Hello, welcome to the Dime Community Bancshares, Inc. first quarter earnings call. Before we begin, the company would like to remind you that discussions during this call contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such statements are subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those contained in any such statements, including as set forth in today's press release and the company's filings with the U.S. Securities and Exchange Commission, to which we refer you. During this call, references will be made to non-GAAP financial measures as supplemental measures to review and assess operating performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP.
For information about these non-GAAP measures and for reconciliation to GAAP, please refer to today's earnings release. I would now like to hand you over to Kevin O'Connor, Chief Executive Officer, to begin. Kevin, please go ahead.
Good morning. Thank you, Lauren, and thank you all for joining us this morning. With me are Stu Lubow, our President and Chief Operating Officer, and Avi Reddy, our CFO. I am pleased to report another strong quarter of returns for Dime, as well as provide positive comments on deposits and loans. This despite the Fed's unprecedented activities and the connected events of March. This further reflects the power of our plain vanilla community bank model and the franchise we've created on Greater Long Island. It's certainly not an overstatement to say we're operating in a unique and challenging environment for the industry. As those of you who follow Dime know, we do not have any of the concentrations that got the failed banks and others in trouble. We also don't have a large book of securities and don't take rate risk in that portfolio.
These facts, coupled with our rock-solid multifamily portfolio, provide us with the confidence we will outperform in any potential recessionary environment. For the record, we have zero multifamily loans that are greater than 60 days delinquent, and the LTV on that portfolio is in the mid-50s. Finally, Dime's credit losses have been well below the bank index over multiple cycles, and we're extremely proud of our track record. Similar to the rest of the banking industry, we took steps in the first quarter to add to our on-balance sheet liquidity. Also, as you would expect, we reached out to our client base, reminding them of Dime's strong track record, our simple plain vanilla business model, and our strong relationship-based mindset. These conversations had their intended impact and we're pleased, despite significant market turbulence, to report our deposits, excluding brokered, were up approximately $15 million versus year-end.
Additionally, to enhance our on-balance sheet liquidity, we added approximately $300 million of broker deposits in the month of March. Our deposit base is diversified and granular and again remained resilient throughout the quarter. Today, consumer deposits represent 33% of the total. Collateralized and insured municipal deposits are 20%, with commercial deposits representing the remainder. Within this commercial book, we do not have any significant industry concentrations. Our cumulative deposit beta for this tightening cycle has been approximately 30% and compares favorably to our Metro New York competitors. This relatively lower beta continue to be positively impacted by our significant level of non-interest-bearing deposits. At 32% of average total deposits, this remains a clear differentiator for Dime versus other community banks in our footprint.
As you know, Metro New York has been a more competitive market for deposit gathering while affording more stable asset quality performance than other parts of the country. While there has been a significant focus on balance sheet metrics, insured deposits, and liquidity, we were also able to deliver a core return on assets of 114 basis points this quarter. It is important to note this marks the eighth consecutive quarter dating back to the closing of a merger transaction where we reported a return on assets in excess of 110 basis points. Our results were driven by prudent expense management and a good quarter for non-interest income. Our credit quality continues to be stable. In fact, our NPAs and 90-day past due actually declined to only 23 basis points of loans.
In light of this overall environment, I want to give full credit to each of our 800+ employees for again delivering strong returns. They have been tirelessly working and communicating with our customers and our communities during these challenging times. Since we want to leave adequate time for questions, I will turn it over to Stu now to provide some updates on some of the recent hires we've made, initiatives we have underway, and the loan portfolio. Avi will then provide additional details on the quarter.
Thanks, Kevin. As you have no doubt seen in our press release, we have hired four experienced deposit-focused groups from Signature Bank. While many banks have been playing defense over the course of the past six weeks, we have viewed the events at Signature as a moment in time opportunity for Dime to enhance our deposit franchise. In total, the four teams managed a book of business at their peak of approximately $1 billion, heavily weighted toward DDA. Hiring these groups was a bank-wide effort, and we're able to impress our new colleagues with Dime's intense focus on relationship-based banking, our state-of-the-art technology, our brand, and our flat organizational structure.
