Cullen/Frost Bankers Inc (CFR) 2024 Q2 法說會逐字稿

Greetings. Welcome to Cullen/Frost Bankers Inc. Second Quarter 2024 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

問候。歡迎參加 Cullen/Frost Bankers Inc. 2024 年第二季財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。

I would now like to turn the call over to A.B. Mendez, Senior Vice President and Director of Investor Relations. Thank you. You may go ahead.

我現在想將電話轉給 A.B.門德斯，資深副總裁兼投資者關係總監。謝謝。你可以繼續。

Thanks, Jerry. This afternoon's conference call will be led by Phil Green, Chairman and CEO; and Jerry Salinas, Group Executive Vice President and CFO.

謝謝，傑瑞。今天下午的電話會議將由董事長兼執行長 Phil Green 主持；以及集團執行副總裁兼財務長 Jerry Salinas。

Before I turn the call over to Phil and Jerry, I need to take a moment to address the safe harbor provisions. Some of the remarks made today will constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 as amended.

在我把電話轉給菲爾和傑瑞之前，我需要花點時間討論安全港條款。今天發表的一些言論將構成經修訂的 1995 年《私人證券訴訟改革法案》中定義的前瞻性陳述。

We intend such statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 as amended. Please see the last page of text in this morning's earnings release for additional information about the risk factors associated with these forward-looking statements. If needed, a copy of the release is available on our website or by calling the Investor Relations department at 210-220-5234.

我們希望此類陳述受到 1995 年《私人證券訴訟改革法案》修訂案中前瞻性陳述安全港條款的保護。請參閱今天早上收益發布的最後一頁文字，以了解與這些前瞻性陳述相關的風險因素的更多資​​訊。如果需要，可以在我們的網站上取得該新聞稿的副本，或致電投資者關係部門：210-220-5234。

At this time, I'll turn the call over to Phil.

這時候，我會把電話轉給菲爾。

Thanks, A.B. Good afternoon, everyone and thanks for joining us. Today, I'll review second quarter results for Cullen/Frost, and I'm accompanied on the call by our CFO, Jerry Salinas and Dan Geddes, who will offer additional comments.

謝謝，A.B.大家下午好，感謝您加入我們。今天，我將回顧 Cullen/Frost 第二季度的業績，我們的財務長 Jerry Salinas 和 Dan Geddes 陪同我參加電話會議，他們將提供更多評論。

Before I discuss the quarter, I'm sure you all saw our recent announcement of Jerry's retirement as of the end of the year after a brilliant career of almost 40 years with Frost. Throughout that time, Jerry has been a part of virtually every major initiative that we've undertaken and I've been blessed to work with him during that entire time and he will be missed. And rest assured, we plan on squeezing as much work out of him as possible before his well-deserved retirement.

在我討論本季之前，我相信你們都看到了我們最近宣布的 Jerry 在與 Frost 一起度過了近 40 年的輝煌職業生涯後於今年年底退休的消息。在那段時間裡，傑瑞幾乎參與了我們所採取的每一項重大舉措，我很幸運能在這段時間與他一起工作，我會想念他的。請放心，我們計劃在他當之無愧的退休之前盡可能多地安排他的工作。

Jerry will be succeeded as CFO, by Dan Geddes, who joins us on the call today. Dan has broad experience over his 25 years at Frost having served in the credit function, headed our Commercial Real Estate division in Houston, successfully executing our initial organic expansion strategy in Houston 1.0 and in leading the San Antonio headquarters market as Regional President overseeing all our commercial activities there.

Jerry 將由 Dan Geddes 接任首席財務官，他今天參加了我們的電話會議。Dan 在Frost 工作了25 年，擁有豐富的經驗，曾擔任信貸職能部門，領導我們位於休斯頓的商業房地產部門，成功執行了我們在休斯頓1.0 的初步有機擴張戰略，並作為區域總裁領導了聖安東尼奧總部市場，負責監督我們的所有業務。

In the second quarter, Cullen/Frost earned the $143.8 million or $2.21 a share compared with earnings of $160.4 million or $2.47 per share reported in the same quarter last year. Our return on average assets and average common equity in the second quarter were 1.18% and 17.08% respectively and that compares with 1.3% and 19.36% for the same period last year. These results are due to our Frost Bankers and are continuing to execute on our organic growth strategy.

第二季度，Cullen/Frost 獲利 1.438 億美元，即每股 2.21 美元，而去年同期的獲利為 1.604 億美元，即每股 2.47 美元。第二季我們的平均資產報酬率和平均普通股本報酬率分別為1.18%和17.08%，去年同期為1.3%和19.36%。這些成果歸功於我們的 Frost Bankers，並繼續執行我們的有機成長策略。

Average deposits in the second quarter were $40.5 billion down 1.2% from $41 billion in the second quarter last year. As was the case in previous quarters, Cullen/Frost didn't utilize any Federal Home Loan Bank advances, brokered deposits or reciprocal deposit arrangements to build insured deposit percentages. Average loans grew by more than 11% to $19.7 billion in the second quarter and that compared with $17.7 billion in the second quarter of last year.

第二季平均存款為 405 億美元，比去年第二季的 410 億美元下降 1.2%。與前幾季的情況一樣，卡倫/弗羅斯特沒有利用任何聯邦住房貸款銀行預付款、經紀存款或互惠存款安排來建立保險存款百分比。第二季平均貸款成長超過 11%，達到 197 億美元，去年第二季為 177 億美元。

I'll now call on Dan Geddes to review the results from our expansion programs.

我現在請 Dan Geddes 審查我們擴張計劃的結果。

Thank you, Phil. I echo your sentiments about Jerry, is will be very big shoes to fill and I look forward to leveraging his institutional knowledge as we move through this transition period.

謝謝你，菲爾。我同意你對傑瑞的看法，他將是一個需要填補的巨大空缺，我期待在我們度過這個過渡時期時利用他的機構知識。

We continue to see excellent results in our organic growth program, where our Houston expansion on a combined basis, what we call Houston 1.0 and 2.0, we stand at 102% of deposit goal, 142% of loan goal and 119% of our new household goal.

我們繼續看到我們的有機成長計畫取得了優異的成果，我們的休士頓擴張綜合起來，我們稱之為休士頓1.0 和2.0，我們達到了存款目標的102%、貸款目標的142% 和新家庭的119 %目標。

Breaking out the two, Houston 1.0 stands at 97% of the deposit goal having recently experienced similar commercial deposit trends as the legacy company, 142% of loan goal and 117% of new household goal. Houston 2.0, which we expect to complete later this year or early in 2025, we stand at 205% of deposit goal, 142% of loan goal and 158% of our new household goal.

將兩者分開後，Houston 1.0 實現了存款目標的 97%（最近經歷了與傳統公司類似的商業存款趨勢）、貸款目標的 142% 和新家庭目標的 117%。我們預計將於今年稍晚或 2025 年初完成休士頓 2.0，目前已完成存款目標的 205%、貸款目標的 142% 和新家庭目標的 158%。

For the Dallas market expansion, we stand at 141% of deposit goal, 187% of loan goal and 178% of our new household goal. We have the first three locations in our Austin expansion project open with several more planned to open before the end of this year. At the end of the second quarter, our overall expansion efforts have generated $2.2 billion in deposits, $1.5 billion in loans and added 50,783 new households.

對於達拉斯市場擴張，我們的存款目標為 141%，貸款目標為 187%，新家庭目標為 178%。我們在奧斯汀擴建計畫中開設了前三個地點，並計劃在今年年底前開設更多地點。截至第二季末，我們的整體擴張努力已產生了 22 億美元的存款、15 億美元的貸款，並新增了 50,783 個家庭。

As Phil and Jerry have mentioned in the past, for perspective, the largest acquisition in our history was a company with $1.4 billion in deposits. In addition, the successes of the earlier expansion projects basically are funding the current expansion. We expect the Houston expansion to fund the Dallas and Houston expansions in 2025 with 2026 being the year that three expansion efforts are accretive to earnings.

