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New York Community Bancorp Inc (NYSE:NYCB)
Q4 2019 Earnings Call
Jan 29, 2020, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Salvatore DiMartino -- First Senior Vice President/Director of Investor Relations

Good morning. This is Sal DiMartino, Director of Investor Relations. Thank you all for joining the management team of New York Community Bancorp for today's conference call. Today's discussion on the company's fourth quarter and full year 2019 performance will be led by President and Chief Executive Officer, Joseph Ficalora, and Chief Financial Officer, Thomas Cangemi, together with Chief Operating Officer, Robert Wann, and Chief Accounting Officer, John Pinto.

Today's release includes a reconciliation of certain GAAP and non-GAAP financial measures that may be discussed during this conference call. These non-GAAP financial measures should be viewed in addition to and not as a substitute for our results prepared in accordance with GAAP.

In addition, certain comments made on today's conference call will contain forward-looking statements that are intended to be covered by the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from expectations. We undertake no obligation to and would not expect to update any such forward-looking statements after today's call.

You will find more information about the risk factors that may impact the company's forward-looking statements and financial performance in today's earnings release and in its SEC filings, including its 2018 Annual Report on Form 10-K and Form 10-Q for the quarterly period ended September 30th, 2019.

To start today's discussion, I will now turn the call over to Mr. Ficalora who will provide a brief overview of the company's performance before opening up the call for Q&A. Mr. Ficalora, please go ahead.

Joseph R. Ficalora -- President and Chief Executive Officer

Good morning to everyone on the phone and on the webcast, and thank you for joining us today as we discuss our fourth quarter and full-year 2019 operating results and performance.

Earlier this morning, we reported diluted earnings per common share of $0.20 for the three months ended December 31st, 2019. That is up 5% compared to both the previous quarter and the year ago quarter and slightly ahead of consensus. We are extremely pleased with the company's performance during the fourth quarter. In many ways it was the strongest quarter of the year for us and marks a significant inflection point in terms of improved fundamentals. We are encouraged by the strong rebound in loan growth during the quarter as well as the linked-quarter improvement in net interest income and net interest margin.

With the Federal Reserve lowering short-term interest rates three times during the second half of last year, the expected benefit to our net interest margin and the net interest income has started as both of those metrics improved during the current quarter.

Turning now to our financial performance. As I mentioned earlier, our loan growth rebounded nicely during the fourth quarter as total loans increased $1 billion compared to the third quarter of the year and rose $1.7 billion, or 4%, on a year-over-year basis. multifamily and specialty finance lending drove the loan growth during the year and the quarter. Multifamily loans increased $893 million on a linked-quarter basis and $1.3 billion or 4% on a year-over-year basis.

Our specialty finance business had another strong quarter and an outstanding year as the portfolio increased $690 million or 36% on a year-over-year basis. Origination activity also rebounded strongly during the fourth quarter of 2019. We originated $3.3 billion of loans during the quarter. That's up 45% compared to the previous quarter, and on a year-over-year basis, total originations were up 5%. Multifamily originations totaled $2 billion this quarter, up 69% compared to the prior quarter, while CRE originations of $327 million increased 6%. This was the highest combined level of multifamily CRE originations since the fourth quarter of 2017. We also originated almost $800 million of specialty finance loans this quarter. That's up 25% compared to the previous quarter.

In addition to the strong origination activity during the fourth quarter, we also opportunistically repurchased $771 million of multifamily loans previously originated by us and sold to other financial institutions. These loans were originally sold by us in order to stay below the SIFI threshold.

Overall, this was one of the strongest quarters for loan growth in over two years. And we continue to be encouraged by the potential loan growth in 2020 as the pipeline started the year off strongly. Currently it stands at $1.5 billion, of which 66% is new money. As a reminder, the pipeline is at a point in time we typically originate more than what is in our pipeline, as was the case this quarter.

On the funding side, total deposits were relatively unchanged compared to the previous quarter, and were up $893 million or 3% year-over-year. Year-over-year growth was led in large part by CDs, which increased $2 billion, or 17%, in 2019, but declined modestly compared to the previous quarter.

Our wholesale borrowings rose $931 million on a linked-quarter basis and was primarily used to fund our loan growth during the fourth quarter as wholesale funding was a more attractive funding alternative during the past quarter. On the revenue front, we were very pleased to see top line revenue growth return this quarter. Net interest income increased $6.6 million, or 11% annualized compared to the previous quarter as interest expense declined.

We also witnessed an improvement in net interest margin during the fourth quarter, as it rose five basis points compared to the third quarter. Excluding the impact from prepayment fees, the fourth quarter margin would have been 1.90%, up two basis points, and in line with expectations. This was driven by a decline in our overall cost of funds and marks the first time since the fourth quarter of 2015 that both net interest income and the margin increased. We expect both of these measures improving throughout 2020 given our liability-sensitive balance sheet, the Fed's current interest rate policies, and the significant repricing opportunities embedded within our CD portfolio and wholesale borrowings.

Moving on to operating expenses, total non-interest expenses were $126.1 million compared to $123.3 million in the prior quarter and $135 million in the year-ago quarter. The efficiency ratio in the fourth quarter was 48.51% compared to 47.37% during the previous quarter and 49.92% during the year-ago quarter.

Over the past two and a half years, we have reduced our operating expenses by approximately $150 million and we'll continue to focus on cost containment going forward. On the asset quality front, our asset quality measures remained strong during quarter and the year. Non-performing assets totaled $74 million, or 14 basis points of total assets, while non-performing loans were $61 million or 15 basis points of total loans. Net charge-offs remained at low levels, totaling five basis points of average loans for the year, and only one basis point of average loans during the fourth quarter. Majority of our charge-offs this year were related to taxi medallion loans. That portfolio has been in runoff mode over the last two years and now stands at $55 million.

Importantly, we have now been operating under the new rent regulation laws for six months, and to-date, we are not seeing any negative asset quality trends in the rent regulated segment of our multifamily loan portfolio. As noticed on page 10 of today's investor presentation, 60% or $18.7 billion of our total multifamily portfolio is subject to New York State rent regulation laws. The weighted average LTV on this portion of the multifamily portfolio is 53%, about 400 basis points less than the weighted average LTV on the entire multifamily portfolio.

