnership is providing us tremendous visibility and it's been well received by our clients and employees across the board and Denver. It demonstrates the Darlington banks Big brand name institutions.

Speaker 2: As I said on our last earning call, my focus is on providing customers outstanding service that only locally managed community banks can provide, growing our franchise value, and delivering our shareholders strong returns.

As I said on our last earnings call. My focus is on providing customers outstanding service that only locally managed community banks can provide growing our franchise value and delivering our shareholder strong returns.

Stuart Lubow: In the third quarter, we grew quarter deposits of approximately $200 million. We reduced wholesale funding on our balance sheet. We increased our already strong risk-based capital, and we reduced our non-performing assets by 16%. As we have mentioned on our previous calls, we do not have any concentrations that got the failed banks and others in trouble. These facts, coupled with our rock solid bulletproof multifamily portfolio, which represents 38% of our overall loan portfolio, gives us confidence that we will outperform in any potential recessionary environment.

Speaker 2: Managing expenses and prudently and being a conservative underwriter credit have always been hallmarks of Dine and will not stray from these two core guiding puts.

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Expenses and prudent.

Managing expenses prudently and be conservative on conservative underwriting credit have always been hallmarks of dine in will not stray from these two core guiding principles.

Speaker 2: I would like to thank all our outstanding employees for staying focused on these goals. With that, I will turn the call over to Avi to provide some more detail on the course.

I'd like to thank all of our outstanding employees for staying focused on these goals.

With that I will turn turn the call over to Avi to price more detail on the quarter.

Speaker 3: Thank you, Stu. Core EPS for the third quarter was 56 cents per share. Our results were marked by prudent, non-interest expense management and stable asset quality. We grew core deposits by approximately $200 million on a spot basis, and importantly, non-intersparing deposits increased in the third quarter. At 29% of average total deposits are non-interest bearing deposit percentage remains a clear differentiator for dime versus other community banks in our foot.

Thank you stew core EPS for the third quarter was <unk> 56 per share. Our results were marked by prudent noninterest expense management and stable asset quality. We grew core deposits by Approx approximately $200 million on a spot basis, and importantly, noninterest bearing deposits increased in the third quarter.

Stuart Lubow: For the record, we have no loans on our entire multifamily portfolio that are delinquent, greater than 60 days, and the LTV on that portfolio is 58%. We continue to be vigilant and diligent around monitoring all parts of our loan portfolio. Overall, all asset quality remains strong with NTAs and 90 days passed due declining to only 17 basis points. As you would expect, we continue to closely monitor our investor office portfolio. As of September 30th, we have no delinquent sheets weighted in 60 days in the investor office portfolio.

At 29% of average total deposits are non interest bearing deposit percentage remains a clear differentiator for <unk> versus other community banks in our footprint.

Speaker 3: in a higher for longer environment, the value of these non-interest bearing deposits will be paramount.

In a higher for longer environment the value of these noninterest bearing deposits will be paramount.

Speaker 3: The NIM was 234 for the third quarter compared to 250 for the prior quarter. As expected, the pace of NIM compression continued to slow in the third quarter.

NIM was $2 34 for the third quarter compared to $2 50 for the prior quarter.

As expected the pace of NIM compression continued to slow in the third quarter as.

Speaker 3: As you know, we don't provide quarterly quantitative NIM guidance. All L sequel, we do expect the NIM to stabilize at the end of the sear and see expansion in 2024. We're currently in our budgeting process for 2024 and we'll have more to add on our January earnings.

As you know, we don't provide quarterly quantitative NIM guidance.

Stuart Lubow: In fact, we only have one loan over 30 days at 9.30, which was only $1.9 million, and had an LTV less than 50%. We provide some additional disclosures on this portfolio as it relates to properties and geography in our recent investor presentation. Our Manhattan investor office portfolio is only $200 million, or less than 1.5% of total assets. The LTV on our Manhattan office portfolio is 50%. We are comfortable with the exposure and the operators of our office portfolio are very strong.

Or else equal, we do expect the NIM to stabilize at the end of the sealer and see expansion in 2024.

We're currently in our budgeting process for 2024, and we will have more to add on our January earnings call.

Given the growth in core deposits, we reduced our wholesale funding position and our loan to deposit ratio ticked down to 102%.

Speaker 3: Given the growth in core deposits, we reduced our wholesale funding position and our loaned deposit ratio tick down to 102%.

Speaker 3: Core Cash operating expenses for the third quarter was approximately $51 million and we are on track to beat up full year guidance for Core Cash operating expenses. Even after absorbing the hires we made in the second and third quarter.

Core cash operating expenses for the third quarter was approximately $51 million.

And we are on track to beat our full year guidance for core cash operating expenses, even after absorbing the hires we made in the second and third quarters.

Speaker 3: We've been able to observe the cost of these high-resistant organizations, along with the additions of various corporate staff to support them by rationalizing expenses across the organization, using technology to automate manual processes, and promoting and filling open roles from our talented employee business.

We have been able to absorb the cost of these hires.

Stuart Lubow: Notably, we do not have a significant amount of repricing or returning office loans for the remainder of 23 or 2024. Repricing or returning office loans for the remainder of 2023 is only $20 million, and for 24, only $39 million. We are cognizant of their challenging revenue environment and continue to manage expenses prudently. Our focus is on being as efficient as possible. Core expenses, which included a full-quarters impact of our private banking group, Hires, were down on a link court of basis.

Organization, along with the additions of various corporate staff to support them by rationalizing expenses across the organization using technology to automate manual processes and promoting and filling open roles from a talented employee base.

Speaker 3: Non-adjusting income for the third quarter was $7.9 million. The decline on a link quarter basis was due to an expected decline in swap revenue, and additionally we had a boldly debt claim in the second quarter. We expect fourth quarter results for swap fees to generally be in line with the third quarter, and then to pick up in 2024 as we have more back-to-back swap loans in the pipeline expected to close in the New York.

Noninterest income for the third quarter was $7 9 million the decline on a linked quarter basis was due to an expected decline in swap revenue and Additionally, we had a bully death claims in the second quarter, we expect fourth quarter results for swap fees to generally be in line with the third quarter and then to pick up in 2024.

Stuart Lubow: There are a number of projects that we are working on that result in expense containment for future years. For example, we recently outsourced our data center. Importantly on a link-quarter basis are non-interest sparing deposits increase. This marks the first increase since the current rate tightening cycle began and portends well for our future earnings potential. Aby will provide more details on the margin in his remarks. Dime has been very active and on the hiring front in 2023 and the third quarter was no different.

As we have more back to back swap loans in the pipeline expected to close in the New York.

We had a $1 $8 million loan loss provision this quarter the allowance to npls increased to over 300% in the third quarter I will point out that excluding multifamily, which we view as a risk asset class our resolve to launch would be approximately 1%.

Speaker 3: We had a $1.8 million loan loss provision this quarter. The allowance to NPLs increased to over 300% in the third quarter. I will point out that excluding multi-family, which we view as a risk-free asset class, our reserve to loans would be approximately 1%.

Speaker 3: We are cognizant of the fact that there's been a lot of scrutiny on CRE concentration. In this regard, DIME's investor-cree concentration, excluding multi-family loans, which are really residential loans for five or more tenants, is only 260% of total capital. As we continue to focus our growth on business loans and building capital, we expect the CRE concentration to decline over time.

We are cognizant of the fact that there's been a lot of scrutiny on CRE concentration in this regard dimes investor Cree concentration, excluding multifamily loans, which are really residential loans of fiber more tenants is only 260% of total capital as we continue to focus our growth on business loans and building capital we expect this.

