Logo of jester cap with thought bubble.

Image source: The Motley Fool.

Sterling Bancorp/DE  (NYSE:STL)
Q3 2018 Earnings Conference Call
Oct. 24, 2018, 10:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day and welcome to the Sterling Bancorp Q3 2018 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jack Kopnisky, President and CEO. Please go ahead, sir.

Jack Kopnisky -- President and Chief Executive Officer

Good morning everyone and thanks for joining us to present our results for the third quarter of 2018. Joining me on the call is Luis Massiani, our Chief Financial Officer. We have a presentation on our website which along with our press release provides detailed information on our quarter.

Our third quarter of 2018 reflects strong financial metrics with adjusted earnings of $114 million which is a 139% greater than the third quarter 2017. Adjusted earnings per share of $0.51 is 46% higher than the same period last year and $0.01 higher than our linked-quarter.

Operating metrics were strong as adjusted return on average assets was 155 basis points and adjusted return on average tangible common equity was 18.09%. The operating efficiency of 38.9% continues to result from the strong positive operating leverage demonstrated by our organic performance model and M&A activities.

Revenues increased $134 million and expenses increased $50 million over the third quarter 2017 representing an operating leverage ratio of 2.7 times. It's been one year since we completed the acquisition of Astoria Financial Corp which doubled the size of our company. On page six you will -- of the presentation, you will see a highlight of the differences between before and after Astoria. To demonstrate the power of an acquisition like Astoria, earnings for the first six -- first nine months of 2017 prior to the acquisition were $133 million. For the first nine months of 2018, earnings were $333 million.

EPS increased from $0.98 to $1.45 during that same period. Additionally, if you compare third quarter 2018 earnings and the EPS to fourth quarter 2017 earnings increased 36% and EPS increased 31%. Tangible book value increased by 27% from year ago.

We have met or exceeded our objectives in completing this transaction in subsequent integration. We will continue to consolidate financial centers and transition the acquired loan book into 2019 and beyond, but the integration of Astoria is effectively complete and it was a successful one.

Before I discuss the details of the performance in the quarter and our view of what you can expect in the future from us, I want to discuss the current market environment and our positioning to ensure continued success in 2019 and beyond.

First, as the economy has expanded, we have seen an approximately 50% increase in the pipeline of opportunities for organic commercial loans. Unfortunately, many of these opportunities do not come with a credit structure we are comfortable with or a yield that meets our hurdle rates. Our view is that this is a period of time where we need to be disciplined and stick to our established credit fundamentals and return targets. We are being selective in our approach to new commercial loan opportunities. We are also reviewing many commercial finance portfolio acquisition opportunities that have the potential to achieve the credit standards and return characteristics that we are seeking. We are very confident that these opportunities will result in portfolio acquisitions that will supplement appropriate organic growth over the coming quarters.

Second, given the continued increase in market interest rates and non-strategic value of many of the loans and asset categories we acquired in the Astoria Merger, we are evaluating the potential sale of a portion of these mortgage portfolios. The benefits of potential sale are numerous. We exit low yielding non-strategic assets, we can exit at or above mark value, while reducing interest rate risk, we accelerate the balance sheet transition, we improved core net interest margin, we can reduce pressure on funding cost by improving our funding profile and reducing our loan to deposit ratio. We can create increased tangible capital and a sale provides increased liquidity to either purchase higher yielding portfolios or grow organically.

We strongly believe in the model we have created and we have demonstrated strong performance each quarter since 2011. We continue to see substantial opportunities to execute our strategy of growing loans and diversifying our balance sheet, however we pride ourselves on being pragmatic and flexible regarding the allocation of capital and resources. To that extent, the targeted growth is not available, we will look to share repurchases until such time as we find higher yielding investment opportunities that meet our risk adjusted return hurdles.

We have authorization to potentially repurchase up to 10 million shares that would increase it if needed, depending on where we see the best and most attractive investment returns. We are managing the company for the intermediate and long-term, not the short-term.

With that, environmental background, let me highlight a number of balance sheet and income statement categories and the associated activities that will enable us to continue to appropriately drive results. First, commercial loan growth based on average loan balances increased by $331 million relative to the linked quarter and spot balances increased $1.8 billion since the completion of the Astoria Merger.

Our commercial loan growth is partially offset by continued run-off of residential mortgage loans , which based on average loan balances declined in the linked quarter by $270 million and have decreased by $879 million since the completion of the Astoria Merger .

Based on current market conditions and our estimate of runoff in the residential portfolio, we are targeting commercial loan growth to be in the 8% to 10% range and overall loan growth to be in the 6% to 8% range excluding any potential sale of Astoria mortgage assets.

Secondly, total deposits grew by $490 million or 9% on an annualized basis. We enjoyed solid core commercial deposit growth along with seasonal municipal deposit growth consistent with the tax collection cycle. Our deposit mix improved and continues to be strong with approximately 42% DDA, 11% savings, 35% money market savings and 12% CDs at a cost of 68 basis points.

The cost of deposits increased by 13 basis points which was primarily due to increases in the higher balance muni, commercial and brokered deposit segments. The total deposit beta since the fourth quarter of 2017 has been 24% . We anticipate deposit costs to moderate as we lower the current loan to deposit ratio of 95.7% over time.

Third, the core net interest margin for the third quarter was 316 basis points, a decline of 5 basis points relative to the linked quarter and within the guidance we provided. We are being cautious in adding new loans and yields that meet our standards. We anticipate that exiting a portion of low-yielding mortgage portfolio, reducing municipal deposit rates and targeting a combination of organic and M&A loan growth will improve our core net interest margins. The 2018 core net interest margin will continue to be in the 315 to 320 basis point range.

Fourth, core operating expense levels continued to be better than planned and are at or at an annualized run rate of $420 million for 2018. We project, we will further reduce OpEx to $415 million in 2019. As I mentioned previously, we have completed the majority of the integration, but we'll continue to lower the number of financial centers. Since the merger, we have consolidated 15 financial centers and anticipate consolidating an additional 22 over the next 18 months.

Fifth. Credit quality and capital ratios remain very strong. Charge-offs for the quarter were 8 basis points. Non-performing loans declined from the linked quarter. We have low levels of charge-offs and strong loan loss reserves and capital levels. Finally, let me emphasize that we have built flexibility and the operating model of this company. We have a diverse asset mix relatively low cost funding and have demonstrated an ability to grow the company organically and through acquisitions. We have clear pass that we can execute against to achieve 10% plus EPS growth in future years, regardless of the general rate environment and we have various alternatives to deliver high performance results.

