Bridgewater Bancshares Inc (BWB) 2024 Q2 法說會逐字稿

Good morning, and welcome to the Bridgewater Bancshares 2024 second quarter earnings call. My name is Cole, and I'll be your conference operator today. (operator instructions) Please note that today's call is being recorded.

早安，歡迎參加 Bridgewater Bancshares 2024 年第二季財報電話會議。我叫科爾，今天我將擔任你們的會議接線生。（操作員說明）請注意，今天的通話正在錄音。

And at this time I would like to introduce Justin Horstman, Vice President of Investor Relations, to begin the conference call. Please go ahead, sir.

現在我想請投資者關係副總裁賈斯汀·霍斯特曼（Justin Horstman）開始電話會議。請繼續，先生。

Thank you, Cole, and good morning, everyone.

謝謝你，科爾，大家早安。

Joining me on today's call are Jerry Baack, Chairman and Chief Executive Officer; Joe Chybowski, President and Chief Financial Officer; and Nick place, Chief Lending Officer.

與我一起參加今天電話會議的還有董事長兼執行長 Jerry Baack；喬‧切博斯基 (Joe Chybowski)，總裁兼財務長；和首席貸款官尼克·普拉斯(Nick Place)。

In just a few moments, we will provide an overview of our 2024 second quarter financial results. We will be referencing a slide presentation that is available on the Investor Relations section of Bridgewater's website, investors.bridgewaterbankmn.com. Following our opening remarks, we'll open it up for questions.

稍後，我們將概述 2024 年第二季財務業績。我們將參考 Bridgewater 網站 Investors 關係部分的幻燈片演示文稿，investors.bridgewaterbankmn.com。在我們的開場白之後，我們將開放提問。

During today's presentation, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. We caution that such statements are predictions and that actual results may differ materially.

在今天的演示中，我們可能會對未來事件或公司未來的財務表現做出預測或其他前瞻性陳述。我們提醒您，此類陳述只是預測，實際結果可能會有重大差異。

Please see the forward-looking statement disclosure in the slide presentation and our 2024 second quarter earnings release for more information about risks and uncertainties which may affect us. The information we will provide today is as of and for the quarter ended June 30, 2024, and we undertake no duty to update the information.

請參閱幻燈片簡報中揭露的前瞻性聲明和我們的 2024 年第二季收益發布，以了解有關可能影響我們的風險和不確定性的更多資訊。我們今天提供的資訊截至 2024 年 6 月 30 日的季度，我們不承擔更新資訊的義務。

We may also disclose non-GAAP financial measures during this call. We believe certain non-GAAP financial measures, in addition to their related GAAP measures, provide meaningful information to investors to help them understand the company's operating performance and trends and to facilitate comparisons with the performance of our peers. We caution that these disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP.

我們也可能在本次電話會議期間揭露非公認會計準則財務指標。我們相信，除了相關的公認會計原則財務指標之外，某些非公認會計原則財務指標還可以為投資者提供有意義的信息，幫助他們了解公司的經營業績和趨勢，並便於與同行的業績進行比較。我們提醒您，這些揭露不應被視為替代根據 GAAP 確定的經營績效。

Please see our slide presentation and 2024 second quarter earnings release for reconciliations of non-GAAP disclosures to the comparable GAAP measures.

請參閱我們的幻燈片簡報和 2024 年第二季收益發布，以了解非 GAAP 揭露與可比較 GAAP 指標的對帳。

I would now like to turn the call over to Bridgewater's Chairman and CEO, Jerry Baack.

我現在想將電話轉給橋水基金董事長兼執行長 Jerry Baack。

Thank you, Justin, and thank you, everyone, for joining us today.

謝謝賈斯汀，也謝謝大家今天加入我們。

I'm pleased to share our second quarter results, which showed us stabilized net interest margin, a return to revenue growth and continued superb asset quality. After seeing the pace of margin compression steadily slow over the past few quarters, we saw it hold steady in the second quarter.

我很高興分享我們第二季的業績，這表明我們穩定了淨利差，恢復了收入成長，並持續保持卓越的資產品質。在看到過去幾季利潤率壓縮的步伐穩定放緩後，我們看到它在第二季度保持穩定。

When coupled with average earning asset growth, we were able to drive net interest income and overall revenue growth for the first time since the third quarter of 2022, resulting in stabilization across our profitability metrics.

加上平均獲利資產的成長，我們自 2022 年第三季以來首次實現了淨利息收入和整體收入的成長，從而使我們的獲利指標趨於穩定。

As we have said in the past, Bridgewater is well-positioned to benefit from future interest rate cuts and a normalizing yield curve. Reaching a point of margin and overall profitability stabilization bodes well for us, especially as we witness more encouraging macro data, including the continued slowing of inflation.

正如我們過去所說，橋水基金處於有利地位，可以從未來的降息和殖利率曲線正常化中受益。利潤率和整體獲利能力達到一定程度的穩定對我們來說是個好兆頭，特別是當我們看到更多令人鼓舞的宏觀數據（包括通膨持續放緩）時。

After strong balance sheet growth in the first quarter, loan and deposit growth were more muted in the second quarter. Loan growth was impacted by higher levels of payoffs, while deposit growth continued to be chunky given the nature of the deposit base.

繼第一季資產負債表強勁成長後，第二季貸款和存款成長更為溫和。貸款成長受到較高回報水準的影響，而考慮到存款基礎的性質，存款成長持續大幅成長。

As expected, on a year-to-date basis, loan and deposit growth were still in the low to mid single digit range. The team continues to participate in good conversations with new and existing clients, keeping us abreast of market opportunities.

正如預期，今年迄今，貸款和存款成長仍處於中低個位數範圍內。團隊繼續與新舊客戶進行良好的對話，讓我們隨時了解市場機會。

Asset quality continued to be very strong in the second quarter with no net charge-offs and very low levels of nonperforming assets. Our consistent underwriting standards, active credit oversight and experienced lending and credit teams have always been differentiators for us. And we are seeing the discipline pay off in the current environment.

