Citizens Financial Group Inc (CFG) 2024 Q3 法說會逐字稿

Good morning, everyone, and welcome to the Citizens Financial Group Third Quarter Earnings Conference Call. My name is Alan, and I'll be your operator today. (Operator Instructions)

大家早安，歡迎參加公民金融集團第三季​​財報電話會議。我叫艾倫，今天我將擔任你們的接線生。 （操作員說明）

As a reminder, this event is being recorded. Now I'll turn the call over to Kristin Silberberg, Executive Vice President, Investor Relations. Kristin, you may begin.

提醒一下，此事件正在被記錄。現在我將把電話轉給投資者關係執行副總裁 Kristin Silberberg。克里斯汀，你可以開始了。

Thank you, Alan. Good morning, everyone, and thank you for joining us. First, this morning, our Chairman and CEO, Bruce Van Saun; and CFO, John Woods, will provide an overview of our third quarter results. Brendan Coughlin, Head of Consumer Banking; and Don McCree, Head of Commercial Banking, are also here to provide additional color.

謝謝你，艾倫。大家早安，感謝您加入我們。首先，今天上午，我們的董事長兼執行長 Bruce Van Saun；財務長約翰伍茲 (John Woods) 將概述我們第三季的業績。 Brendan Coughlin，消費者銀行業務主管；商業銀行業務主管唐·麥克雷 (Don McCree) 也在這裡提供了更多資訊。

We will be referencing our third quarter earnings presentation located on our Investor Relations website. After the presentation, we'll be happy to take questions. Our comments today will include forward-looking statements, which are subject to risks and uncertainties that may cause our results to differ materially from expectations. These are outlined for your review on page 2 of the presentation. We also reference non-GAAP financial measures, so it's important to review our GAAP results on page 3 of the presentation and the reconciliations in the appendix.

我們將參考投資者關係網站上的第三季財報。演示結束後，我們很樂意回答問題。我們今天的評論將包括前瞻性陳述，這些陳述受到風險和不確定性的影響，可能導致我們的結果與預期產生重大差異。這些內容在簡報的第 2 頁上進行了概述，供您審閱。我們也參考了非 GAAP 財務指標，因此查看簡報第 3 頁的 GAAP 結果以及附錄中的調整表非常重要。

And with that, I will hand over to Bruce.

就這樣，我將把工作交給布魯斯。

Thanks, Kristin, and good morning, everyone. Thanks for joining our call today.

謝謝克里斯汀，大家早安。感謝您今天加入我們的電話會議。

We continue to execute well through an uncertain environment. We've made good progress on our strategic initiatives, our balance sheet remains strong across capital, liquidity, funding and loan reserves and our profitability has stabilized and is poised to move higher. Let me start with an update on our initiatives. First, the Private Bank delivered another terrific quarter. We reached $5.6 billion in deposits, up from $4 billion in Q2, and our assets under management reached $4.1 billion.

我們在不確定的環境中繼續保持良好的執行力。我們的策略性舉措取得了良好進展，我們的資產負債表在資本、流動性、資金和貸款儲備方面仍然強勁，我們的獲利能力已經穩定並有望走高。首先讓我介紹一下我們舉措的最新情況。首先，私人銀行又交付了出色的季度業績。我們的存款達到 56 億美元，高於第二季的 40 億美元，我們管理的資產達到 41 億美元。

During the quarter, we opened 2 new private bank offices in the San Francisco Bay Area, and we added a new private banking team to cover Southern California. We reached breakeven in August and September and expect to be profitable in Q4 with good momentum entering 2025.

本季度，我們在舊金山灣區開設了 2 個新的私人銀行辦事處，並增加了一個新的私人銀行團隊以覆蓋南加州。我們在 8 月和 9 月實現了盈虧平衡，預計第四季度將實現盈利，並在進入 2025 年時保持良好勢頭。

Next, our commercial bank continues to demonstrate its capacity to serve private capital well. For the quarter, we were number two in the league tables for sponsor leveraged loan arrangements, and we remain numbr one over the past 12 months. We continue to add quality talent to our coverage and our capital markets teams. Our New York City Metro initiative continues to show nice growth. We had 5% year-on-year growth in households and 7% growth in deposits. We look forward to being a key sponsor of the upcoming New York City Marathon as we continue to raise our brand profile in the market.

接下來，我們商業銀行持續展現服務民間資本的能力。本季度，我們在贊助商槓桿貸款安排排行榜上排名第二，並且在過去 12 個月內仍然排名第一。我們繼續為我們的覆蓋範圍和資本市場團隊增加優質人才。我們的紐約市地鐵計劃繼續顯示出良好的成長勢頭。家庭年增 5%，存款年增 7%。我們期待成為即將舉行的紐約市馬拉松賽的主要贊助商，繼續提高我們在市場上的品牌形象。

We've executed well on TOP 9, achieving a Q4 run rate benefit of $135 million, and we're finalizing the details of TOP 10, which should have a $100 million plus run rate benefit by end of 2025. Our BSO actions continue to proceed as planned. Noncore reduced by $1 billion in the quarter, and we continue to use the liquidity generated to pay down higher cost funding like brokered CDs. We continue to execute actions in commercial to exit lending-only relationships, and we're focused on our medium-term plan to reduce CRE exposure.

我們在TOP 9 上執行得很好，實現了1.35 億美元的第四季度運行率效益，並且我們正在敲定TOP 10 的詳細信息，到2025 年底，該TOP 10 的運行率效益應該會達到1 億美元以上。非核心業務在本季減少了 10 億美元，我們繼續使用產生的流動性來支付經紀 CD 等更高成本的融資。我們繼續在商業領域採取行動，以退出純貸款關係，並且我們專注於減少商業房地產風險的中期計劃。

With respect to our balance sheet, our CET1 ratio is at 10.6%. Adjusting for OCI puts us at 9.2%. We repurchased $325 million in stock during the quarter. Our spot LDR was 80.8%, and our Federal Home Loan Bank advances remained low at well under $1 billion. We are not seeing much loan demand, but we remain hopeful this should start to pick up in coming quarters.

就我們的資產負債表而言，我們的 CET1 比率為 10.6%。在 OCI 進行調整後，我們的比率為 9.2%。我們在本季回購了 3.25 億美元的股票。我們的現貨 LDR 為 80.8%，我們的聯邦住房貸款銀行預付款仍然很低，遠低於 10 億美元。我們沒有看到太多的貸款需求，但我們仍然希望這種需求在未來幾季開始回升。

Our P&L was impacted by the drag from forward starting swaps, which commenced in July as well as some fees that pushed out to Q4. Nonetheless, we did a good job managing expenses and credit is performing broadly as expected.

我們的損益受到 7 月開始的遠期啟動掉期以及推遲到第四季度的一些費用的拖累影響。儘管如此，我們在費用管理方面做得很好，信貸表現也大致符合預期。

Our Q4 guide shows a nice rebound in both NII and fees, leading to positive operating leverage in the quarter. We expect credit to remain broadly stable, and we will continue to repurchase shares. For the full year, we will hit most of our beginning of year guide with the exception of balance sheet volume impacting NII and a modestly higher ACL build. We continue to have strong confidence in our medium-term outlook, and we've added to the materials in the appendix to show more detail on our NIM progression.

我們的第四季指南顯示，NII 和費用均出現良好反彈，導致本季營運槓桿率為正。我們預期信貸將保持大致穩定，我們將繼續回購股票。就全年而言，我們將達到年初指導的大部分目標，但影響 NII 的資產負債表規模和 ACL 建設略有上升除外。我們仍然對中期前景充滿信心，並且我們在附錄中添加了資料，以顯示有關 NIM 進展的更多詳細資訊。

Lots of uncertainty in the environment remains, but we feel good about our capacity to manage through that and continue to execute on our broad strategy. Our strategy rests on a transformed consumer bank, the best positioned super regional commercial bank and the aspiration to have the premier bank-owned private bank. We will continue to execute with the financial and operating discipline that you've come to expect from us.

環境中仍然存在許多不確定性，但我們對自己管理這些不確定性並繼續執行我們的整體策略的能力感到滿意。我們的策略是基於轉型的消費者銀行、定位最佳的超級區域商業銀行以及擁有一流銀行旗下私人銀行的願望。我們將繼續遵守您對我們的期望的財務和營運紀律。

With that, let me turn it over to John.

那麼，讓我把它交給約翰。

Thanks, Bruce, and good morning, everyone. As Bruce mentioned, third quarter saw continued strong execution of our initiatives. And importantly, we believe the third quarter represents a trough in earnings as tailwinds, strengthening fees and continued expense discipline will result in positive operating leverage prospectively.

謝謝布魯斯，大家早安。正如布魯斯所提到的，第三季我們的舉措繼續強勁執行。重要的是，我們認為第三季是獲利的低谷，因為順風、加強費用和持續的費用紀律將導致未來積極的營運槓桿。

We continue to maintain a strong balance sheet with excellent liquidity and capital levels and a healthy credit reserve. This positions us well to continue to execute on our strategic initiatives, which should help drive strong momentum in 2025 and performance over the medium term.