In summary, we are very confident that organic loan growth and deposit growth will occur in the fourth quarter and beyond and that we will find portfolio acquisitions that meet our standards over the next several quarters. We have consistently met or exceeded our growth targets and we expect to do so in future quarters as pricing and credit structure is more normalized. We expect to consistently deliver 10% or greater earnings and EPS growth, return on average tangible assets of 150 basis points or higher, return on average tangible common equity of 18% or greater and efficiency ratios of less than 40% on an annual basis.

Our focus remains on building a company that creates ongoing positive operating leverage where revenues grow two to three times that of expenses. So now let's open up the call for questions.

Questions and Answers:

Operator

Thank you. (Operator Instructions) We'll take our first question from Casey Haire with Jefferies .

Casey Haire -- Jefferies LLC -- Analyst

Thanks, good morning guys.

Jack Kopnisky -- President and Chief Executive Officer

Good morning.

Casey Haire -- Jefferies LLC -- Analyst

Jack question for you on the strategy. Just given the backdrop that you laid out in terms of loan growth, obviously skinny pricing and structures that are not fitting your parameters, it just doesn't seem like this is the environment to grow loans, be it organically or through M&A. So why not pursue, pivot the strategy toward moderating growth immediately maybe even selling some of the Astoria loans, improving liquidity and being more aggressive on the buyback, today?

Jack Kopnisky -- President and Chief Executive Officer

So one, we are going to sell some of the mortgage loans, we've already -- we just said that. So we're going to sell portion of the mortgage loans to increase liquidity. Two, we are going to do share repurchases. Three, we did lower the guidance on the loan, so we took it from 8% to 10% growth to 6% to 8% overall. So, it allows us -- there are still opportunities in the market, we're just being more selective. So the answer to your question directly, we are going to do all three of those things. So we're going to sell the mortgage portfolios for all the reasons that I gave in the script. We're going to do share repurchases until such time as we find other investments that have higher yields. And three, we did lower the expectation on loan growth.

Luis Massiani -- Chief Financial Officer

Okay. So, I'd add that on the M&A side, remember you're buying a portfolio that has been seasoned with outstanding for some time. The pricing term and structure of that is going to be different than what you're seeing in the new origination market today. So the pressures that Jack is alluding to more on the organic side of what we're seeing market participant doing. To the extent that you stay patient and to the extent that we find right opportunity, the right size at the right price with the ability for us to reunderwrite and to reserve forward appropriately upfront, similar to what we did with the Advantage Funding deal, that is the type of transaction that we're interested in. We think that those are available. We just have to stay patient to find the right one .

Casey Haire -- Jefferies LLC -- Analyst

Okay. Fair enough. And I guess on the NIM outlook, can you give us some updated thoughts? I guess I was very surprised by the loan yields kind of holding flat specifically the C&I. So where is the new money yield on C&I loan production and was there something that elevated the second quarter, loan yield within C&I specifically?

Luis Massiani -- Chief Financial Officer

So the prepayment activity that we were talking about was reflected, that's in the press release. That was part of the C&I portfolio. That was not part of commercial real estate. We talked about this in prior calls. A substantial portion of what we do on the diversified C&I and the franchised finance has prepayment activity associated with it too, and there was a $1.4 million decrease in prepayment activity specifically related to the C&I side and to the traditional -- that would be better than traditional C&I and commercial finance portfolios. So if you normalize for that and that happens, it's not perfect but it happens every other quarter, so there should be some bump up in prepayments going forward. Again, it's not perfect and it'll be little bit volatile from quarter to quarter, but there will be some prepayment activity going forward, there always is.

New origination yields are fine. From the perspective of the deals that we're doing, it's similar to the message that we've provided in prior quarters. It's 5% plus type deals that we're seeing on the C&I side. When you look at asset based lending, payroll and factoring, those are yields that are in excess of 6.5%. So those businesses from yield in a return perspective are fine, issue is that, the volume has not been exactly we wanted it to be, because a lot of the new origination have been competed away for term and structure.

Jack Kopnisky -- President and Chief Executive Officer

And then, I'll take the other end of this. On the deposit side, we probably, we had very good -- we had good deposit flows for the quarter. We did pay off on some of the higher priced deposits. By selling off some of the mortgages, keeping a little dry powder in terms of having a lower loan to deposit ratio, we're going to --- we're going to move back on some of the pricing of some of the more interest sensitive deposits out there. So that also would have affected the NIM.

Casey Haire -- Jefferies LLC -- Analyst

Okay. And regarding the Astoria loan sales, I mean, is there an amount in mind that you -- that you're comfortable sharing?

Luis Massiani -- Chief Financial Officer

$1.5 billion to $2 billion, focused mostly on the fixed rate components of the book that we acquired from Astoria.

Casey Haire -- Jefferies LLC -- Analyst

And that would be resi mortgage, right, Luis, primarily?

Jack Kopnisky -- President and Chief Executive Officer

Always.

Luis Massiani -- Chief Financial Officer

Yeah. Primarily.

Jack Kopnisky -- President and Chief Executive Officer

And it's all resi and it's --

Luis Massiani -- Chief Financial Officer

It's all residential mortgage initially. We are exploring other opportunities for some of the commercial real estate components as well, but the residential mortgages is the lower hanging fruit that we can -- that we can address first.

Casey Haire -- Jefferies LLC -- Analyst

Got you. Okay. And just last one from me. On the expenses $415 million you're at I think I believe $420 million run rate today, what -- there is lot of financial centers consolidation on the com. Is that a conservative number or are there going to be, you're gonna have to pay for growth on top of that little back build to (inaudible) from the branch cuts?

Luis Massiani -- Chief Financial Officer

That's an all-inclusive number that factors in, remaining branch cuts a well as reinvestment into the business. We're going to continue hiring folks. So the -- from that perspective, our strategy has not changed. We think that there continues to be good talent to hire out there, both on the front lines and on the sales side as well as in more internal places. So we're going to continue investing in the business and that factors in everything that we're doing from a personnel perspective, investing in risk management, investing in technology and so forth. So that's in all-in number.

Casey Haire -- Jefferies LLC -- Analyst

Okay. All right. I am sorry just one more, just the loan growth. What is the base for -- there's no update for the 2018 guide and we're at 3% year-to-date. So what is the base for 2018 as loans grow 6% to 8%?