第二季資產品質持續強勁，沒有淨沖銷，不良資產水準也非常低。我們始終如一的承保標準、積極的信用監督以及經驗豐富的貸款和信貸團隊一直是我們的優勢所在。我們看到紀律在當前環境中得到了回報。

While CRE and multifamily continue to be a focus across the industry and for us, given our high concentrations, we've been pleased with how these portfolios have performed. Nick will provide more insight into these portfolios and what we are seeing across the Twin Cities later in the presentation.

雖然商業房地產和多戶住宅仍然是整個行業和我們的焦點，但鑑於我們的高度集中度，我們對這些投資組合的表現感到滿意。尼克將在稍後的演講中提供這些投資組合以及我們在雙城所看到的更多見解。

In the meantime, I think it is worth reminding everyone that our teams are exceptionally talented at making CRE and multifamily loans. We have a lot of experience and expertise in the Twin Cities, which is why we are so comfortable with our current loan mix. Finally, this marks the 30 consecutive quarter of tangible book value per share growth, up 9.8% annualized from the first quarter.

同時，我認為值得提醒大家的是，我們的團隊在商業房地產和多戶家庭貸款方面非常有才華。我們在雙城擁有豐富的經驗和專業知識，這就是為什麼我們對目前的貸款組合如此滿意。最後，這標誌著每股有形帳面價值連續 30 個季度成長，較第一季年化成長 9.8%。

On slide 4, you can see our tangible book value is up nearly 200% during those 30 quarters compared to sub-70 percent median for base with three to $10 billion in assets. We continue to believe this is a true differentiator for Bridgewater and how we will provide shareholder value going forward.

在投影片 4 上，您可以看到我們的有形帳面價值在這 30 個季度中成長了近 200%，而資產規模為 3 至 100 億美元的基礎帳面價值中位數不到 70%。我們仍然相信，這是橋水基金真正的差異化因素，也是我們未來為股東提供價值的方式。

Before I turn it over to Joe, I wanted to highlight a few other things we've been working on. On the client front, as part of our commitment to win, retain and grow our network, we launched a new CRM platform. This will be a game changer for us in terms of how we interact with clients, while also enhancing efficiencies across the bank.

在將其交給 Joe 之前，我想強調我們一直在努力的其他一些事情。在客戶方面，作為我們贏得、保留和發展網路的承諾的一部分，我們推出了新的 CRM 平台。這將改變我們與客戶互動的方式，同時也提高整個銀行的效率。

Our product team is also working diligently on a new online banking solution for our retail and small business clients, ultimately enhancing the overall user experience. More to come in future updates on this client-centric initiative.

我們的產品團隊也正在努力為零售和小型企業客戶開發新的網路銀行解決方案，最終增強整體使用者體驗。關於這項以客戶為中心的計畫的未來更新將會有更多內容。

Finally, our culture has always been something we take very seriously. And so we are thrilled to be recognized as a top workplace by the Star Tribune for the 5th year in a row. This further demonstrates how our unconventional corporate culture is appreciated by our diverse employee base and ultimately allowing us to attract and retain top talent.

最後，我們一直非常重視我們的文化。因此，我們很高興連續第五年被《明星論壇報》評為最佳工作場所。這進一步表明我們非傳統的企業文化如何受到多元化員工群體的讚賞，並最終使我們能夠吸引和留住頂尖人才。

We happen to be unconventional with an inclusive and empowering culture. Just a few weeks ago, we hosted an all team happy hour capped off with a neat raffle. All proceeds went to support local charity. It's activities like this that bring our team together and encourage collaboration at every junction. We truly have a great team.

我們恰好不拘一格，擁有包容性和賦權文化。就在幾週前，我們舉辦了一場全團隊歡樂時光，並以一場精美的抽獎活動結束。所有收益都用於支持當地慈善機構。正是這樣的活動將我們的團隊聚集在一起，並鼓勵在每個交叉點進行協作。我們確實擁有一支優秀的團隊。

And I'll turn it over to Joe, who in addition to being our Chief Financial Officer, he recently elevated to the role of President. Joe is well suited for this role and we are excited about what Joe can bring in this capacity. Joe?

我將把它交給喬，他除了擔任我們的財務長之外，最近還晉升為總裁。喬非常適合這個角色，我們對喬能夠在這個職位上帶來的東西感到興奮。喬？

Thank you, Jerry. I'm really excited about the new role, and it's been great to collaborate with the team so far.

謝謝你，傑瑞。我對這個新角色感到非常興奮，到目前為止與團隊的合作非常棒。

Turning to slide 5, you can see the net interest margin held flat at two 2.24%. The stabilization during the quarter was driven by a more meaningful increase in the portfolio loan yield, which offset continued deposit pricing pressures.

翻到投影片 5，您可以看到淨利差保持在 2.24% 不變。本季的穩定是由投資組合貸款收益率更有意義的成長所推動的，這抵消了持續的存款定價壓力。

As we mentioned last quarter, we felt like we were reaching an inflection point on net interest income given the stronger balance sheet growth even if the margin compressed a bit further. As it turned out. balance sheet growth was a bit weaker than expected in the second quarter, but the margin was stronger, ultimately still driving that net interest income inflection up 1.5%. This was also supported by higher loan fees as we saw an uptick in loan payoffs.

正如我們上季度提到的，鑑於資產負債表成長強勁，即使利潤率進一步壓縮，我們仍感覺淨利息收入正達到拐點。事實證明。第二季資產負債表成長略弱於預期，但利潤率較高，最終仍推動淨利息收入上漲 1.5%。這也得到了更高的貸款費用的支持，因為我們看到貸款償還增加。

Slide 6, provides more visibility into the trends of the margin components. The portfolio loan yield increased 12 basis points in the second quarter to 5.50%. While we expect the loan portfolio to continue repricing higher, even a lower rate environment, the pace of the increase may vary based on the loan yields coming off coming on and the off balance and off the balance sheet in a given quarter.

投影片 6 提供了對利潤成分趨勢的更多了解。第二季投資組合貸款收益率上升12個基點至5.50%。雖然我們預期貸款組合將繼續重新定價，甚至在較低的利率環境下，但上漲的速度可能會根據特定季度的表內、表外和表外貸款收益率而有所不同。

During the second quarter, the weighted average yield on new loan originations was in the low 7%, while loans paying off were in the low 6%. The securities portfolio is also supporting our overall asset yields and securities yields increased another 14 basis points to 4.94%. Note that our period end period end securities balances declined in the second quarter following a security sale.