正如 Phil 和 Jerry 過去提到的那樣，從長遠來看，我們歷史上最大的收購是一家擁有 14 億美元存款的公司。此外，早期擴建項目的成功基本上為當前的擴建提供了資金。我們預計休士頓擴張計畫將為 2025 年達拉斯和休士頓擴張計畫提供資金，而 2026 年三個擴張計畫將增加收益。

Since we began the expansion five years ago, we have added 58 locations to our branch network in the expansion regions or about one new location every month for the last five years. Those 58 locations now represent 30% of our entire branch network across Texas. The expansion branches are growing at an impressive rate and becoming a more meaningful part of Cullen/Frost.

自五年前開始擴張以來，我們已在擴張區域的分支機構網絡中增加了 58 個分支機構，或在過去五年中每月增加約一個新分支機構。這 58 個分支機構目前占我們德州整個分支機構網路的 30%。擴展分支機構正在以驚人的速度成長，並成為 Cullen/Frost 更有意義的一部分。

For the second quarter, growth in average loans and deposits in the expansion branches were up an un-annualized 9% linked-quarter, and both average loans and deposits were up 47% year-over-year. The expansion now represents 7.6% of total loans and 5.4% of total deposits for our entire company.

第二季度，擴張分行的平均貸款和存款年增 9%，平均貸款和存款年增 47%。目前，這項擴張佔整個公司貸款總額的 7.6% 和存款總額的 5.4%。

For perspective, at the same time last year, the expansion represented 5.8% of loans and 3.6% of deposits of our company. For the respective regions of Houston and Dallas, the expansion represents 23% of Houston's loans and 21% of deposits. For Dallas, the expansion is already at 14% of loans and 14% of deposits.

從長遠來看，去年同期，擴張占我們公司貸款的 5.8% 和存款的 3.6%。對於休士頓和達拉斯各自地區來說，擴張佔休士頓貸款的 23% 和存款的 21%。對於達拉斯來說，擴張已經達到貸款的 14% 和存款的 14%。

And now, I'll turn the call back over to Phil.

現在，我將把電話轉回給菲爾。

Thanks, Dan. In our consumer bank, we continue to see excellent growth across the board. Average balances in consumer loans were up more than 22% for $571 million year-over-year. This excellent loan growth was driven by record consumer real estate lending, which is comprised of both second loan home equity loans as well as our new mortgage products.

謝謝，丹。在我們的消費者銀行中，我們繼續看到全面的出色成長。消費貸款平均餘額年增超過 22%，達到 5.71 億美元。這種出色的貸款成長是由創紀錄的消費房地產貸款推動的，其中包括第二筆房屋淨值貸款以及我們新的抵押貸款產品。

Mortgage loan fundings were $76 million in the quarter, which is over three times our first quarter fundings. So we're gaining momentum as this product matures. At quarter end, our mortgage portfolio stood at $132.4 million. And I should also mention how proud we are that CNN underscored recently rated Frost as the best mortgage lender in Texas. This is going to be a great asset class for us.

本季抵押貸款資金為 7,600 萬美元，是第一季資金的三倍多。因此，隨著該產品的成熟，我們正在獲得動力。截至季末，我們的抵押貸款投資組合為 1.324 億美元。我還應該提到，CNN 強調最近將 Frost 評為德州最佳抵押貸款機構，我們對此感到多麼自豪。這對我們來說將是一個很好的資產類別。

Average balances in consumer deposits have returned to positive growth territory with a year-over-year increase of 1.4% or $253 million. Finally, we continue to see high-quality industry-leading checking household growth of 5.8%. We do not offer any of the cash incentives to become a customer that have become so commonplace in the industry because people are choosing Frost based on our reputation for outstanding service, which has been recognized by J.D. Power 15 years in a row.

消費者存款平均餘額已恢復正成長區域，較去年同期成長 1.4%，即 2.53 億美元。最後，我們繼續看到行業領先的高品質支票家庭成長 5.8%。我們不提供任何現金獎勵來成為業界中司空見慣的客戶，因為人們選擇 Frost 是基於我們卓越服務的聲譽，這一聲譽已連續 15 年獲得 J.D. Power 的認可。

Our investments in our organic expansions in Houston, Dallas and Austin, as well as our investments in marketing are driving these stellar results in our Consumer Bank, and we expect this to continue.

我們對休士頓、達拉斯和奧斯汀的有機擴張的投資以及對行銷的投資正在推動我們的消費者銀行取得這些出色的業績，我們預計這種情況將持續下去。

Looking at our commercial business, on a linked quarter basis average loan balances increased an annualized rate of 8.7% for, C&I and 10% for CRE. In the second quarter, we brought in 977 new commercial relationships an increase of 19% on a linked quarter basis which represented the second highest quarterly increase ever.

看看我們的商業業務，按季度計算，商業和工業的平均貸款餘額年化增長率為 8.7%，商業房地產的平均貸款餘額年化增長率為 10%。第二季度，我們引入了 977 個新商業關係，季增 19%，這是有史以​​來第二高的季度增幅。

This coincided with us achieving our second highest level quarterly calling activity within 1% of the record high that we set in the first quarter. New loan commitments totaled $1.98 billion in the second quarter an increase of 58% compared with the first quarter and an increase of 29% compared to the second quarter last year.

同時，我們實現了第二高的季度呼叫活動水平，與第一季創下的紀錄高點相差不到 1%。第二季新增貸款承諾總額為19.8億美元，較第一季成長58%，較去年第二季成長29%。

The split of commitments booked in the second quarter was about 54% larger credits and 46% for core credit so good balance there. Credit is good by historical standards with net charge-offs and non-accrual loans both at healthy levels.

第二季登記的承諾比例約為 54% 的信貸額度和 46% 的核心信貸額度，因此存在良好的平衡。依照歷史標準，信貸狀況良好，淨沖銷和非應計貸款均處於健康水準。

We continue to see some normalization in credit terms of risk rating migrations in the portfolio as we come off historic lows and problem loans, but we've not experienced higher credit losses as our borrowers and the Texas economy overall has so far proven to be resilient.

隨著我們擺脫歷史低點和問題貸款，我們繼續看到投資組合中風險評級遷移的信貸方面出現一定程度的正常化，但我們並沒有經歷更高的信貸損失，因為迄今為止，我們的借款人和德州整體經濟已被證明具有彈性。

Net charge-offs for the first quarter were $9.7 million compared to $7.4 million and $9.8 million a year ago. Annualized net charge-offs for the second quarter, represented 19 basis points of period-end loans.

第一季的淨沖銷額為 970 萬美元，而去年同期為 740 萬美元和 980 萬美元。第二季的年化淨沖銷相當於期末貸款的 19 個基點。

Non-performing assets totaled $75 million at the end of the second quarter compared with $72 million last quarter and $69 million a year ago. The quarter end figure represents just 38 basis points of period-end loans and 15 basis points of total assets.

第二季末不良資產總額為 7,500 萬美元，上季為 7,200 萬美元，一年前為 6,900 萬美元。季末數據僅代表期末貸款 38 個基點和總資產 15 個基點。

Problem loans which we define as risk grade 10 or higher some of which I refer this as to this is OAEM loans totaled $986 million at the end of the second quarter that's up from $810 million at the end of the first quarter and $442 million this times last year.