我們繼續保持強勁的資產負債表、良好的流動性和資本水平以及健康的信貸儲備。這使我們能夠繼續執行我們的策略舉措，這將有助於推動 2025 年的強勁勢頭和中期業績。

First, I'll start with some highlights of the third quarter financial results, referencing slides 5 and 6. We generated underlying net income of $392 million for the third quarter, EPS of $0.79 and ROTCE of 9.7%. This includes a negative $0.11 impact from the noncore portfolio, which will continue to steadily run off, creating a tailwind for overall performance going forward. The Private Bank is making strong progress towards profitability reaching breakeven mid-third quarter, and we expect it to start being accretive to earnings in the fourth quarter.

首先，我將先介紹第三季財務表現的一些亮點，參考投影片 5 和 6。這包括非核心投資組合帶來的 0.11 美元的負面影響，該投資組合將繼續穩步下滑，為未來的整體業績創造有利條件。私人銀行在第三季度中期實現盈虧平衡的盈利能力方面取得了強勁進展，我們預計它將在第四季度開始增加盈利。

Our capital position remained strong with CET1 at 10.6% at September 30, and or 9.2% adjusted for the AOCI opt-out removal, and we executed $325 million in stock buybacks during the quarter. We also maintained a strong funding and liquidity profile. Our pro forma LCR is 122%, which is well in excess of the large bank category 1 requirement of 100% and our period-end LDR is 80.8%.

截至 9 月 30 日，我們的資本狀況依然強勁，CET1 為 10.6%，根據 AOCI 選擇退出調整後的資本狀況為 9.2%，我們在本季度執行了 3.25 億美元的股票回購。我們也保持了強勁的資金和流動性狀況。我們的預期 LCR 為 122%，遠超過大型銀行 1 類要求的 100%，期末 LDR 為 80.8%。

Our ACL coverage ratio of 1.61% is down 2 basis points from the prior quarter, given an improved macroeconomic outlook and ongoing front book activity driving a mix shift, which lowered expected loss content in the loan portfolio. We increased our general office reserve to 12.1%, up from 11.1% in the prior quarter.

鑑於宏觀經濟前景改善以及持續的前帳簿活動推動了組合轉變，降低了貸款組合中的預期損失內容，我們的 ACL 覆蓋率為 1.61%，較上一季度下降了 2 個基點。我們將一般辦公室準備金從上一季的 11.1% 提高到 12.1%。

Now I'll talk through the third quarter results in more detail, starting with net interest income on slide 7. NII is down 2.9% linked quarter, primarily reflecting lower NIM and slightly lower interest-earning assets. With respect to NIM, our margin was down 10 basis points to 2.77%, largely reflecting the impact from the increase in hedge costs as forward starting swaps kicked in during the quarter. Other [time] impacts were largely offsetting.

現在我將更詳細地討論第三季的業績，從幻燈片 7 中的淨利息收入開始。就淨利差而言，我們的利潤率下降了 10 個基點至 2.77%，這主要反映了本季啟動遠期起始掉期對沖成本增加的影響。其他[時間]影響在很大程度上被抵消了。

Moving to slide 8. Our fees were down 2.7% linked quarter with seasonality in capital markets and solid card and wealth results. On the heels of a very strong second quarter, our capital markets fees decreased 30% as deal activity slowed given seasonal trends and some M&A deals pushed into the fourth quarter. Year-on-year, however, capital markets fees were up 40%, led by bond underwriting and M&A advisory fees. Our client hedging revenue was down slightly as some clients delayed their interest rate hedging plans, given the potential for a faster pace of rate cuts after the Fed eased aggressively in September.

轉向幻燈片 8。在第二季表現強勁之後，我們的資本市場費用下降了 30%，因為季節性趨勢導致交易活動放緩，而且一些併購交易推遲到了第四季度。然而，資本市場費用年增 40%，其中債券承銷和併購諮詢費用居首。我們的客戶對沖收入略有下降，原因是一些客戶推遲了利率對沖計劃，因為聯準會在 9 月大幅寬鬆後可能會加快降息步伐。

Mortgage banking fees are down modestly given the decline in MSR results net of hedging. This was offset by securities gains we took in making adjustments of the investment portfolio. Our wealth fees were up slightly given growth in AUM from the Private Bank, which was somewhat offset by lower transactional sales activity. We continue to focus on building out our wealth business in both our branch-based financial advisory activity as well as in private wealth, where we are adding teams in our Private Bank office geographies. Total assets under management now approximately $30 billion.

鑑於扣除對沖後的 MSR 業績下降，抵押貸款銀行費用小幅下降。這被我們調整投資組合時所獲得的證券收益所抵銷。鑑於私人銀行資產管理規模的成長，我們的財富費用略有上升，但交易銷售活動的減少在一定程度上抵消了這一增長。我們繼續專注於在分行財務諮詢活動和私人財富領域發展我們的財富業務，我們正在私人銀行辦事處地區增加團隊。目前管理的總資產約 300 億美元。

On slide 9, we did a nice job on expenses, which were down 1.3% linked quarter notwithstanding continued investment in our strategic initiatives. Our TOP 9 program is on target to deliver $135 million pretax run rate benefit by the end of the year. And we are planning to launch our top 10 program, which will target more than $100 million in run rate efficiencies by the end of 2025. We will provide more details for you on our next earnings call.

在投影片 9 上，我們在支出方面做得很好，儘管我們繼續投資於我們的策略計劃，但與季度相比，支出下降了 1.3%。我們的 TOP 9 計畫的目標是在年底前提供 1.35 億美元的稅前營運率效益。我們計劃啟動 Top 10 計劃，目標是到 2025 年底實現運作效率超過 1 億美元。

On slide 10. Period-end loans are broadly stable, and average loans are down 1% linked quarter, reflecting limited loan demand as well as continued balance sheet optimization. We continue to run down the noncore portfolio to the tune of about $1 billion in the quarter. The core loan portfolio was up about $800 million with solid contributions from the private bank and growth in retail mortgage and home equity.

投影片 10 所示。本季我們繼續將非核心投資組合縮減至約 10 億美元。由於私人銀行的強勁貢獻以及零售抵押貸款和房屋淨值的增長，核心貸款組合增加了約 8 億美元。

On a period-end basis, the Private Bank is making good progress with loans up about $630 million to $2 billion. Excluding the Private Bank, retail loans were up about $750 million, reflecting growth in mortgage and home equity, while commercial loans were down about $580 million, reflecting paydowns driven by corporates continuing to issue in the debt markets, exits of lower returning credit-only relationships and generally lower client loan demand.

期末來看，私人銀行取得了良好進展，貸款額約 6.3 億至 20 億美元。不包括私人銀行，零售貸款增加約7.5 億美元，反映抵押貸款和房屋淨值的增長，而商業貸款減少約5.8 億美元，反映企業繼續在債務市場發行、退出較低迴報的純信貸貸款所推動的還款關係，通常會降低客戶貸款需求。

Next, on slide 11 and 12, we continue to do a good job on deposits in a very competitive and dynamic environment. Average deposits are broadly stable with period-end deposits down 1%, driven by the paydown of higher cost treasury deposits tied primarily to noncore rundown. This was partially offset by $1.6 billion of attractive growth in Private Bank deposits.

接下來，在投影片 11 和 12 中，我們在競爭激烈且充滿活力的環境中繼續做好存款工作。平均存款大致穩定，期末存款下降 1%，這是由於主要與非核心縮減相關的成本較高的國庫存款的償還所致。這被私人銀行存款 16 億美元的有吸引力增長部分抵消。

Our interest-bearing deposit costs were up 4 basis points linked quarter. However, total deposit costs were up only 2 basis points, while total cost of funds was stable. CD balances were effectively flat linked quarter with growth in the Private Bank being offset by lower commercial. We anticipate that migration of lower to higher cost categories will drop off now that the Fed has commenced the cutting cycle.

我們的計息存款成本較上季上升 4 個基點。然而，總存款成本僅上升2個基點，而總資金成本維持穩定。定期存款餘額實際上與季度持平，私人銀行的成長被商業銀行的下降所抵消。我們預計，既然聯準會已經開始降息週期，從較低成本類別到較高成本類別的遷移將會減少。

Overall, our deposit franchise continues to perform well in a very competitive environment. Our estimates indicate we ended the upgrade cycle with a terminal interest-bearing deposit beta better than the peer average. Our deposit franchise is highly diversified across product mix and channels. About 70% of our deposits are granular, stable consumer deposits and roughly 68% of our overall deposits are insured or secured.

總體而言，我們的存款業務在競爭激烈的環境中持續表現良好。我們的估計表明，我們以優於同行平均水平的終期計息存款貝塔值結束了升級週期。我們的存款業務在產品組合和通路方面高度多元化。我們約 70% 的存款是細粒度、穩定的消費者存款，約 68% 的總存款受到保險或擔保。

Moving to credit on slide 13. The Net charge-offs rose 2 basis points to 54 basis points, primarily reflecting seasonal impacts in auto. A decline in commercial real estate charge-offs was offset by the resolution of several nonperforming credits in C&I.