Stuart Lubow: We were able to recruit a high caliber banker to lead our healthcare vertical. We continue to spend meaningful amount of time on the recruiting front and believe we have the potential to add more talented bankers in the future. We do believe there will be some more fallout from larger local institutions as well as an opportunity to bring over individual clients who seek the locally managed relationship-based bank with access to key decision-makers at all time.

CRE concentration to decline over time.

In light of the overall environment, our posture as it relates to the balance sheet is to build capital methodically.

Speaker 3: In light of the overall environment, our posture as it relates to the balance sheet is to build capital methodically. This will in turn support us...

This will in turn support our clients when they need it.

Speaker 3: This quarter are wrist-based cap flow ratios increased by approximately 25 base

This quarter, our risk based capital ratios increased by approximately 25 basis points.

Stuart Lubow: That coupled with our strong technology makes us very attractive to new customers and new bankers. With respect to our positioning on lending, our strategy is to ensure we continue to support our key clients through any operating environment. We will continue to prudently add franchise enhancing full service business relationship. The addition of the healthcare verticals consistent with our strategy of growing business loans. Our loan pipelines while down from a year ago, given the much higher rate environment, are intentionally heavily weighted to our business loans.

Speaker 3: As a remainder, we have a very sharp duration EFS portfolio and the EOCA marks this quarter with fairly modest despite the increase in long rates. With that, I'll...

As a reminder, we have a very short duration portfolio and the OCI marks this quarter with fairly modest despite the increase in long rates.

With that I'll turn the call back the call up for questions.

Speaker 1: Thank you. If you'd like to ask a question, you may do so by pressing start followed by one on your telephone keypad. When preparing for your question, please ensure your device is unmuted locally.

Thank you think you'd like to ask a question you may do so by pressing star one by one on your telephone keypad.

Thank you for your question. Please ensure your devices Amit lately.

Speaker 1: And if you wish to devote your question, please press start followed by two.

Thank you Mr Bank. Your question. Please press star followed by chain.

Stuart Lubow: Approximately 60 percent of our loan pipeline is in business loans with an added average rate on the entire loan pipeline of 7.9 percent. We expect loans remain relatively stable between now and the end of the year with growth in business loan offsetting client declines in our investor Cree and multifamily portfolios. Since my appointment at CEO and in my day-to-day meetings with customers, it's apparent to be that Donnie's brand and reputation in our workplace has never been stronger.

Speaker 1: We'll now take our first question, which comes from Steve Moss from Raymond Jane. Steve, your life is minus now open, please go ahead.

We'll now take our first question, which comes from Steve Moss from Raymond James.

Steve Your line of your line is now open. Please go ahead.

Good morning.

Maybe starting here Stu.

Speaker 4: morning to do. Maybe just starting on the, you know, deposit with you guys to show this quarter here, particularly non-stabbing, I realize that's from the signature hires. Just curious to give any expectations or updated thoughts looking forward here into the fourth quarter.

Morning, maybe just start on the.

Deposit growth you guys showed this quarter here, particularly of noninterest bearing I realize that's from the signature hires just curious give any expectations or updated thoughts looking forward here into the fourth quarter.

Stuart Lubow: Our technology platform is better and more agile than many larger local banks and our customer service is second to known. Anatolily, we are winning back some clients who left for biggest banks during the March madness as they realize service and personal funds are important. A big client went for our firm in the third quarter with New York Jets. Donnie is now the official private bank of the Jets. The partnership is providing us tremendous visibility and has been well-received by our clients and employees across the board and Demmer demonstrates that Donnie can bank big brand name institutions.

Speaker 3: Yeah, I'll start Steve, you know, part of the reason for the decline in non-retus band deposits earlier in the year was really, you know, migration out of some consumer DDA. And, you know, the first half of the year, we were probably losing around 50 to 100 million of consumer DDA. In the third quarter, we were down to only around 30 million. So that's kind of, you know, stabilizing the some extent. And obviously the new private banking groups that we have.

Yes, I'll start.

Steve.

Part of the reason for the decline in noninterest bearing deposits earlier in the year was really migration out of some consumer DDA.

And the first half of <unk>, we are probably losing around $50 million to $100 million of consumer DDA in the third quarter, we were down to only around $30 million. So that's kind of.

Stabilizing to some extent and obviously the new private banking groups that we have.

Speaker 3: have added significant deposits. I think overall at the bank, business DDA is up, municipal DDA is fairly stable. So when we're doing our projections, it's pretty much stable to up from here on out. Obviously, any particular quarter could go up or down, but I think we've seen the bulk of declines in DDA at this point. And as I mentioned, and as Stu mentioned, having that 29% and not of that.

Have added significant deposits I think overall at the bank business EDA is up municipal EDI is fairly stable. So.

Stuart Lubow: As I said on a last-earning call, my focus is on providing customers outstanding service that only locally managed community banks can provide, growing our franchise value and delivering our shareholders strong returns. Managing expenses and prudently and being a conservative underwriter credit have always been hallmarks of Don and will not stray from these two core guide inputs.

When we're doing our projections, it's pretty much stable to up from here on out obviously any particular quarter could go up or down, but I think we've seen the bulk of declines in DDA at this point and as I mentioned and as Sue mentioned, having that 29% and north of that in terms of DDA is really going to be a key driver of NIM.

Speaker 3: Dumb to DD is really going to be a key driver of nimic expansion.

<unk> in the future.

Speaker 4: Okay, and then on the expense front here, you know, the good expense controls, you know, Avi previously provided guidance, I think the number is 206209. Just, you know, looks like you're running below that trend if we kind of hold flat in the fourth quarter, just any updated thoughts on expense.

Okay and then.

Stuart Lubow: I would like to thank all our outstanding employees for staying focused on these goals.

On the expense frontier.

Good expense controls.

Abby: With that, I will turn the call over to Abby to provide some more detail in the quarter. Thank you, Stu. Core EPS for the third quarter was 56 cents per share. Our results were marked by prudent non-interest expense management and stable asset quality. We grew core deposits by approximately $200 million on a spot basis, and importantly, non-interspanning deposits increased in the third quarter. At 29% of average total deposits, our non-interest bearing deposit percentage remains a clear differentiator for Dime versus other community banks in our footprint.

All of the previously provided guidance I think the number was $262 nine.

It looks like it looks like Youre running below that trend, if we kind of hold flat into the fourth quarter.

Any updated thoughts on expenses.

Speaker 3: Yeah, typically we don't, you know, re-guide on expenses. I think my comment was we're just gonna beat the folio number or, you know, we're really focused on keeping expenses as low as possible. And we're gonna, you know, use that as a base, you know, into, into next year.

Yes, typically we don't really guide on expenses I think my comment was we're just going to beat the full year number one.

We focused on keeping expenses as low as possible and we're going to use that as a base into next year.

Speaker 3: I think Stu said there's a lot of opportunity to make new hires and revenue generating deposit and people on the loan side. So I think we'll look at both over time, but we're pretty comfortable in terms of beating that to a six number and we'll try to beat it as much as possible in the fourth quarter.

I think <unk> said that.

A lot of opportunity to make new hires and revenue generating deposits and people on the loan side. So I think we'll look at both over time, but we're pretty comfortable in terms of beating that two six number and we will try to beat it as much as possible in the fourth quarter.