我們定義為風險等級 10 或更高的問題貸款，其中一些是 OAEM 貸款，第二季末總額為 9.86 億美元，高於第一季末的 8.1 億美元，本次為 4.42 億美元去年。

The growth in the quarter was mainly due to a few larger C&I credits, mostly in the classified substandard category. About 22% of our problem loans overall are tied to investor commercial real estate.

本季的成長主要歸功於一些較大的工商業信貸，其中大部分屬於分類次級類別。我們的問題貸款中約有 22% 與投資者的商業房地產相關。

Slightly less than 50% are related to C&I credits with most of the rest in owner-occupied real estate loans which are closely related to C&I loans. Regarding commercial real estate lending, our overall portfolio remains stable with steady operating performance across all asset types and acceptable debt service coverage ratios and loans to value.

略低於50%與工商業信貸相關，其餘大部分為與工商業貸款密切相關的自住房地產貸款。在商業房地產貸款方面，我們的整體投資組合保持穩定，所有資產類型的經營績效穩定，償債覆蓋率和貸款價值可接受。

Within this category, what we would consider to be the major categories of investor CRE, office, multifamily, retail and industrial as examples, totaled $4.1 billion or 46% of CRE loans outstanding.

在這一類別中，我們認為投資者 CRE、辦公室、多戶住宅、零售和工業等主要類別的投資總額為 41 億美元，佔未償 CRE 貸款的 46%。

Our investor CRE portfolio has held up well with the average performance metrics stable to slightly improved quarter-over-quarter exhibiting an overall average loan-to-value at underwriting of about 52% and average weighted debt service coverage ratio of about 1.55.

我們的投資人 CRE 投資組合表現良好，平均績效指標穩定，較上季略有改善，承銷時的整體平均貸款價值比約為 52%，平均加權償債覆蓋率約為 1.55。

The investor office portfolio specifically had a balance of $981 million at quarter end and that portfolio exhibited an average loan to value of 52%, healthy occupancy levels and an average debt service coverage ratio of 1.57 which has slightly improved for the third consecutive quarter.

投資者辦公室投資組合在季度末的餘額為 9.81 億美元，該投資組合的平均貸款價值率為 52%，入住率良好，平均償債覆蓋率為 1.57，連續第三個季度略有改善。

Our comfort level with our office portfolio continues to be based on the character and expertise of our borrowers and sponsors and a predominantly Class A nature of our office building projects.

我們對辦公大樓投資組合的舒適度仍然取決於借款人和贊助商的性格和專業知識以及我們辦公大樓專案的主要 A 級性質。

And with that, I'll turn it over to Jerry.

有了這個，我會把它交給傑瑞。

Thank you Phil. Before I begin with my prepared remarks about the quarter, I did want to say that as I head into these last few months of my career here at Frost, I want to say that I am deeply honored and humbled to have had the opportunity to work for such a remarkable company with an outstanding culture for over 38 years, all of which I've spent working for Phil. I feel truly blessed to have had this opportunity including serving as CFO for the past 10 years.

謝謝菲爾。在我開始準備有關本季度的評論之前，我確實想說，當我進入 Frost 職業生涯的最後幾個月時，我想說，我對有機會在 Frost 工作感到非常榮幸和謙卑。卓越文化的卓越公司，我在Phil 工作了38 年多。我真的很幸運能有這個機會，包括在過去 10 年裡擔任財務長。

While I look forward to the next chapter, I will truly miss my incredible teammates who have made this journey so special. I know that Dan will do an outstanding job in his new role as CFO.

在我期待下一章的同時，我會非常想念我那些令人難以置信的隊友，他們讓這段旅程變得如此特別。我知道丹將在擔任財務長的新職位上表現出色。

Looking at our net interest margin. Our net interest margin percentage for the second quarter was 3.54%, up six basis points from the 3.48% reported last quarter. The increase was primarily driven by higher volumes of loans along with higher yields on loans and investment securities. These positives were partially offset by higher cost of interest-bearing deposits and to a lesser extent lower balances at the Fed compared to the first quarter.

看看我們的淨利差。我們第二季的淨利差率為 3.54%，比上季報告的 3.48% 上升了 6 個基點。這一增長主要是由於貸款量增加以及貸款和投資證券收益率上升所致。與第一季相比，這些積極因素部分被計息存款成本上升以及聯準會餘額下降所抵消。

Looking at our investment portfolio. The total investment portfolio average $18.6 billion during the second quarter, down $696 million from the first quarter. During the second quarter, investment purchases totaled $337 million with $235 million of that being Agency MBS securities, yielding 5.69% and $102 million in municipals with a taxable equivalent yield of 5.50.

看看我們的投資組合。第二季投資組合總額平均為 186 億美元，比第一季減少 6.96 億美元。第二季度，投資購買總額為 3.37 億美元，其中 2.35 億美元為機構 MBS 證券，收益率為 5.69%，1.02 億美元為市政債券，應稅等值收益率為 5.50。

The net unrealized loss on the available for sale portfolio at the end of the quarter was $1.63 billion, an increase of $42 million from the $1.59 billion reported at the end of the first quarter. The taxable equivalent yield on the total investment portfolio in the second quarter was 3.38% up six basis points from the first quarter. The taxable portfolio, which averaged $12 billion down approximately $489 million from the prior quarter at a yield of 2.92% up 9 basis points from the prior quarter.

截至本季末，可供出售投資組合的未實現淨虧損為 16.3 億美元，比第一季末報告的 15.9 億美元增加了 4,200 萬美元。第二季總投資組合的應稅等值報酬率為3.38%，較第一季上升6個基點。應稅投資組合平均為 120 億美元，較上季減少約 4.89 億美元，殖利率為 2.92%，較上季上升 9 個基點。

Our tax-exempt municipal portfolio averaged $6.6 billion during the second quarter, down $207 million from the first quarter and had a taxable equivalent yield of 4.30%, up 3 basis points from the prior quarter.

第二季度，我們的免稅市政投資組合平均為 66 億美元，比第一季減少 2.07 億美元，應稅等值收益率為 4.30%，比上一季上升 3 個基點。

At the end of the second quarter approximately 71% of the municipal portfolio was pre-refunded or PSF insured. The duration of the investment portfolio at the end of the second quarter was 5.5 years flat with the first quarter.

截至第二季末，約 71% 的市政投資組合已進行預退款或 PSF 投保。第二季末投資組合久期為5.5年，與第一季持平。

Looking at deposits. On a linked-quarter basis, average total deposits of $40.5 billion were down $215 million or 0.5% from the previous quarter. We did continue to see a mix shift during the second quarter as average noninterest-bearing demand deposits decreased $298 million or 2.1%, while interest-bearing deposits increased $83 million or 0.3% when compared to the previous quarter.

看看存款。按季度計算，平均存款總額為 405 億美元，比上一季減少 2.15 億美元，即 0.5%。我們確實繼續看到第二季的混合變化，平均無息活期存款比上一季減少了 2.98 億美元，即 2.1%，而有息存款則增加了 8,300 萬美元，即 0.3%。

Based on second quarter average balances, noninterest-bearing deposits as a percentage of total deposits were 33.8% compared to 34.3% in the first quarter. The cost of interest-bearing deposits in the second quarter was 2.39%, up five basis points from the 2.34% in the first quarter.

從第二季平均餘額來看，無利息存款佔存款總額的比例為33.8%，而第一季為34.3%。第二季計息存款成本為2.39%，較一季的2.34%上升5個基點。

Looking at July, month-to-date averages for total deposits through yesterday they're down about $140 million from our second quarter average of $40.5 billion. With interest-bearing being down $60 million and noninterest bearing down $80 million month-to-date. Customer repos for the second quarter averaged $3.8 billion, basically flat with the first quarter. The cost of customer repos for the quarter was 3.75% down one basis point from the first quarter. The month-to-date July average balance for customer repos was down approximately $120 million from the second quarter average.

