John Buran: It’s going to be obviously a gradual pace because the factors obviously are what’s happening with loan originations. Currently, we’re talking about the 7% level, the 7th handle there. In addition, you have the loan repricing that we talked about, which is up around the 680 plus area. And then, of course, the CD portfolio, which has some maturities coming in at rates closer to what we’re retaining CDs at today. So I think those factors just make for a slower movement in margin improvement, absent, of course, any activity that the Fed would do in the second half of the year. So, we do expect to see NIM bottoming even without a change in rates.
Manuel Navas: Okay. I appreciate that. Can you go into any more detail yet on some of the opportunities that you could take advantage out of some certain issues with a large competitor in your space? Has it already helped trends at all? Just kind of lay some of that out for me, please.
John Buran: Our pipeline has grown month by month since the beginning of the year, so we’re starting to see some activity already. And it’s really across the board. What we’re bringing on board is really more a function of our desire, as I said earlier, to stick with our very strict credit criteria while we look for improving yields in the loan portfolio.
Manuel Navas: So you would say that some of the loan pipeline has benefited from this. Has some of the deposit growth benefited from this as well?
John Buran: Yes, both.
Manuel Navas: And then have you seen any talent shake loose that interests you?
John Buran: We’ve had limited, not as many as some of our competitors have announced.
Manuel Navas: Okay. And then with the better deposit growth this quarter, is it going to so much slow from here just because of seasonality next quarter? And kind of thoughts on the loan-to-deposit ratio across the year?
John Buran: Yes, so there is some seasonality built into that timeframe. We normally expect to see a little bit of a dip in the summer months.
Manuel Navas: All right. And then I guess just my last question is, can you just comment on multifamily policy, how it could impact you? There’s a number of issues in the budget going through. They’re not finalized. Where do you stand on how that could impact you at all?
John Buran: Obviously, there’s a range of possibilities. You’re talking about some pretty draconian things, which appear to be off the board right now. So what is being spoken about, based upon our understanding, is a little bit less stressful than the most extreme versions of the legislature. There’s clearly not a lot of detail that we can get into yet, until we’ve gotten a full examination of the entire budget and its implications. But at least I think some of the more dramatic and drastic things have been, while not taken off the board, clearly it looks like they maybe watered down. So the expectation of a major disaster is a little bit less so. But I would reserve full judgment until we are able to pick apart all the nuances of the legislation.
Manuel Navas: Completely understood. Thank you for the comments.
Operator: The next question will come from Chris O’Connell with KBW. Please go ahead.
Chris O’Connell: Hey, good morning. I was hoping that you could provide when the timing of the loan purchases and the securities investments were in the quarter. Just any sense of those additions, given the timing, the kind of net impact or add to their impact on the 2Q margin?
Susan Cullen: The loan purchase was late in March. Both of the investments were bought in late February through March.
Chris O’Connell: Got it. And so is the expectation that their benefit to the margin kind of offsets any lingering funding pressures from repricing in 2Q?
Susan Cullen: Everything else being equal, they would improve the NIM since they have a 670 or so handle and our funding has a 3 handle. So that just mathematically, it would increase the NIM, everything else being equal.
Chris O’Connell: Got it. Great. And then just kind of following up on the general discussion on the multifamily market, do you have any kind of additional color as to what you’re seeing from the borrowers in your market, particularly with Q1 maturities and repricing and as you guys are looking and talking to your borrowers about repricing set for this year and where debt service coverage ratios are migrating to and just how you think about the long-term viability of being in this asset class?
John Buran: I think the demand for affordable housing in New York is certainly not going to abate. And I think some of what you hear nationally on the Greece side is associated with some overbuilding which is clearly not occurring in the New York market. With respect to what we’re seeing in our portfolio, we’re still seeing very solid debt coverage ratios. We’re seeing our — the borrowers who moved up in rate are able to accommodate. And frankly, we’re keeping a very close watch on our customers, reaching out to them 18 months before any maturity, so we’ve got a very clear picture of how they would operate under a new rising rate environment. So we’re seeing some positive benefits with a 200 basis point or so jump upward and we’re seeing our borrowers able to accommodate that by and large.
Chris O’Connell: That’s great. And anything more specific, not necessarily exact, but as to where you’ve recently seen and kind of where you’ve mapped out debt service coverage ratios moving to obviously the total portfolio, very strong specifically referring to kind of recent repricing or forward repricings.