Luis Massiani -- Chief Financial Officer

So the fourth quarter is going to be flat to slightly north of up single digits relative to the third quarter. You're going to see some pressure on the warehouse lending balances which not surprisingly given the interest, increase in rates and slowdown or refinance. Balances on the warehouse lending side we anticipate -- are going to be lower at period end forth quarter than what they were in the third quarter and we continued to see that the wild card is, what happens with the progression of the residential mortgage book over the course of the next two months. We started to see a little bit of a slowdown in October because of the increase in rates but the portfolio continues to cash flow to pretty rapid clip. So it should be flat to slightly up relative to third quarter.

Casey Haire -- Jefferies LLC -- Analyst

Great. Thank you.

Operator

And moving on, we'll go to Austin Nicholas with Stephens.

Austin Nicholas -- Stephens Inc. -- Analyst

Hey guys, good morning.

Jack Kopnisky -- President and Chief Executive Officer

Good morning.

Austin Nicholas -- Stephens Inc. -- Analyst

Maybe just, taking a look at the capital management slide you put out a couple months ago, with the current strategy at that time of growing loans in 8% to 10% range, not really tapping the buyback, is it fair to say that we've moved down to the alternative one where loan growth is in that 5% range and buyback of 7 million to 8 million shares or are we somewhere in between that kind of initial strategy in that alternative one?

Luis Massiani -- Chief Financial Officer

No. I think we've moved to the middle tier and our kind of intension would be kind of 6% to 8% range in total loan growth, but it's the middle tier of still being able to achieve the 10% EPS growth by doing that level of loan growth and share repurchases. We are mixing this a little bit more by picking shot in this as with the sale of the mortgage portfolio -- part of the mortgage portfolio.

Austin Nicholas -- Stephens Inc. -- Analyst

Understand. That's helpful. And then I guess just on the -- maybe on the buyback, a little more detail there on, we should think about how active you're likely to be in repurchasing shares?

Luis Massiani -- Chief Financial Officer

So we have 10 million -- so we have an authorization for 10 million shares. We're going to do this progressively taking advantage and being pragmatic of when we -- when -- what the competing investment alternative is relative to buying back our own shares. We're going to do that progressively over the course of the year but we provided in the guidance slide, you see what our target TCE ratio is and you can pretty clearly see what if you run the math, you can see what the excess capital component is in. We anticipate that over 12 month window, that would be at least $350 million repeat to $400 million of excess capital that we will continue to generate, that to the extent that we are not successful in identifying an alternative investment opportunity, we will be pragmatic about the world if it makes sense from a economics perspective and an intrinsic value perspective on our shared, we will absolutely buyback and fully execute that 10 million if that is -- that's the best and most efficient use of our capital.

Austin Nicholas -- Stephens Inc. -- Analyst

Understand. That's helpful. And then, maybe just on a portfolio purchase expectations or optimism. Can you maybe give us a feel on how that maybe changed since the end of the last quarter, in terms of the sizing or the pricing, on those deals that you're seeing come to market?

Jack Kopnisky -- President and Chief Executive Officer

I would tell we have never seen as many deals as there are today. So whether, there are a variety of deals out there are more deals that have -- would appear to have appropriate pricing and appropriate structures than we have seen the prior quarter and frankly at the beginning of the year.

Again these deals all happen, as we discussed with Astoria, we were very disciplined, Astoria and all the prior banks and all the prior commercial finance portfolio purchases we've made, we've been pretty disciplined by looking to this and sometimes when you hang around the hoop there is good opportunities to you, may turn things down once and they come back again. But there is a significant amount of opportunities that we are running off -- I am sorry running out to determine, to make sure that they fit our structure in. There are some other bidders too in some of these portfolios but we think we're an advantageous bidder for a variety of different reasons in the way we run the company and frankly our demonstrated results. So there is meaningful and significant opportunities over the next several quarters define portfolios or deals that makes sense.

Austin Nicholas -- Stephens Inc. -- Analyst

Okay. That's helpful. And then maybe just one last one. I appreciate the full-year guidance for the NIM being intact. Could you maybe give us some clarity on the forth quarter specifically, just given maybe some of your more variable-rate loans beginning to reprice upward with LIBOR moving a little bit more in the forth and the third?

Luis Massiani -- Chief Financial Officer

Yeah. So we are being -- we think that the NIM should stay at about 3.15%, it will stay at about 3.15% or 3.20% for the fourth quarter. We are being cautiously optimistic in the perspective of -- we have not seen same level of repricing in the early parts of this quarter on higher balance commercial and municipal deposit accounts. And so you kind of rewind back to the second -- the second and third or early part of the third quarter, we did see a substantial chunk of no greater repricing activity. So, so far this quarter has been better than the third quarter so the deposit data we anticipate should be lower than on a linked quarter basis between the fourth and the third quarter than what it was in the third to the second quarter, but again we're being cautiously optimistic on that front.

The repricing of the loans on the floating rate side will have some impact. But you have to remember that the asset sensitivity profile of what we are going to end up being is not where it is today, because we only have about $4 billion, $4.5 billion with 25% of the book that is really tied to the short end of the curve. We have to transition out of the residential mortgages and the commercial real estate that we acquired, which is still about 8.5 almost $9 billion of loans to get to the place where the short end of the curve moving up will be meaningfully more impactful for our NIM.

So from that perspective, we're going to, we're anticipating, we're going to be relatively flat. We should see, to the extent that there is a discontinued progression on the deposit pricing side , we know we should do a little bit better than the 3.16% that we had this quarter-on-quarter basis.

Austin Nicholas -- Stephens Inc. -- Analyst

Understood. Appreciate the answer there. I'll hop off. Thank you.

Jack Kopnisky -- President and Chief Executive Officer

Great.

Operator

And moving on to Alex Twerdahl with Sandler O'Neill.

Alexander Twerdahl -- Sandler O'Neill & Partners -- Analyst

Good morning, guys.

Jack Kopnisky -- President and Chief Executive Officer

Good Morning Alex.

Alexander Twerdahl -- Sandler O'Neill & Partners -- Analyst

Little more questions about this that the residential mortgage sale. The $1.5 billion, $2 billion, is there a specific timing associated with that? Is that something that will definitely happen in the fourth quarter? Is it contingent upon finding an acquisition on the commercial finance side to kind of fill that balance sheet gap that will be left?

Luis Massiani -- Chief Financial Officer

No. We are, right now we're targeting doing this in the fourth quarter and this could be agnostic to the to finding a -- this is a stepping stone that we have to go accomplish anyway because the opportunities that we're seeing in the commercial finance side are big enough that we, as we've talked about in the past, we've had to have some balance sheet management to be able to do a deal and maintain the liquidity and funding profile that we want. So we are, this is a, we're going to do this anyway, so our plan is to do it sooner rather than later, and we were anticipating doing it in the fourth quarter.