We believe there could be more fallout in the months, quarters, and years ahead, both from the group hirings perspective as well as an opportunity to bring over individual clients who seek a locally managed, client-focused relationship bank with access to key decision-makers at all times, coupled with a strong technology stack. On the technology front, we expect to roll out our brand new escrow management commercial system at the end of May, and we are on track to complete our new business focus online account opening project that takes our already strong digital capabilities to the next level. With respect to our positioning on lending, our strategy is to ensure we continue to support our key clients through any operating environment. At the same time, we continue to prudently grow loans and add franchise-enhancing full- service relationships.
Our current expectation is to grow loans by approximately $100 million in the second quarter. Our focus continues to be on growing solid business relationships while keeping our multifamily portfolio relatively flat. Obviously, we are keeping a watch on our loan-to-deposit ratio. Should rates decline in future years, 2024 and beyond, we do expect prepayments in the multifamily portfolio to pick up. This will lead to a natural normalizing of the loan-to-deposit ratio over time. In addition, as teams hired from Signature start to build their book of business, we expect additional momentum from our deposit gathering efforts. With respect to specific CRE exposures, as we have mentioned before, our Manhattan portfolio is only $225 million or less than 1.7% of total assets. The LTV on the Manhattan office portfolio is 52%.
We are comfortable with the exposure. The operators of our office portfolio are very strong individuals. Given that Dime undertook an effort in 2018 and 2019 timeframe to remix the loan portfolio, and since the product generally resets after five years, we do not have a significant amount of repricing loans for the remainder of 2023. In fact, only $205 million of investor CRE loans at a rate of 4.67% are set to reprice for the remaining nine months. Thus far, we have not seen any meaningful early warning indicators of credit deterioration, while we continue to be diligent around monitoring all parts of our loan portfolio. As mentioned, our overall asset quality remains strong and NPAs and 90-day past dues are down to 0.23%.
With that, I will turn it over to Avi to provide some details on the results of this quarter.
Thank you, Stu. Our reported net income to common for the first quarter was $35.5 million. Despite the unprecedented and inverted interest rate environment, earnings per share was up 12% on a year-over-year basis. The NIM adjusted for purchase accounting was 2.76 for the first quarter, compared to 3.14 for the prior quarter. As you know, we don't provide quarterly quantitative NIM guidance. We're operating in a significantly inverted yield curve environment with intense competition on the deposit side. We do expect the NIM to have another couple of quarters of declines. For reference, the NIM for the month of March was approximately 2.61. We continue to position the balance sheet for a scenario where forward rates drop in 2024. We have approximately $1.1 billion of FHLB borrowings that all mature by June of 2024.
As mentioned previously, while we had the ability in 2022 to borrow longer at a lower cost, we intentionally did not extend the duration of borrowings. Similar to how many companies kept excess cash during the pandemic and benefited from rising rates, we're following a similar strategy on the liability side, where we're intentionally not going too long and hope to benefit from a full repricing if and when rates do gap down. Core cash operating expenses for the first quarter of 2023 was approximately $47 million. Our core efficiency ratio this quarter was 48.9%, and the core expense to assets ratio was 1.40%. Given the overall operating environment, we remain highly focused on expense discipline.
Pro forma for the Signature teams we have hired, we expect to still be within our previous full year guidance for core cash operating expenses of approximately $206 million-$209 million. That said, we remain focused on controlling the things we can, and we will do everything in our power to beat the guide for the year, and we continue to evaluate opportunities for expense reductions while funding productive deposit teams. Core non-interest income for the first quarter was approximately $10.4 million. The increase in non-interest income was driven by strong swap-related revenue. We expect swap-related revenue to be approximately $1 million-$1.5 million in the second quarter, given our current pipeline. We had a $3.6 million provision release this quarter.