Lastly, this morning, we also announced that the Board of Directors declared a $0.17 cash dividend per common share for the quarter. The dividend will be payable on February 24th to common shareholders of record as of February 10th. Based on yesterday's closing price, this represents an annualized dividend yield of 5.80%.

On that note, I would now ask the operator to open the line for your questions. We will do our best to get to all of you within the time remaining. But if we don't, please feel free to call us later today or this week.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from Ebrahim Poonawala with Bank of America. Please proceed with your question.

Ebrahim Poonawala -- BofA Securities, Inc. -- Analyst

So I guess the first question just around loan growth, if I -- two parts to it: one, if I take out the $771 million in purchased, loan growth I guess on a core organic basis still seemed a little soft. So I would love to hear just in terms of your loan growth outlook for the multifamily and the overall loan book for 2020. And I think the last time you updated on participations was in 2016 where you had about $3 billion to $4 billion in loans that had been participated. So if you could remind us how much additional opportunity there is to repurchase some of those loans back.

Joseph R. Ficalora -- President and Chief Executive Officer

We currently have about $2 billion more that we could do that. But the thing is, the market is strong, and we'll have the ability to originate well within our appetite over the period ahead.

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

Ebrahim, it's Tom. I would add to Joe's commentary that obviously, the focus here is to analyze, be in the market, we're very effective in the market. We see very strong economic spreads compared to the previous year since the rent was changed. But more importantly, when you take some of the one-off transactions that we anticipate to go away in the fourth quarter versus Q3, which is a very volatile quarter, we saw our retention rate improved slightly, which is a good signal. Our goal for 2020 is to go back to that predictable retention rate historically which will be much higher compared to the past -- the second half of 2019. So when you think about that and you model it, modeling a mid-single digit loan growth is very reasonable for our appetite in the market.

Ebrahim Poonawala -- BofA Securities, Inc. -- Analyst

Got it. But single-digit loan growth. And I guess, Tom, on the core margins, it went up two basis points in line with your guidance. How should we think about the margin going forward and just in terms of where the CD book is repricing relative to the 2.37% cost in the fourth quarter?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

Right. Ebrahim, as you know, I don't go on a limb more than three months on the margin, because obviously it's a very interesting environment. But clearly, we had the inflection point, as we expected, in fourth quarter 2019, and we continue to see very strong visibility throughout the full-year 2020 with margin expansion every quarter, as well as the growth in NII. So NII inflected in 2019 Q4 as expected, up two basis points in the fourth quarter. I would say for the first quarter we'll have a higher NII expansion and probably another two basis points in the margin, and that's assuming no changes in interest rates and it excludes any prepayment penalty income. [Speech Overlap] continuation of margin expansion throughout 2020.

We're liability sensitive and we have a substantial amount, as you indicated, CDs that will reprice it's about $14.2 billion, and it's throughout the entire year. So the lowest quarter of the repricing -- actually, second lowest quarter is the first quarter was $2.8 million at a 2.29% rate, then Q2 was about $4.5 billion at 2% to 2.40% rate. So we really have a lot of repricing expectations going forward given where current interest rates are. And if you look at where CDs are coming on, it's just slightly south of 2%, I think the number was like $188 million in the fourth quarter.

Ebrahim Poonawala -- BofA Securities, Inc. -- Analyst

So I guess just to be clear, Tom, you expect the margin expansion of two basis points. Is it safe to assume given what you said that that accelerates, so we should see -- I know you don't want to give guidance beyond three months, but all else equal, should we see that two basis points become four, five, six and accelerate as 2020 progresses because that's kind of where Street expectations are?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

Yeah. Again, I feel really good that we have the inflection point. I'm not going to give long-dated guidance, but I was very clear that I see margin expansion throughout the year. But more importantly, the NII growth is significant for us. We haven't seen that since the first half of 2016. So, inflection point is here, we're liability sensitive, we have a lot of liability repricing. So on the liability side, we get good benefit. In addition to the borrowings -- in the CDs, we have the borrowings, which is material for us, and borrowing rates compared to what's coming off is significantly attractive to us in 2020 and '21.

Ebrahim Poonawala -- BofA Securities, Inc. -- Analyst

Got it. I'll requeue.

Operator

Our next question comes from Brock Vandervliet with UBS. Please proceed with your question.

Brock Vandervliet -- UBS Warburg LLC (US) -- Analyst

Okay. So you covered the CD aspect. On the wholesale borrowings, I know you were pretty creative last year in using some of these hybrid FHLB structures. The borrowing cost ticked down a bit this quarter. What should we look for in the near-term in terms of relief on the borrowing cost?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

I'll just be specific with the actual numbers. We have $3.7 billion that comes due in 2020 at a 2.11% rate. We put on a trade yesterday at about 1.47%. That was about $0.5 billion. And that was based on LIBOR, home loan bank floating LIBOR, and we swapped it out for three years with a a swap, which got our cost down to 1.47%. So we're locked in there for three years with very little basis risk. So that's kind of what we've been doing recently. So we'll continue doing that as depending on market opportunities. We're not going to -- we look at where short-term funding is, it's probably a 35 basis points benefit to lock it at and swap it out to 2.5 years to 3 years. So we'll take advantage of that opportunity given the shape of the curve. And when you go into 2021, you have another $823 million at a 2.40% rate. So for the next two years, we have some high-cost money compared to the markets that could be repriced lower.

Brock Vandervliet -- UBS Warburg LLC (US) -- Analyst

Okay. And near term, is there any anything we should be aware of for Q1 on that front?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

I think it's continuing. I think, it's going to be an ongoing benefit each month. We have -- it's staggered throughout the quarter, just like the CDs. I think in Q2 for the CDs we'll have a substantial, given it's almost double the amount in Q1, and it's at the highest cost of the year. So 2.38% is the highest cost that we have rolling off from Q2 for CDs, and that money is coming [Indecipherable] right now is 1.65% three months and nine months at 1.85% and that 12-month liquid CDs at 1.50%. So if you tag on a few basis points [Indecipherable] customers, you're still well below 2%. So you're going to get a nice benefit on the CD front for the run rate next year.

Brock Vandervliet -- UBS Warburg LLC (US) -- Analyst

Got it. Okay. I'll jump back in the queue.