Jack Kopnisky -- President and Chief Executive Officer

And remember too, this take some interest rate risk off the table, rates go up. This potentially becomes less positive going forward, creates all kinds of advantages by doing this now rather than waiting. I'm sorry, Alex, I cut you off.

Alexander Twerdahl -- Sandler O'Neill & Partners -- Analyst

That's OK. Now, I totally agree that it has to be done, but at least in the near term, I got to imagine that shedding $2 billion -- $1.5 billion to $2 billion of mortgage loans is going to leave a fairly substantial earnings. So also maybe Luis you can kind of just talk us through the earnings that will be lost from doing this and including there some of the purchase accounting adjustments that we should be including in our model going forward, that would be associated with these loans.

Luis Massiani -- Chief Financial Officer

Yeah. So the purchase accounting adjustment, so, assuming $1.5 billion of the fixed rates, the purchase accounting adjustments will decrease by about half relative to the guidance that we provided before. So the 75 million of accretion income that that we have provided for 2018 would be -- sorry half of the residential mortgage would decrease, sorry, not the entirety of the $75 million, and the residential mortgage represents about 50% of the 75 million. So it's 50% of the 50%. So the $75 million of 2015 would result in we'd lose approximately $20 million to $25 million -- about $20 million of that on the accretion income on the residential mortgage loans that were acquired.

Now from a core NIM perspective at a $1.5 billion you'd see an increase of about 12 to 15 basis points on a core NIM basis, and that's based on today's wholesale borrowing cost of funds. If you kind of extrapolate that out, this is the concept that which Jack was talking about of just relieving pressure is the fact that, we've stayed pretty short on the curve from wholesale borrowings perspective. So taking out $1.5 billion to $2 billion of wholesale borrowings, which is about half of the wholesale borrowings that we have today will result in a substantially greater core NIM. So at the, at the end of the day, this -- we're doing this because we anticipate we're going to be able to replace that on a relatively short basis with other assets and those assets are likely going to be on the acquisitions that we're talking about. So once you have those acquisitions in place there would be no drop-off in the perspective of GAAP or core NIM if anything, this is the -- the strategies that we're employing here is going to be accretion to both of those numbers.

Jack Kopnisky -- President and Chief Executive Officer

Yeah. And once we transact this thing, I think, in fairness, you all were trying to build models on this thing. We're negotiating that kind of the sale of this thing as we go forward. Once we complete this thing, we will work with you on your models to be more explicit around what the NIM effect is and what the earnings effect is but this is our view of accelerating the transition of the balance sheet at exactly the appropriate time so that we free up capital and free up liquidity to be able to do the things we want to do in the future appropriately.

Alexander Twerdahl -- Sandler O'Neill & Partners -- Analyst

Great. Thanks for taking my questions.

Jack Kopnisky -- President and Chief Executive Officer

Thank you .

Operator

And next we'll go to Dave Bishop with FIG Partners.

David Bishop -- FIG Partners -- Analyst

Hey, good morning gentlemen.

Luis Massiani -- Chief Financial Officer

Good Morning.

David Bishop -- FIG Partners -- Analyst

Sticking with that topic, any sense what we could can think of in terms of potential gains from a $1.5 billion divestiture? Any sort of scale or sense that we can think of in terms of, you know, pointing out into the earnings string.

Luis Massiani -- Chief Financial Officer

The gain -- there won't be a significant gain on the sale. So there is a -- there is a good market, and as we talked about, we would get out of this securing value or better but this isn't going to be a significant driver of capital. Capital will be generated more as we continue to work out of the real estate, that we are going to start seeing some additional sales of locations and so forth hitting in the fourth quarter and then into the first quarter, but the downsizing and reducing of this is more driven, it's not driven by generating capital from a gains perspective. This is more driven by just easing off on the funding pressures and kind of improving the liquidity profile of the balance sheet.

David Bishop -- FIG Partners -- Analyst

Got it. And you said, in terms of the financial center outlook, over the next 18 months, how many we thinking exactly?

Jack Kopnisky -- President and Chief Executive Officer

22 additional financial centers. So we had originally talked about doing total 30, we're now up to 37 in total, from the beginning of Astoria.

Luis Massiani -- Chief Financial Officer

So we've done 15 to date. We're going to do an additional 22.

David Bishop -- FIG Partners -- Analyst

(inaudible) 22. Got it. Got it. And in terms of the expense guidance for next year, does that contemplates additional lending teams are you still be out there being opportunistic in lifting out additional lending teams as you come across on the -- on opportunistic perspective.

Luis Massiani -- Chief Financial Officer

So no, we're still being very opportunistic. I tell you what we found though. We're actually lifting our teams and putting them into existing teams in some cases. We found that there is an effectiveness and economy of scale by a certain size of the teams as we go forward, but we're still finding lots of opportunities out there that folks that folks that can bring the right client contacts and right expertise to the company. That's one of the things that we've constantly done in this company and it must not be clear enough with everybody on this, but we've tried to continue to reinvent the company. So as we changed the size and the scope of the company, we make constant adjustments to both the balance sheet, the portfolios and also the people as time go on and we think that's what high performing companies do. They adjust as the market dictates and as the opportunities present themselves and we worked hard to be able to create a company that is flexible and has alternatives moving forward regardless of the, kind of economic and rate situation.

David Bishop -- FIG Partners -- Analyst

Got it. Thank you.

Jack Kopnisky -- President and Chief Executive Officer

Thank you.

Operator

And moving on, we'll go to Joe Fenech Hovde Group.

Joseph Fenech -- Hovde Group -- Analyst

Good morning, guys. So my first question was on that near-time earnings call, just building on that, appreciate that near-term will be volatile, guys, with these actions, but looking out longer term, is there anything you can give us so we can kind of hang our head on whether that's blessing, longer-term EPS, consensus forecast or profitability forecast or just something we can use as a measuring stick in the target for how you expect to play the, how you expect to play out longer term when all is said and done. Otherwise it would seem to me as though the problem with the market, unwillingness to give you a multiple on that projected EPS has been the issue for the stock that's going to persist? Or is that just all too much to expect at this point until you execute on the divestiture?