As mentioned in the press release, the release was tied to a reduction in acquired pooled PCD loans. This speaks to the improvement in credit quality and the conservative reserve we had set up for PCD loans as part of our merger- of-equals transaction. Importantly, the reserve for our non-PCD non-individually analyzed loans remained steady versus the linked quarter and accounted for approximately $51 million of the overall total reserve. Needless to say, we are very comfortable with the level of reserves on our balance sheet. During the first quarter, our risk-based regulatory capital ratios increased by approximately 15 basis points. We do expect some improvement in the RWA in the second and third quarters as multifamily loans originated in 2022 reached their one-year seasoning period and will qualify for 50% RWA treatment. With that, I'll turn the call back to Lauren for questions.
Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure that your phone is unmuted locally.
Our first question comes from Mark Fitzgibbon from Piper Sandler. Mark, please go ahead.
Hey guys, how are you? It's Greg Zingone filling in for Mark. How are you guys doing?
Hey, Greg. How are you doing?
Good. I know you guys mentioned that there's a few more quarters of decline in the NIM. Assuming the Fed follows the forward curve, when would you expect the NIM to bottom?
Yeah. I think the comment there was a couple of more quarters of declines. I think you can imply from that it plateaus after that and starts increasing after that. It's obviously going to be a function of how quickly they do cut rates. I mean, obviously we have this $1.1 billion-$1.2 billion of FHLB, which is all pretty short-term. We have around $750 million-$800 million of broker on the balance sheet, which again is pretty short term. All the CDs we've been putting on the balance sheet, are again, you know, fairly short term, 11-12 months. I would say, you know, next couple of quarters, pressure on the NIM, maybe a quarter of stabilization after that.
Then, you know, following the forward curve, you know, improvements in 2024 for sure.
Okay. Do you have a sense of how long until liquidity returns to a normal level?
I think it's gonna be a function of the overall environment. We're basically, you know, three weeks removed from a mini banking crisis. I think, you know, somewhat elevated in the near term. Our deposits were up linked quarter, so we're not really, you know, required to be holding more, you know, liquidity to meet, you know, outflows because we've not really had any. I think it's prudent for everybody to maintain a level of liquidity at this point in time. We're also going to be, you know, following what the industry does, overall, you know, and keeping a watch on that.
Okay. Lastly, if you could share with us your current loan pipeline and the rate attached to it.
Sure. Today, our loan pipeline is approximately $1.1 billion, and the average weighted average rate on that is 7.17%.
All right. Thank you guys so much.
Thanks, Greg.
Thank you. Our next question comes from Steve Moss from Raymond James. Steve, please go ahead.
Hey, everybody. This is Tom. It's on for Steve. Good morning.
Hey, Tom.
I guess to start off. Yes. Thanks. I guess to start off, what drove the timing of the release on acquired PCD loans?
We put the company together two years back. There's been, you know, two years seasoning on this loan portfolio, Tom, and the risk ratings in that particular portfolio have remained stable or increased. You know, the way the accounting works for that is, you know, at some point in time you got to take into account, you know, risk ratings. Enough time had passed that these loans were moved to the general pool. You know, as I said in my prepared remarks, you know, we put the two companies together in the middle of COVID. Times were pretty uncertain then. Economic projections were all over the place. We took our, you know, best estimate at that point and were conservative.
We've obviously, you know, marked them appropriately and just seen, you know, good credit quality over time. You know, given the passage of a couple of years, this was the time to move those loans out of the, pool PCD into the general pool.
Okay. That's helpful. Can you provide any additional color on the new hires that are going to be working on the deposit initiatives and some of the associated, I know you said that OpEx growth isn't going to increase related to guidance from last quarter, any other associated expenses that may be tied to that?