第二季度，新發放貸款的加權平均收益率低至 7%，而償還貸款則低至 6%。證券投資組合也支撐了我們的整體資產收益率，證券收益率再上升14個基點至4.94%。請注意，在證券出售後，我們的期末證券餘額在第二季度有所下降。

While asset yields have picked up, deposit costs have continued to increase up 14 basis points in the second quarter. This continues to be due to elevated competition and overall mix shifts within the portfolio. We would expect to see additional deposit pricing pressures, albeit at a slower pace until we start to see some relief on rates.

在資產收益率回升的同時，第二季存款成本持續上升14個基點。這仍然是由於競爭加劇和投資組合內的整體組合變化所致。我們預計將看到額外的存款定價壓力，儘管速度較慢，直到我們開始看到利率緩解。

As Jerry mentioned, our balance sheet remains well positioned for a rate sound environment and a more normalized yield curve. We have over $1 billion of adjustable funding tied to short-term rates and a loan portfolio that is positioned to continue repricing higher even in a lower rate environment.

正如傑瑞所提到的，我們的資產負債表仍然處於良好的利率環境和更標準化的殖利率曲線的有利位置。我們擁有超過 10 億美元的與短期利率掛鉤的可調整資金，以及即使在較低利率環境下也能繼續以更高價格重新定價的貸款組合。

While the potential for rate cuts appears more likely today than it did three months ago, we would still expect net interest margin to remain relatively stable near current levels in the near term, with expansion coming after we see potential rate cuts take effect.

儘管今天降息的可能性似乎比三個月前更大，但我們仍預計短期內淨利差將在當前水準附近保持相對穩定，在我們看到潛在降息生效後，淨利差將擴大。

Turning to Slide 7, we saw quarter-over-quarter revenue growth for the first time in nearly two years, driven by higher net interest income. As a result, ROA and pre-provision ROA, both stabilized while ROTCE increased by 16 basis points. Non-interest income grew during the second quarter, primarily due to a $320,000 gain on the sale of securities. However, total revenue would have grown even when excluding securities gains.

轉向投影片 7，在淨利息收入增加的推動下，我們看到近兩年來首次出現季度環比收入成長。因此，ROA 和撥備前 ROA 均穩定，而 ROTCE 則成長 16 個基點。第二季非利息收入有所成長，主要是因為出售證券獲得了 32 萬美元的收益。然而，即使排除證券收益，總收入也會成長。

Turning to Slide 8, our ability to manage expenses while making investments in the business continues to be a real strength of the organization. Expenses so far in 2024 have tracked in line with what we expected after a 3.5% decrease in expenses in the first quarter, which is typically our low point, we saw a 2% increase in the second quarter.

轉向投影片 8，我們在業務投資的同時管理費用的能力仍然是該組織的真正優勢。2024 年迄今的費用符合我們的預期，第一季費用下降 3.5%（通常是我們的低點），第二季費用增加了 2%。

The increase was primarily due to higher salary and employee benefits, technology and occupancy expenses, partially offset by lower FDIC expense. The trajectory is similar to what we saw in 2023, and we would expect that to continue with expenses increasing throughout the back half of the year. Overall, we would expect full year expense growth to remain relatively in line with asset growth in 2024.

這一增長主要是由於工資和員工福利、技術和占用費用增加，但部分被 FDIC 費用減少所抵消。這一軌跡與我們在 2023 年看到的情況類似，我們預計這種情況將持續下去，整個下半年的費用都會增加。總體而言，我們預計 2024 年全年費用成長將與資產成長保持相對一致。

With that, I'll turn it over to Nick.

有了這個，我會把它交給尼克。

Thanks, Joe. Turning to Slide 9, total deposit balances were relatively flat in the second quarter with core deposits down $53 million. As we've always said, our core deposit growth tends not to be linear due to the nature of our client base, which includes higher balance client relationships, longer acquisition and onboarding times, and timing of larger inflows and outflows.

謝謝，喬。轉向投影片 9，第二季總存款餘額相對持平，核心存款減少 5,300 萬美元。正如我們一直所說，由於我們客戶群的性質，我們的核心存款成長往往不是線性的，其中包括更高的客戶關係餘額、更長的收購和入職時間以及更大的資金流入和流出的時間。

In addition, the second quarter tends to be seasonally lower for deposits due to tax season and industry cyclicality. It's not unusual for us to see larger inflows and outflows from quarter to quarter.

此外，由於納稅季節和行業週期性，第二季存款往往會出現季節性下降。我們看到每個季度都有較大的流入和流出並不罕見。

For example, we generated $90 million of core deposit growth in the second quarter. On a year-to-date basis, total deposits are up 5.3% annualized, while core deposits are up 3%, both in line with the 4.1% loan growth. We have generated so far this year.

例如，我們第二季的核心存款增加了 9,000 萬美元。今年迄今，存款總額年化成長 5.3%，核心存款成長 3%，均與 4.1% 的貸款成長一致。今年到目前為止我們已經產生了。

We also continue to see various deposit mix changes specifically as we leveraged more brokered deposits to supplement core deposit growth during the second quarter. On the other hand, we are pleased to see non-interest bearing deposits grow at a nearly 4% annualized pace. These deposit mix changes have contributed to funding costs continuing to slowly move higher. However, from a broader funding perspective, we have ample repricing opportunities even if rates move lower or if rates move lower.

我們也繼續看到各種存款組合的變化，特別是因為我們利用更多的經紀存款來補充第二季核心存款的成長。另一方面，我們很高興看到無息存款以近4%的年化速度成長。這些存款結構的變化導致融資成本持續緩慢上升。然而，從更廣泛的融資角度來看，即使利率走低或利率走低，我們也有充足的重新定價機會。

Overall, we feel good about our ability to drive core deposit growth and moderate deposit costs over time.

總體而言，我們對隨著時間的推移推動核心存款成長和適度存款成本的能力感到滿意。

Turning to slide 10, similar to deposit balances, annualized loan growth moderated a bit in the second quarter to 1.7% after stronger growth of 6.5% in the first quarter. Elevated payoffs, which increased nearly $50 million from last quarter, contributed to the slower growth. On a year-to-date basis, loan balances were up 4.1% annualized, which is in line with our expectations. Also, our loan-to-deposit ratio remains just under 100%, which is in the middle of our target range.