轉到投影片 13 的信貸。商業房地產沖銷的下降被商業和工業領域多項不良信貸的解決所抵消。

Nonaccrual loans increased 10% linked quarter, primarily reflecting an increase in CRE general office as we proceed with workout actions on a handful of loans. We believe we are near the peak of NPAs as criticized classified loans have been broadly stable for four quarters and loans and workout get resolved.

非應計貸款較上季成長 10%，主要反映了隨著我們對少數貸款採取解決行動，商業房地產總辦事處的增加。我們相信，我們已接近不良貸款的峰值，因為受到批評的分類貸款在四個季度中基本上保持穩定，貸款和解決方案也得到了解決。

Turning to the allowance for credit losses on slide 14. Our overall coverage ratio stands at 1.61%, which is a 2 basis point decline from the prior quarter, reflecting an improving macroeconomic outlook and better loan mix given the runoff of the noncore auto portfolio and lower loss content originations in retail, real estate secured and commercial categories. The general office portfolio was down $150 million to $3.2 billion at the end of the third quarter and our reserve of $382 million represents 12.1% coverage, up from 11.1% in the second quarter.

轉向幻燈片14 上的信貸損失準備金。 。第三季末，普通辦公室投資組合減少了 1.5 億美元，降至 32 億美元，我們的儲備金為 3.82 億美元，覆蓋率達到 12.1%，高於第二季的 11.1%。

On the right side of the page, you can see some of the key assumptions driving the general office reserve coverage level. While rate cuts may be beneficial at the margin, we continue to expect this sector to be challenged. We believe our current reserve represents a severe scenario that is much worse than we've seen in historical downturns. So we feel the current coverage is very strong. Additionally, since the second quarter of 2023, we have absorbed $364 million of cumulative losses in the general office portfolio. When you add these cumulative losses to the reserve outstanding, this represents an almost 20% loss rate based on the March 2023 balance of $4.1 billion.

在頁面右側，您可以看到推動一般辦公室準備金覆蓋水平的一些關鍵假設。儘管降息可能帶來一定程度的好處，但我們仍預期該產業將面臨挑戰。我們認為，我們目前的儲備代表著一種嚴峻的情況，比我們在歷史低迷時期看到的情況要糟糕得多。所以我們覺得目前的覆蓋範圍非常強。此外，自 2023 年第二季以來，我們在普通辦公室投資組合中吸收了 3.64 億美元的累積虧損。當您將這些累積損失添加到未償準備金中時，根據 2023 年 3 月的 41 億美元餘額，損失率幾乎達到 20%。

Over the past 6 quarters, we have continued to work down the exposure to general office, with the portfolio down roughly $1 billion over the last 18 months to $3.2 billion at September 30, given paydowns of about $600 million in addition to the charge-offs I just mentioned.

在過去6 個季度中，我們繼續降低一般辦公室業務的風險敞口，投資組合在過去18 個月內減少了約10 億美元，至9 月30 日的32 億美元，考慮到除了沖銷之外還付了約6 億美元我剛才提到了。

Moving to slides 15 and 16. We have maintained excellent balance sheet strength. Our CET1 ratio is a strong 10.6%, which compares with 10.7% in the prior quarter. And if you were to adjust for the AOCI opt-out removal under the current regulatory proposal, our CET1 ratio increased from 9% to 9.2%. Both CET1 and TCE ratios have consistently been above the average of our peers. Given our strong capital position, we repurchased $325 million in common shares, and including dividends, we returned a total of $516 million to shareholders in the third quarter.

轉到投影片 15 和 16。我們的 CET1 比率高達 10.6%，而上一季為 10.7%。如果根據當前監管提案對 AOCI 選擇退出進行調整，我們的 CET1 比率將從 9% 增加到 9.2%。 CET1 和 TCE 比率一直高於同業平均值。鑑於我們強大的資本狀況，我們回購了 3.25 億美元的普通股，包括股息在內，我們在第三季向股東總共返還了 5.16 億美元。

Moving to slide 17. Our strategy is built on a transformed consumer bank that best positioned Commercial Bank among our regional peers and our aspiration to build a premier bank-owned private bank and wealth franchise. First, we have a strong transformed consumer bank with substantial wealth revenue potential that is set to drive further deposit growth while efficiently managing costs and we are well positioned to continue gaining market share in the important New York metro market.

轉向幻燈片 17。首先，我們擁有一家經過轉型的強大消費銀行，具有巨大的財富收入潛力，將在有效管理成本的同時推動存款進一步增長，並且我們處於有利地位，可以繼續在重要的紐約地鐵市場獲得市場份額。

Next, we believe we have built a leading commercial bank among the super regional banks. We are focused on serving sponsors and middle market companies and high-growth sectors of the economy. Our investments over the years in capital markets capabilities and coverage of the private capital space have positioned us well to take advantage when market activity picks up.

接下來，我們相信我們已經建成超級區域銀行中領先的商業銀行。我們專注於為贊助商、中間市場公司和高成長經濟部門提供服務。多年來，我們在資本市場能力和私人資本領域覆蓋方面的投資使我們能夠在市場活動回升時充分利用。

With the Fed beginning to ease and fears of a recession subsiding, the movement in our commercial client base is decidedly more positive, which has us optimistic that we'll see a strong finish to the year and good momentum into 2025. And we are pleased to report that for the third quarter in a row, our capital markets business sits the top of middle-market lead tables, holding the number one sponsor middle market book runner position on a trailing 12-month basis.

隨著聯準會開始放鬆貨幣政策以及對經濟衰退的擔憂消退，我們的商業客戶群的變化顯然更加積極，這讓我們樂觀地認為，我們將看到今年的強勁收官和2025 年的良好勢頭。很高興報告稱，我們的資本市場業務連續第三季度位居中間市場領先榜榜首，在過去 12 個月的基礎上保持著第一大贊助商中間市場賬簿管理人的位置。

Moving to the Private Bank. I'm pleased to report that the effort is going very well and continues to gain momentum. We are growing our client base and now have about $5.6 billion of attractive deposits. This is a $1.6 billion increase from the prior quarter with roughly 34% noninterest-bearing. Also, we are now at $2 billion of loans and continuing to grow. We recently announced the addition of a top private banking team in Southern California, and we have plans to add new offices in the Bay Area, which adds to the offices we've already opened in San Francisco and Mill Valley, California, Palm Beach and Boston. You should expect to see us opportunistically adding talent to bolster our banking and wealth capabilities.

轉向私人銀行。我很高興地向大家報告，這項工作進展順利，並且勢頭不斷增強。我們正在擴大客戶群，目前擁有約 56 億美元的有吸引力的存款。這比上一季增加了 16 億美元，其中約 34% 是無息的。此外，我們現在擁有 20 億美元的貸款，並且還在繼續成長。我們最近宣佈在南加州增加頂級私人銀行團隊，並計劃在灣區增加新辦事處，這是我們在舊金山和米爾谷、加利福尼亞州、棕櫚灘和波士頓。您應該期待看到我們機會主義地增加人才，以增強我們的銀行和財富能力。

Notably, our Private Bank revenue rose 64% to $49.7 million in the third quarter breaking even by mid-quarter. We are on track for the Private Bank to start contributing to earnings in the fourth quarter and add meaningfully to EPS next year.

值得注意的是，第三季我們的私人銀行營收成長了 64%，達到 4,970 萬美元，到季中期達到收支平衡。我們預計私人銀行將在第四季開始為獲利做出貢獻，並大幅增加明年的每股盈餘。

Moving to slide 18. We provide a guide for the fourth quarter. This outlook contemplates a 25 basis point rate cut in each of November and December. We expect NII to be up about 1.5% to 2.5%, driven primarily by a 5 basis point improvement in net interest margin, reflecting the benefit of swaps given lower rates, deposit repricing, noncore runoff and favorable front book back book dynamics partially offset by lower asset yields. Spot loans should be up slightly paced by private bank and commercial sponsor activity. Noninterest income should be up mid- to high single digits reflecting expected seasonal strength in capital markets. Our deal pipelines are robust, and we expect to see a strong finish to the year.

轉到投影片 18。該展望預計 11 月和 12 月分別降息 25 個基點。我們預期NII將上漲約1.5%至2.5%，主要由淨利差改善5個基點推動，反映出掉期帶來的好處，因為較低的利率、存款重新定價、非核心徑流和有利的帳面帳面動態被部分抵銷。由於私人銀行和商業贊助商的活動，現貨貸款應略有增加。非利息收入應會上升到中高個位數，反映出資本市場預期的季節性強勁。我們的交易管道很強勁，我們預計今年將會有一個強勁的收官。

We also expect modest improvements across other key categories. Noninterest expense is projected to be up about 2%, and we expect to achieve positive operating leverage. Net charge-offs are expected to be broadly stable, while the ACL should continue to benefit from noncore runoff and improving loan mix. Our CET1 ratio is expected to be broadly stable with about $200 million to $250 million of share repurchases. I called your attention to an updated slide in the appendix on our medium-term NIM walk which projects us to be in the 3.25% to 3.4% range in 2027.