Jack Kopnisky -- President and Chief Executive Officer

So from an EPS -- so (inaudible) and the EPS forecast, I don't -- yeah I think that, that would probably be a little bit too much, but I think that we-- so this is what we've been talking about all along which is we continue to see the opportunity to through a variety of different avenues be it through growth or though capital management and through the various actions that we're talking about being able to generate 1.6% plus ROA, 18% plus (technical difficulty) 10% EPS growth and so we, that's where our focus is and we're going to continue focusing on that and I'll leave it up to you all Joe, you guys are smarter than we are, you figure out how you value that. I think that, you see our run rate today we were at $0.51 to $0.52, and you factor in the various mechanisms and avenues that we have to being able to generate (technical difficulty) that gives you a good guide to where we see things are going to shake out in 2019 for the full year. We're very confident to being able to deliver that EPS growth. How we're going to get there is going to take, it's going to take some, it's not going to be a straight line from point A to point B because we are in the middle of executing a balance sheet transition and the full integration of a very large deal that we did last year. So we're confident in generating the results. How we're going to get there is -- there is going to be a little bit more flexibility.

Joseph Fenech -- Hovde Group -- Analyst

Okay. Fair enough. And on the expense side guys, you consistently talked about and you delivered on the opportunity to see the cost save expectations out of Astoria. Is that the integrations behind you now. Is there still a cushion there in that forward guidance where you might have the opportunity to exceed it or is that opportunity mostly passed now?

Jack Kopnisky -- President and Chief Executive Officer

I go to tell you, I think we are, as demonstrated by the efficiency ratio, I think we're really good at managing kind of the operating leverage in the company, so there is always opportunity to make things more efficient and effective, and frankly we have a group even internally, transformation management group that works with each of the lines of business to increase efficiency effectiveness first and also efficiency. So effectiveness in driving revenue and productivity and efficiency in terms of allocating the right cost to different areas.

So one way to answer your question is, there is always opportunity to improve the efficiency and effectiveness of the company. Secondly, back to your question of Luis on the guidance. That's the challenge with all markets. What we've tried to do is, we've tried to say, this is a company that we have historically always delivered and we are going to continue to deliver and what we care about is that the returns of the company rather than the size of the company (technical difficulty). So we're talking about a 10% EPS growth, we're talking about 1.50% or above in return on assets and 18% or above on equity and the efficiency ratio is less than 40%. Those numbers are high-performing numbers -- metrics. We are less concerned about getting to $40 billion or $50 billion or whatever, we're more concerned about the returns. And obviously the market isn't seen at that way. So the share buybacks and the balance sheet management, we are taking a much more aggressive stance to address that, but in the end that's what we care about. We care about producing the company that demonstrates consistently those types of returns.

Joseph Fenech -- Hovde Group -- Analyst

I guess just trying to figure out ballpark though, Jack back to my question was, is this the one quarter kind of sort, I will call the hiccup with the transition and the earnings GAAP, this is a multi-quarter situation or the transition from an -- strictly from an earnings standpoint or is this just kind of execute and you're kind of back on the trajectory that you just talked about?

Jack Kopnisky -- President and Chief Executive Officer

I'm not sure how to answer that question because of the variables of being able to put assets on the books over a period of time. So what we've said is, we expect to put meaningful assets on the books over the next several quarters to be able to offset the exit of this portfolio, but in the end, we think this is the most efficient and effective way to create long-term value out of there.

Joseph Fenech -- Hovde Group -- Analyst

Okay. And assuming since these are portfolio -- potentially portfolio acquisitions, the stock multiple isn't an issue for you here for any of the stocks that you're looking at?

Jack Kopnisky -- President and Chief Executive Officer

That's correct.

Luis Massiani -- Chief Financial Officer

That's right.

David Bishop -- -- Analyst

Okay. And then last one for me. Jack, obviously some concern in the market about national lending platforms in light of the Ozark's disclosure, even though their issue seem to be very specific to them from a decade or so ago. You did talk about seeing credit structures that are acceptable to you. Assuming others are making those loans, how close do you think we are seeing well I will call it ramifications of that bad decision making? Do you think the problems people are likely to see are still ways out given further strength of the economy?

Jack Kopnisky -- President and Chief Executive Officer

Yeah, it's interesting. This happens every time. I guess I'm getting, I am old enough to know that have gone through five or six cycles where our rates go up when they have been low for a period of time, and the exact same thing has happened over that period of time that's happening now. Bank start to stretch on credit structures, they start to stretch on or they taking less yield and then all of a sudden at some point in the future, folks will back up and say, oh my gosh, these loans are in pain.

We have -- give me a one example, we have I may get these numbers wrong by a little bit, but our ABL Group is actually seeing -- saw 350 potential opportunities year-to-date. That's an incredible amount of deal flow coming in. In the end, they're doing about 50% or 75% of what they did before, because the credit dynamics of what is happening in the ABL has gotten off track. The yields aren't where they need to be in some cases and the credit structures aren't where they need to be. So there is lot of people trying to put money to work and they are stretching the credit parameters. So there will be a crunch at some point in time. Look at the capital markets, a lot of the capital markets are providing lots more debt. There's more leverage in the market and they are usually in that kind of canaries in the cave before things start to go right from a credit standpoint.

So I don't know the answer exactly but there will be a credit crunch at some point in time. I do not think it will be anywhere close as bad as what it has been in many of the past times in part because the regulatory environment has been structured such that it's prevented a lot of the issues in the banking sector. I can't say the same thing in the non-banking sector, but in the banking sector, I think the regulators have done a good job of limiting some of the craziness that happened before in real estate, commercial real estate and it has limited some of the banks and companies to go in the leveraged lending in a more highly leveraged manner. So I think the regulatory environment is -- will help prevent that but I think there will be some credit challenges in the future in the industry.

David Bishop -- FIG Partners -- Analyst

Okay. Thanks guys. That's all I have.

Operator

Moving on, we'll go to Collyn Gilbert with KBW.

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

Thanks, good morning guys.

Jack Kopnisky -- President and Chief Executive Officer

Good morning.

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

So I just want to make sure I understand here. So the loan guidance that you guys put in the slide deck, does that include the sale of this resi book that you're talking about?

Jack Kopnisky -- President and Chief Executive Officer

It does not. So it does the 8% to 10% and -- well the 8% to 10% is -- doesn't -- that to begin with -- the 6% to 8% does not include that.

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

Okay. And then, how about portfolio acquisitions. I think, I thought in the past your loan growth target did assume perhaps some acquisitions, does it is still?

Luis Massiani -- Chief Financial Officer

The portfolio acquisitions would take that to the higher end of the range or exceed it.

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

Okay. All right. And then just broadly, I know there's a lot of moving parts here for you guys selling this portfolio, but are you it's kind of the funding source that you're anticipating paying down with the sale, is it borrowings or do you think you can, you can unload some of the higher cost muni deposits? I am just trying to think about what the -- OK the blended yield on the 1.5 billion, did you say what that was, Luis?

