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

Thomas Cangemi: I think, I mean, there’s obviously the three components. The one that’s very seasonal is obviously escrow payments. When you have mortgages coming in and out, you have tax payments. But we think that’s going to be something that we could really drive further deposit opportunity. Like I indicated in my previous commentary, on the Lee Smith’s business, there’s tremendous opportunity to really be focused on managing the P&I payments and the tax payments for our large customers that we do business with, both on the warehouse side as well as on the servicing side. And that number can — it goes up and down depending when the payments go back to the municipalities on the tax side, but there’s always the P&I payments coming through.

And we have a long history under AmTrust Mortgage to manage that. So, I think we have a few billion dollars of pre-consolidation with Flagstar. As we indicated, I think it was at $4 billion. So we’re probably around $6 billion now. But I see a $10 billion opportunity there, just by the current client base as we go after it. It’s very volatile with respect to interest rates. There’s a cost to that. But as things start to normalize on the interest rate side, we have an opportunity to have a different funding mechanism versus traditional — non-traditional wholesale funding that the bank has been accustomed to. So another source of opportunity. And the ones that we have credit with, I really feel the clients will be a credit with, I feel that we could do a better job on banking that client.

And that’s what we’re going to go after. As we indicated, the true operating activity, that we could be helpful, given our size and balance sheet and our technology offerings as well.

Manan Gosalia: Great. Thank you.

Operator: Thank you. Our next questions come from the line of Steven Alexopoulos with JPMorgan. Please proceed with your questions.

Steven Alexopoulos: Hey, Good morning, everyone.

Thomas Cangemi: Steven, how are you?

Steven Alexopoulos: Good. How are you, Tom? I wanted to start on NIM. So I appreciate the 1Q 2023 guidance. But, Tom, what does that mean in the release? Here you say you expect 2023 margin above where you ended the year, I would think that would be on a spot basis, maybe consistent with 1Q 2023 guidance. Can you talk through that?

Thomas Cangemi: I’ll give a broad discussion up front and John will go into the details. But we’re kind of indicating that we have one month of Flagstar at the fourth quarter going into our current NIM on a historical look-back basis for Q4, and we’ve been in the low 2.20. Was it 2.28, John.

John Pinto: 2.28.

Thomas Cangemi: So if you think about our guide for Q1 at 2.55 to 2.65, we have the benefit of a lot more floating rate assets, different verticals that are priced to footing rating indices. At the same time, we have a significant amount of customers that are rolling into their option period. So, for example, in Q4, we had about $0.5 billion of multifamily loans that went to sell for plus 2.25, 2.50