Operator

Our next question comes from Ken Zerbe with Morgan Stanley. Please proceed with your question.

Ken Zerbe -- Morgan Stanley & Co. LLC -- Analyst

I guess, Tom, you certainly laid out the case for a lot of opportunity on the -- for the liabilities to reprice lower. But I guess, we've heard this for a few quarters now and your core NIM is only going up about two basis points per quarter. Can you just walk us through the other side of the balance sheet? I mean, obviously, with a five-year Treasury at like 1.44%, is it just simply a matter that the loans are repricing a lot lower that offsets a lot of this liability benefit?

Joseph R. Ficalora -- President and Chief Executive Officer

Yeah. Ken, let me be clear, I didn't give any guidance [Indecipherable] Q1 on the margin. So that's your expectation. But, we're very bullish about the fact that the funding costs are going low and our yields for the most part should be in a good position depending where our interest rates go. We really don't know where our rates are going to be at the end of the year, but we have a sizable book of business that's coming due in 2020 and '21. The multifamily portfolio is about $3.3 billion at a 3.18% coming due in 2020, '21 to $3.8 billion at 3.32%. When you look at those rates compared to market rates, we [Indecipherable] seen a lot of volatility in rates. We've been effectively pricing our multifamily CRE business at a healthy spread compared to it was a year ago. So that 200 basis point spread is real. Yes, rates have come down, but we still have a very good offering out there, and we'll be very competitive.

I think the plan for 2020 is to focus on our retention. We're going to be very focused on bumping that retention rate up to historical norms. You've had a nice improvement when you take some of the one-off deals from Q3 versus Q4, but Q3 in 2019 we had lots of retention go away, and a lot of that was because of what we'll call aggressive underwriting and aggressive agencies. We're going to be razor focused to move that retention. When you move the retention to a higher percentage with [Indecipherable] for NYCB, you'll see the loan growth kick in. That's our goal for '20.

At the same time, you see where the market is on security yields, we have a very small securities portfolio. There's really not a whole lot of benefit right now to put capital and liquidity to work at these levels. So we're being mindful of keeping it relatively flat until we see opportunities.

Ken Zerbe -- Morgan Stanley & Co. LLC -- Analyst

Got you. Okay. So if I paraphrase that, it sounds like you're going to get NIM expansion, but most of the NII growth is going to come from the balance sheet growth rather than the NIM side, if I understand that...

Joseph R. Ficalora -- President and Chief Executive Officer

Yeah. Again, depending where the interest rates are. Obviously, if you were to categorize that in the middle of the fourth quarter, rates were dramatically higher, right. Look where rates are today. But they move around quite a bit, and we're very excited to get that 200 basis point spread. That's a much healthier spread we've seen and probably a good -- post crisis, because pre crisis, it was a 110 spread. It went back to 150. And ultimately, when the rent control laws have changed, we believe that 200 basis points is more of a fair spread. And we're seeing some good activity there. Our lending people are very busy. Our focus is on making sure we have strong retention. We have all the data. We have all the loan files. We know what's coming due, and we're going to work very hard to maintain our share. At the same time, we were very opportunistic in the previous quarter to take advantage of some other people that are looking at divesting their position in multifamily, including some of our partners on participation, and we'll be active there as well.

Ken Zerbe -- Morgan Stanley & Co. LLC -- Analyst

Got you. Okay. And then switching gears just a little bit. In terms of expenses, looks like they were a little bit above your guidance that you gave last quarter. Any reason for the increase this quarter? And what do you think about expenses going into first quarter?

Joseph R. Ficalora -- President and Chief Executive Officer

So number one, I would say, I commend the entire team on the expense containment control we've had for two years. It's been a very difficult two years to keep those expenses down significantly. So we had obviously a very strong expense [Indecipherable] our guidance. We probably beat for the most part throughout the year, but for the most part we came, I'd say, slightly better than what management expected for the expense guide for 2019. As far as 2020, we believe that it's going to be relatively stable with the one -- I don't want to go on a limb yet, but I think it's fair to say that stabilization or expenses are going to be key. Cost containment, we have a few items that are going to increase our expenses slightly. We've instituted a 401(k) match for the first time as a public company. We've increased our minimum wage for our metro customers -- metro employees to $15 an hour. So we're being competitive because it is a changing universe in the New York metro area as far as compensation costs. And we've also released the salary freezes for offices. So my guess is probably looking at maybe another $10 million of expenses when you look at year-over-year when you normalize the expense base for 2019. So although we printed a higher number, if you normalize that, you're looking for like $5.05 million to $5.15 million, another $10 million as far as potential run rate for next -- for 2020.

Ken Zerbe -- Morgan Stanley & Co. LLC -- Analyst

Sorry, $5.15 million includes the $10 million...

Joseph R. Ficalora -- President and Chief Executive Officer

Sorry about the longwinded answer, by the way.

Ken Zerbe -- Morgan Stanley & Co. LLC -- Analyst

No, that's totally fine. Just making sure we got it right. But the $5.15 million includes that $10 million increase?

Joseph R. Ficalora -- President and Chief Executive Officer

Yeah, I think that's fair.

Ken Zerbe -- Morgan Stanley & Co. LLC -- Analyst

Okay.

Joseph R. Ficalora -- President and Chief Executive Officer

Again, we're doing a lot on -- we're going to grow this year again. That's the anticipation, but we've had a lot of cost contamination issues over the past few years, and we're going to still be efficient. Our conversion yet has not completed. We anticipate to have that by Q2. That's probably dragging a little bit. We'll get some benefit there in 2020. But I don't want to be too aggressive on the guide.

Operator

Our next question comes from Steven Moss with B. Riley. Please proceed with your question.

Steven Moss -- B. Riley FBR, Inc. -- Analyst

On prepayments, I was just wondering what expectations are for the full year. I missed how much you said, Tom, that was coming due in terms of loan maturities this year.

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

So we have approximately $3.3 billion of multifamily loans with a 3.18% that will be contractually maturing this year. They have to come to the table. At the same time, the 2021 book's about another $3.8 billion at 3.32% that has to come to the table in the next two years.