我們也預期其他關鍵類別會有適度改善。非利息支出預計將成長約 2%，我們預計將實現正營運槓桿。預計淨沖銷將大致穩定，而 ACL 應繼續受益於非核心徑流和改善的貸款組合。我們的 CET1 比率預計將大致穩定，回購股份金額約為 2 億至 2.5 億美元。我提請您注意附錄中有關我們中期 NIM 運行的更新幻燈片，該幻燈片預計我們將在 2027 年處於 3.25% 至 3.4% 的範圍內。

To wrap up, we delivered a solid quarter in a dynamic environment with strong results in capital markets, wealth and card and credit performance that continues to play out largely as expected. We are playing strong defense maintaining a robust capital and reserve position, a high level of liquidity and a more structural long-term funding profile as we prepare for potential regulatory changes and any challenges the environment may bring. Importantly, we are also playing offense as we pursue our unique multiyear strategic initiatives, which will drive improving performance over the medium term. We remain confident in our ability to hit our medium-term 16% to 18% return target.

總而言之，我們在充滿活力的環境中實現了穩健的季度業績，在資本市場、財富、信用卡和信貸表現方面取得了強勁的業績，並且繼續基本符合預期。在我們為潛在的監管變化和環境可能帶來的任何挑戰做好準備的同時，我們正在採取強有力的防禦措施，維持穩健的資本和儲備狀況、高水準的流動性和更具結構性的長期融資狀況。重要的是，當我們追求獨特的多年戰略舉措時，我們也在積極進攻，這將推動中期業績的提高。我們對實現 16% 至 18% 中期回報率目標的能力仍然充滿信心。

With that, I'll hand back over to Bruce.

這樣，我就把任務交還給布魯斯。

Okay. Thank you, John. Alan, let's open it up for some Q&A.

好的。謝謝你，約翰。艾倫，讓我們開始一些問答。

Ladies and gentlemen, we will now begin the Q&A portion of the call. (Operator Instructions) Our first question will come from the line of Scott Siefers with Piper Sandler.

女士們先生們，我們現在開始電話會議的問答部分。 （操作員說明）我們的第一個問題將來自 Scott Siefers 和 Piper Sandler。

I wanted to start off with a couple of questions both related to the margin progression and that medium-term walk to which you alluded on slide 23 as we kind of start to march upward. Maybe first, in the immediate term, can you sort of walk through the puts and takes that allow for the 5 basis points or so of margin expansion into the fourth quarter?

我想從幾個問題開始，這兩個問題都與利潤進展以及您在幻燈片 23 中提到的中期走勢有關，因為我們開始向上前進。也許首先，在短期內，您能否介紹一下允許第四季度利潤率擴張 5 個基點左右的看跌期權和看跌期權？

And then, I guess, more importantly, as we sort of start the journey upward and think about that next year or so, it looks like that 18 basis points of time-based benefits is largely programmatic, which all else equal would get us to like a 2.95.But of course, the wild cards are like the timing of the ebbs and flows of the swaps and the rate-based impact. So maybe if you could sort of help I guess, narrow the cone on the moving parts as we think about the next few quarters, please?

然後，我想，更重要的是，當我們開始向上的旅程並考慮明年左右的時候，看起來18 個基點的基於時間的福利很大程度上是程序化的，在其他條件相同的情況下，這將使我們就像 2.95 一樣。因此，我想，如果您能提供一些幫助，請在我們考慮接下來的幾個季度時縮小移動部件上的錐體，好嗎？

Yes, sure. Thanks for the question, Scott. I'd say starting off with the fourth quarter. I mean, I think when you think about the progression there, 1 of the drivers -- several drivers of tailwinds that we're seeing. First off, I would highlight noncore, which continues to contribute about 2 basis points a quarter. And so that's the starting point. I think the second big driver is broadly the active balance sheet management, fixed asset repricing and front book back book that continues to play out on -- will continue to play out every quarter going forward. And that's a huge contributor.

是的，當然。謝謝你的提問，斯科特。我想說從第四季開始。我的意思是，我認為當你考慮那裡的進展時，其中一個驅動因素 - 我們看到的幾個順風驅動因素。首先，我要強調非核心，它每季持續貢獻約 2 個基點。這就是起點。我認為第二大驅動力總體上是積極的資產負債表管理、固定資產重新定價和帳面帳面帳簿繼續發揮作用，並將在未來每個季度繼續發揮作用。這是一個巨大的貢獻者。

I'll offer up one of the highlights of the balance sheet transition as you get into the fourth quarter also relates to deposit migration. We've had negative deposit migration throughout the cycle. That's been kind of declining over time. And we're seeing late third quarter, early fourth quarter trends that tell us that, that's going to flip around to be more of a neutral, maybe a slightly positive going into the fourth quarter. And that's really significant for that to become less of a headwind than it's been. And given what's been going on in the past.

當你進入第四季時，我將提供資產負債表轉型的亮點之一也與存款遷移有關。我們在整個週期中都出現了負存款遷移。隨著時間的推移，這種情況一直在下降。我們看到第三季末、第四季初的趨勢告訴我們，進入第四季度，情況將變得更加中性，甚至可能略有積極。這對於減少逆風來說非常重要。考慮到過去發生的事情。

Just on the color on that, let me just jump in here, John. But we have the Private Bank continuing to generate very attractive deposits, and they've been growing well over $1 billion in $1.5 billion range the last 2 quarters. So that will be positively benefiting that mix. And then typically, seasonally, in the fourth quarter, we'll see an uptick in both commercial and consumer in terms of demand deposits. So we're counting on that as part of the equation.

就顏色而言，讓我跳到這裡，約翰。但我們的私人銀行繼續產生非常有吸引力的存款，並且在過去 2 個季度中，存款成長遠遠超過 10 億美元，達到 15 億美元。因此，這將對這種組合產生積極的好處。然後，通常情況下，季節性地，在第四季度，我們會看到商業和消費者的活期存款都有所增加。所以我們指望它作為等式的一部分。

Absolutely. And I think just playing on that a little further. I mean, I think we are -- the other big category, we are slightly asset sensitive, but based on the noncore and those balance sheet trends that we just talked about those are more powerful. And are -- you got to keep in mind that the receipt swaps, which have been a headwind are going to flip over to a tailwind and be a mitigant to our asset sensitivity going forward. So they'll actually contribute into the fourth quarter. And so one of the important things we're also doing is being extremely proactive on down betas.

絕對地。我認為只是進一步發揮這一點。我的意思是，我認為我們是 - 另一個大類別，我們對資產稍微敏感，但基於非核心和我們剛才談到的資產負債表趨勢，這些趨勢更強大。而且你必須記住，收據掉期一直是逆風，它將轉變為順風，並減輕我們未來的資產敏感性。所以他們實際上會對第四季做出貢獻。因此，我們正在做的重要事情之一就是非常積極地進行測試。

Just taking all the learnings from prior cycles and what you've seen from our deposit portfolio, where our deposit betas on the up are now better than peer average from what we can tell. We're flipping all of that energy and capability into the down beta management being highly proactive in the consumer side of things.

只需吸取先前週期的所有經驗教訓以及您從我們的存款投資組合中看到的信息，我們可以看出，我們的存款貝塔值現在優於同行平均水平。我們正在將所有精力和能力投入到測試管理中，在消費者方面保持高度主動。

And on the commercial side, most of our deposits there are -- the majority of them are 100% beta anyway. But we're feeling really good about how we're really pouncing on this transition to a downgrade cycle. And all of that, when you add all that up, that gives us confidence that we're going to achieve that 5 basis points. And as I may mentioned earlier, the late 3Q trends and the early 4Q trends are very consistent with that trajectory. So that's the 4Q.

在商業方面，我們的大部分存款——無論如何，其中大部分都是 100% 貝塔值。但我們對如何真正抓住向降級週期的過渡感到非常滿意。所有這些，當你把所有這些加起來時，這讓我們有信心我們將實現這 5 個基點。正如我之前提到的，第三季末的趨勢和第四季初的趨勢與該軌跡非常一致。這就是第四季。

I think the second -- there are similar themes, but the second question was take me out to the fourth quarter of 25%. And you're right. If you look at the $277 million in 3Q, you're at the 18 basis points, that's really time-based, and it's just really baked in. We'll get to $295 million. And there's another, call it, I'd say in the neighborhood of 5-ish basis points of benefit that we can really expect such that we can get in that neighborhood of 3% NIM in the fourth quarter of '25 and the drivers are very similar. The tailwinds related to the growing front book back book.

我認為第二個問題——也有類似的主題，但第二個問題是帶我到第四季的 25%。你是對的。如果你看看第三季的 2.77 億美元，你會發現這是 18 個基點，這確實是基於時間的，而且它真的已經融入了。還有另一個，我想說的是，在 5 個左右基點的收益附近，我們確實可以預期，這樣我們就可以在 25 年第四季度達到 3% 的淨息差 (NIM)，驅動因素是非常相似。順風與不斷增長的前書後書有關。

And when you think about our fixed loan portfolio and securities as that turns over under a wide range of rate scenarios, which is more kind of focused on longer end rates where the 10 year is going to end up in 5-year rates. We end up with anywhere from 200 to 300 basis points of front book back book benefit for as that turns over every quarter, so over the next 5 quarters, that's a driver that we feel very good about. Our strategic initiatives on the deposit side with respect to Private Bank at New York Metro continue to contribute.