Luis Massiani -- Chief Financial Officer

It's about 3.50% core.

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

3.50%. Okay. And then so in terms of maybe what the associated borrowings are through Muni's and borrowings, is that like a 2.50% funding source or ?

Luis Massiani -- Chief Financial Officer

Today it's slightly higher than that, it's about 2.65%. Going forward, that is a -- the is the component of the deposit book -- actually wholesale borrowings have a beta of one over some short period of time. The municipal components that we're talking about are the ones that have the highest beta of our portfolio. And so, today, it's about a 50 basis point to 75 basis point difference between the spread on those loans and the cost of the -- weighted average cost of the deposit -- of the funding that we're talking about. Going forward that is going to be a that spread will narrow. But today it's about a 50 basis point to 65 basis point difference.

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

Got it. Okay. And then, I just want to make sure I understand your comments on the accretion. So you guys are targeting total accretion income in 2019 of roughly $75 million. And then associated with the sale, leaving that will be $20 million to $25 million that will go with this portfolio?

Jack Kopnisky -- President and Chief Executive Officer

It will be (technical difficulty) not $25 million. The $25 million is too much, it about $20 million.

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

$20 million. Got it. Okay. So the, just on the portfolio acquisitions, is there a concern at all or have you guys thought about, I know you've been very patient in pursuing these and I presume that means because pricing is just going to keep getting better and better, or you think pricing is getting better and better on these portfolios. But do you think the window there -- how do you see that window? I guess why I'm asking that is, clearly we're sitting in a banking environment where loan generation and asset growth is just the outlook has decelerated quite meaningfully. So I would imagine banks are going to start to look to need to supplement assets. So do you think the competitive landscape changes for pricing on these assets, and if so, do you feel like you need to execute this more quickly than waiting further into '19?

Luis Massiani -- Chief Financial Officer

Two things there. First and foremost, I think that the best deals are done in the worst of times. And so from that perspective, the tougher the environment gets and the more stretched some of these non-bank lenders and others get from a funding perspective. The better off we're going to be from a pricing and from a timing of being able to do these deals. We're very confident that as things as conditions continue to get little bit further stretched, that's when good -- really good opportunities show up.

And secondly, not every bank out there does the businesses that we are in. A lot of other folks are involved in these, but these are, we are very confident with the infrastructure and platforms that we created and the ability of providing a plug and play type of opportunity for the management team that will join us or for the person who's -- we are very good at managing the assets, that we are looking at here from an acquisition perspective and not everybody else can say that. So from that -- this isn't a broad universe of buyers. If you look at equipment financing those types of things, those are more commoditized plain vanilla type things that there's, there will be more competition for. And the other types of businesses that we're looking at, it's not a broad universe of bank buyers that would be looking at these.

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

Okay. Okay. That's helpful. And then just trying to understand Luis you reconciled the C&I, the drop in the C&I loans quarter-to-quarter but ironically I feel like all this discussion could be mute when you look at the yield on the resi book at this quarter was 5.28%. I know obviously accretion is in there, but I mean it's one of your highest yielding assets. So what's going on there and then the potential sale, I presume of this -- the lower yielding tranche of that, does that -- do we see that yield actually increasing? Or just kind of walk me through how -- what's going on with the --

Luis Massiani -- Chief Financial Officer

So there is -- so you'd see it increase a lot. So this is why we are focusing on that component of the book, is because when you look at the $4 billion rough numbers, $4 billion of residential mortgage assets that came to us from Astoria there is a total 4.5 billion, the incremental $500 million or so of assets are driven by the legacy Provident business in Rockland and Orange County and those are new mortgages that we're going to keep because those are mortgages that are tied to deposit customers that have been worse for a very long period of time back to the Provident days.

So we look at the $4 billion of Astoria mortgages, $1.5 billion of those are 15 and 30 year whole loans that are fixed rate, and those are the ones that have that 3.5% weighted average yield, and the remaining of the loans are either floating rate today already or 5, 7 and 10 one (ph) arms that are going to start coming into the reset periods relatively quickly. So one of two things is going to happen with the reset rates on that I guess $2.5 billion of non-fixed-rate loans. Are those loans going to stay with us and they're going to reset in which case you are going to get a bump up in yields which will be perfectly fine with us, or they're going to payoff at par, where we're going to get our money back relative to the market that we have today from a purchase accounting perspective.

So the strategy behind eliminating the fixed rate, those are the -- that are going to be with us for a very, very long period of time and we've started to see a slow down specifically in the 30 year fixed rate portion of that book because 30 year fixed-rate loans, yes when rates go up those are the ones that typically slow down the most and we've started to see that happen there. And so the yield on the residential mortgage books, not that we don't like it that 5.28% does include the accretion income, there is a component of the residential mortgage book that we retain, we will continue to either enjoy the benefits of a repricing asset or we're essentially going to get our money back at par which we can then redeploying into something else. So there is flexibility in that. Rather, we don't want to get rid of the entirety of that because there's components of it that were perfectly fine owning for a period of time.

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

Okay. So then how do -- how should we think about the potential runoff in the book once you complete the sale?

Luis Massiani -- Chief Financial Officer

The runoff would stay at roughly the same rate where we are going today because the two components we would be selling are the components that are not running off meaningfully. So in this quarter we add $250 million of runoff. You tell me Collyn where rates are going to be for new mortgage originations in the next three months, I can tell you with a better certainty of these assets prepay or not.

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

I am not doing that.

Jack Kopnisky -- President and Chief Executive Officer

It's also a function of (technical difficulty).

Luis Massiani -- Chief Financial Officer

It's a function of the alternatives, the financing alternative that the individual mortgage borrower will have, right? So if somebody's coming into their adjustable rate period and they can adjust for another 12 months 4.5% or 5%, in some cases the reset rates are going to be much higher than that. They can essentially refinance into a 5 or 7 one ARM (ph) at a lower rate than that, then you now what, that asset is going to repay over some relatively quick period of time because it's a very efficient market. So the way that we're thinking about it today, is the components of the books that are cash flowing which is about $200 to $250 million per quarter are the ones that we would retain because that is from a yield perspective on a core basis as well as a prepayment activity and the cash flow activity perspective, it's the more attractive components of the book.