So we feel very opportunistic that there'll be elevated prepayment activity. Depending on the economic dollars, depends on when they decide to prepay and refinance with us or away from us. But that being said, we had a relatively strong Q4 on prepay. Activity was strong. Q3 versus Q4 I'd say was a very healthy quarter. Origination stream was very strong. As Mr. Ficalora indicated, a very strong origination quarter. We anticipate to have a very strong follow-through as we go through 2020, given the dynamics of the marketplace. There were some interesting deals that hit the market. And when you look at what buyers are looking at transactions, their hurdle rate of returns are higher, but they're getting done. So there's been that zero activity starting to move slowly toward buyers and sellers.

Yes. It's a Q4 activity. It always happens on Q4, but we see deals being done, which is interesting because the hurdle rate returns are reasonable. And these are 100% tied multifamily rent regulated buildings being transacted at levels that are reasonable. Cap rates are very reasonable. They're not elevated. So I'd say the reaction to the rent control law changes, that hurdle rate of returns for long-term property owners are higher. They're getting some transactions done, and we believe that will continue as we move further away from the enactment of the new change of the law.

Steven Moss -- B. Riley FBR, Inc. -- Analyst

Okay, that's helpful. And then, Tom, I think you also said that the second quarter CD bucket's the largest. Just wondering how large that bucket is repricing?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

Q2 is about $4.5 billion. That's [Indecipherable] $2.38 billion coming due.

Steven Moss -- B. Riley FBR, Inc. -- Analyst

Okay. And then just in terms of new money yields here, just wondering where you're seeing spreads for multifamily and CRE these days.

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

Yeah. We've been holding solid at 200, probably another 0.125% to 0.25% above that to CRE. We're going to adjust to be competitive, but we've done a fine job since June on making our presence known that we need to get paid a higher premium compared to historical premiums of that 150 spread on the Treasury. So it's still hovering around 200, give or take, 0.125% here and there, but it's been very healthy.

Operator

Our next question comes from Steven Alexopoulos with JPMorgan. Please proceed with your question.

Steven Alexopoulos -- JP Morgan Securities LLC -- Analyst

To start first on the $771 million of loan repurchases in the quarter, I assume that was done at par. Correct?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

I'm not going to be specific on the price. But obviously, this paper there's probably two years left. So it's all loans. It's underwritten on our standards. We control the transaction. We're going to be very proactive. So I would say, approximately that level, but give and take, I'm not going to be specific on the actual dollar. But look, it's opportunistic. We think that there's a few more out there, and we're here to accommodate. These are the loans that we've originated. We have all the files, the data, and we will be proactive in the event other partners are looking to move away out of this line of business and/or decide to be more focused on C&I.

Bear in mind, Steven, when we put this in place, we were in a SIFI threshold criteria that we could not grow the bank. So we've had billions of dollars that had to go to the marketplace, and our partners, our friends out in the marketplace are very accommodating because of our asset quality metrics. So we're very pleased to be able to offer that, our balance sheet to get it back.

Joseph R. Ficalora -- President and Chief Executive Officer

High probability, we will refinance most of these loans.

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

Yeah. And I think what's important about that, the way the transaction is originally structured, a lot of this retention that we've done, we've originated. If someone has a [Indecipherable] at 75, 25, we have the 25, we only keep 25. So as we take this out, we have more potential for growth. And as that was part of an ongoing thing over the past few years, we've had many players that gets refilled on refinancing that we're actually getting lesser of the deal because of the transaction that we struck with them on the original sale.

Steven Alexopoulos -- JP Morgan Securities LLC -- Analyst

All right. But what would be the yield of these $771 million?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

Probably about just under 3.40%, 3.40%.

Steven Alexopoulos -- JP Morgan Securities LLC -- Analyst

3.40%, OK.

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

[Speech Overlap] it's got two years life left. It's not two years average life. Two years life left. So that's at 2015 and '14 origination bucket.

Steven Alexopoulos -- JP Morgan Securities LLC -- Analyst

Right.

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

There's [Indecipherable] that actually don't have it. And by the way, we don't have to replace that with pari passu terms [Indecipherable] decide what to do with the refinance.

Steven Alexopoulos -- JP Morgan Securities LLC -- Analyst

Right. And then the $2 billion that's remaining, which you could repurchase, could you repurchase all that tomorrow if you wanted to, or are there time restrictions or other restrictions on that?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

There's no time restrictions. I mean, look, it is what it is. If someone's willing to -- we would love to have the opportunity to take our loans back, as we believe in our credit metrics. Those loans are done at a very opportunistic time and they're well-underwritten and low LTV. So clearly, I'm not even going to there as far as the number. And from time to time we'll be there for the market. I don't want to give you false expectations. The best loans in the market we think are our loans. So we're more than willing to accommodate.

Steven Alexopoulos -- JP Morgan Securities LLC -- Analyst

But if the yields are not bad and the credit quality is good, why are your partners looking to divest these?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

There's a number of reasons. I mean, obviously, you see many public statements made by a lot of the competitor diversifying their balance sheet, the C&I, they're doing other things with their business model. We are a multi-family CRE lender. This is our business model. We focus in the rent regulated rent control marketplace. That's what we do. We do not -- we're not going to try to say we're a commercial bank doing C&I lending. This is our core business model. So we will be there for our customers, like I said initially, from when the rent laws will change at higher spreads.

Joseph R. Ficalora -- President and Chief Executive Officer

We are far more comfortable with these assets than people that have never originated these assets. So for us, the future period is not an unusual concern. This is going to work out very well for us.

Steven Alexopoulos -- JP Morgan Securities LLC -- Analyst

Yeah. And as you guys are seeing new appraisals on multifamily loans, how much have valuations contracted post new rent regulation, now that you have six months?

Ebrahim Poonawala -- BofA Securities, Inc. -- Analyst

So I would comment, there hasn't been a lot of deals that have been done, but you've probably read the same publications that we've all reviewed. A lot of the information is not correct because they don't take the full picture of the transaction. As most of these deals have a commercial use component to the total rent roll as well as the rent control aspect, but the cap rates that are coming in are not near what the fear was when the rent laws were put in place. So we're still seeing low 5 to mid-5s versus high-4s in certain markets. Like I said, you have to look at each market, each street, each area differently, each borough, Bronx versus Manhattan, certain pockets of Manhattan versus other pockets of Manhattan, the diversity of the income streams. So cap rates have held in very well.