轉向投影片 10，與存款餘額類似，年化貸款成長在第一季強勁成長 6.5% 後，第二季略有放緩至 1.7%。支出增加，較上季增加近 5,000 萬美元，導致成長放緩。年初至今，貸款餘額年化成長 4.1%，符合我們的預期。此外，我們的貸存比率仍略低於 100%，位於我們目標範圍的中間位置。

We are continuing to see good loan demand in the Twin Cities and are getting in front of strong deals. However, the continued high interest rate environment to challenge equity market has caused some borrowers to delay projects, while others deals just haven't penciled out.

我們繼續看到雙城的良好貸款需求，並正在爭取強勁的交易。然而，持續的高利率環境對股市構成挑戰，導致一些借款人推遲項目，而另一些交易則尚未完成。

We still expect full year loan growth to be in the low to mid single digit range. However, we are expecting more robust payoff levels to continue into the back half of the year, which will continue to be a headwind, while other factors, including overall demand, economic conditions and core deposit growth will influence the pace of loan growth.

我們仍然預計全年貸款成長將在中低個位數範圍內。然而，我們預計今年下半年將繼續保持更強勁的回報水平，這將繼續成為不利因素，而包括整體需求、經濟狀況和核心存款成長在內的其他因素將影響貸款成長的步伐。

Overall, we feel like we have the ability to turn on our loan growth engine when appropriate, but we are continuing to take a disciplined approach. That said, we have been active in adding new talent to our lending teams to support our long-term growth initiatives.

總體而言，我們認為我們有能力在適當的時候啟動貸款成長引擎，但我們將繼續採取嚴格的方法。也就是說，我們一直在積極為我們的貸款團隊增加新的人才，以支持我們的長期成長計畫。

You can see the increase in loan payoffs on Slide 11. While higher payoffs may limit our overall loan growth, there are potential benefits as well. For example, payoffs create liquidity that can --we can redeploy into higher yielding loans as the payoffs are generally rolling off below new production yields, as Joe mentioned earlier.

您可以在投影片 11 上看到貸款償還額的增加。雖然更高的回報可能會限制我們的整體貸款成長，但也有潛在的好處。例如，正如喬之前提到的，回報創造了流動性，我們可以重新部署到收益率更高的貸款，因為回報通常會低於新的生產收益率。

In addition, payoffs can generate loan fees, which support net interest income, which we saw here in the second quarter.

此外，回報可以產生貸款費用，從而支持淨利息收入，我們在第二季度看到了這一點。

New loan originations also continued to be strong, exceeding loan advances for the second consecutive quarter. We did not see any meaningful changes to the loan mix during the quarter. Construction and development balances continued to decline as deals completed their construction phase, while growth came primarily in our C&I, CRE and multifamily portfolio.

新貸款發放也持續強勁，連續第二季超過預支貸款。我們沒有看到本季貸款組合發生任何有意義的變化。隨著交易完成建設階段，建設和開發餘額繼續下降，而成長主要來自我們的工商業、商業房地產和多戶型投資組合。

Slide 12 shows how our loan portfolio is positioned to reprice higher even if rates decline. This is primarily due to our large fixed rate portfolio, which makes up 69% of total loans and our smaller variable-rate portfolio, which makes up just 15% of all, we have $633 million of fixed and adjustable rate loans maturing or repricing over the next 12 months with weighted average yields of 5.29% and 4.75%, respectively.

投影片 12 顯示了即使利率下降，我們的貸款組合如何重新定價更高。這主要是由於我們龐大的固定利率投資組合（佔總貸款的69%）和規模較小的可變利率投資組合（僅佔全部貸款的15%），我們有6.33 億美元的固定利率和可調利率貸款到期或重新定價超過未來12個月的加權平均收益率分別為5.29%和4.75%。

We would be able to redeploy these funds into loans with meaningfully higher yields even if we see rate cuts over the coming months. The repricing impact of our larger fixed and adjustable rate portfolios should outweigh the repricing of our smaller variable rate portfolios as rates come down.

即使我們在未來幾個月看到降息，我們也能夠將這些資金重新部署到收益率顯著更高的貸款中。隨著利率下降，我們較大的固定利率和可調利率投資組合的重新定價影響應該會超過較小的可變利率投資組合的重新定價影響。

Also, we have been diligent increasing loan floors on variable rate transactions with over 70% of our floors now being about 5%. This should provide loan yield support if we see a meaningful drop in rates. We are confident that our overall portfolio yields should only continue to rise even as rates come down.

此外，我們一直在努力提高可變利率交易的貸款下限，超過 70% 的貸款下限現在約為 5%。如果我們看到利率大幅下降，這應該會提供貸款收益率支持。我們相信，即使利率下降，我們的整體投資組合收益率只會繼續上升。

Slide 13 highlights our multifamily and office portfolios. Over 90% of our multi-family loans are in the Twin Cities, and we have only experienced $62,000 of net charge-offs in the portfolio since we started the bank in 2005.

投影片 13 重點介紹了我們的多戶住宅和辦公室產品組合。我們超過 90% 的多戶家庭貸款位於雙子城，自 2005 年成立銀行以來，我們的投資組合中僅經歷了 62,000 美元的淨沖銷。

The Twin Cities multi-family market has historically been a stable market with less volatility than some of the coastal and high-growth markets. While vacancies increased throughout 2023, we have seen signs of vacancy rate stabilizing and even starting to tick down a bit over the past few months. Coupled this with absorption levels exceeding deliveries as new construction remains slow and you have a more favorable outlook for occupancy levels and rent growth in the Twin Cities.

雙城多戶住宅市場歷來是一個穩定的市場，波動性小於一些沿海和高成長市場。儘管 2023 年空缺率有所增加，但我們看到空缺率在過去幾個月趨於穩定甚至開始略有下降的跡象。再加上由於新建築仍然緩慢而吸收水平超過了交付量，雙城的入住率和租金增長前景更加樂觀。

We have been proactively testing covenants across our multifamily portfolio and have been very pleased with the results. For any issues that we have found, we have action plans in place, including principal curtailments, pledges of additional collateral or other risk mitigants. We continue to closely monitor the portfolio as the economic and interest rate environments remain challenging. However, we have been pleased with the performance to date and remain bullish on multifamily over the long term.