看看 7 月份，截至昨天的月至今總存款平均值比第二季 405 億美元的平均值下降了約 1.4 億美元。本月迄今，計息貸款減少了 6,000 萬美元，無息貸款減少了 8,000 萬美元。第二季顧客回購平均38億美元，與第一季基本持平。本季顧客回購成本較一季下降3.75%一個基點。7 月迄今的客戶回購平均餘額比第二季平均減少了約 1.2 億美元。

Looking at noninterest income and expense on a linked quarter basis I'll just point out a couple of items. Insurance commissions and fees were down $4.4 million or 23.9%. As I've mentioned in previous quarters, Property & Casualty and benefit company bonuses are typically received in the first quarter. These bonuses contributed about $3.1 million of the decrease when compared to the first quarter.

從關聯季度的非利息收入和支出來看，我只想指出幾個項目。保險佣金和費用下降 440 萬美元，或 23.9%。正如我在前幾個季度提到的，財產與意外險和福利公司的獎金通常在第一季收到。與第一季相比，這些獎金減少了約 310 萬美元。

In terms of non-interest expenses on a linked quarter basis benefit expense was down $7.2 million or almost 20% impacted by lower payroll taxes and 401 pay expenses related to annual bonuses paid during the first quarter.

就相關季度的非利息費用而言，由於工資稅下降以及與第一季支付的年度獎金相關的 401 支付費用的影響，福利費用減少了 720 萬美元或近 20%。

Deposit insurance was down $6.3 million as we recognized $1.2 million in special FDIC assessments in the second quarter compared to $7.7 million related to the special assessment in the first quarter.

存款保險減少了 630 萬美元，因為我們在第二季確認了 FDIC 特別評估中的 120 萬美元，而第一季的特別評估相關的金額為 770 萬美元。

Looking at capital. During the second quarter, we did buy back $30 million of our stock that translates into a little over 300,000 shares at an average price of $99.50.

看資本。在第二季度，我們確實回購了 3,000 萬美元的股票，相當於以 99.50 美元的平均價格回購了略多於 300,000 股的股票。

Regarding our guidance for full year 2024, our current projections include 225 basis point cuts for the Fed funds rate over the remainder of 2024 with one cut in September and another one in November that is consistent with our previous guidance.

關於我們對2024 年全年的指導，我們目前的預測包括在2024 年剩餘時間內將聯邦基金利率下調225 個基點，其中一次在9 月下調，另一次在11 月下調，這與我們之前的指導一致。

Looking at loans. On a year-to-date average basis loans are up 10.8% compared to last year-to-date. We now expect full year average loan growth in the range of high single digits to low double-digits a little higher than our previous guidance.

看看貸款。與去年迄今相比，今年迄今的平均貸款增加了 10.8%。我們現在預計全年平均貸款成長將在高個位數到低兩位數的範圍內，略高於我們先前的指引。

Looking at deposits. The current year-to-date average is down 3% compared to last year-to-date. We now expect full year average deposits to be flat to down 2%. That is down from our previous guidance of flat to growth of 2%. We expect net interest income growth in the range of 2% to 3%.

看看存款。目前年初至今的平均值比去年迄今下降了 3%。我們現在預計全年平均存款將持平至下降 2%。這低於我們先前持平至 2% 成長的指引。我們預計淨利息收入成長在2%至3%之間。

The upper end of our guidance is down from our previous guidance of growth in the range of 2% to 4%. The net interest margin percentage is still expected to trend slightly upward each quarter for the remainder of the year.

我們的指導上限低於之前 2% 至 4% 的成長指導。預計今年剩餘時間內每季的淨利差百分比仍將小幅上升。

Based on year-to-date growth and current projections we are projecting growth in non-interest income in the range of 2% to 3% up from our previous guidance of flat to up 1%. Based on year-to-date results and current projections, we are projecting non-interest expense growth in the range of 6% to 7% on a reported basis. That is down from the 6% to 8% previous guidance. I will say however that we continue to be focused on bringing that expense growth percentage down.

根據今年迄今的成長和目前的預測，我們預計非利息收入的成長範圍為 2% 至 3%，高於我們先前持平至成長 1% 的指引。根據年初至今的業績和目前的預測，我們預計非利息支出的成長率將在 6% 至 7% 之間。這低於之前 6% 至 8% 的指導值。不過，我要說的是，我們將繼續致力於降低費用成長率。

Regarding net charge-offs we still expect those to go up to a more normalized historical level of 25 basis points to 30 basis points of average loans. And regarding taxes our effective tax rate for the full year 2023 was 16.1% and we continue to currently expect a flat to slightly higher effective rate in 2024.

關於淨沖銷，我們仍然預計這些將上升至平均貸款 25 個基點至 30 個基點的更正常的歷史水平。關於稅收，我們 2023 年全年的有效稅率為 16.1%，目前我們仍預期 2024 年的有效稅率將持平或略高。

With that I'll now turn the call back over to Phil for questions.

現在我將把電話轉回菲爾詢問問題。

Thank you, Jerry. We'll now open up the call for questions.

謝謝你，傑瑞。我們現在開始提問。

Thank you. (Operator Instructions) Our first question is from Steven Alexopoulos with JPMorgan. Please proceed.

謝謝。（操作員指示）我們的第一個問題來自摩根大通的 Steven Alexopoulos。請繼續。

Hey, Steven.

嘿，史蒂文。

Let me start. So you guys had good commercial loan growth. Can you talk about what you saw from a line utilization trend? Is that what drove the loan growth? Or is this all share gains?

讓我開始吧。所以你們的商業貸款成長良好。您能談談您從生產線利用率趨勢中看到的情況嗎？這是推動貸款成長的原因嗎？還是這就是全部份額收益？

No. It wasn't line utilization, Steve. It was growth. I don't know if I didn't think up in terms of share gains, but I guess we did do pretty well relative to the market. But it was just good activity. If you look at new commitments that we had which I realize they're not balances but they are the basis of those balances new commitments for the quarter were up strongly, about 80% of it was from C&I and energy we had a really good quarter on energy this time some really well underwritten deals good structures and good relationships.

不。這不是線路利用率，史蒂夫。這是成長。我不知道我是否沒有考慮到股票收益，但我想相對於市場來說我們確實做得很好。但這只是很好的活動。如果你看看我們的新承諾，我意識到它們不是餘額，而是這些餘額的基礎，本季度的新承諾強勁增長，其中約 80% 來自 C&I 和能源，我們度過了一個非常好的季度這次在能源方面，一些真正承保的交易有良好的結構和良好的關係。

So it was just good activity. Our people are working hard. And I think I said we had our second highest quarter of calls in the second quarter and things are just going well to be honest.

所以這只是很好的活動。我們的人民正在努力工作。我想我說過，我們在第二季度接到了第二高的電話，說實話，一切都很順利。

And Phil on the commercial real estate side, you guys had good growth there. It's an area where many peers continue to pull away from. Are you just being opportunistic stepping in where others are stepping back? And should that be a continued driver of loan growth in the back half?

菲爾在商業房地產方面，你們在那裡取得了良好的成長。這是許多同行繼續迴避的領域。你是否只是在別人退縮的地方投機取巧？這是否會成為下半年貸款成長的持續驅動力？

Well, I think, the balanced growth in C&I is really driven mainly by projects that have been put in place in the past and you're seeing those fund up, I don't see that being a developing driver of balanced growth going forward. I mean, there will be some and we are being opportunistic in a number of different areas. I mean, you may think I'm crazy but we did an office building loan in San Antonio in the quarter. And a great sponsor, great project, great metrics, and et cetera. So it was mainly though about great people we wanted to bank and had relationships with. So we continue to bank people not things. And we are taking advantage business as it presents itself and it's what we want to do.

