Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
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| So we’re proud of the opportunity to diversify our lines and focus on the positive relationship of lending |
| And we have a very strong overall average LTV and a strong debt service coverage ratio |
| So we're really pleased with the retention in that portfolio |
| Among this quarter's highlights were good linked-quarter loan growth, stable deposit trends, and a significantly higher net interest margin |
| We also made further progress in improving our funding mix, as both wholesale borrowings and brokered CDs declined, while non-interest-bearing deposits remained approximately one-third of total deposits, virtually unchanged from the previous quarter |
| Our EPS this quarter was $0.02 better than consensus |
| One of the drivers this quarter was our much higher net interest margin |
| But we feel really good that the portfolio has performed well this year |
| So we continue to be really optimistic around the positives |
| We remain constructive on the net interest margin going forward due to the continuing positive shift in our funding mix and the impact of higher asset yields |
| And I think another good news story is, from a CD renewal perspective, we've been above the 80% retention rate all year, which is kind of top of class from an industry perspective |
| So we're excited at this whole team |
| But like we talked about before, prior to this quarter, the performance has been extremely strong |
| So I will tell you that we're very pleased where we are and we're building new Flagstar |
| It's designed to create a great client experience and it will be uniquely Flagstar positioned with the brand that Tom talked about |
| Despite the increase in MPLs, our asset quality metrics remained strong as MPLs to total loans were 47 basis points compared to 28 basis points last quarter, while our net charge-offs were also up or near 3 basis points of average loans |
| Also, as you can see on Slide 9 to 12 on our investor presentation materials, our asset quality metrics remained solid and continue to rank among the best relative to the industry and our peers |
| The strong metrics reflect our conservative underwriting standards, which has served us well over multiple business cycles |
| So it's been a relatively strong book, like I said, a very powerful position regarding the consistency of performance |
| Particularly given the tough environment, the team has done a lot of really good work |
| And I think there's opportunities to do slightly better than that in the fourth quarter as well to get to more than mid to the low end of that guide |
| And those systems integrations will provide us the benefit and some cost reductions as well as depending on what happens with the rest of the FDIC receivership loans, the multifamily and the CRE loans, if those do end up transferring to a purchaser in this fourth quarter, then we'll have some benefits also on the cost side from that extra servicing that we no longer have |
| We have the SOFR option on repricing, which has been very positive for their refinancing opportunities |
| And I feel really good about where that retail business is positioned |
| We want to have a very strong margin as we run these businesses through changes of interest rates |
| We've seen some significant success with our client book, given the fact that we have a long history |
| So we've got a lot in the pipeline and we feel really good about our prospects of winning additional business |
| Throughout the past few years, we've had tremendous success with that model |
| We're moving towards, as John indicated, neutrality was still asset sensitive and it's rising rate -- the current rate environment that will add to continued margin benefits |
| Feel pretty good about the portfolio |
| Statement |
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| It's a difficult environment coming from a much lower rate I'd say in the mid threes to now |
| I think, first of all, just from an origination point of view, if you look at Q3 versus Q2, the market was down 6% quarter-over-quarter, and our mock mortgage locks were down only 1.7% |
| And then secondly, also talk about the health of the multifamily landlords in New York, like you're hearing a lot more concern around the rent regulation limiting the ability to raise rents, and that's going to squeeze these landlords |
| From a forecasting perspective, we're expecting it to be a little bit lower than that in the fourth quarter, not substantially |
| Now we're focusing on the businesses, and the businesses will have -- some businesses actually seen declines in particular multifamily, CRE, the business is very slow, you'll see the offset of growth in the C&I portfolio |
| And that's in the face of obviously the most difficult deposit environment that we've seen in our careers, for sure |
| So we're being proactive to get the customer to the other side, given the challenges because of the significant changes of interest rates |
| Quarter-over-quarter, we're only down 500 million, which is less than 1.5% |
| We will see the Flagstar piece start to slow down here as we get to the one-year mark in December |
| Overall, they are down 33% or nearly 7 billion since the year end 2022 |
| Excluding these two items, deposits were down less than 1% on a linked-quarter basis |
| There are some instances where a lot of the issues from them not being able to pay timely is because the tenants aren't paying |
| A new player coming in doesn't have that culture, that history, so it makes it challenging |
| But in answer to your question, if there's not enough to refinance out, the debt service coverage have come down, but not to the point where they can't meet their obligations |
| That was the business risks when we announced the transaction |
| And some of the news articles out there are setting this as a more difficult portfolio to sell |
| And then we have after that, once we get to December, we're going to be very, very low in that number |
| As Tom mentioned, we definitely have some additional adds, both back office and through our PCG groups that are going to put pressure on the expense base going up along with just the additional expenses for being over 100 billion |
| We just don't expect it to be as big a drop as it was quarter-over-quarter |
| And as you can recall from the original deal mechanics, we felt there will be further runoff just because of the unknown factor as we came into a very tumultuous time |
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