當你考慮我們的固定貸款投資組合和證券時，它們會在各種利率情景下週轉，這更側重於長期利率，其中 10 年期利率最終將達到 5 年期利率。隨著每個季度的周轉，我們最終會獲得 200 到 300 個基點的前帳面收益，因此在接下來的 5 個季度中，這是我們感覺非常好的驅動因素。我們在存款方面針對紐約地鐵私人銀行的策略性舉措持續做出貢獻。

And when you add all that up, we end up with what we think is something nearing 3% by the end of '25 and we still have a lot of downrate protection on. Keep in mind, we've got our swap portfolio is largely intact through the middle of 2026. So we remain pretty well protected and slightly asset sensitive. But all those other factors offset it and give us a net positive as you get into the end of '25.

當你把所有這些加起來時，我們認為到 25 年底我們最終會得到接近 3% 的數字，而且我們仍然有很多降價保護。請記住，到 2026 年中期，我們的掉期投資組合基本上完好無損。但所有其他因素都抵消了這一影響，並在進入 25 年底時為我們帶來了淨利好。

Yes, the one other thing is to the fourth quarter lift and then would add to that target as well.

是的，另一件事是第四季的提升，然後也會增加該目標。

Matt O'Connor with Deutsche Bank.

德意志銀行的馬特·奧康納。

I guess just to drill down on the net interest income coming in weaker than kind of your thought maybe a month ago. Was that a bigger head cut and a little bit less loan growth? And kind of and then all the positive trends that you said is what we should expect from here? Or was there something help to throw out there, too?

我想只是為了深入了解淨利息收入可能比您一個月前的想法要弱。這是一個更大的削減和稍微減少的貸款增長嗎？您所說的所有正面趨勢都是我們應該期待的嗎？或者還有什麼東西可以丟掉嗎？

Yes. I'd say we are slightly asset sensitive. So 50, maybe a little bit more kind of than we expected. But I'd say that the deposit trends 3Q, in the trajectory of low-cost migration came down during the quarter, but they may be a little bit than we expected. And so I think we got to the end of the quarter where we expected, but the average for the quarter in terms of migration was a little higher than we were thinking. But as I mentioned, that is now flipping around and as you look at the late September, early October trends that it was almost -- the bell went off there when the Fed pull the 50 basis point lever, we really are seeing that low-cost migration really flip to more of a neutral to slight positive. And so that's really what you can see going into 4Q.

是的。我想說我們對資產有點敏感。 50，也許比我們預期的要好一些。但我想說的是，第三季的存款趨勢，在低成本遷移的軌跡中，在本季度有所下降，但可能會比我們預期的要小一些。因此，我認為我們已經達到了預期的季度末，但該季度的平均遷移率比我們想像的要高一些。但正如我所提到的，現在情況正在發生逆轉，當你看看 9 月底、10 月初的趨勢時，當聯準會拉動 50 個基點槓桿時，鐘聲就響起了，我們確實看到了低點——成本遷移實際上轉向中性至輕微積極。這就是您在第四季度所看到的情況。

And then on volume, too, I think we we anticipated a little more loan growth that, I'd say, we had nice loan growth in the Private Bank, but not maybe quite as much as we thought. I think that's really just timing. And as rates come down, that will continue to pick up similarly on commercial bank. We thought we'd see a little faster rebound in line utilization, particularly on the sponsor side. We're starting to see that. So again, I think that's kind of on the come and should -- that's why we have an outlook in the guide that fourth quarter, we should start to see slight growth in our spot loans, even comprehending the noncore rundown.

然後在數量上，我認為我們預計貸款增長會更多一些，我想說的是，我們在私人銀行的貸款增長不錯，但可能沒有我們想像的那麼多。我認為這確實只是時機。隨著利率下降，商業銀行的利率將繼續回升。我們認為線路利用率會出現更快的反彈，特別是在贊助商方面。我們開始看到這一點。所以，我再次認為，這即將到來，而且應該如此——這就是為什麼我們在第四季度的指南中展望，我們應該開始看到我們的現貨貸款略有增長，甚至包括非核心貸款的縮減。

Okay. And then separately, how do you think about operating leverage kind of more medium term? Obviously, like just income could be a bigger driver dollar-wise, if we just look at fourth quarter to kind frame it, you're guiding to revenues up about 3.5% versus costs up [2%] So 150 bps of operating leverage, but that's more driven by fees. Just thoughts on medium term how much operating leverage would you envision?

好的。然後，您如何看待更中期的營運槓桿？顯然，就像收入可能是美元方面更大的驅動力一樣，如果我們只看第四季度來進行框架，你會指導收入增長約3.5%，而成本增長[2%]，因此運營槓桿為150 個基點，但這更多是由費用驅動的。就中期而言，您設想的營運槓桿是多少？

Yes. I mean I think we'll talk more about this in January. But I mean, I think we have significant opportunity for operating leverage. When you look at the net interest margin reflating to that $3.25 to $3.40 range provides significant tailwinds and consistent operating leverage over time. We'll come back in January and frame that for you a little more in terms of what we expect in 2025.

是的。我的意思是，我想我們會在一月份更多地討論這個問題。但我的意思是，我認為我們有很大的營運槓桿機會。當您觀察淨利差重升至 3.25 美元至 3.40 美元的範圍時，您會發現隨著時間的推移，淨利差將帶來顯著的推動力和一致的營運槓桿。我們將在 1 月回來，根據 2025 年的預期為您提供更多框架。

The best thing about the NIM reflation is that there's no real cost of goods sold in terms of the impact on expenses. So that pretty much drops straight through. I think there's clearly going to be continued growth in fees led by capital markets, some of the things we're doing in the payments business, some of the exciting developments in our wealth business but those usually come with payouts and investments on the expense side. But Nonetheless, I think the operating leverage should be quite positive when we look out over that 25 to 27 period.

淨利差通貨再膨脹的最大好處是，就對費用的影響而言，沒有銷售商品的實際成本。所以這幾乎是直接通過的。我認為資本市場主導的費用顯然將持續成長，我們在支付業務中所做的一些事情，我們財富業務中的一些令人興奮的發展，但這些通常伴隨著費用方面的支出和投資。但儘管如此，我認為當我們展望 25 至 27 年期間時，營運槓桿應該相當積極。

Brendan, maybe you could add couple comments.

布倫丹，也許你可以添加一些評論。

One other comment I mentioned on the Private Bank is just remember that the cost base that we're working our way through right now is fixed on the short-term basis with the comp guarantees that we've given to the team. So as the revenue grows, we're kind of earning our way through the comp guarantees. So that's all straight positive operating leverage linked quarter where the revenue is coming without necessarily incremental expenses because we've essentially put that in.

我提到的關於私人銀行的另一條評論是，請記住，我們現在正在努力解決的成本基礎是在短期基礎上固定的，並提供給團隊的補償保證。因此，隨著收入的成長，我們可以透過補償保證來賺錢。因此，這都是與直接正營運槓桿相關的季度，收入的到來不一定會增加支出，因為我們基本上已經將其計入其中。

And then over time, that will work their way through the guarantee and we get the right scale, they'll grow with further linkage together.

然後隨著時間的推移，這將透過保證發揮作用，我們獲得適當的規模，他們將透過進一步的聯繫而成長。

Yes. Good point.

是的。好點。

John Pancari with Evercore.

約翰潘卡里 (John Pancari) 與 Evercore。

Bruce, you just talked about the loan growth dynamics of (inaudible). And maybe if you could just elaborate a little bit more on your confidence in that you're seeing this inflection in demand here that should drive a modest growth in the fourth quarter. What is the bigger catalyst? Is it the rate cut? Is it clarity you expect around the election? And then -- can you maybe help us think about where like the type of acceleration in overall loan growth that you expect you could see going into -- or as you look at 2025?

布魯斯，您剛才談到了（聽不清楚）的貸款成長動態。也許您可以詳細說明您的信心，因為您看到這裡的需求變化應該會推動第四季度的溫和成長。更大的催化劑是什麼？是降息嗎？您期望選舉結果明朗嗎？然後，您能否幫助我們思考您預計會看到的整體貸款成長加速類型，或者您展望 2025 年的情況？

Yes. Let me start, and then I'm going to pass it to Don and Brendan to talk about their segments and their outlooks. But we're not calling for any heroics here in fourth quarter. So I think the guide is pretty much derisked from meeting significant step-up in loan growth. But it is, I think, worth noting that we're starting to see things build a bit. We said our biggest quarterly increase in the Private Bank and the pipeline is looking pretty good. So I think that will continue.