Abby: In a higher for longer environment, the value of these non-interest bearing deposits will be paramount. The NIM was 234 for the third quarter, compared to 250 for the prior quarter. As expected, the pace of NIM compression continued to slow in the third quarter. As you know, we don't provide quarterly quantitative NIM guidance. All else equal, we do expect the NIM to stabilize at the end of this year and see expansion in 2024.

Okay.

Speaker 4: Okay, and just one last one for me, just curious on, where is going pricing these days for you guys? And it sounds like the business, C&I business side remains strong for the pipeline, while obviously some further declines in theory.

One last one for me just curious on where is loan pricing. These days for you guys and just.

It sounds like the business.

The C&I business side remained strong and the pipeline.

Abby: We're currently in our budgeting process for 2024, and we'll have more to add on our January earnings call. Given the growth in core deposits, we reduced our wholesale funding position and our loaned deposit ratio ticked down to 102%. Core cash operating expenses for the third quarter was approximately $51 million, and we are on track to beat our full-year guidance for core cash operating expenses, even after absorbing the hires we made in the second and third quarters.

Obviously, some further decline in CRE.

Yes, so basically our pipeline is about $985 million the average weighted average rate on the entire portfolio of 790, but.

Speaker 2: Yeah, so, you know, basically, our pie points about $985 million, you know, the average weight of the entire portfolio is $790.

Speaker 2: But on the CNI side, the pipeline is about 321 million and that the yield or the way that it would rate on those loans is actually...

But on the C&I side, the pipeline is about $321 million and that the yield or the weighted average rate on those loans is actually 897%. So.

Speaker 2: 8.97%. So you know, we have, you know, quite a bit in that pipeline and then there's about $300 million dollars.

Abby: We've been able to absorb the cost of these hires into our organization along with the additions of various corporate staff to support them by rationalizing expenses across the organization using technology to automate manual processes and promoting and filling open rules from our talented employee base. Non-interest income for the third quarter was $7.9 million. The decline on a link quarter basis was due to an expected decline in Swap revenue, and additionally, we had a boldly debt claim in the second quarter.

We have.

Quite a bit in that pipeline and then theres about $300 million.

Speaker 2: in honor occupied CR-E, which is in the sevens.

In owner occupied CRE, which is.

In the Sevens and.

Speaker 2: and uh... you know interestingly we only have twenty two million dollars in multi-family in the pipeline so obviously our focus is on cn i and on rock about c-r-e

Interestingly, we only have $22 million in multifamily in the pipeline. So obviously, our focus is on C&I and owner occupied CRE.

Alright, great. Thank you very much.

Thanks, Steve.

Yeah.

Speaker 1: Thank you Steve. Our next question is from Matthew Breeze from Stephen Zinc. Matthew your line is now open, please go ahead.

Thank you Steve. Our next question is from Matthew Breese from Stephens, Inc.

Abby: We expect fourth quarter results for Swap fees to generally be in line with the third quarter, and then to pick up in 2024, as we have more back-to-back Swap loans in the pipeline expected to close in the New York. We had a $1.8 million loan loss provision this quarter. The allowance to NPLs increased to over 300% in the third quarter. I will point out that excluding multi-family, which we view as a risk-free asset class, our reserved loans would be approximately 1%.

Matthew Your line is now open. Please go ahead.

Hey, good morning.

Speaker 5: You know, I've actually had the updates on the deposit side and certainly the inflection point this quarter was a welcome to one.

You are going to assume that the updates on the on the deposit side and certainly the.

Inflection point this quarter was.

Welcome to one.

Speaker 5: You know, one of the curious about us on the opposite side of the balance, she movement in Loneal hasn't been as robust and a lot of it's tied to the longer duration nature of CRE, RE, RE, multi-family. I was curious when you expect to see a bigger pickup in Loneal.

What I'm curious about is on the opposite side of the balance sheet movement in loan yields hasnt been as robust in a lot of its tied to the longer duration nature of CRE regime multifamily.

Abby: We are cognizant of the fact that there's been a lot of scrutiny on CRE concentration. In this regard, DIMS investor CRE concentration, excluding multi-family loans, which are really residential loans for five or more tenants, is only 260% of total capital. As we continue to focus our growth on business loans and building capital, we expect the CRE concentration to decline over time. In light of the overall environment, our posture as it relates to the balance sheet is to build capital methodically.

I was curious when you expect to see.

Bigger pickup.

In loan yields.

Speaker 5: provide some expectations around low low and beta through the end of the year early 2024.

Provide provide some expectations around low loan beta through the end of the year early 2024. Please.

Yes, sure. So we mentioned in the past.

Speaker 3: Yes, short. So Matt, you know, we've mentioned in the past, you know, we have a Slidener investor presentation to do about, you know, the next couple of years in terms of reprisings and maturities.

Slide nine Investor presentation do about the next couple of years in terms of re pricings and maturities off of the real estate book, We obviously were not big originated back in 2017, and 2018 and typically those come to you five years afterwards, right. So it's going to be.

Speaker 3: off off the real estate book. We obviously were not big originators back in 2017 and 2018 and typically those come due five years afterwards, right? So it's gonna be a

Abby: This will in turn support our clients when they need it. This quarter, our risk-based capital ratios increased by approximately 25 basis points. As a reminder, we have a very sharp duration AFS portfolio and the AOCI marks this quarter with fairly modest, despite the increase in with that.

Speaker 3: steady progression up. I think what's gonna make the differences, the originations now are really focused on the owner occupied and CNI side. This quarter we had a large construction loan payoff, which was a good thing. The rate on that was pretty high. So I think if you're replacing,

Steady progression up I think what's going to make the differences. The originations now are really focused on the owner occupied and C&I side. This quarter, we had a large construction loan payoffs, which was a good thing the rate on that was pretty high so.

Operator: I'll turn the call back to Carla for questions. Thank you.

I think if you're replacing.

Operator: If you'd like to ask a question, you may do so by pressing start followed by one on your telephone keypad.

Speaker 3: Loans that are coming off at 5.5 and a half at 8.5 to 9% you're going to see that optic.

Loans that are coming off at five five and a half at $8, 5% to 9% youre going to see that uptick.

Speaker 3: over time. And our portfolio is also gearing more towards floating rate loans going forward. So I think it's going to be a steady build. We have outlined in our investor presentation too that

Operator: When preparing for your question, please ensure your device is unmuted locally. And if you wish to revoke your question, please press start followed by two.

Over time, and our portfolio is also gearing more towards floating rate loans going forward. So I think it's going to be a steady build.

Steve Moss: We will now take our first question, which comes from Steve Moss from Raymond James. Steve, your life in line is now open. Please go ahead.

Have outlined in our Investor presentation do that there is a big slug of multifamily loans that are coming due in 2026 and 2027, obviously with current rates, where they are probably not going to prepay at this point in time. However, if you follow the forward curve and rates do drop at some point in 2024 and 2025, you could see some of that.

Speaker 3: There's a big plug of multifamily loans that are coming to you in 2026 and 2027.

Speaker 3: Obviously with current rates where they are those are probably not gonna be paid at this point in time However, if you follow the forward curve and rates do drop at some point in 2024 and 2025 you could see some of that come in and and we've outlined You know that's around 30 basis points to the margin once all those repays. So it's in the near term

Steve Moss: Good morning. I'm maybe starting here this morning. Maybe just starting on the, you know, deposit breathy guys to show this quarter here, particularly in I'm sharing, I realize that's from the signature hires. I'm just curious to give any expectations or updated thoughts looking forward here into the fourth quarter. Yeah, I'll start Steve, you know, part of the reason for the decline in non-ertice band deposits earlier in the year was really, you know, migration out of some consumer DDA.