No. I mean, we've taken that into account in terms of looking at the teams. They were, they're all, you know, relatively small teams, two and three and four-person teams. Good, granular deposit bases. You know, we look at their insured versus uninsured, and we looked at their total cost of funds. We looked at their operational needs, and we certainly could fit that within our current environment and our capacity. You know, we have taken other efforts within the bank in terms of cost savings measures. We've got a hiring freeze. We've done other things that we're pretty comfortable that will enhance our cost effectiveness and keep our costs in line even as we hire these additional teams.
Okay. Okay. Thank you for that color. My other questions were hit on, so that's going to cover it for me. Nice job in a difficult environment, guys. Thanks.
Yeah, thanks.
Thank you. Our next question comes from Manuel Navas from D.A. Davidson. Manuel, please go ahead.
Hey, good morning.
Hey, Manuel. Good morning.
What is driving the expectation for $100 million in loan growth? Did I hear that right for next quarter? Just kind of.
Yeah.
What are some of the puts and takes with that expectation?
Yeah. We have, you know, we have a pipeline, as I mentioned just earlier, of about $1 billion, which, you know, is spread out across all product lines. The average yield is 7.17%. The largest pipeline is our C&I pipeline, you know, that actually has a yield of 8.62%. We do expect they are loans that are approved. We do expect these to migrate to close. They do, particularly on the C&I side, you know, our philosophy is to service our existing customers first. Secondly, really focus on relationship banking and making loans to customers who are bringing significant deposits along with that, with that loan.
We do have some very attractive deposit opportunities as part of the loan pipeline that we have in place. You know, we're pretty comfortable that we're gonna be at least $100 million growth just based on what we have in the pipeline.
Okay. I'm sorry. That was kind of like a minimum for the quarter?
No, that's, that is our current baseline for the quarter, not a minimum.
Okay. All right. The new teams, can you just clarify? You said $1 billion was their prior book of business. Was that per team or for the four teams combined?
Combined.
Any color why you guys are having such success in adding? There hasn't been that many announcements of folks moving over. I think you called out that you have. You're offering more management engagement. Just any color on your success with attracting these teams and the opportunities there.
Well, I think. Yeah, I think part of it is we already have the team concept in place. We have our loan teams. We have, you know, we have a group concept and some base that are not dissimilar from what the Signature model was. You know, this has been a bank-wide effort. We've all been engaged, all senior management. I've met with every team and had discussions, multiple discussions with all the teams, even the ones we've hired and the ones we're still talking to. I think there's a level of comfort in terms of the granular nature of how we operate and the attention to detail.
We spent some time going through our technology stack and going through our online and the treasury management systems. They found, you know, roundly indicated from the teams that we've spoken to that, you know, we matched up very, very well to what they had in place or see coming down the road. I think all those items contributed to our success and you know, and the level of importance we're placing on this on a bank-wide basis, I think comes through.
Any color on kind of what's still out there in terms of talent? You said that you're talking to some folks, but I'm sure that it's still up in the air a bit, but any extra color on the potential for more adds?
Yeah. We are in serious conversations with several more teams, including some larger teams.
That's great. I appreciate that. When we're looking at the negative provision this quarter, how should I think about the provision going forward? More closer to like what it was in the fourth quarter? Is that kind of the right level to think about as we proceed forward? It seems like loan growth will be a little bit less, so perhaps it could be even a little bit lower than that.
Yeah. I think, Manuel, it's really gonna be a function of, you know, the Moody's unemployment rate at the end of the day. I mean, that's kind of what we're tied to. I mean, that stayed pretty stable this quarter. You know, what we've said historically is, you know, for any real estate loans, you know, commercial real estate was probably 55 - 60 basis points is kind of what the reserve on that portfolio is. You know, for C&I loans, it's between 1 and 1.25. On the multifamily side, given our, you know, loss history there being zero, our reserve on that portfolio is probably between 20 and 25 basis points. Yeah. Short answer is function of growth and the composition of that growth.