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

Okay. Okay, that's super helpful. And then just, you said it Luis, but like, but the target, the TCE target of 8.3%, I mean that's sending a pretty clear message, right? Because obviously you're -- and this is going to be even more, I mean you're gonna be shrinking the balance sheet, I presume it even more, which is going to generate even more capital through this acquisition -- sorry the sale. So that's obviously a lot of capital that you can have to put to work. I hear what you're saying on the buyback. You're going to be sort of progressive or whatever the word was that you used, just curious, why what's the process to increase that authorization and why have you not done it yet?

Luis Massiani -- Chief Financial Officer

I think I said pragmatic not progressive.

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

Well, I would say at $17.39 (ph) it's pretty pragmatic to be buying back right now.

Jack Kopnisky -- President and Chief Executive Officer

Exactly.

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

Anyway. So I've said that a million times you. I just want to say it again, but go ahead. So why, what's the authorization process?

Luis Massiani -- Chief Financial Officer

The authorization processes is -- we don't need to have secondary approvals or anything like that. This is essentially our management and our Board of Directors approving an increase to the share repurchase authority, and similar to how we announced our 10 million share buyback authority in February, sorry that we did in February and we and made it public in connection with the first quarter earnings this will be -- say, if we wanted to increase from 10 million we could do that very quickly. This is not --

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

You don't have to wait for any kind of Board meeting or any -- you could do that it off-Board cycle?

Luis Massiani -- Chief Financial Officer

Yeah.

Jack Kopnisky -- President and Chief Executive Officer

Yeah.

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

Yeah. Okay. And I'm just curious how come you've not done that yet?

Luis Massiani -- Chief Financial Officer

Because we're going to use the 10 million first and then we'll use the, we again we think that there's going to be good opportunities to continue to invest in other assets going forward. So to the extent that we have -- that we determine that the best use of capital speak more than 10 million shares then we can do that from one day to the next. So it's not, we haven't done it, there are no other reason that we are going to use the 10 million first and then we're going to reassess what the investment to alternatives are, and at that point it makes sense to continue buying back shares we will.

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

Okay.

Jack Kopnisky -- President and Chief Executive Officer

Bluntly -- bluntly Collyn, it is better for us to use capital to buy things and grow things that it is to share repurchases. And maybe we're bullheaded on this thing, but we, because we've demonstrated this, the returns that we've created out of those buying things or building things have been better than share repurchase, it's widely clear that everybody in the Board or every investor out there wants us to look at share repurchases and put this capital to work rather than orient it all in a thank until such time we put it to work. So we are now, this is given where the stock is kind of flown to -- flown down to. This is the right thing to do now and we fully expect to find things that we can put more capital to work for in the future that gives us higher returns but in the interim, we are going to put this capital to work.

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

Okay. And then, I think I probably know the answer to this, given what you just said, Jack. But I'm just gonna ask it anyway. I mean again, you've got a lot of capital that you're building here. Any reconsideration on how you're thinking about the dividend?

Jack Kopnisky -- President and Chief Executive Officer

We actually, we just had a Board meeting yesterday and talked about the dividend and it's an ongoing conversation with the dividend. Again we positioned ourselves as a growth stock and somebody that keeps on growing at 10% or more outsized in the industry. Our view is we're not getting credit for that. So most investors are looking at bank stocks as value plays and we're going kind of sequentially. Here's the opportunities to buy things or to grow things. Here is the opportunity to do share repurchases and here's the opportunity to improve the dividend. So all those things are on the table.

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

Okay. I will leave it there. Thank You very much.

Jack Kopnisky -- President and Chief Executive Officer

Thanks Collyn.

Luis Massiani -- Chief Financial Officer

Thank you.

Operator

(Operator Instructions) Moving on we'll go to Matthew Breese with Piper Jaffray.

Matthew Breese -- Piper Jaffray -- Analyst

Good morning, everybody.

Jack Kopnisky -- President and Chief Executive Officer

Good Morning. Matt.

Matthew Breese -- Piper Jaffray -- Analyst

I'm sorry to harp on the NIM once more. I just wanted to make sure I had my numbers accurate. So I think you said, with the divestiture it would be 12 basis points to 15 basis points accretion to the core NIM. Is that accurate?

Luis Massiani -- Chief Financial Officer

That's correct.

Matthew Breese -- Piper Jaffray -- Analyst

And so, is that included in the 2019 guide or should we assume that once completed 2019 guide should also be 12 basis points to 15 basis points higher?

Jack Kopnisky -- President and Chief Executive Officer

That is not included. It would be higher.

Matthew Breese -- Piper Jaffray -- Analyst

Okay. And then as we think about post the divestiture, how should we think about your ability in this environment to defend the NIM? I mean once done can we start to see some margin expansion on a go forward basis as the fed hikes. Is that, the situation will be in?

Luis Massiani -- Chief Financial Officer

I think for every dollar of fixed rate assets that we take off the books that we replace with something else. Yes, we start to get to a position where we are going to be able to defend that NIM in a substantially better fashion. That's -- that had two components to it, the transitioning of the balance sheet and then the being more I think the right word would be selective, regarding the higher balance commercial and municipal types of deposit that we would take where we would focus on exclusively places where we have full relationships with operating accounts and excess liquidity accounts and cash management products and so forth. So, both components of that would -- both sides or both asset and that deposit in wholesale borrowing funding would allow us to protect the NIM a little bit better.

Jack Kopnisky -- President and Chief Executive Officer

Yeah, you think about it this way, that this creates better asset sensitivity. So we've been working our way back to the level that we were previous to Astoria acquisition of getting to being kind of 60% of the loans being variable rate and 40% fixed. We've been just the opposite of that to this point. So by this action, it gives us a little closer to improved asset sensitivity that ends up being able to slow up with the increases in rates.

Matthew Breese -- Piper Jaffray -- Analyst

Okay. And I think you mentioned a second chapter of this could be a commercial real estate divestiture. What could that look like and then what's the next leg of funding that you would look to perhaps run off the balance sheet?

Luis Massiani -- Chief Financial Officer

So too early to tell -- to give you specifics on it Matt but we another $1.5 billion or so of long-term fixed rate commercial real estate really multi-family loans, that would be the next leg that we will book to do something with. What we would do with proceeds and something like that is we have $4 billion of wholesale borrowings that are all relatively short-term. There is 300 -- about $300 million of senior notes that we still have outstanding that have yield or cost of 3.5%, that are also a component to funding that isn't really giving us anything other than high cost of fund. So we can take care that as well. So there is plenty of things that we can still chip off from a borrowing perspective and unwinding some higher-cost municipals that we can -- we will sit around with the excess liquidity for a long periods of time.

