Alexander Roberts Twerdahl's questions to FLIC leadership • Q1 2024
Question
Asked about the long-term outlook for the commercial loan portfolio, expectations for overall loan growth versus amortization, the strategy for balance sheet restructuring given the capital position, potential for selling securities to boost NIM, and details on underwriting standards and NOI trends for the multifamily portfolio.
Answer
The bank aims for a more balanced loan portfolio with 25% in C&I, but this is a long-term goal. They expect low single-digit loan growth for the year, with the pipeline sufficient to offset payoffs. Balance sheet restructuring is continuously monitored, but current earn-back periods of 5-6 years are too long. There are no immediate plans to sell securities as the portfolio has low prepayments. For multifamily, NOIs are pressured by inflation, but their conservative underwriting (1.8x DSCR average) provides a significant cushion, with post-reset DSCRs expected to remain strong at around 1.4x.