嗯，我認為，工商業的平衡成長實際上主要是由過去實施的項目推動的，你會看到這些資金的增加，我不認為這是未來平衡成長的發展動力。我的意思是，會有一些，我們在許多不同的領域都在投機取巧。我的意思是，你可能認為我瘋了，但我們本季在聖安東尼奧做了一筆辦公大樓貸款。還有一個偉大的贊助商、偉大的項目、偉大的指標等等。所以這主要是關於我們想要存錢並與之建立關係的優秀人士。所以我們繼續把人存入銀行而不是物。我們正在利用商業的優勢，因為它本身就是我們想要做的。

Okay. Thank you. And then just finally, I want to ask you about your deposit strategy, if you will, because when the Fed started raising rates I remember you guys were one of the first banks that started raising deposit rates for your customers. I think on the call you said you were going to share the benefit with them. And that was while many peers were not raising rates and then there was a big lag for the industry, which you guys really didn't see. But with the Fed looking like they're about to cut now, what's your strategy? Do you take that benefit back more quickly? Do you see what the competitive environment does first? Like how are you thinking about it at this stage?

好的。謝謝。最後，如果願意的話，我想問一下你們的存款策略，因為當聯準會開始升息時，我記得你們是第一批開始提高客戶存款利率的銀行之一。我想你在電話中說過你將與他們分享利益。當時許多同行沒有升息，然後該行業出現了很大的滯後，這是你們真的沒有看到的。但鑑於聯準會現在看起來即將降息，您的策略是什麼？您會更快收回該福利嗎？您首先看到競爭環境會做些什麼嗎？請問現階段您是如何考慮的？

No Steven, you're exactly right with the history there. Our current expectations is that we would move in the same manner that we went up, we would kind of move back down in that same sort of manner. Obviously, I always give that caveat. We'll continue to look at what competitors are doing, but we were quick to go up and expect that we'd be able to make those same sort of decreases on the way down.

不，史蒂文，你對那裡的歷史完全正確。我們目前的期望是，我們將以與上漲相同的方式移動，我們將以同樣的方式回落。顯然，我總是提出這樣的警告。我們將繼續關注競爭對手的做法，但我們很快就會上升，並期望我們能夠在下降的過程中實現同樣的下降。

Okay. Perfect. Thanks for taking my questions.

好的。完美的。感謝您回答我的問題。

Thank you.

謝謝。

Our next question is from Dave Rochester with Compass Point. Please proceed.

我們的下一個問題來自 Compass Point 的 Dave Rochester。請繼續。

Hey, good afternoon guys. On the NII guide, I appreciated all the color on your assumptions for rate cuts there. I think last quarter you mentioned you get roughly $1.4 million and a hit on a monthly basis for each 25 basis point rate cut, correct me if that's wrong. But is that about the same today? And then just given what you just said in terms of moving deposit costs down at a similar pace as the increase on the way up. That's how you're thinking about it from the first cut? Or is there a little delay? Thanks.

嘿，大家下午好。在國家資訊基礎設施指南中，我很欣賞你們對降息假設的所有色彩。我想上個季度你提到每降息 25 個基點你會得到大約 140 萬美元和每月的打擊，如果這是錯誤的，請糾正我。但今天也是如此嗎？然後考慮到您剛才所說的，存款成本下降的速度與上升的速度相似。從第一次剪輯開始你就是這麼想的嗎？還是有一點延遲？謝謝。

Yes. No right from the first cut is what we're currently thinking. But I'll continue to say we'll continue and look at what the market is doing, but our current thought process is we will move immediately.

是的。我們目前的想法是從第一次剪輯開始就沒有權利。但我會繼續說，我們將繼續關注市場正在做什麼，但我們目前的思考過程是我們將立即採取行動。

As far as what the cost or the benefit if you will or the cost of the hike or cut, it is probably a little bit higher and a lot of that is going to be dependent on how much liquidity we have. So that can move. Today I'd probably tell you if you said it was $1.4 million, I tell you it might be in the range of $1.5 million to $1.6 million. So not too far different, but it's really going to be dependent on how much liquidity we have at the Fed. And that's from per month as you said on a pre-tax basis.

至於成本或收益，或加息或削減的成本，它可能會高一點，其中很大一部分將取決於我們擁有多少流動性。這樣就可以移動了。今天我可能會告訴你，如果你說是140萬美元，我告訴你可能在150萬到160萬美元之間。所以差別不大，但這實際上取決於我們在聯準會擁有多少流動性。正如您所說，這是在稅前基礎上按月計算的。

Yes. Got it. All right. And then just following on the loan growth discussion it sounded like you saw a decent amount of strength in C&I. You mentioned energy. Are there any other areas where you're seeing particular bright spots there?

是的。知道了。好的。然後，就在貸款成長討論之後，聽起來您看到了 C&I 的相當大的實力。你提到了能源。您是否在其他領域看到了特別的亮點？

No, I wouldn't say, there's anything that stands out. The energy I think was most unusual in terms of its growth during the quarter. But no I think it's just been good growth overall. We've been seeing lots of good opportunities and taking advantage of them.

不，我不會說，有什麼突出的地方。我認為就本季的成長而言，能源是最不尋常的。但不，我認為整體成長良好。我們看到了很多好的機會並加以利用。

Yes. Okay. And on the credit side, you talked about the problem loan increase. Some of that it sounded like it was on the C&I front. Any patterns there or any color just on the industries where you saw a little bit of weakness?

是的。好的。在信貸方面，您談到了貸款增加的問題。其中一些聽起來像是在 C&I 方面。您認為有一點弱點的行業有什麼模式或顏色嗎？

Yes. I would say, it was driven by two industries one that we've talked about them both really over the last few quarters as we've had the interest rate increases. It would be in contractors. There were a couple of large contractors that we moved to the classified position based on their situation.

是的。我想說，這是由兩個行業推動的，我們在過去幾個季度中確實討論過這兩個行業，因為我們已經升息了。它將在承包商中。有幾個大型承包商，我們根據他們的情況轉移到了機密位置。

And then we've had a couple of automobile dealers. One was a used car dealer almost a new car dealer in the South Texas area and car dealers have been pressed by certainly the used car dealers have been pressed by the increase in interest rates higher floor plan costs if they're financing with buy your pay here their credit losses have been higher.

然後我們有幾個汽車經銷商。一個是德克薩斯州南部地區的二手車經銷商，幾乎是新車經銷商，汽車經銷商肯定受到利率上漲的壓力，如果他們通過購買你的工資進行融資，那麼二手車經銷商會受到更高的平面圖成本的壓力在這裡，他們的信用損失更高。

They've sort of had a perfect storm and they've had some dislocations in that industry and we've talked about those over the last several quarters. The contractors are ones that we'd like to believe they have a path forward in the not-too-distant future, but we'll just have to see. But it's not commercial real estate.

他們經歷了一場完美的風暴，並且在該行業中遇到了一些混亂，我們在過去幾季中已經討論過這些問題。我們希望承包商在不久的將來能夠找到前進的道路，但我們只能拭目以待。但這不是商業地產。

I will say there were a couple of multifamily deals that we did move to risk grade 10 and really that was because they had come upon their covenant and their loan agreements had been introduced at that time in that agreement after say about a 3-year period.

我想說的是，我們確實將一些多戶家庭交易的風險等級提升到了10 級，​​這實際上是因為他們已經履行了契約，並且他們的貸款協議是在大約3 年期限後在該協議中引入的。

And they were below their covenants and they are working to move those back either through operations of the property or through a sale or refinancing of it and we think those will both be just fine. But because of the situation with the covenant, we elect to move that to risk rate 10. And I think we'll see more go into that. I think we'll see some of these flow out and we'll see new ones go in. But I'm really not concerned with the multifamily situation and the debt service covenant ratios that might cause them to be in a risk grade 10 at any one point in time.