I'm in and we've outlined that is around 30 basis points of the margin once all of those repay so I'd say in the near term.

Speaker 2: You know, we're following the cash flows and it's going to be based on yields and in the medium a longer term It's going to be based on the multi-family coming coming deal Yeah, and I do think you know, we'll see a pickup in the scene. I business and I'm looking you know right now I expect you know between a hundred and a hundred fifty million dollars of seeing I business to close in the in the quarter We've got our first two health care deals that

Following the cash flows and it's going to be based on yield in the medium to longer term. It is going to be based on the multifamily coming coming due.

I do think you will see a pickup in the C&I business.

Looking right now.

I expect between 101 hundred $50 million of C&I business to close in the quarter, We got our first two health care deals.

Steve Moss: And, you know, the first half of the year, we're probably losing around 50 to 100 million of consumer DDA. In the third quarter, we were down to only around 30 million. So that's kind of, you know, stabilizing the some extent. And obviously the new private banking groups that we have have added significant deposits. I think overall at the bank, you know, business DDA is up, municipal DDA is no fairly stable. So, you know, when we're doing our projections, you know, it's pretty much stable to up from here on out.

That.

Speaker 2: that will either close late in the year, early, 2024 and that the yields on those are about 9%, 905 and that's about 50 million dollars. So we're starting to see real traction on the CNI side.

That will either closed late in the year early.

2024, and the yields on those are about 9% nine.

905, and that's about $50 million. So we're starting to see real traction on the C&I side at this point.

Speaker 5: Got it. Okay. And then Avi, I know you don't provide

Got it Okay, and then I know you don't provide.

Steve Moss: Obviously, any particular quarter could go up or down. But I think we've seen the bulk of, you know, declines in DDA at this point. And as I mentioned, and as Stu mentioned, you know, having that 29% and not of that, the terms of DDA is really going to be a key driver of anemic expansion in the future. Oh, okay. And then on the expense front here, you know, the good expense controls, you know, Avi previously provided guidance, I think the number is 206209.

Speaker 5: quarterly NIM guidance, but historically you have kind of disgust for this institution what the appropriate NIM should migrate to. Over time, and I'm curious in this kind of yield curve environment, with that migration point, that point of gravity.

Quarterly NIM guidance, but historically you have kind of <unk>.

Discuss for this institution, what the appropriate NIM should migrate to over time and I'm curious in this kind of yield curve environment with that migration point that point of gravity is.

Speaker 3: Yeah, it's, I mean, so for example, in terms of the Neothome, Nymatic probably didn't mention my prepared remarks.

Yes.

So for example in terms of the near term NIM that probably Didnt mentioned in my prepared remarks the.

Speaker 3: The spot name in the month of September was around 2.35. So it kind of stabilized in September . We want to wait, have a couple more months of stability before officially calling the bottom for sure. So that was the Neo-Tome thought process around that. Look, when we do our medium to long-atome projections, obviously with the long end being up, that's a good thing for us, right? Because you're going to be reprising into a higher rate environment as your deposit cost of stabilize. So I think getting back to that 3% to 325 area is the right medium to longer-term opportunity for us. And if the club stays as less inverted as it is now, one of the five of the continuous stay where it is.

<unk> in the month of September was around $2 35, so kind.

Kind of stabilized in September we want to wait a couple more months of stability before officially calling the bottom for sure. So.

Steve Moss: Just, you know, looks like you're running below that trend, if we kind of hold flat in the fourth quarter, just any updated thoughts on expense. Yeah, typically we don't, you know, re-guide on expenses. I think my comment was we're just going to beat the full year number or, you know, we're really focused on keeping expenses as low as possible. And we're going to, you know, use that as a base, you know, in the next year.

There was a near term thought process around that look when we do our medium to longer term projections, obviously with the long end being up that's a good thing for us right, because youre going to be repricing into a higher rate environment as well.

Deposit costs have stabilized so I think getting back to that 3% $3 25 area is the right medium to longer term opportunity for us and of the <unk> status.

Steve Moss: You know, I think Stu said there's a lot of, you know, opportunity to make new hires and, you know, revenue generating deposit and, you know, people on the loan side. So I think we'll look at both over time, but, you know, we're pretty comfortable in terms of beating that 206 number and we'll try to beat it as much as possible in the fourth quarter. Okay. And just one last one for me.

If it's less inverted as it is now one of the fiber continues to stay where it where it is with 30% DDA.

Speaker 3: with 30% DDA. I mean, there's the probability that, you know, we can get higher than 325 in the long run.

<unk> ability that we can get higher than 325 and in the long run and the short term its obviously going to be methodical every quarter expansion in 2024.

Speaker 3: In the short term it's up to you're going to be a methodical every quarter in expansion in 2024.

Steve Moss: Just curious on, you know, where is going pricing these days for you guys and, you know, just, you know, sounds like the business, uh, CNI business side remains strong for the pipeline, you know, while, you know, obviously some further declines in theory. Yeah. So, you know, basically our pipelines about $985 million, you know, the average weighted average rate on the entire portfolio is $790, but, but, uh, on the CNI side, the pipelines about $321 million and that the yield or the weighted average rate on those loans is actually 8.97%.

Got it okay.

Speaker 5: Got it. Okay. Last couple of questions, you know, understanding historically, multi-family, particularly rent and regularly multi-family has been a risk-free asset. But, you know, does the combination of the 2019 rent law change with, you know, the still very tenant-friendly rent guidelines board, higher expenses, higher loan yields, and then the more recent, sub-free and court decision? Does that change the risk-free nature particularly if the rent regulated portfolio?

Last couple questions understanding historically multifamily, particularly rent regulated multifamily has been a risk free asset but.

Is it a combination of the 2019 Revpar change with this still very tenant friendly rent guidelines board higher expenses higher loan yields and then the more recent Supreme Court decision does that change the the risk free nature, particularly with the rent regulated portfolio.

Steve Moss: So, you know, we have, you know, quite a bit in that pipeline and then there's about $300 million in owner occupied CRE, which is, you know, in the 7s. And, you know, interestingly, we only have $22 million in multi-family in the pipeline. So, obviously our focus is on CNI and owner occupied CRE.

Speaker 2: Yeah, Matt, not really. I mean, we took that into account in terms of our underwriting as we originated from 2019 on. And at dime, legacy dime.

Yes, Matt not really I mean, we took that into account in terms of our underwriting as we as we.

Originated from 2019 on and a dime.

Legacy dime.

Speaker 2: We changed our underwriting guidance to take that into account. You have to remember, we really never did any repositioning multifamily. We underwrite very stringently. We raise our underwriting criteria. And we always had a very low LTV. And so what we're seeing is that we haven't had any pressure in terms of the...

We changed our underwriting guidance to take that into account.

You have to remember.

Really never did any repositioning multifamily.

We underwrite very stringently, we raised our underwriting criteria and we always had a very low LTV and.

Steve Moss: All right, great. Thank you very much. Thank you, Steve.

And so what we're seeing is that we haven't had any.

Matthew Breese: Our next question is from Matthew Breese, from Stephen Zing. Matthew, your line is now open. Please go ahead.

Pressure in terms of.

Speaker 2: of the credit quality on the multifamily at all. And in fact, we have a significant amount reprised this year where we haven't been asked for modifications, they just moved into a higher rate, which was obviously a...