是的。讓我開始，然後我將把它交給 Don 和 Brendan，讓他們談談他們的細分市場和前景。但我們並不要求第四季出現任何英雄行為。因此，我認為該指南幾乎不會面臨貸款成長大幅成長的風險。但我認為值得注意的是，我們開始看到事情有所進展。我們表示，我們的私人銀行季度增幅最大，而且管道看起來相當不錯。所以我認為這種情況將會持續下去。

And I think there, as rates come down, folks are willing to transact and borrow. I think it's a similar thing in the Commercial Bank, where there's lots of interest in private equity kind of starting to realize some exits and put some money to work -- that's -- so we see it by the amount of conversations that we're privy to with clients, but it's starting to build. But really, the dam has not broken yet. And so I think we'll see that trend continue to flex up. But let me start first with Don and then maybe, Brendan, you could pick up a second.

我認為，隨著利率下降，人們願意進行交易和借貸。我認為商業銀行也有類似的情況，那裡對私募股權有很多興趣，開始實現一些退出並投入一些資金——那就是——所以我們從我們正在進行的對話數量中看到了這一點。 ，但它正在開始建立。但實際上，大壩還沒有潰決。所以我認為我們會看到這種趨勢繼續上升。但讓我先從 Don 開始，然後，Brendan，你也許可以再講第二個。

Yes. I think you said it, Bruce. The leader in the clubhouse is subscription lines where we saw some very strong growth late quarter, and we're continuing to see it into the fourth quarter. And that's not really leveraged by us that we're doing. It's just activity in the private equity space that we're seeing build, and we've seen a pretty nice utilization bump in that business.

是的。我想你已經說過了，布魯斯。俱樂部會所的領先者是訂閱線，我們在季度末看到了一些非常強勁的成長，並且我們將繼續看到它進入第四季度。我們正在做的事情並沒有真正利用這一點。我們看到的只是私募股權領域的活動，而且我們已經看到該業務的利用率出現了相當不錯的成長。

We haven't really seen it in C&I yet, but the conversations we're having with our core C&I clients, particularly in the middle market, with the economy kind of stabilizing rates coming down, it's just a general level of confidence that the business environment is going to be better as we get into '25, and that will result in more working capital utilization, more investment in their businesses.

我們還沒有真正在 C&I 中看到這一點，但我們與核心 C&I 客戶進行的對話，特別是在中間市場，隨著經濟穩定利率的下降，這只是企業的普遍信心水平當我們進入25 世紀時，環境將會變得更好，這將導致更多的營運資金利用率，更多的業務投資。

And remember, one of the things John said, one of the downdrafts we've had against kind of core loan growth has been a lot of activity where companies have been refinancing in the public securities markets. So we've seen stuff that's been on our balance sheet being refinanced, and good for our fee lines. But it's put a little bit pressure on core asset levels. So -- we think a lot of that is behind us now. So the net growth we'll see in the core book should begin to grow as we get into '25.

請記住，約翰說過的一件事是，我們對核心貸款成長的不利影響之一是公司在公共證券市場上進行的大量再融資活動。因此，我們已經看到資產負債表上的東西得到了再融資，這對我們的費用線有利。但這對核心資產水準造成了一些壓力。所以——我們認為現在很多事情都已經過去了。因此，當我們進入 25 世紀時，我們將在核心書中看到的淨增長應該開始增長。

Brendan?

布倫丹？

Yes, I'll quickly hit on consumer and then private banking. On the consumer side, I just would remind folks at the pace of rundown on non-core is turning into a net positive. So last year, at this time, we were running off [$1.2 billion, $1.3] billion a quarter, and now we're in the consumer book and now we're in the $800 million to $900 million. So that's -- the linked quarter rundown is slowing a bit and that will continue into the future. And when we look at the growth portfolios, we're seeing decent growth in mortgage and home equity.

是的，我很快就會談到消費者銀行業務，然後是私人銀行業務。在消費者方面，我只是想提醒人們，非核心業務的縮減速度正在轉變為淨積極的。所以去年這個時候，我們每季虧損[12億美元、13億美元]，現在我們進入了消費者帳戶，現在我們進入了8億至9億美元。因此，相關季度的下滑速度有所放緩，並且這種情況將持續到未來。當我們審視成長投資組合時，我們發現抵押貸款和房屋淨值出現了可觀的成長。

And as rates pull back a little bit, we expect to see a modest pickup in mortgage originations activity. But as everybody knows, the majority of the country is locked into 3%-ish mortgage rates. And so our HELOC business is incredibly well positioned. We've got a real strength in that business where we're the very top of the league tables and national HELOC originations in the super prime space, and you'll continue to see that grow.

隨著利率略有回落，我們預計抵押貸款發放活動將小幅回升。但眾所周知，該國大部分地區的抵押貸款利率都被鎖定在 3% 左右。因此，我們的 HELOC 業務處於非常有利的位置。我們在該業務中擁有真正的實力，我們在超級黃金領域的排名中名列前茅，並且是全國 HELOC 的起源，而且您將繼續看到這種增長。

And I believe that product, it will be a main lever for US consumers as the economy gets more confidence in footing for consumers to borrow against record equity in their homes that's been built up over the last 5 or 6 years. So we expect that to continue.

我相信該產品將成為美國消費者的主要槓桿，因為經濟對消費者更有信心，可以利用過去五、六年建立的創紀錄的房屋淨值進行借貸。所以我們預計這種情況會持續下去。

The other tailwind -- headwind moving to a tailwind is likely student in a modest way with high rates student loan refinance product has been all that sidelined. And now with the federal government not collecting payments again on that portfolio and rates coming back down, we should see more late 20s, early 30 year olds who have great credit coming back in the money that see value in restructuring their student loan debt. So we're expecting that to modestly pick up. as we get into next year.

另一個順風——逆風轉變為順風可能是學生以溫和的方式，高利率的學生貸款再融資產品一直被邊緣化。現在，隨著聯邦政府不再就該投資組合收取付款且利率回落，我們應該會看到更多擁有良好信用的20 歲末、30 歲出頭的人重新獲得資金，他們看到了重組學生貸款債務的價值。因此，我們預計這一數字將小幅回升。當我們進入明年。

On the Private Bank side, it's a little bit of the same story. Rates pulling back should really put more customers an attractive place to use credit. And right now, we're seeing a lot of cash transactions, whether it's on the resi side or business is sitting on the sidelines, and we're hearing very strong feedback. But as rates pull back, they'll be more comfortable using credit versus just going cash temporarily on whether it's an investment home or facilitating business growth given that high net worth and ultrahigh net profile of that customer base.

在私人銀行方面，情況也有些相似。利率回落確實應該讓更多客戶成為使用信貸的有吸引力的地方。現在，我們看到大量的現金交易，無論是黃金交易還是觀望交易，我們都聽到了非常強烈的回饋。但隨著利率回落，考慮到該客戶群的高淨值和超高淨資產，他們會更願意使用信貸，而不是暫時使用現金，無論是投資房屋還是促進業務成長。

So we've got good confidence that the rate dynamic should drive a decent amount of embedded demand. And as everybody knows, we've also went to market very strong on the deposit side. We've been very focused on getting the operations up. There's a progression here on earning the customer's full wallet of do the day-to-day banking really well. Now they'll come from borrowing needs and then we'll build a dislodge well. So there's a natural sort of earned wallet share gain that we anticipate getting as we get into next year on the private banking side that will be supported by the rate environment.

因此，我們很有信心，利率動態應該會推動相當數量的嵌入需求。眾所周知，我們在存款方面的市場表現也非常強勁。我們一直非常專注於恢復營運。在贏得客戶的全部錢包以及做好日常銀行業務方面取得了進展。現在它們將來自借貸需求，然後我們將建造一口排水井。因此，我們預計明年私人銀行業務將獲得自然的錢包份額收益，這將得到利率環境的支持。

Okay. Great. And then a quick second one on credit. Can you just talk about the confidence that I believe you indicated that you've seen, you believe NPAs are peaking here this quarter. Maybe your confidence there, what gives you that? And then also on the confidence in the broadly stable charge-offs with the third quarter as you look at fourth quarter. I know your auto delinquencies were up pretty sharply year-over-year. So that would be beyond the seasonality. So I'm interested in what drove that and then thoughts on the reserve going forward?

好的。偉大的。然後快速賒購第二筆。您能否談談您所表現出的信心，您認為不良資產將在本季達到頂峰。也許你有信心，是什麼給了你這樣的信心？然後，當您觀察第四季時，也對第三季大致穩定的沖銷充滿信心。我知道你們的汽車拖欠率逐年大幅上升。所以這超出了季節性。所以我感興趣的是什麼推動了這一點，然後對保護區的未來有何想法？

Yes. Maybe I'll start, and then we'll pass it around whoever wants to jump in, feel free. But yes, I'd say the big issue that's well known that we've been managing through is the general office portfolio. And that one is going to -- it's a multi-quarter workout that has commenced in '23, it's with us all through '24. It will be with us for a good chunk of 25%. And we think we've got our arms fully around that. We've got very heavy reserves there.

