Financial Data and Key Metrics Changes - Net income for the quarter was $58,500,000 or $0.78 per share, slightly above consensus of $0.76 [7] - Net interest margin (NIM) was $2.81, down three basis points from the previous quarter [7] - Cost of deposits decreased by 14 basis points to 2.58% from 2.72% last quarter [8] - Cost of interest-bearing deposits fell by 21 basis points to 3.54% from 3.75% [8] - Average yield on loans declined from 5.6% to 5.48% [35] Business Line Data and Key Metrics Changes - Total loans decreased by $300,000,000, with $200,000,000 attributed to the residential book and $100,000,000 from the core commercial book [12] - Average non-interest bearing demand deposits (NIDDA) increased by $453,000,000 [10] - Total deposit growth, excluding brokered deposits, was $719,000,000 [11] Market Data and Key Metrics Changes - The weighted average loan-to-value (LTV) of the commercial real estate (CRE) portfolio was 55% [31] - The weighted average debt service coverage ratio was 1.78 [31] - CRE exposure totaled 26% of loans, which is lower than the industry average [31] Company Strategy and Development Direction - The company is focused on managing interest rate risk and maintaining a neutral position in various scenarios [19] - The management emphasized the importance of relationship-oriented clients and deposit growth [27] - The company plans to continue increasing dividends steadily over time [22] Management Comments on Operating Environment and Future Outlook - Management noted a larger "cone of uncertainty" regarding economic conditions and interest rates [17] - Despite uncertainties, management remains optimistic about client engagement and business growth [15] - The company is prepared for both positive and negative economic scenarios, with more capital and liquidity than ever [23] Other Important Information - The company completed a general ledger conversion successfully [5] - The average cost of total deposits declined to 2.52% at the end of the quarter [37] - The provision for credit losses was $15,000,000, with a stable allowance for credit losses (ACL) to loans ratio of 92 basis points [40] Q&A Session Summary Question: What is the impact of spread compression on new loans? - Management indicated that credit spreads have widened in the securities market and noted increased competition in the CRE space, leading to tighter spreads [48][49] Question: Any insights on the growth of nonperforming loans? - The increase in nonperforming loans is primarily in the C&I book, with no specific trends or concerns highlighted [52] Question: What percentage of DDA balances are subject to ECR? - Most commercial deposit accounts are subject to ECR, but the extent is not significant [54] Question: Are there any downgrades in the New York City office market? - Management believes they have moved past the worst of potential downgrades, with no surprises expected in the portfolio [103][104] Question: What is the outlook for margin and NII trajectory into the second quarter? - Management expects margin expansion driven by growth and transformation of the balance sheet mix, but specific quarter-by-quarter guidance was avoided [75][76]

Financial Data and Key Metrics Changes - The company reported net income of $17.2 million or $1.47 per diluted common share, up from $13.4 million or $1.13 per share in the same quarter a year ago, reflecting a strong performance driven by higher interest income and lower funding costs [6][16] - Net interest income totaled $49.3 million in Q1 2025, an increase of about 10% from $44.8 million in Q1 2024, with a net interest margin of 3.57%, up 25 basis points year-over-year [8][17] - Non-interest income decreased to $6.6 million, a decline of 3.2% compared to the first quarter last year [20] Business Line Data and Key Metrics Changes - The loan portfolio remained flat at $4.76 billion, up 2.2% from the end of Q1 2024, with multifamily loans at $1.59 billion and commercial real estate at $1.49 billion [9][10] - Construction lending totaled $475 million, with a healthy pipeline of unfunded balances [10] - Non-interest expenses were flat at $34.8 million year-over-year, despite investments in technology and personnel [14][21] Market Data and Key Metrics Changes - Total deposits increased by 3.3% to $4.76 billion, driven by increases in interest-bearing checking balances and brokerage deposits [11][26] - Non-performing assets remained minimal at 0.16% of total assets, with non-performing loans at 0.07% [28][29] Company Strategy and Development Direction - The company remains focused on executing its strategy, protecting margins, managing credit proactively, and investing in people and systems [15][24] - The board approved a new stock repurchase authorization of up to 1 million shares, indicating confidence in the company's capital position [33] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is competition for loans, activity has decreased slightly, and they do not expect significant growth in the near term [47] - The company maintains a neutral interest rate risk posture and is prepared for potential rate cuts from the Fed [43][44] Other Important Information - The allowance for credit losses as a percentage of total loans stood at 1.36%, consistent with the end of 2024 [30] - Total assets increased to $5.99 billion, up from $5.78 billion a year ago [24] Q&A Session Summary Question: How should the margin react without changes to Fed policy? - Management indicated that while there may be slight benefits from maturing CDs, substantial changes are not expected [38] Question: How will the balance sheet react if there are rate cuts from the Fed? - Management believes the overall interest rate risk posture is neutral, with a slight negative impact expected initially from a rate cut [43] Question: Can the company expect to remain active with buybacks given the current growth? - Management confirmed they expect to continue buybacks, depending on market conditions [54] Question: Is modest growth in expenses reasonable without any material planned expenditures? - Management stated that modest growth in expenses is a fair assumption, with no unusual expenditures anticipated [57]