If you want to do some statistical analysis, maybe a quarter with 25 to 30 basis points movement in the cap rate, which is not near what the fear was initially. Some of the publications that put these numbers that made no sense down 40%, it's not reality. They literally carved out the commercial use space of the income stream. When you add that back, it's not an unreasonable decline on value adjustment because of really the driven off the hurdle rate of return. This is not -- when you think about the business model. Some of them put their capital up and they'll be financing behind it. If they can get high single-digit, it's attractive if you're a long-term property owner and you have thousands of units that you manage, and you're willing to put your money up at a high-single digit return. That return when it was at its peak was zero, because they were improving units constantly. So the fact that [Indecipherable] became high-single digits, there is a market for that. When you put IO features into it, it comes out to mid-teens. So on an amortization, you're probably looking at high-single and with IO it's mid-teens.

Joseph R. Ficalora -- President and Chief Executive Officer

But it's really important to recognize. The change that has occurred has impacted future values. We never lend on future values. We lend on existing values. So our portfolio has not had any adverse effect of the change. And our prospective opportunity is going to be based upon whatever the numbers may be when in fact we're projecting the value of the asset. That is going to be consistent with our past practice. We've never used the future value, and therefore the trade in the real estate six months from now, 12 months from now, is not going to impact one iota our ability to lend because we lend on the existing values that are in the portfolio that actually do exist in that particular building. There is no concern that we have that our assets are going to start non-performing because we over-lent many, many, many, many people in the market. And everybody knows this. If you're lending more dollars than we're lending, you're lending on the value other than the existing cash flow. We only lend on the existing cash flow. So even though this change has occurred and the prospective value will be less, it doesn't threaten our ability to be repaid.

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

Yeah, Steve, I would just add one additional commentary that it's very encouraging to see large transactions hit the marketplace and being financed. Some of them are well financing, others are financing it. But the reality is there are people stepping up looking at the long-term and getting a reasonable rate of return on their money and willing to be in this business. And a lot of the nuances between how they manage these units now are going to be somewhat different. They're looking for loopholes based on the rent reg changes, in particular they'll leave units vacant and try to join the adjoining unit next door. That's something that some of the wealthier players can do because they have capacity and they have network to do so. So I think you're seeing a lot of that, and it's probably less units hitting the marketplace than ever before because of these changes, which unfortunately will be negative for the city. But these large players will continue to transact.

Steven Alexopoulos -- JP Morgan Securities LLC -- Analyst

Yeah. And Joe, if I could change direction, just ask you one final question. So we saw another MOE announce earlier in the week and you've talked about wanting to do a deal for a while now. Do you feel any sense of urgency to try and get something announced and done before the [Indecipherable] approve before the Presidential election?

Joseph R. Ficalora -- President and Chief Executive Officer

No, I don't feel any urgency to do that. But I would suggest that we are actively in discussions in the marketplace with a variety of people to accomplish the goals that we have articulated over the course of our entire public life. We've made it very clear that we have the ability and have the desire to grow by acquisition and create value for shareholders. So there is going to be a transaction on the horizon that will be exactly in line with the kinds of things that we've done in the past. So I would openly suggest to you that we are in active discussions to do transactions because that's what we do.

Operator

Our next question comes from Peter Winter with Wedbush Securities. Please proceed with your question.

Peter Winter -- Wedbush Securities, Inc. -- Analyst

I was just curious, last quarter you talked about the efficiency ratio for 2020 in the low 40s. I'm just wondering if you're still comfortable with that range.

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

I kind of -- and I hate to go on a limb. I'm not going to say specifically, but I gave you the expense guide up 10% based on normalized '19. Obviously, prepay does play a factor. So I'm not giving you any guys on prepay, but we should have a relatively healthy prepayment world in 2020, given the duration of the portfolio. At the same time, I think that we have the NII going up every quarter. So we should see improvements on the overall efficiency ratio. Our goal will be to bring it in the low 40s. But hopefully, mid-to-low 40s is kind of our targets. It's going to take a few positive changes in the marketplace to make that happen, but it's not unreasonable. Given the fact that we've been in a cost containment mode for so many years and now we're growing the balance sheet and our NII is now moving in the right direction. And we had a shapes a compressed NII for many, many years. So this inflection point should bode well for the other attribute of the calculation of the efficiency ratio. So this should help us improve the ratio.

Peter Winter -- Wedbush Securities, Inc. -- Analyst

Okay. And I was just looking at securities to assets. It's been in a pretty consistent range last couple quarters at 11%. I'm just wondering if you're thinking about growing the securities portfolio, because I think you'd like to get it, at some point, to the high teens if I'm not mistaken.

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

Yeah. I think it's fair to say that, Pete, but at the end of the day, you look where spreads are right now, we've had a lot of the ventures pay off over the past six to 12 months, cash flows are flying into the bank as far as structured mortgage paper. So we were very large [Indecipherable] player and that stuff has been very nice as far as overall yield to the bank. But at the end of the day, the yields have come down materially. So we're going to allocate our resources to the loan book. In the event the market changes, and we start seeing a slope [Indecipherable] highest slope in the curve, we'll get to that level. It's going to take some time in this market given where interest rates are, but if we go back to a healthier curve, we'll be more proactive.

Peter Winter -- Wedbush Securities, Inc. -- Analyst

Okay. And then my last question. Just can you talk about what your expectations are for deposit growth in 2020, and how you think about the balance between deposit growth and the use of wholesale borrowings?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

I mean, we're going to be obviously in the market for deposits. The goal is commensurate with asset growth. If you look back for the full year of 2019, we grew deposits almost as consistent with our asset growth. We had a little bit more wholesale toward the end of the quarter, fourth quarter, because of the fact that we shifted a lot of the higher-cost relationships out of the bank in Q3. But when you look at overall absolute deposit growth, we had a good year in deposit growth in 2019. That's the plan for 2020. It's commensurate with asset growth and we'll readjust depending on market conditions. If the Fed cuts substantially, we may alter that. But right now short-term money is expensive compared to if you look at the belly of the curve and pushing it out a few years, like I said previously, we locked in solid funding at the low, let's say, 1.50%, 1.47% and 1.50% versus short-term rates that are out there at high-high 1s. So it's attractive. Both sides are attractive, given that we're liability sensitive. But the more attractive aspect is the refinancing of our current liabilities.