他們低於自己的契約，他們正在努力透過財產運作或透過出售或再融資來將其收回，我們認為這些都很好。但由於契約的情況，我們選擇將風險率調整為 10。我想我們會看到更多的內容。我認為我們會看到其中一些流出，也會看到新的流入。但我真的不關心多戶家庭的情況和償債契約比率，這些比率可能會導致他們在任何一個時間點處於風險等級 10。

All right, great. Appreciate it guys. Thanks.

好吧，太好了。很欣賞你們。謝謝。

Our next question is from Ebrahim Poonawala with Bank of America. Please proceed.

我們的下一個問題來自美國銀行的 Ebrahim Poonawala。請繼續。

Hey good afternoon. So I guess first Jerry and then congratulations to each of you on the retirement and the new role. I know you have a few months. And I'm glad Phil is going to extract the last bit out of your Jerry. But maybe I think I heard this earlier just big picture question I think when you shared the stats about the new branches and it sounded like as we fast forward to 2026 all three expansion for the markets would be breakeven. So two questions on that.

嘿下午好。所以我想先是傑瑞，然後恭喜你們每個人的退休和新角色。我知道你還有幾個月的時間。我很高興菲爾將從你的傑瑞身上榨取最後一點。但也許我想我之前聽過這個只是大局問題，我想當你分享有關新分支機構的統計數據時，聽起來就像我們快進到2026 年，所有三個市場擴張都將實現收支平衡。所以有兩個問題。

One, what's the exact to earnings or returns today because of this investment spend. And I'm just trying to get to what operating leverage that we should expect as we think about ROA ROE once we get to '26? And is there more appetite or need to add a similar number of branches over the next five years once this is done?

第一，由於這項投資支出，今天的收益或回報到底是多少。我只是想知道，一旦我們進入 26 年，當我們考慮 ROA ROE 時，我們應該期望什麼營運槓桿？一旦完成，是否有更多的興趣或需要在未來五年內增加類似數量的分支機構？

Yes. Let me answer the second part. This is our strategy and I hope that they'll continue to be really good opportunities in the state of Texas for us to continue to expand. We expect that they are. We're doing some work now on identifying those places and trying to see where the puck is going to go and not get behind that.

是的。我來回答第二部分。這是我們的策略，我希望它們將繼續成為我們在德克薩斯州繼續擴張的良好機會。我們希望他們是這樣。我們現在正在做一些工作來識別這些位置，並嘗試看看冰球將去往何處，而不是落後。

In 2026 I think as Dan said and as Jerry has said before it's basically breakeven now. We're going to be adding on several locations in Austin so I think we'll be basically breakeven next year. And other things equal that's when you'd see some significant accretion I think from that program and continuing to move forward from there.

我認為到 2026 年，正如 Dan 和 Jerry 之前所說，現在基本上已經實現了盈虧平衡。我們將在奧斯汀增加幾個地點，所以我認為明年我們基本上將實現收支平衡。在其他條件相同的情況下，我認為該計劃會帶來一些顯著的成長，並繼續向前邁進。

And we've got to remember that a couple of years from now but we've got to remember that if we do have opportunities to expand into very attractive markets we're going to do it because as I've said many times this strategy is durable and it is scalable and it's been very successful and we're building great long-term value here.

我們必須記住，幾年後，我們必須記住，如果我們確實有機會擴展到非常有吸引力的市場，我們就會這樣做，因為正如我多次說過的那樣，這個策略耐用且可擴展，並且非常成功，我們正在這裡創造巨大的長期價值。

Got it. And maybe I guess Jerry for you, I think I heard you expect NIM to move higher third and fourth quarter. Just as we think about rate cuts in the world where we get a series of rate cuts one if does that continue? Or are there actions that you may take outside of deposits on the asset side at some point to change the complexion of the balance sheet? Or there is no such sort of plan to do anything? Answer

知道了。也許我猜傑瑞對你來說，我想我聽說你預計 NIM 在第三和第四季會走高。正如我們思考世界範圍內的降息一樣，我們會經歷一系列降息，如果這種情況繼續下去呢？或者您可以在資產方面的存款之外採取一些行動來改變資產負債表的結構？或是沒有這樣的計劃去做任何事？回答

Yes. And as I mentioned what our rate scenario is we do have two rate cuts in there. And don't forget I did say slightly higher in the next couple of quarters. So, we're not talking about the sort of growth that we had between the first and second quarter, which really was a nice size growth.

是的。正如我所提到的，我們的利率情境是我們確實有兩次降息。別忘了我確實說過接下來幾季的價格會稍微高一些。因此，我們不是在談論第一季和第二季之間的成長，這確實是一個不錯的規模成長。

I think for us the opportunities are really as we've talked about before, investment opportunities coming out of that portfolio. Especially this year as we talk about the latter half of the year, I think we talked about the fact that we've got, it's like $500 million just in the fourth quarter it's under 1% right 96 basis points. So we'll see some uptick there.

我認為對我們來說，機會確實正如我們之前討論的那樣，是來自該投資組合的投資機會。尤其是今年，當我們談論下半年時，我想我們談論了這樣一個事實：第四季度的投資額約為 5 億美元，低於 1%，即 96 個基點。所以我們會看到那裡有一些上升。

From a fixed loan standpoint, the size of the portfolio that we have that our bullet sort of fixed rate loans are probably not as significant. But if you throw in amortizing fixed rate loans, you probably get proceeds of about $500 million through the rest of the year and then north of $1 billion next year. So, we'll have opportunities there as well to reprice those at even higher rates than where we would be even if the rate environment was lower. So, I think we do have those sorts of opportunities going forward.

從固定貸款的角度來看，我們的子彈型固定利率貸款的投資組合規模可能沒那麼重要。但如果算上攤銷固定利率貸款，今年剩餘時間你可能會獲得約 5 億美元的收益，然後明年將獲得超過 10 億美元的收益。因此，即使利率環境較低，我們也將有機會以比我們更高的利率重新定價。所以，我認為我們未來確實有這樣的機會。

We'll continue to see what we do on the asset side. We continue always looking at that. But right now I think those and the ability to price down on the deposit side are probably things that we're focusing on.

我們將繼續關注我們在資產方面所做的事情。我們將繼續關注這一點。但現在我認為這些以及存款方面的降價能力可能是我們關注的重點。

And just one quick follow-up. Is it safe for us given how you've talked about the investment spend how expense growth is tracking this year that as we look into next year most likely that expense growth decelerates as opposed to accelerate compared to 2024?

只需一個快速跟進。鑑於您如何談論投資支出，今年的費用增長情況如何，當我們展望明年時，與 2024 年相比，費用增長很可能會減速而不是加速，這對我們來說安全嗎？

From an expense growth standpoint, I mean I think that's what we've been saying right is that the plan would be that the expense growth would not be at the same level of the growth that we had projected. What I will say is that we're running a pretty tight ship right now. We're doing a lot of things that we need to do. We guided down on that expense growth. And Dan is going to be the new sheriff in town.

從費用增長的角度來看，我的意思是，我認為我們一直說的正確的是，計劃中的費用增長不會與我們預計的增長水平相同。我要說的是，我們現在的管理非常嚴格。我們正在做很多我們需要做的事情。我們下調了費用成長。丹將成為鎮上的新警長。

So, we're still trying to get the growth down this year. But there will be some things that we have to do that we know we have to do. So, I've said before I don't expect that our growth rate will be back in that 3% to 4% to 5%. I still think that we're probably talking about growth in the higher single-digits. And that's all going to be refined and would be discussed at January call.