Of.

The.

Matthew Breese: Hey, good morning. You know, I appreciate all the updates on the deposit side and certainly the inflection point this quarter was a welcome to one. You know, one I'm curious about is on the opposite side of the balance sheet, movement in loan yield hasn't been as robust and a lot of it's tied to the longer duration, nature of CRE, RE, multi-family. I was curious when you expect to see a bigger pickup in loan yields provide some expectations around loan beta through the end of the year, early 2024, please.

The credit quality on the multifamily at all and in fact, we have a significant amount re price this year.

Where.

We haven't been asked for modifications. They just moved into a higher rate, which was obviously a.

A positive.

Speaker 2: positive and uh... you know so we're not seeing the pressure that others have but you know when you have a

And.

So we're not seeing the pressure to others have but when you have a.

Speaker 2: you know, at 58% average LTV, there's a lot of equity in those buildings and these are generational owners that we're not looking for quick hits and repositioning of loans. So, you know, I think from our perspective, we still feel very comfortable. And obviously, our delinquency and not forming numbers bear that out.

58% average LTV theres a lot of <unk>.

Equity in those buildings and these are generational owners.

No.

We're not looking for quick hits and repositioning of loans. So.

Matthew Breese: Yes, sure. So Matt, you know, we mentioned in the past, you know, we have a slide now investor presentation, do about, you know, the next couple of years in terms of reprisings and maturities off off the real estate book. We obviously were not big originators back in 2017 and 2018 and typically those come due five years afterwards, right. So it's going to be a steady progression. Up, I think what's going to make the difference is the originations now are really focused on the owner occupied and CNI side this quarter, we had a large construction loan payoff, which was a good thing.

Matthew Breese: The rate on that was, you know, pretty high. So, you know, I think if you're replacing, you know, loans that are coming off at five, five and a half at, you know, eight and a half to nine percent, you're going to see that uptick over time. And our portfolio is also, you know, gearing more towards floating rate loans going forward. So I think it's going to be a steady build. We have outlined in our investor presentation, too, that there's a big plug of multifamily loans that are coming due in 2026 and 2027.

I think from our perspective, we still feel very comfortable and obviously our delinquency.

And nonperforming numbers bear that out the amount of the only other thing I'd add is we really want in the multifamily market in 2017 and 2018 can remember that once you got a diamond we pivoted our balance sheet. So for example, we only have a $100 million of multifamily loans that were made in.

Speaker 3: The amount of the only other thing I'd add is we really weren't in the multi-family market in 2017 and 2018. If you remember, that's when Stu got to Diamond, we pivoted our balance sheet. So for example, we only have a hundred million dollars of multi-family loans that were made in...

Speaker 3: 2018 so a lot of production is post 2019 and taking this into account already

2018, so in a lot of our production is post 2019.

Taking this into account already.

Okay.

Speaker 5: Got it. Okay. I mean, just just industry sources are starting to point to new transaction values down, showing valuation down to 45% contact request.

Got it okay.

I mean just <unk>.

Industry sources are starting to point to new transaction values down showing valuations down 30% to 45% asset class.

Speaker 5: And I guess you close to kind of your average L2B is 58%. I guess that's my bottom line point.

And it gets you close to kind of your average LTV of 58% I guess Thats my bottom line point.

Speaker 5: And then I guess I'd be curious, obviously multifamily can buck it close, the market rate and the rent regulated. How much rent regulated multifamily exposure do you have today?

And then I guess I'd be curious, obviously multifamily can bucket bowls, the market rate and rent regulated.

Matthew Breese: Obviously with current rates where they are, those are probably not going to pay at this point in time. However, if you follow the forward curve and rates do drop at some point in 2024 and 2025, you could see some of that come in and we've outlined. You know, that's around 30 basis points to the margin once all those repress. So it's in the near term, you know, we're following the cash flows and it's going to be based on yields in the medium of longer term.

How much rent regulated multifamily exposure do you have today.

Yes, it's around the matter of a portfolio of free markets around two thirds grant regulators around that basically look I mean at the end of the day, we can only tell you what we're seeing in our portfolio, we're really not seeing any signs at this point in time, So we'll leave it at that.

Totally understood.

Matthew Breese: It's going to be based on the multifamily coming due. Yeah, and I do think, you know, we'll see a pickup in the CNI business. You know, I'm looking, you know, right now I expect, you know, between $100 and $150 million of CNI business to close in the quarter. We've got our first two healthcare deals that will either close late in the year, early 2024 and that the yields on those are about 9%, 905, and you know, that's about 50 million dollars.

Okay. Thank you for taking my questions and I'll leave it there I appreciate it.

Matthew Breese: So we're starting to see real traction on the CNI side at this point. Got it. Okay. And then I know you don't provide, you know, quarterly NIM guidance, but historically, you have kind of disgust for this institution, what the appropriate name should migrate to overtime. And I'm curious in this kind of yield curve environment, what that migration point that point of gravity is. Yeah, I mean, so for example, in terms of the near term, NIM added probably didn't mention my prepared remarks.

Thanks Brent.

Speaker 1: Thank you, Matt. Our next question comes from Mark's It's Given from Piper Fannna. Mark your lines now open, please go ahead.

Thank you Matt.

Next question comes from Marc Goodman from Piper Sandler.

Your line is now open. Please go ahead.

Hey, guys good morning.

Speaker 6: I guess I was curious first. What if the pipeline and new private client teams look like today? And of the private client teams you've hired recently, can you give us a sense for how much they've already brought in in terms of deposits and loans?

Yes.

I guess I was curious first what is the pipeline of new private.

Client teams look like today.

The private client teams <unk> hired recently can you give us a sense for how much they've already brought in in terms of deposits and loans.

Pat.

Speaker 2: But, you know, they opened up about 2000 accounts at this point and about thousands separate customers. Not all of that has funded yet. I'd say there's problems.

They've opened up about 2000 accounts at this point and about thousands separate customers.

Not all of that is funded yet I'd say, there's probably.

Speaker 2: you know by the six hundred accounts that have funded yet i mean at this point they brought in about two hundred and fifty million dollars uh... and uh... and about fifty percent of that is dd

Yes.

<unk>.

600 accounts that haven't funded yet I mean at this point they brought in about $250 million.

And.

And about 50% of that is DDA.

Matthew Breese: The spot name, you know, in the month of September was around 235. So, you know, it kind of stabilized in September. You know, we want to wait, you know, have a couple more months of stability before, you know, officially calling the bottom for sure. So that was the near term, you know, thought process around that. Look, when we do our medium, the long term projections, you know, obviously with the long end being up, that's a good thing for us, right?

Speaker 2: Okay. And the pipeline and the teams do, would you say it's still quite a few out there? Yeah, I mean, it's growing really steadily every week. We got to report twice a week. And basically, we're seeing steady growth every week.

Okay.

And the pipeline of teams too would you say, it's still quite a few out there.

It's growing really steadily every week, we get reports twice a week and basically we are seeing steady growth.

Every week.

Okay.

Speaker 6: And then I wondered if you could share with us your thoughts on maybe restructuring some of the available for sale securities book given as you said that you know it's relatively short and duration and you know rates maybe stuck up here for a little bit. Is that something you're contemplating?

And then Avi, but I'm wondering if you could share with us your thoughts on maybe restructuring some of the available for sale Securities book, given as you said that it's relatively short in duration and rates may be stuck up here for a little bit is that something you are contemplating.