我們一直在積極測試多戶型投資組合中的契約，並對結果感到非常滿意。對於我們發現的任何問題，我們都制定了行動計劃，包括削減本金、承諾提供額外抵押品或其他風險緩解措施。由於經濟和利率環境仍然充滿挑戰，我們將繼續密切監控投資組合。然而，我們對迄今為止的表現感到滿意，並從長遠來看仍然看好多戶型住宅。

Looking at our non-owner occupied CRE office portfolio, our exposure remains quite limited at just 5% of loans. This includes only four loans located in central business districts, totaling $35 million. As a reminder, in previous quarters, we placed one of these central business district office loans on watch and moved another to substandard, both due to potential lease rollover risk.

看看我們的非業主佔用的 CRE 辦公大樓投資組合，我們的風險敞口仍然相當有限，僅佔貸款的 5%。這僅包括位於中央商務區的四筆貸款，總額為 3500 萬美元。提醒一下，在前幾個季度，我們將其中一筆中央商務區辦公室貸款置於觀察狀態，並將另一筆貸款轉為次級貸款，這都是由於潛在的租賃展期風險。

We will continue to monitor these transactions closely given the headwinds facing the sector. That said, we feel good about the office portfolio as a whole, given the lower average loan amount, diversified client base and primarily Midwest suburban office exposure.

鑑於該行業面臨的不利因素，我們將繼續密切關注這些交易。儘管如此，鑑於平均貸款金額較低、客戶群多元化以及主要是中西部郊區的辦公室業務，我們對整個辦公室投資組合感覺良好。

Turning to Slide 14, we continue to see strong performance across our entire loan portfolio as we had no net charge-offs again in the second quarter and nonperforming assets were just 0.01% of assets. We remain well reserved at 1.37% of gross loans, which is well in excess of peer levels. Reserves included $600,000 in provision during the quarter, which has generally been tied to loan growth.

轉向投影片 14，我們繼續看到整個貸款組合的強勁表現，因為我們在第二季再次沒有淨沖銷，不良資產僅佔資產的 0.01%。我們仍保持充足的儲備，佔貸款總額的 1.37%，遠高於同業水準。準備金包括本季撥備的 60 萬美元，通常與貸款成長掛鉤。

Overall, we continue to feel good about our loan portfolio. That said, as higher as this higher interest rate environment continues to put pressure on businesses, we still expect to see some credit normalization over time.

總體而言，我們仍然對我們的貸款組合感覺良好。儘管如此，隨著利率上升的環境繼續給企業帶來壓力，我們仍然預計隨著時間的推移，信貸將會出現一定程度的正常化。

On Slide 15, you can see our watch and substandard loans, both of which remained at very low levels. We are pleased with the risk profile of the portfolio and believe it is well positioned moving forward.

在幻燈片 15 上，您可以看到我們的觀察貸款和次級貸款，兩者都保持在非常低的水平。我們對該投資組合的風險狀況感到滿意，並相信其未來處於有利位置。

I'll now turn it back over to Joe.

我現在將把它轉回給喬。

Thanks, Nick. Slide 16 highlights our strong capital ratios, which have continued to build, including CET1, which increased from 9.21% to 9.41%. In addition, we repurchased nearly 253,000 shares during the second quarter at a weighted average price of $11.48 per share for a total of $2.9 million.

謝謝，尼克。幻燈片 16 突顯了我們強勁的資本比率，這些比率仍在不斷提高，包括 CET1，從 9.21% 增加到 9.41%。此外，我們在第二季以每股 11.48 美元的加權平均價格回購了近 253,000 股股票，總計 290 萬美元。

We still have $15.3 million remaining under our current authorization. We will continue to evaluate future repurchases based on a variety of factors, including capital levels, growth opportunities and market conditions. Share repurchases are just one of our capital priorities. Our primary capital priority remains organic growth. Beyond that, we continue to review and monitor potential M&A opportunities.

目前的授權還剩 1530 萬美元。我們將繼續根據多種因素評估未來的回購，包括資本水準、成長機會和市場狀況。股票回購只是我們的資本優先事項之一。我們的首要資本優先事項仍然是有機成長。除此之外，我們繼續審查和監控潛在的併購機會。

Turning to slide 17, I'll recap our near term expectations. We expect full year loan growth to remain in the low to mid single digit range, although as Nick mentioned, anticipated, higher levels of loan payoffs will likely be a headwind over the remainder of the year. We are pleased to see the margin stabilize in second quarter.

轉向投影片 17，我將回顧我們的近期預期。我們預計全年貸款成長將保持在中低個位數範圍內，儘管正如尼克提到的那樣，較高的貸款償還水準可能會成為今年剩餘時間的阻力。我們很高興看到第二季的利潤率穩定下來。

We'd expect that stability to continue in the near term until we see some interest rate cuts and a normalized yield curve. While the loan book is repricing higher, there's still pressure on deposit costs. As we have mentioned, we are well positioned to benefit as rates come down.

我們預計這種穩定將在短期內持續，直到我們看到一些降息和殖利率曲線正常化。儘管貸款帳目重新定價較高，但存款成本仍面臨壓力。正如我們所提到的，隨著利率下降，我們已經做好了受益的準備。

On the expense side, we expect full year noninterest expense in 2024 to track relatively in line with asset growth similar to prior years. This includes a similar trajectory throughout the year as we saw in 2023, with expenses starting out low in the first quarter and building in subsequent quarters. The provision expense will likely be tied to our pace of loan growth and the overall asset quality of the portfolio.

在費用方面，我們預計 2024 年全年非利息費用將與前幾年類似的資產成長相對一致。這包括與 2023 年類似的全年軌跡，第一季的支出較低，隨後幾季的支出不斷增加。撥備費用可能與我們的貸款成長速度和投資組合的整體資產品質掛鉤。

I'll now turn it over to Jerry.

我現在把它交給傑瑞。

Thanks, Joe. Finishing up on Slide 18, I'll provide a quick update on our 2024 strategic priorities. First, as we look to optimize our balance sheet for longer term growth, both loan and deposit growth are tracking as expected on a year-to-date basis.