因此，我們今年仍在努力降低成長率。但有些事情我們必須做，我們知道我們必須做。所以，我之前說過，我預期我們的成長率不會再回到3%、4%、5%。我仍然認為我們可能正在談論更高個位數的成長。這一切都將得到完善，並將在一月份的電話會議上進行討論。

Got it. Thank you.

知道了。謝謝。

Our next question is from Peter Winter with D.A. Davidson. Please proceed.

我們的下一個問題來自 Peter Winter 和 D.A.戴維森。請繼續。

Thanks. Good afternoon. If I could just follow-up on expenses. I hear you that you lowered the top end of the range for expenses for this year, but it does imply a pretty steep ramp in the second half of the year. And that's on top of core expenses coming down this quarter if I exclude FDIC. So, could you just talk about what type of expense initiatives you have in the second half of this year that's driving that?

謝謝。午安.如果我能跟進費用就好了。我聽說您降低了今年費用範圍的上限，但這確實意味著下半年的支出將大幅上升。如果我排除 FDIC，這還不包括本季核心支出的下降。那麼，您能否談談今年下半年哪些類型的支出計畫推動了這一趨勢？

Yes. One of the things that we have every year in the fourth quarter are restricted stock awards. And there's quite a few of them that by their nature that vest immediately. Some of them are age-based. And given some of those awards, you'll see that expense growth. And if you look at our historical trends on expenses you'll see that the fourth quarter goes up pretty significantly that's the main driver that comes to mind.

是的。我們每年第四季都會有的事情之一就是限制性股票獎勵。其中有相當多的資產本質上是立即歸屬的。其中一些是基於年齡的。獲得其中一些獎項後，您會看到費用增長。如果您查看我們的支出歷史趨勢，您會發現第四季度的支出大幅成長，這是您想到的主要驅動因素。

Again we're continuing to put these initiatives in place. So, our run rate naturally is growing. But as I said we are looking and trying to ensure that if we are approving expenses there are things that we really absolutely need to do.

我們將再次繼續實施這些措施。所以，我們的運行率自然而然地在成長。但正如我所說，我們正在尋找並努力確保，如果我們批准支出，那麼我們確實絕對需要做一些事情。

But I think what you're looking at is primarily driven by increases in compensation associated with true-ups of incentive plans and then the issuance of the restricted stock is probably the biggest piece of it.

但我認為你所看到的主要是由與激勵計劃的調整相關的薪酬增加所驅動的，然後限制性股票的發行可能是其中最大的一部分。

Got it. And then can I just ask a big picture question. If I think about the branch expansion, it's really starting to pay some strong dividends and you've got this long runway for growth as you open up more branches. Are there opportunities maybe to close some underperforming branches or consolidate branches that are kind of close to one another to kind of help manage the expense and offset some of these costs?

知道了。然後我可以問一個大問題嗎？如果我考慮分支機構的擴張，它確實開始帶來一些強勁的紅利，隨著您開設更多分支機構，您將擁有很長的成長跑道。是否有機會關閉一些表現不佳的分支機構或合併彼此接近的分支機構，以幫助管理費用並抵消其中一些成本？

Peter, I think, there are. In a number of cases and we are closing older locations in these markets and we're moving them to new locations. I don't know that we count those in the in the expansion numbers, but that is happening. And so rest assured we are looking at locations that are underperforming and that we don't need I think we've had good luck and not having a lot of those because frankly we were under branched. If you look at the various competitors in the state. So we didn't have a lot to make up their backfill as far as closures go. So yes, we do that and it's not unusual for us to close an old one and get it in a new location that we think has better growth prospects.

彼得，我想，是有的。在許多情況下，我們會關閉這些市場中的舊地點，並將它們轉移到新地點。我不知道我們是否將這些資料計入擴展資料中，但這種情況正在發生。所以請放心，我們正在尋找表現不佳的地點，我們不需要我認為我們運氣很好，而且沒有很多這樣的地點，因為坦率地說，我們的分支不足。如果你看看該州的各種競爭對手。因此，就關閉而言，我們沒有太多的資源來彌補他們的回填。所以，是的，我們這樣做，關閉舊工廠並將其轉移到我們認為具有更好成長前景的新地點並不罕見。

Got it. Thanks, Phil.

知道了。謝謝，菲爾。

Our next question is from Manan Gosalia with Morgan Stanley. Please proceed.

我們的下一個問題來自摩根士丹利的馬南·戈薩利亞。請繼續。

Hey. Good afternoon.

嘿。午安.

Good afternoon.

午安.

I wanted to come back to the loan and deposit guide. So loans up high single to low double-digits deposits flat to down 2%. Does cash come down? What makes up the difference I asked because you highlighted your plan to cut deposit rates as Fed rates come down but loan growth feels really strong here. So just trying to see where the offset is. And what the appetite is to allow deposits to run down a little if you need to?

我想回到貸款和存款指南。因此貸款年增至低點兩位數，存款持平至下降2%。現金會減少嗎？我問是什麼造成了差異，因為你強調了隨著聯準會利率下降而降低存款利率的計劃，但貸款成長感覺非常強勁。所以只是想看看偏移量在哪裡。如果需要的話，你有什麼意願允許存款減少一點呢？

Yes. No real appetite to run down deposits. We really are a relationship bank. We're really focused on deposits and with a loan-to-deposit ratio at 50%. Loan growth at 12% really doesn't scare me. I mean, as Phil said we're going after great opportunities and we're glad that we have those opportunities to be growing today.

是的。沒有真正的意願減少存款。我們確實是一家關係銀行。我們非常關注存款，貸存比為 50%。12% 的貸款成長並沒有嚇到我。我的意思是，正如菲爾所說，我們正在尋找巨大的機會，我們很高興今天有這些成長的機會。

The thing that will probably be more a handle that we can move if you will would be the investment portfolio purchases. We had started the year I think at $1.6 billion is what we thought we would purchase. Last quarter, I said we brought that down to $1.2 billion. We're probably closer to $900 million right now. And we bought maybe $0.5 billion of that year-to-date.

如果你願意的話，我們可以移動的東西可能更多的是投資組合購買。我認為今年伊始我們會買 16 億美元。上個季度，我說我們將其降至 12 億美元。我們現在可能接近 9 億美元。那年至今我們大約買了 5 億美元。

And so just have projected maybe another 400,000 to make. So at this that's really the mechanism that we've used in that scenario where deposits might be a little bit softer. And our projections are pretty light in the second half. We do see some growth and those could obviously be better, but we just really don't feel any conviction at this point and felt like that's the right thing to do.

所以我只是預計可能還要製作 40 萬個。因此，這實際上是我們在存款可能稍微軟一點的情況下使用的機制。我們對下半年的預測相當寬鬆。我們確實看到了一些成長，而且顯然可以做得更好，但我們目前並沒有任何信心，覺得這是正確的做法。

And so from an investment portfolio standpoint that's the one that's really easy for us right now to just put the brakes on given where rates are today if we went out and invested in some cases we might earn a little bit less than where we're at today. I think the purchases that we made were slightly better, but that's really what we would move more than anything else is what we would do in the investment portfolio.

因此，從投資組合的角度來看，鑑於目前的利率，我們現在很容易踩剎車，如果我們出去投資，在某些情況下，我們的收入可能會比我們現在的水平少一點。我認為我們所做的購買稍微好一些，但這實際上是我們在投資組合中所做的最重要的事情。

I think Jerry is right on that. And your question really, I think, brings up something that we need to keep in mind and it is that our loan growth is good, but our what it really is relationship growth because we don't make any loans that we don't get the deposit relationship. And so in this environment you've got good loan growth here but you're getting those deposit relationships underneath that that because of where rates are today and the efficiency that businesses are employing with their deposits and their cash you're not seeing as much deposits following on is I think we will see in the future as these things normalize and as the rates normalize. So while you may not see the deposit growth now I'm encouraged that you'll see it in the future.