Matthew Breese: Because you're going to be repricing into a higher rate environment as, you know, your deposit costs have stabilized. So I think, you know, getting back to that, you know, 3% 325 area is the right, you know, medium to, you know, longer term opportunity for us. And if the club stays as, you know, if it's less inverted as it is now, and if the fiber continues to stay where it is with 30% DDA, I mean, there's the probability that, you know, we can get higher than 325 in the long run. In the short term, it's obviously going to be methodical every quarter, you know, expansion in 2024. Got it. Okay.

Yes, I think at this point, probably not an honest mark I think just having a little more stability in the banking industry in general is important.

Speaker 3: Yeah, I think at this point, probably not in on a smart, I think just having a little more stability in the banking industry in general is important. I think we're focused on building capital optically. We're doing that 10 to 20 basis points of every quarter. So it's pretty sharp. It's going to run off pretty quickly. So I'd say in the near to medium term, probably not. But something we evaluate and update our analysis.

And I think we're focused on building capital optically, we're doing that 10 to 20 basis points.

Every quarter, so it's pretty short, it's going to run off pretty quickly.

Saying that in the near to medium term, probably not but it's something we evaluate and update our analysis constantly.

Matthew Breese: Last couple of questions, you know, understanding historically multi-family, particularly rent and regularly multi-family has been a risk-free asset. But, you know, does the combination of the 2019 rent law change with, you know, the still very tenant-friendly rent guidelines board, higher expenses, higher loan yields, and then the more recent Supreme Court decision. Does that change the risk-free nature particularly of the rent-regulated court portfolio? Yeah, Matt, not really. I mean, we took that into account in terms of our underwriting, as we originated from 2019 on.

Okay, and then lastly.

Speaker 6: Okay, and then lastly, what are your thoughts around share buybacks, you know, given the depressed level of the stock price, you know, or capital levels, you know, an impediment to doing buybacks here?

What are your thoughts around share buybacks, given the depressed level of the stock price.

Our capital levels and impediment to doing buybacks here.

Speaker 3: Not really, Mark, I think from a corporate finance perspective, it's screaming out to do buybacks. I think that's set in the current operating environment. I think clients value banks with capital and strong liquidity. And you don't know how long the Fed's going to stay at these levels. Don't know what's going to happen if the raise rates more. So I think at this point, we're keeping the capital to support our clients.

Not really Mark I think from a corporate finance perspective, it's screaming out to do buybacks I think that said in the current operating environment, and I think clients value banks with capital and strong liquidity.

You don't know how long the fed is going to stay at these levels don't know what's going to happen.

Matthew Breese: And, you know, at Dime, you know, legacy Dime, we changed our underwriting guidance to take that into account. You know, you have to remember, we really never did any repositioning multi-family. We underwrite very stringently, we raise our underwriting criteria, and we always had a very low LTV. And so, you know, what we're seeing is that, you know, we haven't had any, you know, pressure in terms of, you know, the credit quality on the multi-family at all.

They raise rates more so I think at this point, we are keeping the capital to support our clients. They will come a time and place far buybacks in.

Speaker 3: They'll come in time and place far bybacks. And as we've been very active on that front since the merger, and when the times right will do it, but like a lot of up here, I think right now, we're waiting and watching to see what happens over the course of the next three months or so.

We've been very active on that front.

The merger and.

When the Time's right, we'll do it but like a lot of our peers I think right now, we're waiting and watching to see what happens over the course of the next three months or so.

Thank you.

Speaker 1: Thank you Mark. Our next question comes from Chris O'Connell from KBW. Chris, your line is now open, please go ahead.

Thank you Mark our next question comes from Chris O'connell from K B W. Chris. Your line is now open. Please go ahead.

Matthew Breese: And, in fact, we have a significant amount reprised this year, where we haven't been asked for modifications. They just moved into a higher rate, which was obviously a positive. And, you know, so we're not seeing the pressure that others have, but, you know, when you have a, you know, a 58% average LTV, there's a lot of equity in those buildings and these are generational owners, you know, that we're not looking for quick hits and repositioning of loans.

Hey, good morning.

Speaker 4: Yeah, it started off on the credit for this quarter. You know, I noticed the reserve came down a little bit and that charted us a bit higher. You know, but at MPAs came down, just any commentary around the movement this quarter and whether there was something chart drop that was maybe fully reserved for.

Yes, I'll start off.

The credit.

For this quarter.

Noticed the reserve came down a little bit.

Net charge offs are a bit higher.

But it came down.

Just any any commentary around the movement this quarter and whether there is something charge off that was maybe fully reserved for.

Speaker 3: Yeah, that's exactly right Chris. So, you know, we had a loan that's, you know, fully resolved, you know, we took a charge on that, but, again, at 18 basis points, you know, it's pretty, pretty minimal overall. Our pool resolved, you know, it stayed pretty constant. So within our 70 odd million of resolves, there's around $53 million, you know, for the general pool, and that really didn't change much. So, the overall pool stayed clean.

Yes, that's exactly right Chris.

We had a loan is fully resolved.

Matthew Breese: So, you know, I think from our perspective, we still feel very comfortable. And obviously, our delinquency and not forming numbers bear that out. The amount of the only other thing I'd add is we really want in the multi-family market in 2017 and 2018. If you remember, that's when Stu got to Diamond, we pivoted our balance sheet. So, for example, we only have a hundred million dollars of multi-family loans that were made in 2018. So, you know, a lot of our production is post-2019, you know, and taking this into account already. Got it. Okay.

We took a charge on that but I mean again at 18 basis points now, it's pretty pretty minimal overall, a poor resolved it stayed pretty constant so within our 70 odd million dollars of resolved is around $53 million in them.

For the general pool, and that really didn't change much so the overall pool.

Assistant.

Speaker 4: Got it and any color you could provide on the type of credit in any details around the one that was charged off.

Got it and any color you can provide on the type of credit.

Any details around those charge offs.

Yes, it was a line of credit.

Speaker 2: Yeah, it was a line of credit to an individual who was helping involved in the hotel industry and never really recovered from the COVID.

Two individuals who.

Who was heavily involved in the hotel industry and never really recovered from the Covid.

Matthew Breese: I mean, just just industry sources are starting to point to, you know, new transaction values down, showing valuations down 30 to 45% in that request. And I guess you're close to kind of your average LTV at 58%. I guess that's my bottom line point. And then I guess I'd be curious, obviously, multi-family can bucket close the market rate and the rent regulated. How much rent regulated multi-family exposure do you have today?

Speaker 2: pandemic and been working with him for a while. We did get a significant paydown, but you know, we thought at this point we do have a we do have a judgment and you know, we expect recovery, but at this point we thought it is prudent to To take the charge and any any funds we get in return. We take as recovery

Pandemic and been working with them for a while we did get a significant pay down but.

We thought at this point, we do have we.

We do have a judgment and we expect recovery, but at this point, we thought it was prudent to take the charge and any any funds we get in return we take as a recovery.

Great.

Speaker 4: Just regarding your commentary about the expenses going forward and the potential to drive some efficiencies and things that you're looking at on a go-forward basis. Just any color around where you guys are looking at to drive those efficiencies and what the potential magnitude of those efficiencies could be as we go into 2024. Yeah, Emmy.

And just regarding your commentary about.

Matthew Breese: Yeah, it's around the third matter of our portfolio free markets, around two thirds, the rent regulators around the third basically. Look, I mean, at the end of the day, we can only tell you what we're seeing in our portfolio, we're really not seeing any signs at this point in time. So, we'll leave it at that.