謝謝，喬。在投影片 18 結束時，我將快速介紹我們 2024 年策略重點的最新情況。首先，當我們尋求優化資產負債表以實現長期成長時，今年迄今貸款和存款的成長都符合預期。

Second, we continue to focus on expanding our client base through additional affordable housing efforts as well as hosting successful networking events at our corporate office for local women business leaders and entrepreneurs.

其次，我們繼續致力於透過額外的經濟適用房努力擴大我們的客戶群，並在我們的公司辦公室為當地女性商業領袖和企業家舉辦成功的社交活動。

Third, we have continued to invest in the business, including the launch of our new CRM tool, which is creating efficiencies in how we engage with our clients.

第三，我們持續對業務進行投資，包括推出新的 CRM 工具，提高了我們與客戶互動的效率。

Finally, our credit teams are working hard to monitor our loan portfolios, especially CRE and multifamily. This has been evident through our continued strong asset quality.

最後，我們的信貸團隊正在努力監控我們的貸款組合，特別是商業房地產和多戶住宅。我們持續強勁的資產品質證明了這一點。

With that, we'll open it up for questions.

至此，我們將開放提問。

(operator instructions)

（操作員說明）

Brendan Nosal, Hovde Group.

布倫丹‧諾薩爾，霍夫德集團。

And good morning, guys. Maybe just to start off here on credit. I mean, your asset quality remains completely pristine, but we've been hearing rumblings that regulators are increasingly using tools at their disposal to increase individual capital requirements for CRE-heavy banks. So maybe just take us through your relationship with your regulators and their understanding of your business model, especially considering how clean credit's been historically?

早安，夥計們。也許只是從信用開始。我的意思是，你的資產品質仍然完全原始，但我們一直聽到有傳言稱，監管機構越來越多地使用他們可以使用的工具來提高對商業房地產為主的銀行的個人資本要求。那麼，也許請讓我們了解一下您與監管機構的關係以及他們對您的商業模式的理解，特別是考慮到歷史上信用的清潔程度如何？

Hey, Brendan, it's Jerry. I mean, we've had basically the same platform since we started in 2005. We continue to have conversations with our regulators. They have continued to be comfortable with what what our overall enterprise risk management system is and how we monitor our concentrations. And although our concentrations have come down, that is certainly not something that they've asked us to do, So we continue to feel comfortable. We have another exam here in August, and we -- and our last exam, it was a it was kind of business as usual. So I don't I don't expect anything different.

嘿，布蘭登，我是傑瑞。我的意思是，自 2005 年成立以來，我們一直擁有基本上相同的平台。我們繼續與監管機構進行對話。他們仍然對我們的整體企業風險管理體係以及我們如何監控我們的集中度感到滿意。儘管我們的注意力有所下降，但這肯定不是他們要求我們做的事情，所以我們仍然感到舒適。八月我們在這裡還有另一場考試，我們——以及我們的最後一次考試，一切如常。所以我不期望有什麼不同。

Okay. That's great color. Thank you. And then, maybe can you update us on your appetite to continue repurchasing shares just given the pricing has firmed up above tangible book value?

好的。那顏色真棒。謝謝。然後，考慮到股價已經穩定在有形帳面價值之上，您是否可以向我們介紹一下您繼續回購股票的意願？

Hey Brendan, this is Joe. Yeah, I think, it's like we always say. I mean, there's a variety of factors, some that we consider. Obviously, the share price being one of them, but I think in the context of everything else, whether it's future growth opportunities from the environment itself, we consider all that.

嘿布倫丹，這是喬。是的，我想，就像我們常說的。我的意思是，有多種因素，我們會考慮一些因素。顯然，股價是其中之一，但我認為在其他一切的背景下，無論是環境本身的未來成長機會，我們都會考慮所有這些。

So I think we're really pleased and happy that we are as active as we were over the last, it's three quarters, just given the blended cost that we're able to buy back shares at and then considering where the stock is today. But again, we'll continue to evaluate that going forward, and that's that's kind of a fluid analysis.

因此，我認為我們真的很高興和高興，我們像過去一樣活躍，這是三個季度，考慮到我們能夠回購股票的混合成本，然後考慮股票今天的價格。但同樣，我們將繼續評估未來的情況，這就是一種流動分析。

Maybe one more for me before I step back. Really great to see the margin finally level out. Do you happen to have spot rates for both deposit costs and the margin at quarter end, just to give us a sense of how trends played out across the quarter?

在我退後一步之前，也許還可以再給我一份。很高興看到利潤率最終趨於平穩。你們是否剛好有季末存款成本和保證金的即期匯率，只是為了讓我們了解整個季度的趨勢如何？

Yeah. So June was 2.20%. And then, spot rates for deposits were 3.50%..

是的。所以 6 月是 2.20%。然後，存款即期利率為3.50%。

Okay, Perfect. Thank you.

好的，完美。謝謝。

Jeff Rulis, D.A. Davidson.

傑夫·魯利斯，D.A.戴維森。

Thanks, Joe. Good morning. Just on the, I think you were cautious on the acceleration of loan yields and encouraging stat. I wanted to kind of see, is that more timing than anything in terms of 12 basis points versus 5 basis points? Or kind of expectations for -- do you expect that to jump around? Or do you think we could we could see further acceleration?

謝謝，喬。早安.就這一點而言，我認為您對貸款收益率的加速和令人鼓舞的統計數據持謹慎態度。我想看看，就 12 個基點與 5 個基點而言，這是否比任何事情都更時機？或者是某種期望——你希望這種情況會跳躍嗎？或者您認為我們可以看到進一步的加速嗎？

Hey, Jeff, this is Joe. Yeah, so I think we had really strong growth in the back half of the first quarter, really in March, which I think really propelled the loan yield in the second quarter. So I think as we think about growth in the in the overall loan yield, it's obviously linked together.

嘿，傑夫，這是喬。是的，所以我認為我們在第一季後半段（尤其是三月）實現了非常強勁的成長，我認為這確實推動了第二季的貸款收益率。因此，我認為，當我們考慮整體貸款收益率的成長時，它顯然是相互關聯的。

I think, as Nick mentioned on the pay upfront, I mean, I think it's the payoff piece is certainly beneficial on one hand. It obviously allows us to recycle back and really kind of roll-off. Yields are certainly less than where new money yields are coming on at. So it's definitely it's not only margin accretive, but certainly is beneficial to the overall loan yields. So that's that's helpful.