I think some of, you know, the anomaly with this quarter was we had a lot of, you know, pooled PCD loans that came out, and that pool is right now down to around $40 million, so it's not a big pool remaining. I don't think you should see any, you know, one-time items like happened this particular quarter. Again, it's gonna be a function of Moody's. I mean, if the unemployment rate goes up, there'll be an increase in the reserve. I think you're gonna see that industry-wide, not just specific to us.
Okay. Thank you. I'll step back into the queue. I appreciate the comment.
Yep. Thank you.
Thank you. Our next question comes from Christopher O'Connell from KBW. Christopher, please go ahead.
Hey. Good morning. I know you guys confirmed, you know, that the expense guide is holding and, you know, obviously, you know, a little bit of a shakeup in the NIM coming out of this environment. As far as the rest of the 2023 guidance that you gave on last quarter's call, does all that still hold?
Yeah. Well, the only other guidance we gave, Chris, is on fee income. We had $35 million-$37 million on the last call. We obviously had around a $10 million quarter this quarter with strong swap income. I'd say, you know, we're trending towards the higher end of that range. Beyond expenses and fees, we don't give any other guidance.
Okay. I mean, is tax rate 28% still good? It seems like with the $100 million next quarter that, you know, loan growth still, you know, should end up kind of in the mid-single-digit range.
I mean, I think our loan growth guidance last time around was only for the first half of the year. I think we're gonna wait till we report earnings in the second quarter to provide guidance for the second half. I mean obviously, you know, to the extent we have, you know, good loan opportunities with associated deposits, we're gonna be all over that. I think on the tax rate, probably, you know, closer to 27% is probably a better number. Obviously, with a little bit less income, the tax rate comes down a little bit given where the margin is. I'd probably budget around 27% on the tax rate.
Okay. Got it. For the excess liquidity build on balance sheet this quarter, you know, cash is obviously running, you know, quite a bit higher than it has, you know, in prior periods. Do you guys intend to take that down kind of immediately, over the course of, you know, 2Q? Was it just kind of a temporary measure given, you know, the, you know, turmoil in the system, in March, or is it something that you will be holding on balance sheet for a few quarters?
Yeah, I mean, I think, you know, it's probably the high point of like you characterized it. I think a lot of, you know, banks went in towards the end of the quarter and made sure they have access to the FHLB, you know, items like that. Given where we are right now, I mean, I don't expect it to be higher than that. I think we're just watching the environment overall and just wanna do, you know, the right thing overall. I mean, safety and soundness comes first, so you want to make sure it's there. You know, obviously, we have significant amount of collateral that we can pledge and, you know, borrow whenever we need. I don't expect it to be higher than that given, you know, where conditions are right now.
Got it. And for, you know, deposit flows since the end of March, if you guys have any update on that, you know, that'd be great. And in particular, you know, in non-interest bearing and, you know, maybe how significant, you know, you think that mix shift will be going forward.
Yeah. I mean, in terms of the mix shifts, look, we're gonna be, you know, pretty similar to, you know, other banks with a high level of DDA. I think if you have a low level of DDA, you're not gonna see a mix shift out because you don't have much to start with. You know, starting where we did, there's obviously been a movement towards, you know, treasuries, and there's money coming out of the system. We'd expect, you know, the number to, you know, decline over the course of the next couple of quarters. We really don't provide intra quarter guidance on deposits and loans. Not really sure that's a good practice. I mean, all I'll say is we continue to open accounts really well.
Our account opening over the last month has been far above what it was prior to the crisis. A lot of that's not funded yet, but, you know, the net new account opening is very positive. You know, with time, with some of these Signature teams that we've hired, once they've, you know, find their legs over here, you know, we believe that's gonna be the next leg of growth over here for deposits. We feel pretty comfortable overall in terms of funding the balance sheet.
Yeah. As I mentioned in my comments, we have significant amount of deposit opportunity in new customers that we're bringing on, in our C&I business and even in our commercial real estate business. We are seeing some opportunities from former Signature clients who have begun to move their business to us as well. You know, we're encouraged and, you know, somewhat optimistic in terms of deposit growth, not even taking into account the Signature teams we're bringing on board.