Matthew Breese -- Piper Jaffray -- Analyst

Right. Okay. And then just thinking about the portfolio deal process, following the advantage deal, commentary has been very positive about the landscape for portfolio deals, there's been a lot of confidence that you can get one done prior to the end of the year. So one, is there a likelihood that we could see something announced by the end of the year? What would be the size of that potentially? And then two, could you help me just better understand the process. How do you bid on these things ?How do they come back to you and eventually you get the win to help us better understand how ultimately these things end up in your hands?

Jack Kopnisky -- President and Chief Executive Officer

So the answer for the question is, we're looking at things. So we see things all the time and most of what we look at and evaluate we pass on because either they're not the right price, they're not the right yields, they're not the right credit structure, it's not the right strategy, any one of those four or five things that we look at. The ones we do generally have been the most likely scenarios. These are mostly coming out of private equity firms that firms that have purchased businesses or portfolios and their cost to funds keep on going up and their ability to manage the portfolio purchase may or may not work. So a lot of these are coming out of private equity funds, some are coming out of banks that these end up being non-strategic assets.

So we look at these things, we determine whether if they do fit. We then in some cases they are exclusive, in most cases, they are bids. When they are bids, we look at the -- we evaluate the portfolio, look at trying to get those second round and then getting in the due diligence and going from there. So the answer is, the likelihood is over this quarter and next quarter that we have the opportunity to purchase, anywhere from a $0.5 billion to $2 billion worth of assets. That's what we are targeting as an objective to make happen. We are again, this is the hardest thing for US analysts and investors. We can't be specific about the exact timing because frankly, we're not in a stretch to things that don't make sense just to putting numbers on the board.

I said to Luis before we came on the call, we could have taken the pain of this quarter away on the loan growth side just by going out and buying $300 million or $400 million or $500 million worth of assets at yields that would look OK today but would be terrible in the future. We're not going to do that. We're not going to print the balance sheet up on a short-term basis to be able to look good just for the quarter. We'd rather stick to the long term. So long way to answer -- sorry for the long answer on this thing, but that's the process we're looking -- we look at when we look at these deals. We're trying to be very smart and like I said, do this for the term of this thing and not frankly take on assets that we'll regret in the future that either don't fit or look good short-term but don't -- aren't accretion for the long-term in terms of returns and in quality.

Matthew Breese -- Piper Jaffray -- Analyst

How many active bids do you have out there or active NDA, do you have out there on portfolios?

Jack Kopnisky -- President and Chief Executive Officer

Probably half a dozen.

Matthew Breese -- Piper Jaffray -- Analyst

On that $500 million to $2 billion range?

Jack Kopnisky -- President and Chief Executive Officer

Yeah. This is stretched to $400 million to $2 billion range, somewhere around there. Yes.

Matthew Breese -- Piper Jaffray -- Analyst

Okay. Understood. Okay. And then two quick ones from me. Just curious on the share repurchases. Up to what levels, do you find shared attracted to repurchase. And then the second one is just a better sense of where the provision can go over the next -- over the next year?

Jack Kopnisky -- President and Chief Executive Officer

The provision -- in what way -- you mean, the provision -- what's the progression of provision for loan losses.

Matthew Breese -- Piper Jaffray -- Analyst

Yeah, the provision was a bit below when I was thinking this quarter. So (multiple speakers) just wanted to get a sense, if that's a good run rate?

Luis Massiani -- Chief Financial Officer

Yeah we've been guiding $10 million to $12 million and that was with some asset growth attached to it. So the reason for the provision being lower than what it's been in prior quarters is driven by the fact that there wasn't from an average balance perspective and then end of period balance perspective there wasn't a whole lot of loan growth. So we don't have to provide for too much on the growth side and so --

Jack Kopnisky -- President and Chief Executive Officer

And low charge-offs.

Luis Massiani -- Chief Financial Officer

And low charge-offs, yeah. Charge-offs were $4.5 million relative to $7.5 million last couple of quarters, $7.5 million to $8 million. So that's the reason for that provision. Our guidance from a $10 million to $12 million number going forward is continues to be good. I think that's a good target for you to continue to use.

On the share buybacks, again it depends on the -- it depends on the investment alternatives. We're not going to sit on the capital to the extent that -- those stock continues to trade at these levels and below we determine as intrinsic value we will continue to execute repurchases. That's what we determine as the best and in most efficient use of our capital.

So if we were to tell me today that the share price is back at $24, $25 then, yeah, probably not going to buy it then at $17 and change where it is this morning $17.50 or so. If those types of levels remain you can -- you can expect us to be pretty pragmatic about the world and buying shares in a way that we think make sense of that the best use of our capital. I hate to sound like a broken record, but it really is at the end of the day, it's how we think about it. It's the universe of we get paid to allocate capital and resources and that's the best and most use of our capital. We will use it that way.

Matthew Breese -- Piper Jaffray -- Analyst

Understood. And how quickly can you start to execute on that buyback?

Jack Kopnisky -- President and Chief Executive Officer

We have to execute tomorrow. We're ready -- so we will be ready to go.

Matthew Breese -- Piper Jaffray -- Analyst

That's all I had. Thanks for taking my questions.

Luis Massiani -- Chief Financial Officer

Thanks.

Alexander Twerdahl -- Sandler O'Neill & Partners -- Analyst

Thank you Matt.

Operator

And I will turn it back to Mr. Kopnisky for any additional or closing comments.

Jack Kopnisky -- President and Chief Executive Officer

Hey, thanks for your time and thanks for your terrific questions. And again, I'll emphasize the actions we're taking on this that, we're being selective and we're trying to be smart. And as Luis said, good patrons of the capital we have. We are taking action on the mortgage portfolio and we are going to look at doing share buybacks. So we appreciate it and look forward to continue good things from the company going forward. Thanks.

Operator

And that does conclude today's conference. We'd like to thank everyone for their participation. You may now disconnect.

Duration: 64 minutes

Call participants:

Jack Kopnisky -- President and Chief Executive Officer

Casey Haire -- Jefferies LLC -- Analyst

Luis Massiani -- Chief Financial Officer

Austin Nicholas -- Stephens Inc. -- Analyst

Alexander Twerdahl -- Sandler O'Neill & Partners -- Analyst

David Bishop -- FIG Partners -- Analyst

Joseph Fenech -- Hovde Group -- Analyst

David Bishop -- -- Analyst

Collyn Gilbert -- Keefe, Bruyette & Woods, Inc. -- Analyst

Matthew Breese -- Piper Jaffray -- Analyst

More STL analysis

Transcript powered by AlphaStreet

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

Motley Fool Transcribers has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.