我認為，正如尼克在預付款中提到的那樣，我的意思是，我認為一方面，回報肯定是有益的。顯然，它允許我們回收並真正進行滾降。收益率肯定低於新貨幣的收益率。因此，這肯定不僅會增加利潤，而且肯定有利於整體貸款收益率。所以這很有幫助。

So I think it's going to be growth driven. And I think in prior quarters where the growth was was not as strong as it was in first quarter, you saw 5 basis points to 7 basis points on a linked-quarter basis. And so I think given the strong growth in the first quarter, we do feel like that really propelled the loan yield in the second quarter.

所以我認為這將是成長驅動的。我認為，在前幾個季度的成長不如第一季那麼強勁的情況下，您會看到環比增長了 5 到 7 個基點。因此，我認為鑑於第一季的強勁成長，我們確實認為這確實推動了第二季的貸款收益率。

Got it. And then, Nick sort of mentioned Q2 a more of a headwind from business cyclicality from a deposit gathering. Now kind of through that. And I know you're kind of targeting a low mid-single-digit balance sheet growth, but we feel better about deposit gathering in the second half of the year? Is that typically seasonality becomes a tailwind?

知道了。然後，尼克提到第二季更多的是存款收集帶來的商業週期性的逆風。現在有點通過了。我知道你們的目標是實現中低個位數的資產負債表成長，但我們對下半年的存款收集感覺更好？這種典型的季節性是否會成為順風？

Yeah. Hey, this is Nick. Yeah, we've seen deposit balances sort of rebuild back up here, and that's not uncommon for us in Q2. It tends to be a low, sort of low watermark for us in the deposit front, just as taxes and other income, typical cyclicality of our business clients tends to we tend to see that in the second quarter.

是的。嘿，這是尼克。是的，我們已經看到存款餘額有所恢復，這對我們來說在第二季並不罕見。對我們來說，在存款方面，這往往是一個低水位線，就像稅收和其他收入一樣，我們的商業客戶的典型週期性往往會在第二季度看到這一點。

We feel really good about our traction that we've had on new client acquisitions. And really what we've seen in new hires this year and we've had some great treasury management hires and feel really good about the bankers that we brought on board. So that will pay dividends over the long term and we're starting to see that it drives some of our pipeline growth now.

我們對新客戶獲取的吸引力感到非常滿意。實際上，我們今年在新員工中看到了這一點，我們聘用了一些出色的財務管理人員，並對我們引入的銀行家感到非常滿意。因此，從長遠來看，這將帶來紅利，我們現在開始看到它推動了我們的一些管道成長。

But yes, Q2 is was a bit down for us, and that's just not uncommon for us. We tend to have some chunky quarters. First quarter, we saw really great both core and overall deposit growth. And then Q2, as we expected, was a bit more muted. So we expect those sort of inflows and outflows to continue over the long term.

但是，是的，第二季對我們來說有點低迷，這對我們來說並不罕見。我們往往有一些矮胖的宿舍。第一季度，我們看到核心存款和整體存款成長都非常強勁。然後，正如我們預期的那樣，第二季度的表現更加平靜。因此，我們預計這種資金流入和流出將長期持續。

Thanks. And last one for me. I think you touched the buyback area pretty well. I guess just that might as well check in on M&A and thoughts about the share prices as run-up here and conversations on that side, interested the recent updates?

謝謝。最後一張給我。我認為你很好地觸及了回購領域。我想這也可以檢查一下併購和對股價上漲的想法以及那邊的對話，對最近的更新感興趣嗎？

I can talk a bit about M&A Jeff. We similar to last quarter, last previous years actually. I mean, we continue to have conversations with other local banks and some of those conversations have always went well.

我可以談談併購傑夫。實際上，我們與上個季度、去年的情況類似。我的意思是，我們繼續與其他當地銀行進行對話，其中一些對話一直進展順利。

So it's really just stand and stand in front of potential targets along the way. And it's, I know across the country, things are heating up a little bit on the M&A front, at least that's what I hear from investment bankers, but I'd say in the Twin Cities, it's still a little slow, but we'll see.

所以，其實只是一路站到潛在目標面前。我知道在全國範圍內，併購方面的事情正在升溫，至少這是我從投資銀行家那裡聽到的，但我想說在雙城，它仍然有點慢，但我們」會看到的。

Nathan Race, Piper Sandler.

內森·雷斯，派珀·桑德勒。

Hey, guys. Good morning. Thanks for taking my questions. Just as we think about the potential increase in deposit costs in the third quarter, curious just in terms of the CDs that you have maturing down in 3Q and 4Q, how that stacks up to kind of your replacement rates today?

嘿，夥計們。早安.感謝您回答我的問題。正如我們考慮第三季存款成本的潛在增加一樣，我們對第三季和第四季到期的存款證感到好奇，這與今天的替代率相比如何？

Hey, Nate, this is Joe. Yeah, I definitely think we've seen an inflection point. I'd say over the last couple of quarters, we've really been mindful to kind of shortening up, the ultimate maturity of those CDs, in anticipation for potential rate cuts.

嘿，內特，這是喬。是的，我確實認為我們已經看到了一個拐點。我想說，在過去的幾個季度中，我們確實一直在註意縮短這些定期存款的最終期限，以預期可能的降息。

So I think really we've seen inflection where the 12 month CD at 5.25% is now pricing in the low 5%. And so I think that and while we had maybe a longer duration CD portfolio a couple of years ago, that stuff rolls off and shortens up, it certainly provides a lot of repricing opportunities and there's definitely inflection on from that perspective.

所以我認為我們確實已經看到了拐點，即 12 個月 CD 利率為 5.25%，現在定價在 5% 的低點。因此，我認為，雖然幾年前我們可能擁有較長期限的CD 投資組合，但這些東西會逐漸減少並縮短，但它確實提供了很多重新定價的機會，而且從這個角度來看肯定會有所變化。

I'd say the other thing too, is just on the on the brokered fronts, we've really been able to put on longer-term CDs that have optionality in our ability to call those CDs. So I think, while it might feel like a longer term and certainly gets disclosed that way, there's definitely a lot of optionality from our perspective that allows us to call and reissue or supplement with core growth.