Got it. You know, for capital levels in the buyback, any change in kind of capital level targets? Do you guys expect to, you know, use a little bit of buyback this quarter? Do you guys expect to continue to use that going forward? Take a pause? Yeah, I guess, you know, any thoughts on that?
Sure. I mean, we kind of, you know, dialed the buyback down in the first quarter. I mean, we obviously have a 10b5-1 plan out there. I'd say just given the overall environment, this is probably not the right time to step in. I mean, obviously valuations are very attractive, but, you know, keeping capital on the balance sheet, supporting customers is important. Probably should see a little bit of build in the capital ratios going forward. You saw around a, you know, 15 basis points increase in risk-based capital now. I would say, you know, our stress testing continues to be very favorable in terms of performance. We obviously had, you know, very good performance, very low charge-off levels. You know, our classified levels, you know, are down significantly on a year-over-year basis.
Nothing on stress testing indicates we should be, you know, holding more capital. Given the current environment, it probably makes sense to accrete capital here, you know, over the next couple of quarters.
Got it. You know, within, you know, the commentary, you know, around the margin, you know, I know you guys, you know, don't give guidance or on that, but, you know, any sense as to where, you know, deposits, you know, kind of shake out, you know, within the next couple of quarter in terms of, you know, costs there? I guess, you know, how much of your, you know, deposit base do you think, you know, you can keep, you know, at kind of reasonably low rates? What percentage of the deposit base do you guys consider kind of, you know, highly rate sensitive?
I mean, look, we're a relationship bank, so you know, we'd like to think, you know, the whole base is relationship focused. We do have a consumer portion of the deposit mix, as Kevin said, which is around, you know, 32% of our base. I would say on the commercial side, you know, a lot of those rate increases have already happened at this point in time, and the customers that wanted to move have moved. At the same time, you know, commercial clients do like keeping cash, you know, in this environment. Some of them, you know, are also looking at treasuries, right? Now treasury rates are going up and down a lot. It's a little hard to predict, you know, over there.
I think what we're focused on more is, you know, keeping relationships, you know, not, you know, losing customers based on rate to some extent, especially in this environment. But I, but I do think over time, you know, there is an opportunity to reduce the cost of deposits when rates eventually do go down. And I think, you know, us and a lot of other peers in our market are gonna do that. I would say the other piece of, you know, Signature going away is you have a competitor in the market who was paying very high rates on deposits not being around anymore. And so I think that's gonna help all of us in our market, in the medium to longer term, something that's not in the numbers right now.
As stuff stabilizes, I think that should be a positive as well for deposit costs in Metro New York.
Great. Just, I, you know, I know you guys have the expense guide, which is pretty specific, but was there anything in particular, you know, timing or something, you know, seasonal or on the compensation line this quarter that, you know, I expect it will reverse a little bit next quarter?
No, nothing seasonal. Just, you know, we have a fixed cost base, and we have a variable cost base. I mean, I think profitability for the industry overall this year is gonna be below what it was last year. You know, we appropriately adjust our, you know, compensation metrics over time, so nothing seasonal.
Got it. Last one for me. I mean, there's, you know, been a lot of articles and, you know, there's been a lot of discussion kind of around, you know, this, you know, the state of the commercial real estate market particularly, you know, some about New York. Can you guys just give us an update as to, you know, what you're seeing and how you guys are feeling about, you know, the market overall and, you know, I guess, you know, traditional CRE as well as kind of the, you know, multifamily market?
Well, as I mentioned in my comments, you know, we have a very small office portfolio in Manhattan, only about $225 million. The average LTV is about 52%. Good debt service coverage. All are current. You know, 30 loans. You know, the average loan size is about $7 million-$8 million. From that perspective, we're not, you know, real concerned. You know, we're always looking at credit. We have not been in that space in the last several years and, you know, we're not big into the retail space either. At this point we're, you know, we're monitoring our portfolios, but we're not seeing any real weakness.