是的。也許我會開始，然後我們會把它傳遞給任何想加入的人，請隨意。但是，是的，我想說的是，我們一直在解決的眾所周知的大問題是綜合辦公室投資組合。這是一項從 23 年開始的多季訓練，我們所有人都會持續到 24 年。我們將獲得 25% 的大部分份額。我們認為我們已經全力支持這一點。我們在那裡有大量儲備。

We've got our best people working with borrowers to try to come up with mutually satisfactory outcomes. But the timing of when you recognize the charge-offs and when something might go moves around a bit, and it's not always in our control. If a borrower decides to put a property up for sale then there are certain actions we have to take in terms of NPA recognition or charge-off recognition. So this quarter, we were on the low end of CRE charge-offs and we had a blip in CRE NPAs.

我們擁有最優秀的人員與借款人合作，努力達成雙方都滿意的結果。但是，當你認識到沖銷的時間以及何時可能發生某些事情的時間會有所不同，並且並不總是在我們的控制範圍內。如果借款人決定出售房產，那麼我們必須在 NPA 確認或沖銷確認方面採取某些行動。因此，本季度，我們的商業房地產沖銷處於低端，商業房地產不良資產也出現了波動。

But having said that, the problem loan population that we're managing is pretty consistent. And so one of the things we take comfort in is when we look at criticized and classified loans across the board in commercial, they've been pretty stable now for four quarters. So that's the big thing. I'll see, Don, if you want to add any color on the CRE and then, Brendan, if anything on the delinquencies.

但話雖如此，我們管理的問題貸款群體相當一致。因此，令我們感到安慰的一件事是，當我們全面審視商業領域受到批評和分類的貸款時，它們現在已經連續四個季度保持穩定。所以這才是大事。唐，我會看看你是否想在 CRE 上添加任何顏色，然後，布蘭登，如果有關於拖欠的內容。

I think that's exactly right, Bruce. I think that we've seen, what, zero surprises in our credit book for the last 4 quarters, and it's playing out exactly as we thought it was going to play out. And as Bruce said, we'll have charge-offs going through the general office portfolio for the next several quarters, but it's pretty much playing out as we expected. We had a little bit of a blip in C&I charge-off this quarter, which was things that have been in the workout teams for literally five, six, seven years, and they just happened to resolve this quarter.

我認為這是完全正確的，布魯斯。我認為我們已經看到，過去 4 個季度我們的信用簿中出現了零意外，而且它的表現與我們預期的完全一致。正如布魯斯所說，我們將在接下來的幾個季度對一般辦公室投資組合進行沖銷，但這幾乎符合我們的預期。本季我們在 C&I 沖銷方面遇到了一些小問題，這些問題在訓練團隊中已經存在了五年、六年、七年，而他們恰好在本季度得到了解決。

So I don't worry a lot about NPA moves, what I focus on is the class levels and the fact that those have been stable. The other thing we're seeing in the general real estate area is not in general office, but in general real estate. There's a lot of liquidity coming back into the marketplace. So it's accelerating our ability to move down the overall exposures in the book, which you know is a strategic matter or something that I want to do. And we're seeing nothing in the C&I book and broadly that is disturbing to us at all, that's quite healthy from an overall credit standpoint.

所以我不太擔心 NPA 的變動，我關注的是班級水平以及這些水平一直穩定的事實。我們在一般房地產領域看到的另一件事不是一般辦公室，而是一般房地產。有大量流動性回到市場。因此，它正在加速我們降低書中整體曝光的能力，你知道這是一個策略問題或我想做的事情。我們在 C&I 書中沒有看到任何讓我們感到不安的內容，從整體信用的角度來看，這是相當健康的。

Yes. Consumer is broadly normalized and pre-COVID we're between 50 and 55 basis points in net charge-offs. And that's where we are now. And while there's always a little bit of puts and takes. There's nothing that we're observing in the portfolio that's making me lose any sleep.

是的。消費者普遍正常化，在新冠疫情爆發之前，我們的淨沖銷幅度在 50 到 55 個基點之間。這就是我們現在的處境。雖然總是有一些投入和拿取。我們在投資組合中沒有觀察到任何讓我失眠的事情。

And your question on auto, a couple of comments. One would be -- last quarter was -- on the charge-off side was very low, seasonally impacted, but also we had a very strong recovery month in used value. So this quarter was much more just a reversion to the mean. The other dynamic I would mention in auto, it's tough to read into published delinquency numbers, even though delinquency is relatively in check. But when you're not originating anymore, it takes 12 to 18 months for a vintage curve to build up to its appropriate steady state and delinquency.

關於你關於汽車的問題，我提幾點意見。一個是——上個季度——沖銷方面非常低，受到季節性影響，但我們的使用價值也有一個非常強勁的復甦月份。因此，本季更像是平均值的回歸。我要在汽車領域提到的另一個動態是，儘管拖欠率相對受到控制，但很難解讀公佈的拖欠率數據。但是，當您不再發起時，老式曲線需要 12 到 18 個月才能達到適當的穩定狀態和拖欠率。

So when you shut the pick it off on new originations, it's just a denominator issue that you've got other origination vintages that are normally progressing along their lines to our ultimate expected loss number and you're not getting the denominator benefit of a bunch of new flow coming in that has zero delinquencies. So when you decompose all that there's really nothing that we're worried about whatsoever in the auto portfolio.

因此，當您關閉新產地的選擇時，這只是一個分母問題，因為您擁有其他產地年份，這些年份通常沿著其路線發展到我們的最終預期損失數字，而您卻沒有獲得大量的分母收益新增流量的拖欠率為零。因此，當你分解所有這些時，我們實際上不需要擔心汽車投資組合中的任何內容。

Erika Najarian with UBS.

瑞銀 (UBS) 的 Erika Najarian。

My first question is for you, John. On the 10-Q, you had $30 billion of notional received fixed peso for swaps for both 3Q and 4Q and $30.9 billion for 2025. Obviously, slide 24 would indicate lower notionals. Could you give us an update on whether you terminated those swaps. And maybe confirm the accounting for the swaps and that you would just -- those losses are crystallized and they would be in your NII for the duration of the swap life and then just as a follow-up, you mentioned a 3% NIM by 4Q '25. How many rate cuts would you need to ensure yourself of getting to that 3% level?

我的第一個問題是問你的，約翰。在第 10 季度，您有 300 億美元的名義收到固定比索用於第三季度和第四季度的掉期，以及 2025 年的 309 億美元。您能否向我們提供有關您是否終止這些互換的最新資訊？也許確認掉期的會計處理，你會——這些損失已經具體化，它們將在掉期壽命期間包含在你的NII中，然後作為後續行動，你提到到第四季度NIM為3% '25 。您需要降息多少次才能確保達到 3% 的水平？

Yes. I'll take those. So yes, I think during the third quarter, as you may recall, there was a period of time when the yield curve was discounting as many as 7 or 8 cuts over -- through the second quarter of next year was pretty aggressive, expectation of the pace of Fed rate cuts. We happen to have about $4 billion of short-dated receive-fixed swaps that were maturing in May of '25. And so what we opportunistically chose to do was to terminate $4 billion of swaps during the third quarter in an environment where there was approximately 7 or 8 cuts that we locked in that benefit given the swaps are very short dated and really, we're only providing downrate protection through May, we felt like that, that was a good risk reward to lock in that benefit and lock in the contribution and protection against lower rates that the swaps were there to cover in the first place.

是的。我會接受那些。所以，是的，我認為在第三季度，正如你可能還記得的那樣，有一段時間，收益率曲線貼現了多達 7 或 8 次削減——到明年第二季度是相當激進的，預期美聯儲降息的步伐。我們碰巧有大約 40 億美元的短期接收固定互換，將於 2025 年 5 月到期。因此，我們機會主義地選擇做的是在第三季終止40 億美元的互換，在大約有7 或8 次削減的環境下，我們鎖定了該利益，因為互換的日期非常短，而且實際上，我們只是提供整個五月的降息保護，我們認為，這是一個很好的風險回報，可以鎖定該收益，並鎖定掉期首先要涵蓋的較低利率的貢獻和保護。

Out the window. There are fewer cuts through May. So at least at this point, that was a round trip positive for us to move on from those swaps, and they did exactly what they were intended to do, was to create that protection. The accounting aspects of it are that we amortize the impact of that over the remaining life of the swaps through May. So that will be amortized through but that impact will be, again, a lower impact or a more favorable impact than otherwise would be the case that we were to have held the swaps. And so that was the point of the terminations. So that's that one.

窗外。五月份的削減數量較少。因此，至少在這一點上，這對我們從這些互換中繼續前進是一次積極的往返，而且他們確實做了他們想要做的事情，那就是創造這種保護。從會計角度來看，我們將其影響攤銷到 5 月的掉期剩餘期限內。因此，這將被攤銷，但這種影響將再次比我們持有掉期的情況更低或更有利的影響。這就是終止的重點。這就是那個。

And I think the second question was about 3% (inaudible) cuts. And the rate environment that we would -- there's a range of rate environments that would still be consistent. With that. I mean I would say that we have a slightly asset-sensitive position. So net interest margin is stable across a range of rate environments into '25 given the swap portfolio, it doesn't begin to drop off until mid-2026. So I mean, the forward curve out the window implies getting to around 350 by the end of '25, but we would be able to achieve that 3% at rate environments that would be below that level as well.