我還要說另一件事，就是在經紀方面，我們確實能夠發行長期 CD，我們可以選擇呼叫這些 CD。所以我認為，雖然它可能感覺像是一個較長的期限，並且肯定會以這種方式披露，但從我們的角度來看，肯定有很多選擇，使我們能夠調用並重新發行或補充核心增長。

So feel good about that time, deposit portfolio and and really hitting an inflection point in terms of costs.

因此，對那段時間、存款組合以及成本方面真正達到的拐點感覺良好。

Okay. Great. And then, I think we touched on earlier, but just in terms of the elevated payoffs in the quarter, curious if these are kind of as expected and if you have any kind of visibility into potential payoff levels over the course of that, 3Q and 4Q?

好的。偉大的。然後，我想我們之前談過，但只是就本季度的回報增加而言，好奇這些是否符合預期，以及您是否對在此過程中的潛在回報水平有任何了解，第三季度和4Q？

I mean, we anticipated payoffs picking up a little bit. I mean, we did see a drop in rates at the back end of last year, which allowed some some transactions to work toward a closing to refinance and those do take time, and we saw some of that stuff come together in the second quarter. We've seen some of those pullback in their win rates happen again here.

我的意思是，我們預計回報會增加。我的意思是，我們確實在去年年底看到利率下降，這使得一些交易能夠完成再融資，而這些確實需要時間，我們看到其中一些東西在第二季度匯集在一起。我們已經看到他們的勝率再次出現一些回落。

So we're seeing our payout pipeline rebuild again. And a lot of it's stuff that we had originated in '21 and '20, that it was the intention of those transactions to to payoff. A lot of that came within our construction book that had rolls our multifamily book. So it's sort of right within the lifecycle of those transactions that we expected to see it.

因此，我們看到我們的支付管道再次重建。其中很多東西都是我們在 21 世紀和 20 世紀起源的，這些交易的目的是為了獲得回報。其中許多內容都包含在我們的建築手冊中，該手冊包含我們的多戶家庭手冊。因此，這正好在我們期望看到的那些交易的生命週期內。

And we've actually seen even quarter-to-date, payoffs that really -- that payoff trend has continued. And we've seen almost and two-thirds of the level of payoffs that we experienced in all of Q2 already here through July. So we're working to dig back out of that, and we expect that to and to continue to be a headwind here. But overall, we feel good about what that allows us to do.

事實上，我們甚至已經看到了迄今為止的季度回報，這種回報趨勢仍在繼續。我們已經看到了整個第二季到 7 月所經歷的幾乎三分之二的回報水平。因此，我們正在努力解決這個問題，我們預計這將繼續成為一個阻力。但總的來說，我們對這讓我們能夠做的事情感到滿意。

It allows us to recycle that cash back into new transactions, which is really our primary driver of both new loan yields and increased loan yields and fees. And in some cases, it's allowing some of those older vintage transactions '20 and 2021 that have felt a little bit more pain as these rate environments have come up, as they were underwritten into a different rate environment to find the right home with an agency takeout or something like that.

它使我們能夠將現金回收到新的交易中，這實際上是我們新貸款收益率以及貸款收益率和費用增加的主要驅動力。在某些情況下，它允許一些20年和2021年的較舊交易，隨著這些利率環境的出現，這些交易會感到更加痛苦，因為它們被承保到不同的利率環境中，以便透過代理商找到合適的家外賣或類似的東西。

So ultimately, it helps us with some of our credit risk metrics too. So not something that we're concerned with, but it is something that is a on a headwind to new loan to loan growth as it offset some of that new origination activity that we have.

因此，最終，它也可以幫助我們了解一些信用風險指標。因此，這不是我們關心的事情，但它是新貸款成長的阻力，因為它抵消了我們現有的一些新的發起活動。

Got it. Very helpful. Thank you. And then maybe just one last housekeeping question. The securities yields on the taxable portfolio increased nicely over the last quarter. Any repositioning there of note or any other items to keep in mind there?

知道了。非常有幫助。謝謝。然後也許只是最後一個家事問題。應稅投資組合的證券收益率較上季大幅成長。有任何值得注意的重新定位或任何其他需要記住的事項嗎？

Yeah, Nate, this is Joe. No, nothing out of the ordinary, more of the same just from a composition standpoint. We are definitely an active portfolio management from our perspective. We did sell some securities this last quarter, which is more of a floating rate nature and kind of reorienting in conjunction with the rest of the balance sheet. So nothing out of the ordinary there, just really ordinary course and some similar composition as we've as we've had over the last couple of quarters.

是的，內特，這是喬。不，沒有什麼不尋常的，只是從構圖的角度來看，更多的是相同的。從我們的角度來看，我們絕對是一家積極的投資組合管理公司。上個季度我們確實出售了一些證券，這更多地具有浮動利率性質，並且與資產負債表的其餘部分一起進行了重新定位。因此，那裡沒有什麼不尋常的，只是非常普通的課程和一些與我們過去幾季相似的成分。

Okay. Great. I appreciate all the color.

好的。偉大的。我欣賞所有的顏色。

And this will conclude our question and answer session. I would like to turn the conference back over to Jerry Baack for any closing remarks.

我們的問答環節到此結束。我想將會議轉回傑瑞·巴克（Jerry Baack）發表閉幕詞。

Thanks for joining the call today. We continue to be encouraged by our margin stabilization, overall revenue growth, our superb asset quality and continued growth in tangible book value.

感謝您今天加入通話。我們的利潤率穩定、整體收入成長、卓越的資產品質和有形帳面價值的持續成長持續令我們感到鼓舞。

And I guess I'd just close by, I want to thank our team members. We have a phenomenal team here. We've brought on some more real key hires in this last quarter on the treasury and banking side. So we're excited for that. Hope you have a great day.

我想我就在附近，我要感謝我們的團隊成員。我們這裡有一支非凡的團隊。上個季度，我們在財務和銀行方面招募了一些真正的關鍵員工。所以我們對此感到興奮。希望您度過愉快的一天。

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.

會議現已結束。感謝您參加今天的演講。此時您可以斷開線路。