On the multifamily side, I know there's been a lot of talk about repricing, but we haven't had one, you know, borrower come to us, ask for a restructure. About 75% of what has hit the repricing period has opted for the, they have opted for the repriced, the repricing and not move their relationship. We haven't had to deal with the issue of right-sizing or restructuring any loans. You know, at this point, you know, we're looking at it, we're monitoring it, but we haven't seen any real deterioration at this point in credit, and that shows in our delinquencies and our metrics as well.
Thank you. Our final question comes from Adam Hurwich from Ulysses. Adam, please go ahead.
Hi. I have a question that's a little bit longer term, If you don't want to answer, that's fine as well. You look at the total interest expense in year-over-year, you went effectively from about $5 million - $55 million. It's startling. I'm sure a year ago nobody even considered that as a possibility. I'm looking forward to not next two quarters, but a year, two years. Think further out. You've got a normalization potentially of an interest rate environment after an extended abnormal interest rate environment. Could you share with us how you think structurally about the business model for Dime?
Adam, I'll take that. You know, I think we're a company that, you know, should have a margin, you know, between 3.25% and 3.50%, given our, you know, risk profile in a, you know, moderately sloping positive, you know, rate environment. Obviously, last year our margin got up to around 3.35%-3.40%. The issue is obviously the inverted curve, right? I think there's various scenarios that could play out, but if you play out a scenario where the curve is either flat or moderately upward sloping, you know, that is the level we aim to achieve and get back to. Obviously, the industry was operating with a level of DDA that, you know, we may not get back to that level.
Adjusted for that, you know, there's no reason why, you know, we shouldn't be, you know, in the low to mid- 3% on margin. Obviously, the opportunity for us is to hire, you know, teams, you know, very productive deposit teams and, you know, that's gonna drive part of that. I think what we've shown this quarter, you know, with our expense to asset management is, you know, we're a sub 150 expense to asset bank at, you know, $12.5 billion-$13 billion of assets. You know, assuming marginal growth on the asset side, you know, we can continue to drive that lower.
I think all in, you know, when we set our medium to longer term plans, we want to be a, you know, 1.15%-1.30% ROA bank across any environment, and we definitely believe that's achievable again over the next couple of years.
Yeah. You know, Adam, you know, if rates are stable and get back to a normal, a normal curve, there's no reason that this bank can't earn even at today's rates, you know, those kind of margins. I mean, as I said earlier, we're putting loans on today at, you know, the low to mid sevens. You know, this isn't the first time in the history of banking that rates have been in the fours and fives. It just takes time. You know, you had nine months of rate increases. It takes time to, you know, in a stable environment or a modestly rising rate environment, banks usually do very well in this rate environment.
I would expect that to happen with us as well, particularly since we've built out a very strong lending engine and, you know, hired some very good teams. You know, I think, you know, the future bodes well from that perspective. Particularly as we kind of move away from the multifamily portfolio at, you know, which is the lowest yielding asset, probably from a risk-adjusted basis, a very safe asset, but the lowest yielding asset in our, in our product stack. As we move away from that, you know, we're looking at 100 basis point, you know, more rate in terms of the new loans we're putting on it. I think that will help us as well.
Got it. Frankly, given the disruption, it's pretty impressive how you guys are managing through it. Good luck.
Thank you.
Thank you.
Thank you. That is now the end of the Q&A session, and I'll hand you back over to Kevin O'Connor for closing remarks.
Again, I wanna thank everybody for participating. I appreciate all the questions. I think you can hear from us that we're excited about the opportunities that are out there in front of us. Obviously, a challenging environment short term, but believe we are certainly well positioned to take advantage, and I think we're demonstrating that with the opportunistic hires we're doing. Again, appreciate the support, appreciate the interest in the company and the very good dialogue and questions, and have a great day.
This concludes today's call. Thank you for joining. You may now disconnect your line.