PBCT
#I know we are very optimistic on both parts.
We have a great C&I team there and we've made really great, what I would call steady progress through that timeframe.
Built a really nice team and have good customer base.
I also think the Suffolk team joins and integrated, I see a lot more progress on that front.
When I think about pre-book, I know we have mentioned and announced fairly recently the addition of a senior executive in the New York market, and Mark Melchione and he has brought in a very experienced team and we are very excited about their progress.
We've had some closings already and we have a very strong pipeline and we are looking forward to a positive impact there.
That is what we would call our traditional pre-book.
We're looking for relationship customers that will have multiple transactions with us and deposit relationships very similar to what we've experienced across the rest of the franchise.
So we do continue to move away from the New York multi-family smaller transactional piece.
So we see a lot of opportunity as we move forward.
No.
It's not.
It will be the same.
32.4%.
So we were accruing at 33.5% through the first two quarters.
And we trued that up.
That's all it is.
Full year.
The $3.1 million included costs associated with both Suffolk and Gerstein Fisher.
You will probably see a small amount of costs in the fourth quarter and then the restructuring charges when we close the deal.
Which should be first quarter.
And just want to remind or maybe give you more perspective on the New York lending just to make sure I interpret your question right but we really have a New York customer base that includes the customers in ABL, equipment finance, large corporate, a lot of business banking activity.
So while you ask about C&I and CRE if you think about our total business across the New York Metro area, it includes all of our business lines.
Got you.
Thank you <UNK>.
Professional and outside services.
Yes.
About $900,000.
Actually $700,000.
They were not prepared to give any guidance for next year at this point.
That's not in our hands at all and very difficult to call.
I think you're going to have to make that decision yourself.
It is purely in the regulators hands, and we have no idea when we will get any final answers.
As we said, and what we've been saying consistently for at least a year and a half is the size and in the back half of 2016.
So on the calendar it continues to move forward but we can only be as specific as before the year is over.
I think that is still a good place in terms of looking at it.
I think everybody recognizes now and through our history we have had very low nonperforming levels and charge-offs and it gets pretty bumpy at these levels.
Every once in awhile you have an asset that turns heads so I think planning in the range you are talking about is appropriate.
Thank you.
Sure.
So I will go to where you started first with the CRE thinking.
There is a dynamic taking place right now that involves the pullback from the New York multi-family portfolio.
That is running off and we are still gauging the pace of that.
Probably somewhere between $20 million and $40 million a quarter.
But we will see how that goes.
It has slowed as of late.
On the other hand, we have obviously a large customer base across the rest of the footprint and now a very strengthened group in New York, and we are getting I would say good origination.
I expect we will start seeing some growth in CRE as we go forward.
And the only contrary I guess or signal I would give there the market does seem to be a little slower, a little softer in terms of transactions this year.
So that's CRE.
C&I is very steady across the middle market.
Starting to see a little better progress on business banking.
ABL is having a very strong year.
Mortgage warehouse is having a very strong year even though they had a flat quarter if you will or a modest quarter.
And equipment finance is also doing reasonably well although slower overall than it has been in the past.
And so on the residential and consumer side, the residential side there is a shift going on, the mix of purchase and refi is kind of 50/50 lately and the volumes are strong is, the pipelines are strong.
The branches tend to do a little less purchase so the refi as it slowed down I think is affecting that.
We are getting a lot more activity through the mortgage originators, mortgage account officers and we are adding as we have told you the past mortgage account officers particularly inside 495 in Boston and in New York.
So those numbers of mortgage originators are up fairly considerably.
And then our wholesale business is seeing a good amount of activity as well.
So it's a mix of the channels if you will in the residential area.
The consumer I think consumer has been flat and continues to be on the flattish side and it tends to build as we build households and it tends to pull back when refi is more active and people tend to roll their home equities outstandings into fixed rate longer terms.
I just want to correct I said $20 million to $40 million a quarter.
And it is monthly.
The $20 million to $40 million of multi-family runoff is per month.
Not per quarter.
If you notice you have seen the pace of NIM compression slow dramatically and then this quarter actually it went up a basis point.
It is too early to call a bottom in the NIM.
There still is a small and shrinking differential between the existing loan portfolio and new business.
And you are correct, you saw about an 8 basis point decline quarter over quarter in security portfolio yield.
So the way I would answer the question is, are we buying guidance on the margin with 275 to 285 in July and it looks like we are on track to be right there in the middle of that guidance plus or minus.
I did call out the $2 million increase was driven by an acquired private investment partnership.
So there is a little bit of that in that line.
That was about a little over $3 million in the quarter.
There is a lot of little things that go through there.
Credit card fees is probably one of the larger drivers that has been growing.
We talked about that before, where a few quarters ago we entered an agreement with Elan, and we are getting a lot of traction in our customer base adopting the credit card offering that we now have.
That was almost nonexistent over the last couple of years.
That is the primary driver.
But the rest of the stuff our fees around some retail, home equity, HELOC accounts.
Things of that nature.
What we said when we announced that deal in Q&A is from a ---+ their annual run rate of revenue is about $17 million.
We also said that it was modestly accretive to 2017.
It is spreads.
It is a combination of LIBOR which we called out and then spreads.
That entire portfolio is not one month LIBOR based.
We got a little better spread performance during the quarter.
You are welcome.
I don't believe it has anything to do with that.
It really is the normal process that you probably are aware the process is an extended on a post crisis and I think it is generally getting slightly better as of late but what we see is transactions taking six to nine months, and we are in that timeframe.
We are certainly hopeful to be on the shorter end, but we ---+ as I said, it is nothing in our control.
So to get to the nature of your question, I don't think you should view it as it is taking longer than normal.
No, I wouldn't over complicate that.
We have gotten regulatory support to maintain our dividends and our approach to dividends over an extended period of time.
Our dividend payout ratio continues to improve if you will to get lower over time.
And as we move through ---+ go forward the next few years we expect to continue to improve our profitability, to improve that ratio, and we also expect that the regulatory view of levels of dividend payout ratio for all banks our size and banks in that 50 will evolve.
And it has been evolving.
So trying to be clear that we believe that we will continue to reduce that payout ratio and we believe that in our dialogue with regulators that we will get support.
We obviously can't predict exactly where the payout ratio will be or exactly what the regulatory view will be, but we've got very good communication and relationships with our regulators, and we will approach those dialogues, I should say we have them regularly and we will continue to have them regularly.
That issue will get discussed.
Thank you again for joining us today.
We appreciate your interest in People's United.
If you should have any additional questions feel free to contact me at (203)338-4581.
Have a great night.