The expenses going forward and the potential to drive some efficiencies and things that youre looking at.

On a go forward basis.

Any color around where you guys are looking at.

Matthew Breese: Totally understood. Okay, thank you for taking my questions. I'll leave it there. I appreciate it. Thanks.

To drive those efficiencies and what the potential magnitude.

Hum.

<unk>.

Matthew Breese: Thank you, Matt.

Efficiencies could be as we get into 2024.

Mark Fitzgibbon: Our next question comes from Mark Fitzgibbon from Pythasana. Mark, your line is now open. Please go ahead. Hey guys, good morning. I guess I was curious first. What does the pipeline and new private client teams look like today? And of the private client teams you've hired recently, can you give us a sense for how much they've already brought in in terms of deposits and loans? They've opened up about 2,000 accounts at this point and about 1,000 separate customers.

Yes, I mean look we've.

Been pretty active in looking at efficiencies throughout the year, we had a reduction in force in June .

Speaker 2: pretty active in looking at efficiencies throughout the year. We had a reduction of force in June . You know, it's a constant state of affairs in terms of...

No.

It's a constant state of affairs in terms of trying to.

Speaker 2: trying to look at opportunities across the board. Obviously, I mentioned we just outsourced our data center, that's gonna save personnel costs and equipment costs and whatnot, and that's gonna register in the fourth quarter. And...

To look at opportunities across the board, obviously I mentioned, we just outsource our data center thats going to save.

Personnel costs and equipment costs and whatnot.

And Thats going to register in the in the fourth quarter.

Mark Fitzgibbon: Not all of that has funded yet. I'd say there's probably five to 600 accounts that haven't funded yet. I mean, at this point they brought in about $250 million and about 50% of that is DDA. Okay. And the pipeline and the teams too, would you say it's still quite a few out there? Yeah, I mean, it's growing really steadily every week. We get reports twice a week and basically we're seeing steady growth every week.

And we're looking.

Speaker 2: you know, we're in our budget process now, so we're looking across the board in terms of opportunities to.

In our budget process now so we're looking across the board in terms of opportunities too.

Speaker 2: to become more efficient. On the other hand, we want to take advantage of opportunities and we've done that so far in terms of hiring the signature teams and...

To become more efficient on.

On the other hand, we want to take advantage of opportunities and we've done that so far in terms of hiring the signature teams and.

And.

Speaker 2: and you know our recent higher terms of a health care vertical and i think it's important that you know we don't want to just play defense we want to play off and and and take advantage of the opportunities that are out there uh... and i think we've been able to do that we're one of the few banks that were able to hire significant amount of teams from

A recent hire in terms of our health care vertical and I think it is important that we don't want to just play defense, we want to play offense and to take advantage of the opportunities that are out there.

And I think we've been able to do that where we wanted a few banks that were able to hire a significant amount of teams from from signature and obviously its pay dividends to us already.

Speaker 2: from signature and obviously it's paid dividends to us already. And we've been able to do that while keeping our expenses below our guidance. So we're gonna continue to explore a number of opportunities. We are looking at certain areas that I think there's more expense savings available.

Mark Fitzgibbon: Okay. And then I wonder if you could share with us your thoughts on maybe restructuring some of the available for sale securities book, given as you said that, you know, it's relatively short and duration. And you know, rates maybe stuck up here for a little bit. Is that something you're contemplating? Yeah, I think at this point, probably not in honest, Mark, I think you know, just having a little more stability in the banking industry and general is important.

And we've been able to do that while keeping our expenses.

Lower our guidance so.

Sure.

Going to continue to explore.

<unk> opportunities, we are looking at certain certain areas that I think theres more.

Hence savings available, but again, we've been we've been doing that on a fairly regular basis.

Speaker 2: But, you know, again, we've been doing that on a fairly regular basis. And, you know, I don't think we're going to do any significant major initiatives. I think it's going to be, you know, very granular in terms of how we manage our expenses.

Mark Fitzgibbon: You know, I think we're focused on, you know, building capital optically, you know, we're doing that, you know, 10 to 20 basis points of every quarter. So it's pretty short. It's going to run off pretty quickly. So I'd say in the in the near to medium tone, probably not, but you know, something we evaluate and you know, update our analysis constantly. Okay. And then lastly, what are your thoughts around share buybacks, you know, given the depressed level of the stock price, you know, or capital levels, you know, an impediment to doing buybacks here?

I don't think were going to do any significant major initiatives I think it's going to be very granular in terms of how we manage our expenses.

Got it.

Mark Fitzgibbon: Not not really, Mark, you know, I think, you know, from a corporate finance perspective, it's screaming out to do buybacks. I think that said in the current operating environment, you know, I think clients value, you know, banks with capital and strong liquidity and, you know, you don't know how long the Fed is going to stay at these levels. Don't know, you know, what's going to happen, you know, if there is rates more.

And just on.

Speaker 4: And just on the loan growth, appreciate all the color around the pipeline and the rates there. As you're looking to the fourth quarter here in the amount of CRE and multi-family that might pay down or run off, how are you thinking about net overall loan growth for next quarter?

On the loan growth I appreciate all the color around the pipeline and the rates there.

As you're looking into the fourth quarter here.

In the amount of CRE and multifamily that might pay down or run off how are you thinking about kind of net overall loan growth.

For next quarter.

Speaker 3: I think Chris and our prepared remarks we said the balance sheet should be pretty stable. Runoff and multifamily and Cree off that right, C&I and oneruff.

Yes, I think Chris in our prepared remarks, we said the balance sheet should be pretty stable runoff in multifamily in Korea offset by CNI.

In owner occupied.

Mark Fitzgibbon: So I think at this point, we're keeping the capital to support our clients. They'll come a time and place, you know, far buybacks and, you know, you know, we've been very active on that front since the merger and, you know, when the time's right, we'll do it. But, you know, like a lot of up years, I think right now we're, you know, waiting and watching to see what happens over the course of the next, you know, three months or so.

Thank you Chris as a reminder, if you'd like to ask a question. Please press star followed by one telephone keypad.

Speaker 1: Thank you Chris. As a reminder, if you'd like to ask the question, please press start followed by one in your telephone keypad.

Mark Fitzgibbon: Thank you. Thank you, Mark.

Speaker 1: Our next question is from Mooshia Freddy from DA Davidson. Do you mind us now open please go ahead.

Our next question is from Moshe <unk> from D. A Davidson. Your line is now open. Please go ahead.

Hey, good morning on for Manuel here most of my questions have been asked but could you.

Speaker 7: Hey, good morning, on for a manual here. Most of my questions have been asked, but could you talk about your loan to deposit ratio?

Talk about your loan to deposit ratio.

Chris O'connell: Our next question comes from Chris O'Connell from KBW. Chris, your line is now open. Please go ahead. Hey, good morning. Start off on the credit for this quarter. I noticed the reserve came down a little bit, and that charted us a bit higher, but MPAs came down. Any commentary around the movement, this quarter, and whether there was something hard drop that was maybe fully reserved for? Yeah, that's exactly right, Chris. We had a loan that was fully resolved.

<unk>.

Speaker 7: how it's going to settle in by the end of the year. Just some color on that would be great.

And how it's going to settle in by the end of the year, just some color on that would be great.

Yes, we obviously down this quarter to 102.