Operator

Our next question comes from Christopher Marinac with FIG Partners. Please proceed with your question.

Christopher Marinac -- Janney Montgomery Scott LLC -- Analyst

Tom and Joe, the success you've had on the specialty finance the past year and the pipeline looks really strong. Could you remind us the differences in yield on that portfolio and then the types of things that you do and also types of things that you avoid in specialty finance?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

So as we talked about, our team has done a phenomenal job and we're very pleased of their production. We believe they're going to have another strong 2020, and we support that with team members that have done an incredible job focusing on asset quality. No late pays, no delinquencies, no defaults, no real credit hiccups to speak of, and very well diverse book. The book is broken down between three categories: asset-backed loans, equipment finance, and dealer floor-planning. Asset-backed's around $700 million outstanding with a 25 percentage of total outstandings compared to the total dollar amount of $2.8 billion. Equipment's about $1.3 billion at 48% of the total. And dealer floor-planning, which has been very attractive in this environment, at $775 million, which is 27%.

The yield on the papers is slightly higher than our multifamily yield when you take into account fees that we amortized through the yield. It's about 3.66%. We're going to be active. I think what's most important is that what we see is we turn down most of what we see. So we're effectively doing about 10% hit rate on 100% of what we see. So 90% is what we don't do, not because it's credit. It could be yield. It could be various reasons. Our Board may not be happy with the various counterparties. But at the end of the day, we typically have been turning down 90% of what we see. We've been growing the book around 25% on a CAGR basis.

So we're very pleased to allocate capital there. Like I've said in many previous conference calls, it doesn't come with deposit relationships. We're not intrusive to the lead bank, but we're a credit buy-up shop. And we're going to be very -- we'll be a good partner for some of the largest players, but we're not booking deposit relationship. That's the down -- that's one of the negative aspects of the business. We're not bringing in the funding for this type of business.

Christopher Marinac -- Janney Montgomery Scott LLC -- Analyst

And then speaking of deposits, it seemed that the core deposits, ex-CDs, had a solid quarter and was stronger than the total. What do you see for this year? I know it's still a challenging environment, but what's sort of in your deposit pipeline?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

We think that it's going to be continuing similar to the trend that we saw in the fourth quarter. Rates are dramatically lower than they were a year ago when it was -- when the Fed was in a tightening mode, right. So a highest offering rate in the three-month category will bring the highest cost money into the short end of the curve. So three months at 1.65%, and I think customers are looking at that as a viable alternative in going out to a year or longer given where rates are. A one year offering on a liquid CD is about 1.5%. So we're clearly enticing customers to go into the shorter duration. A nine-month money is 1.85%. And you're seeing that -- so customers are keeping inside of one year as has been consistent to the past decade. And we think that if the Fed happens to reduce rates, we'll benefit further. In the meantime, if the Fed stays flat for the year, this should be very well in our plan for 2020 to take advantage of those higher-cost CDs coming due throughout the year, which I mentioned in the previous commentary.

Operator

Our next question comes from Matthew Breese with Stephens. Please proceed with your question.

Matthew Breese -- Stephens, Inc. -- Analyst

I was hoping you could talk about CECL, what the day one [Indecipherable] reserve would look like. And then on a go-forward basis, could you help us understand what the types of growth you're talking about if we should expect that reserve to increase or decrease or just any sort of commentary on day two as well would be helpful.

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

I'd say on our respect to the one-time adjustment, we're looking at probably 25% to 30% increase in our overall reserve, which is about $15 million to $30 million.

Joseph R. Ficalora -- President and Chief Executive Officer

Yeah, 10% to 20%.

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

10% to 20%. Again, we don't envision this having a material impact to our company, given that we're a real estate lender, and our duration is very, very short compared to other types of loans. If you look at our average life at 2.1 years for the book, it's very short. All the macroeconomic changes to the environment, it's hard to predict what could happen two, three years from now, but we are multifamily lender that has a relatively short duration book and should not have a material impact going forward. [Indecipherable] capital is probably between three to six basis points upfront and not material.

Matthew Breese -- Stephens, Inc. -- Analyst

And then sticking with the capital question, over the last year, year and a half we've seen capital as measured by tangible common equity grind slowly lower. Given the kind of growth outlook you're talking about, the NIM expansion, how comfortable are you with taking capital levels potentially lower? And do you see any need to adjust the dividend or potentially down the road raise any sort of common equity?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

I'm not going to go to the dividend question at this stage of the game. We've been doing this for quite some time. Obviously commensurate with NII growth, margin expansion, also comes EPS growth. So, like I said in the previous quarter, and I think as people say we should have double-digit EPS growth, which is reasonable and that's conservative. So I think that we're going to pause [Indecipherable] and we expect to build some capital for the first time in a while as earnings improve with this dynamic of the margin and NII expanding. So I think we're encouraged by that. We're very comfortable about capital position. We have no losses. We have a history of no losses, we have a history of having the best asset quality in the country. So as far as when you allocate capital to a business that has zero losses, we have very little allocation toward the impact of provisioning for high-quality, low-leverage lending. So we're very comfortable about capital position. Our dividend is solid, and we've always been standing by our dividend and that's been the hallmark of the company.

Matthew Breese -- Stephens, Inc. -- Analyst

Okay. And then going back to your mid-single digit loan growth comment, the pipeline's down 30% quarter-over-quarter. Just want to get a sense for how much of the growth you anticipate being from organic versus repurchase activity, if you could give us a breakdown.

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

Yeah. I wouldn't even budget repurchase activity. [Indecipherable] organic. We are laser focused to increase our retention rates, which we will do in 2020. And more importantly, if you look at [Indecipherable] $3 billion of business in the fourth quarter. Q1 is down on seasonality. It's a seasonality quarter. So we're very excited about what's ahead of us. Our guys are extremely busy. The pipeline that we announced is the committed pipeline. The pipeline that we have is much higher because the loans are coming in and we're laser focused on managing that retention rate, managing that $6 billion, $7 billion of business coming due in the next two years. We have the files, we have the data, we will make sure that we get first crack at our customers.