我認為第二個問題是大約 3%（聽不清楚）的削減。我們希望的利率環境—有一系列利率環境仍然保持一致。就這樣。我的意思是，我們的立場對資產稍微敏感。因此，考慮到掉期投資組合，淨利差在 25 年的一系列利率環境中保持穩定，直到 2026 年中期才會開始下降。所以我的意思是，窗外的遠期曲線意味著到 25 年底將達到 350 左右，但我們也能夠在低於該水準的利率環境下達到 3%。

Got it. And my follow-up question is twofold. First, could you explain the more favorable impact? I think I was thinking that as I amortize that impact of the terminated swap, it would just be the difference between the SOFR and received fixed rate through May 2025.

知道了。我的後續問題是雙重的。首先您能解釋一下更有利的影響嗎？我認為，當我攤銷終止掉期的影響時，這只是 SOFR 與 2025 年 5 月之前收到的固定利率之間的差額。

So John, maybe give us some insight on what the more favorable treatment would be. And then just secondly, I just wanted to follow up. I think that there are a lot of questions over being able to achieve that NIM expansion for next quarter, which you've explained well. I just wanted to sort of nail down what kind of deposit beta you are assuming in that $2.82 number for next quarter?

約翰，也許可以給我們一些關於什麼是更優惠的待遇的見解。其次，我只是想跟進。我認為對於能否實現下個季度的淨利差擴張存在許多問題，您已經對此進行了很好的解釋。我只是想確定下個季度 2.82 美元的存款貝塔值是多少？

Yes. So again, so when you terminate the swap, you basically terminate based upon the forward curve that's assumed at the time. And so the forward curve at that.

是的。再說一遍，當您終止掉期時，您基本上是根據當時假設的遠期曲線來終止的。遠期曲線也是如此。

That's the difference -- got it.

這就是區別——明白了。

Okay. Yes. And so yes. Got it. And then the -- on the NIM expansion into the fourth quarter, highly proactive focus on this is going to get our deposit beta to be up to around nearing 40% by the end of the quarter. You've got all of the 100% beta stuff in commercial leading the way, but we're being highly proactive in consumer as well and just really taking all the learnings over the cycle over the last many years and applying that to how we continue to be able to drive solid deposit growth at a really attractive cost of funds. So that's the number that's baked in about 40% deposit beta in 4Q.

好的。是的。所以是的。知道了。然後，關於淨利差擴展到第四季度的情況，高度主動地關注這一點將使我們的存款貝塔值在本季度末達到接近 40% 左右。商業領域所有 100% 測試版的東西都處於領先地位，但我們在消費者方面也非常積極主動，並且真正吸取了過去多年周期中的所有經驗教訓，並將其應用到我們如何繼續下去能夠以極具吸引力的資金成本推動存款穩健成長。這就是第四季約 40% 的存款貝塔值中得出的數字。

Got it. Thanks so much for the straightforward answer. Appreciate it.

知道了。非常感謝您的簡單回答。欣賞它。

Manan Gosalia, Morgan Stanley.

馬南‧戈薩利亞，摩根士丹利。

I wanted to follow up on the deposit beta question. Do you have any more specifics on what your spot deposit rates are now that we're a month past the Fed rate cut how you expect that deposit beta to traject as we get further into the Fed rate cut cycle, right? So as we get -- as we get as more Fed rate cuts are behind us, does that make it easier or more difficult to continue to drop your deposit rates going forward?

我想跟進存款測試版問題。您是否有更多關於現貨存款利率的具體信息，距離美聯儲降息已經過去一個月了，您預計隨著我們進一步進入美聯儲降息週期，存款貝塔值將如何變化，對嗎？因此，隨著聯準會進一步降息的結束，繼續降低存款利率會變得更容易還是更困難？

I mean I think if you kind of do the math there, if you -- based on the forward -- from the forward curve that we'll have 2 more Fed cuts in 4Q and we're using a curve that was after nonfarm payrolls from a week or 2 ago. But after nonfarm payrolls, you've got the two cuts. Based on that curve, and if you apply a 40% beta to what you think the average SOFR rate would be in 4Q versus 3Q, you can come up with the decline in net interest-bearing deposit costs on that basis.

我的意思是，我認為如果你在那裡做數學計算，如果你——基於遠期——從遠期曲線來看，我們將在第四季度再進行兩次美聯儲降息，並且我們使用的是非農就業數據之後的曲線從一、兩週前開始。但在非農就業數據之後，你就得到了兩次削減。根據該曲線，如果您將 40% 的貝塔值應用於您認為的第四季度與第三季度的平均 SOFR 利率，您可以在此基礎上得出淨計息存款成本的下降。

And second question, what was the second part of that question?

第二個問題，問題的第二部分是什麼？

The second part of the question was just as we get into -- as we get into, say, the middle of next year and we have a series of Fed rate cuts behind us. Does that make it easier to continue to drop deposit rates? Or does it make it harder to drop deposit rates because there's fewer cuts in the forward curve front there?

問題的第二部分是，當我們進入明年年中時，聯準會將進行一系列降息。這是否會讓繼續降低存款利率變得更容易？還是因為遠期曲線前端的削減較少，所以降低存款利率變得更加困難？

I think the way to think about that is the longer the down cycle lasts, the more you can continue to contribute to ongoing lowering of deposit costs, but broadly, I think what we've said in the past was that our down cycle betas are going to approximate our cycle -- so around 50 to 55. And so we're going to be around 40 by the end of the fourth quarter, and it will gradually migrate to that 50 to 55 over the cutting cycle that's going to proceed over the -- in the coming years. And so you can kind of think about that gradual improvement in that way, I think.

我認為思考這個問題的方法是，下行週期持續的時間越長，你就越能繼續為持續降低存款成本做出貢獻，但總的來說，我認為我們過去所說的是，我們的下行週期貝塔值是我們的週期大約是 50 到 55。所以我認為你可以以這種方式思考逐漸的改進。

Yes. But there was acceleration in the up cycle towards the later part of the cycle, which I think you mirror that on the downside.

是的。但上行週期向週期後期加速，我認為這反映了下行週期。

Yes, that's right. Exactly.

是的，沒錯。確切地。

Yes, perfect. That's what I was getting to. That's really helpful. And then maybe just on the front book back book, I think you noted the 200 to 300 basis point spread benefit. Can you talk about what balances we should apply that to? What are the fixed rate securities and loans coming due over the next year or so? And is there any room to use some of the excess capital for any securities positioning from here?

是的，完美。這就是我要做的事。這真的很有幫助。然後也許就在前書後書上，我想您注意到了 200 到 300 個基點的利差好處。您能談談我們應該將其應用到哪些平衡上嗎？明年左右到期的固定利率證券貸款有哪些？這裡是否有空間使用一些多餘的資本來進行任何證券定位？

Yes. I mean I think that's a good metric to use that this will be growing over time. So when you see when you see the activity and loan growth picking up over time, you're going to see this being a contributor over the next couple of years. I mean, I'd say that the what turns over in the back book quarterly basis in resi mortgage, call it, call it, around $750 million a quarter -- and that's a similar number for securities as well.

是的。我的意思是，我認為這是一個很好的衡量標準，它會隨著時間的推移而增長。因此，當您看到活動和貸款成長隨著時間的推移而增加時，您將看到這是未來幾年的貢獻者。我的意思是，我想說的是，Resi 抵押貸款的季度週轉額約為每季 7.5 億美元，這對證券來說也是類似的數字。

When you talk about what turns over those are the balances that you would apply it to is the front book, back book, but that will continue to contribute and build on itself over the next couple of years.

當你談論什麼週轉時，你會應用它來平衡前書、後書，但在接下來的幾年裡，這將繼續做出貢獻並不斷發展。

That's right. And would you do as securities repositioning from here? Is there any room to that?

這是正確的。您會從這裡開始進行證券重新定位嗎？有這樣的空間嗎？

I mean that's not in our plans. I mean we'll look at -- we actively manage the securities portfolio and we -- on an ongoing basis, but we don't have a a large single repositioning.

我的意思是這不在我們的計劃中。我的意思是，我們將持續積極管理證券投資組合，但我們沒有進行大規模的單一重新定位。

And I would also just point to slide 23 and some of the built-in momentum that we have to raise NIM, so that the need to expend capital to shift the timing on that NIM walk is not something that we need to avail ourselves of.

我還想指出幻燈片 23 以及我們必須提高 NIM 的一些內在動力，因此我們不需要花費資金來改變 NIM 步行的時間。

And at this time, you have no further questions in queue.

此時，您已經沒有其他問題了。

Okay. Great. Well, thanks again, folks for dialing in today. We appreciate your interest and support in Citizens. Have a good day.

好的。偉大的。好吧，再次感謝大家今天撥電話。我們感謝您對公民的興趣和支持。祝你有美好的一天。

Ladies and gentlemen, that concludes our conference call for today. Thank you for your participation. You may now disconnect.

女士們、先生們，我們今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。