Speaker 3: Yeah, we're obviously down this quarter to 102. Obviously, if we keep low on flat and we grow deposits, it's gonna continue to go further down. I think at the start of the year, we had said, we had set a hard line and said, we don't wanna go above 107 and a half, and that was when there was a banking crisis and deposits were in flux. I mean, at this point in time, we'd like to get to 100% as quickly as possible, and then continue to move that ratio down as deposits keep coming in.

If we keep loans flatten we grow deposits that's going to continue to go further down I think at the start of the year. We had said we'd set a hotline and said we don't want to go above 107, and a half and that was when.

There was a banking crisis and depository influx I mean at this point in time, we'd like to get to a 100% as quickly as possible and then continue to move that ratio down as deposits keep coming in.

Greg just to add one more.

Speaker 7: Great, just have one more. In terms of the technology rollout study day last quarter, could you just provide some color on?

Chris O'connell: We took a charge on that, but again, at 18 basis points, it's pretty minimal overall. Our pool reserves stayed pretty constant. Within our 70 odd million of reserves, there's around $53 million for the general pool, and that really didn't change much. So the overall pool stayed pretty consistent.

In terms of the technology Rollouts that you said last quarter could you just provide some color on what the progress is in terms of the new business focused accounts.

Speaker 7: progress today in terms of the new business focused accounts and sorry if I mess that but just to call it on that will be great.

Sorry, if I missed that but just some color on that would be great.

Yes, so we rolled out our online banking.

Speaker 2: Yeah, so we rolled out our online banking.

Chris O'connell: Got it. And any color you could provide on the type of credit in any details around the one that was charged off? Yeah, it was a line of credit to an individual who was heavily involved in the hotel industry and never really recovered from the COVID pandemic, and been working with him for a while. We did get a significant pay down, but we thought at this point, we do have a judgment, and we expect recovery, but at this point, we thought it is prudent to take the charge and any funds we get in return will take us recovery.

<unk>.

Digital online account opening process for retail we're rolling out the digital online for commercial as we speak.

Speaker 2: Digital Online Account Oping Process for retail. We're rolling out the digital online for commercial as we speak.

Speaker 2: And, you know, we're very happy with that. It kind of completes the package in terms of our digital capabilities. And, you know, our new bankers, our new private bankers, and what not are using that, we're certainly going to continue to enhance that. Our online, our new

And.

We're very happy with that it kind of completes the package in terms of our digital capabilities.

And.

And our new bankers are new private bankers and whatnot are using that certainly going to.

<unk> to enhance that are are online.

Or are new.

Speaker 2: Escal Management System has been very successful and we're very happy with that. And so, you know, we're pleased with all the changes we made and, you know, it just adds to the sweeter products for our customers.

ESCO management system has been very successful and we're very happy with that.

And so we're pleased with all the all the changes we made in.

Chris O'connell: Great. Just regarding your commentary about the expenses going forward, the potential to drive some efficiencies and things that you're looking at on a go-forward basis. Just any color around where you guys are looking at to drive those efficiencies and what the potential magnitude of those efficiencies could be as we get into 2024? I mean, look, we've been pretty active in looking at efficiencies throughout the year. We had a reduction of force in June.

I'd just add to the suite of products for our customers.

All right fantastic Thanks for taking my questions.

Speaker 1: Thank you, my chef. As a reminder, ask the question, you may do so by pressing start followed by one on your telephone keypad.

Thank you Moshe as a reminder, <unk> asked the question you may do so by pressing star.

One on your telephone keypads.

We have no further questions registered today, so with that I will hand that Gilles Hi, Stuart Libre for final remarks.

Speaker 1: We have no further questions registered today. So with that, I will hand back to your host, Stuart Leigh, both the final remarks.

Chris O'connell: It's a constant state of affairs in terms of trying to look at opportunities across the board. Obviously, I mentioned we just outsourced our data center. That's going to save personnel costs and equipment costs and whatnot, and that's going to register in the fourth quarter. We're in our budget process now, so we're looking across the board in terms of opportunities to become more efficient. On the other hand, we want to take advantage of opportunities, and we've done that so far in terms of hiring the signature teams and our recent hiring in terms of a healthcare vertical.

Speaker 2: Thank you, Carla. Again, I would like to thank all of our employees for their diligence and hard work as well as our shareholders for all their support. And we look forward to speaking to you all again at the end of January .

Thank you Carla again, I would like to thank all of our employees for their diligence and hard work as well as our shareholders for all their support.

And we look forward to speaking to you all again at the end of January .

Yes.

This concludes today's call. Thank you for your participation you may now disconnect. Your line have a great day.

Speaker 1: This concludes today's call. Thank you for your participation. You may now disconnect your line. Have a great day. Good day.

At the end of January .

Yes.

Chris O'connell: I think it's important that we don't want to just play defense. We want to play offense and take advantage of the opportunities that are out there. I think we've been able to do that. We're one of the few banks that were able to hire significant amount of teams from signature. Obviously, it's paid dividends to us already. We've been able to do that while keeping our expenses below our guidance. We're going to continue to explore a number of opportunities.

Chris O'connell: We are looking at certain areas that I think there's more expense savings available. Again, we've been doing that on a fairly regular basis. I don't think we're going to do any significant major initiatives. I think it's going to be very granular in terms of how we manage our... And just on the loan growth, appreciate all the color around the pipeline and the rates there. As you're looking into the fourth quarter here in the amount of CRI and multi-family that might pay down or run off, how are you thinking about kind of net overall loan growth for next quarter? Yeah, I think Chris and I prepared remarks. We said the balance sheet should be pretty stable, run off in multi-family and CRI, off that right, C&I, and on the archipelago.

Chris O'connell: Thank you, Chris.

Operator: As it reminds that, if you'd like to ask the question, please press start followed by one on your telephone keypad.

Manuel Navas: Our next question is from Moosha Reddy from D.A. Davidson.

Manuel Navas: The line is now open, please go ahead. Hey, good morning. I'm from Manuel here. Most of my questions have been asked, but could you talk about your loan to deposit ratio and how it's going to settle in by the end of the year, just some color around that would be great? Yeah, we're obviously down this quarter to 102. Obviously, if we keep loan flat and we grow deposits, it's going to continue to go further down.

Manuel Navas: I think at the start of the year, we had said a hard line and said, we don't want to go above 107 and a half and that was when there was a banking crisis and deposits were in flux. At this point in time, we'd like to get to 100 percent as quickly as possible and then continue to move that ratio down as the deposits keep coming in.

Manuel Navas: Great. Just have one more. In terms of the technology rollout study day at last quarter, could you just provide some color on what the progress it has in terms of the new business focused accounts and sorry, if I missed that, but just some color on that would be great. We rolled out our online banking digital online account opening process for retail. We're rolling out the digital online for commercial as we speak.

Manuel Navas: We're very happy with that. It completes the package in terms of our digital capabilities. Our new bankers, our new private bankers and what not are using that, we're certainly going to continue to enhance that. Our online or our new ethical management system has been very successful and we're very happy with that. We're pleased with all the changes we made and it just adds to the suite of products for our customers.

Manuel Navas: I have a fantastic thanks for taking my questions. Thank you, my chef.

Stuart Lubow: As a reminder, to ask the question, you may do so by pressing start followed by one and your color going P pads. We have no further questions registered today, so with that, I will hand back to your host, Stuart Lubow, for final remarks. Thank you, Carla. Again, I would like to thank all of our employees for their diligence and hard work as well as our shareholders for all their support, and we look forward to speaking to you all again at the end of January.

Operator: This concludes today's call. Thank you for your participation. You may now disconnect your line. Have a great day. In the end of January.