Matthew Breese -- Stephens, Inc. -- Analyst

Understood. And then just last one for me is we get to see the press releases. We don't see behind the scenes what's going on with LTVs and reappraisals like you do on the multifamily side. And so I was hoping you could just walk us through where there have been reappraisals, where there have been valuations that have come in lower, have you seen any LTVs that have tripped over 80%. If they do, what is borrower behavior? Are people willing and actively bringing cash to the table to maintain low LTVs. Just some sense for comfort around borrower behaviors in the light of lower valuation.

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

So I'm not going to sound cavalier about this, but at the end of the day, we're a low leverage lender. And we don't see these types of numbers that they're concerned about at today's environment. With two quarters past the rent control laws that have been in effect, it's going to take some time to see what those impacts are in other parts of the borrowers. But at the end of the day, if you're a low leverage lender and buyers and sellers are coming together and they're putting a hurdle rate of return that people can agree with, there'll be transactions. We'll finance it based on a very conservative policy, and if we lose loans, we'll lose them because other banks are being aggressive. We play against the government. We play against a lot of large banks, but we are very targeted toward super-conservative underwriting.

So what we're seeing right now you'll see a lot of information in the current trade publications about deals that get done. We're not doing all those deals because it doesn't make sense for our balance sheet. But you may have to extend a little bit longer in this environment because property owners may want an extra couple of years, so the five years may go to seven, maybe some 10-year money, you may try to tweak some IO structure from no IO to maybe two, three year IO. But you'll be competitive, but it all comes down to that we're not going to lose deals because of rate. We will lose deals because of dollar amount, and that's always been the hallmark of the company. So when times are difficult, there will be activity. Buyers will come in and buy opportunity, then we'll finance that opportunity. So we're not there yet. The good news is that some of the non-traditional players that are equity financiers or bridge financiers are getting diluted on their deals because they're not working, but that's not our book.

So that's positive because you're not seeing the losses yet. It's a handful of customers that are in the -- not our customers, a handful of customers that are in the Fannie Mae structure or the Freddie Mac structure that are coming into some difficulties, and when it goes to the special servicer get put out the sale, someone will buy that at a hurdle rate of return that works for them. And if the numbers work for us, we'll finance it.

Matthew Breese -- Stephens, Inc. -- Analyst

Understood. Okay.

Joseph R. Ficalora -- President and Chief Executive Officer

And I'll just add one other point. Cap rates are not moving aggressively. Cap rates are holding very nicely. Interest rates are relatively low compared to last year, so you still have a very low cap rate and you have a low interest rate environment. So business is relatively strong because of that.

Operator

Our next question comes from Steven Duong with RBC Capital Markets. Please proceed with your question.

Steven Duong -- RBC Capital Markets LLC -- Analyst

So, just getting back to the competitive environment, can you give us some color to what you're seeing today versus what you saw last quarter in terms of the GSEs and other non-banks and what are the factors driving those differences?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

I would say -- it's Tom. I would say that the GSE is very real, a very large, and it's going to be always a relevant player. And the [Indecipherable] players will be very active, and IO is a very attractive alternative for customers who want to bring their payments lower and try to drive higher returns to them potentially over a 10-year period. We've been very proactive and trying to avoid that type of model. When we structure IO, we tend to be a hybrid IO player. Maybe one, two, three years have IO. But if you have a solid low average transaction with a very good long term customer, you may have to play in that landscape.

What the best scenario for us is rates go up in the back end, the GEs -- the agencies are less relevant. So right now they're relevant, but will compete. And I'd say the government has the biggest acts for the transactions in the marketplace. And at the same time, like I said, we're going to be very active on managing that book that's coming due and making sure that we get first crack at all our customers.

Steven Duong -- RBC Capital Markets LLC -- Analyst

Appreciate that. And then just last question. Your non-interest bearing deposits had a nice uptick in the quarter. Can you just give some color on that?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

I would say, again, seasonality, escrows, year-end. I wouldn't think it is not a targeted plan. This is, we're running a very large deposit book, but we do have some seasonality there.

Operator

Our next question comes from Collyn Gilbert with KBW. Please proceed with your question.

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

Okay. My first question, just first on the funding side. So, Tom, I appreciate some of the rates you're offering that you're putting out there on the CD market now. It seems like some of those CD rates are probably below market or sort of at market. I mean, do you still have confidence in your ability to grow the deposit book even if you're below market rates on CDs?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

We're a large institution. We have lot of branches in different markets. Like I said, we do offer a hybrid elite customer base, maybe a few basis points of customers who are going to penalize us for five or six basis points to retain it. But at the end of the day, we've been very competitive there. We're not in a massive growth campaign right now. If we were to look at a normal growth campaign, if the market does change and 5% becomes 10% growth on the loan side, then we'll go into a growth campaign mode. But to be in the market, you said in the middle of the range, and I think, slightly south of 2% on average is where the overall market is. And I think, by the way, the market is too high if you look at where treasuries are trading right now. I think a lot of liquidity was put in place year end because of balance sheet requirements. Some of the larger money center banks were pushing their balance sheet requirements. But if you think about where rates are right now and rates have come down quite a bit, you will grab 1.85% for nine months. It's a reasonable rate. Probably too high and as I said, cuts rates were lower. But in the meantime, our model has no Fed changes. We assume the Fed's on hold for the year, and we're in a unique spot to benefit from a liability sensitive balance sheet and see some good NII growth from that.

Joseph R. Ficalora -- President and Chief Executive Officer

[Speech Overlap] very quickly.

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

And then just -- so, Tom, you'd indicated deposit growth commensurate with loan growth. How about if you do see more opportunistic loan purchases, how do you intend to fund those?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

We will be -- we will look at both the wholesale markets as well as the deposit markets. Like I said before, the wholesale markets, if structured properly, is very attractive right now. There is somewhat of a uniqueness when you look at the belly of the curve and the short end of the curve. Short-end financing is expensive compared to doing a three or four-year lockout with putting a swap on. So we've been doing that from time to time. The basis risk is low. I think it's a reasonable execution. And we've been very proactive there, both from time to time, depending on the marketplace. But we're putting money on 1.50% right now versus 1.90% on CDs. So there's definitely a reasonable delta is going to move toward wholesale.

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

And just also to your point, right, so retention is going to be still key to sort of the loan growth outlook. Just a couple questions on that. So you had indicated, and I think this is the first time you guys put it in the press release. So the pipeline had 66% new money this quarter. Do you have what that percentage was from last quarter's pipeline?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

No, so I would say, and I think we've always put it in. Maybe in the past I remember various press releases we always trying to tell the overall the new money pipeline. New money has been around two-thirds. It's been pretty consistent. I think what's interesting is that you know when you have certain deals that are going to go for good reason. We had some customers that finance that themselves rather than going to the bank because of mortgage transfer tax. They didn't have to deal with the expense of doing a transaction in New York. So they use their credit facility, which was cheaper than getting money from the bank. That happens from time to time. So we take advantage of those one-offs and try to carve out what happened in the quarter. I think our retention has improved slightly. We have a long way to go. I like to have that retention rate going back toward normality, which was significantly higher than we were in the previous six months. So you saw drop off when the rent control laws were put in place. We had a lot of volatility in Q3. Q4 we had good stabilization. The healthy yield curve in Q4, very attractive buying and selling. It wasn't a blockbuster quarter as far as transaction but there were some transactions and things are getting done. So I like the fact that there's a predictable Fed right now, more or less, for the year. And I think that customers are realizing that a lot of money has to be dealt with in the next two years, so they have the finance, and with that we're open for business.

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

Okay, OK. And then, so just kind of along the lines of, you know, the $3.3 billion of originations, net growth, putting the purchase aside, was $280 million. So just trying to sort of, I mean, obviously, better understand bridging that gap. And I think when you talk about the outlook for prepays and that dynamic in 2020, I guess if they're contractually maturing, if the numbers you've laid out, are contractually maturing this year, why would they prepay? I wouldn't think they would prepay, right. So wouldn't prepay income be completely less?

Joseph R. Ficalora -- President and Chief Executive Officer

Like I said, depending on what bucket comes due it's very important. We know that in 2020 if they wait the last second, they're not going to pay 8% on their financing, right. So pay the market. Let's say the market's 3.5%. So you have a 3.18% going to 3.5%. So good for the bank. Yes, you don't get a prepayment because they're rolling it to the next financing, but those loans have no choice but to come due. The ones that are in 2021, '22 is where the opportunity will arise if they decide to lock in for the next seven years instead of five, they may choose to do so based on their own internal decisions based on financing their entire portfolio loans. We're going to be very active on working with our customer to get into the table sooner. We do that all the time. But in this particular case, our goal is to maintain higher retention. So we know what's coming due, we know what's coming due in the next -- for the next five years, but for the next two years, there's an opportunity to take those lower-yielding loans and not put them in a position to go to a much higher rate because no one knows where rates are going to be a year from now. They may opt to finance today. And if so, they can be proactive with the portfolio.

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

Okay. One last question. [Speech Overlap]. Okay, sorry. One last question, the retention rate. Can you tell us what that was this quarter and how that compares to what you've been running previously or what your goal is?

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

So the reality is that our goal is to get back to historical levels, which is well above 50%, OK. We're not there yet. The Q3 was probably the worst we've seen. We've bumped it up by 10% when you carve out certain loans that we knew were going and we were not willing to finance. I mentioned one in particular because it was a large loan of $100 million that used their credit facility to finance themselves. When you take those one-offs, we probably improved our retention rate by 10%. So 34 becomes 44. We need to be well over 50 and moving toward 60 in 2020. That's the goal.

Operator

We have a follow-up question from Brock Vandervliet with UBS. Please proceed with your question.

Brock Vandervliet -- UBS Warburg LLC (US) -- Analyst

I know you talked about the day one CECL impact. We've heard a lot of banks kind of walking up net charge-off guides for a variety of reasons. How should we think about 2020 as far as net charge-offs? Is this still a five basis point kind of a number or should we be thinking something more given the shift into specialty finance or what have you?

Joseph R. Ficalora -- President and Chief Executive Officer

So, Brock, what I would say is if you carve out the medallion, zero is probably a good number for us. It's really the history. You know the history of the company, our credit quality. Medallion has been a most of the charge we've taken over the past few years. The good news there is, there are some major players circling to look at acquiring most of those assets in the marketplace. So it sounds like we're getting close to the bottom there. You can never predict when the bottom is. When you take out medallion losses, we don't have any losses.

As far as specialty finance, it's been a -- we haven't seen a 30-day ever. So I think we're in a very good spot. I wouldn't work too hard on understanding difference between a credit card line because this is what we do, right. We're a rent regulated multifamily CRE lender with a history of no losses. I think our CRE book is half the losses we've had in multifamily, which is de minimis.

So, yes, [Indecipherable] change. We're going to take a upfront change in the provision because we have to, to right-size the one-time adjustment. The capital impact of that is between three to six basis points. But after that it's business as usual. And unless there's a change in the marketplace and duration goes from two years to 10, I don't envision any real material changes for us.

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

And then, by the way, medallion are down dramatically. That's not part of our business. That's something we had actually negotiated to sell. So we've been getting out of that consistently over the period past.

Operator

At this time, I would like to turn the call back over to Mr. Ficalora for closing comments.

Joseph R. Ficalora -- President and Chief Executive Officer

Thank you, again, for taking the time to join us this morning and for your interest in NYCB. We look forward to chatting with you again at the end of April when we will discuss our performance for the three months ended March 31st, '20.

Operator

[Operator Closing Remarks]

Duration: 87 minutes

Call participants:

Salvatore DiMartino -- First Senior Vice President/Director of Investor Relations

Joseph R. Ficalora -- President and Chief Executive Officer

Thomas R. Cangemi -- Senior Executive Vice President and Chief Financial Officer

Ebrahim Poonawala -- BofA Securities, Inc. -- Analyst

Brock Vandervliet -- UBS Warburg LLC (US) -- Analyst

Ken Zerbe -- Morgan Stanley & Co. LLC -- Analyst

Steven Moss -- B. Riley FBR, Inc. -- Analyst

Steven Alexopoulos -- JP Morgan Securities LLC -- Analyst

Peter Winter -- Wedbush Securities, Inc. -- Analyst

Christopher Marinac -- Janney Montgomery Scott LLC -- Analyst

Matthew Breese -- Stephens, Inc. -- Analyst

Steven Duong -- RBC Capital Markets LLC -- Analyst

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

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