我認為傑瑞在這一點上是對的。我認為，你的問題確實提出了我們需要牢記的一些事情，那就是我們的貸款增長良好，但我們真正的關係增長，因為我們不會發放任何我們得不到的貸款存款關係。因此，在這種環境下，貸款成長良好，但存款關係卻隱藏在這種關係之下，因為目前的利率水平以及企業利用存款和現金的效率，你看不到那麼多。事情和利率的正常化，我們將在未來看到接下來的存款。因此，雖然您現在可能看不到存款成長，但我很高興您將來會看到它。

Yes. And just something to add to that is when we're out in the marketplace having the ability to provide capital in this market puts us at a competitive advantage in looking at the impact of new relationships and our year-to-date loan balance growth 38% of that is from new relationships and we're able to get $249 million in new relationship deposits. We are open for business. And so we're able to bring in new relationships with these ones.

是的。需要補充的是，當我們進入市場時，有能力在這個市場上提供資本，使我們在考慮新關係的影響和年初至今的貸款餘額增長方面處於競爭優勢38其中% 來自新關係，我們能夠從新關係存款中獲得2.49 億美元。我們開門營業。因此我們能夠與這些人建立新的關係。

Got it. That's great color. Maybe the second part of the question is peers are saying that they expect a pretty sizable pickup in loan growth as rates come down. Is that something you expect as well? I mean loans are already growing 11% year-on-year for the first six months. Could you see an acceleration from here of rate from there?

知道了。那顏色真棒。也許問題的第二部分是同行表示，隨著利率下降，他們預計貸款成長將大幅回升。這也是你所期待的嗎？我的意思是，前六個月貸款已經年增了 11%。你能看到從這裡到那裡的速率加速嗎？

No. Not necessarily. I don't think we're thinking of it that way. I mean what we're doing is we're making calls. We're developing relationships. And I don't think it would move us one way or another. I think -- what we might see is if we get some clarity in the election the political process it's clear to me that just from talking from our loan officers, relationship managers. There are a number of companies that are as is typical. They're waiting to see which way the political winds blow, and based upon what they see, it will give them some visibility in terms of what kind of -- primarily what kind of regulation they might see. And once that clears up and they understand where they are, I think you'll see businesses that might be holding off today move forward, at least that's what we've heard from a lot of our people.

不。未必。我不認為我們是這樣想的。我的意思是我們正在做的就是打電話。我們正在發展關係。我認為這不會以某種方式打動我們。我認為，如果我們對選舉和政治過程有一定的了解，我們可能會看到，從我們的信貸官員、客戶關係經理的談話中，我就清楚這一點。有許多公司是典型的。他們正在等待觀察政治風向，根據他們所看到的情況，這將使他們對他們可能會看到什麼樣的監管（主要是什麼樣的監管）有一定的了解。一旦問題得到解決並且他們了解了自己的處境，我想你會看到今天可能停滯不前的企業向前發展，至少這是我們從許多員工那裡聽到的。

So I've heard less talk about once rates go down, than I've heard about once the environment gets more clarity with regard to what kind of administration we might have making the regulatory decisions.

因此，我聽到的關於一旦利率下降的討論，比我聽到的關於一旦環境變得更加清晰，我們可能會由什麼樣的政府來製定監管決策的討論要少。

Got it. Thanks very much and Jerry all the very best and Dan, looking forward to working with you.

知道了。非常感謝傑瑞，祝一切順利，丹期待與您合作。

Our next question is from Brandon King with Truist Securities. Please proceed.

我們的下一個問題來自 Truist Securities 的 Brandon King。請繼續。

Hey, good afternoon. So just following up kind of on the last line of questioning. And just could you speak broadly as far as what you're seeing from a competitive standpoint in your markets. Remember, last call, you mentioned now some lenders were kind of came back in the game. But could you just speak as far as what you're seeing today?

嘿，下午好。所以只是跟進最後一行提問。您能否從市場競爭的角度廣泛談談您所看到的情況。請記住，上次通話時，您提到現在一些貸方又回來了。但您能就今天看到的情況談談嗎？

I think it's getting more competitive. I think where we had -- let's take commercial real estate I think we're seeing people move back in. I think we were hopeful that you'd see more people requiring guarantees. I think there are a lot of players that are not doing that. And so I think we we're seeing it slide a little bit back to where it was before. But as some people that have been out of the market, pencils down, as they say are coming back and you're seeing some more competition. I think we're seeing maybe in the real estate side, a little more competition from the smaller banks just an observation, but that's kind of what we're seeing. Dan, any thoughts from you.

我認為競爭越來越激烈。我認為，以商業房地產為例，我認為我們看到人們搬回來了。我認為我們希望您會看到更多的人需要保證。我認為有很多玩家沒有這樣做。所以我認為我們看到它有點回到之前的水平。但正如他們所說，隨著一些已經退出市場的人回來，你會看到更多的競爭。我認為我們可能在房地產方面看到來自小型銀行的更多競爭只是一種觀察，但這就是我們所看到的。丹，你有什麼想法嗎？

Yeah. I see kind of this second half, we had a really strong second quarter in terms of closings. And with what Phil mentioned about, just the uncertainty in the environment. I see that it being a little slower, just looking at our weighted pipeline. But in terms of competition from the other banks and lenders in the marketplace, we certainly kind of see it from the community banks in the markets that we're in, we'll see it from some regionals or some regionals that decide to get into our markets. And so we're seeing some new players who are coming into our markets in over the last kind of 6 months to a year.

是的。我認為下半年，我們的第二季成交量非常強勁。菲爾提到的就是環境的不確定性。只要看看我們的加權管道，我就發現它有點慢。但就市場上其他銀行和貸方的競爭而言，我們當然可以從我們所在市場的社區銀行中看到這一點，我們將從某些地區或決定進入的某些地區看到這一點我們的市場。因此，我們看到一些新參與者在過去 6 個月到一年內進入我們的市場。

So I could see the competition picking up.

所以我可以看到競爭的加劇。

Got it. Got it. And how has that impacted pricing discipline, right? You've increased your loan growth guide. So I assume you're getting the right pricing, but has there been any pressure there?

知道了。知道了。這對定價紀律有何影響，對嗎？您增加了貸款成長指南。所以我認為你得到了正確的定價，但是那裡有壓力嗎？

Yeah, there's always pricing pressure. But actually, if you look at the deals that we've lost about third-quarters of the deals that we've lost have been due to structure. And that's the thing that concerns us most. With our cost of deposits and our cost of funding, I'd argue that we're one of the low-cost producers in the marketplace in regards the cost of funding. And therefore, we can be very competitive on pricing. And remember, we're booking or we are banking relationships first. And so if someone passes the test to be a Frost customer and they're willing to live within our structures, we don't want to lose that after all that development for a few basis points.

是的，價格壓力總是存在的。但實際上，如果你看看我們失去的交易，大約有第三季我們失去的交易是由於結構造成的。這是我們最關心的事。考慮到我們的存款成本和融資成本，我認為就融資成本而言，我們是市場上低成本的生產商之一。因此，我們在定價上非常有競爭力。請記住，我們首先是預訂或銀行關係。因此，如果有人通過了 Frost 客戶測試，並且他們願意在我們的結構中生活，我們不想在所有這些發展之後失去一些基點。

So we'll be very competitive on price, but structure is a different deal. We have been and will be disciplined as it relates to structure. And so that's where we're seeing more of our losses.

因此，我們在價格上將非常有競爭力，但結構則不同。我們已經並將繼續受到與結構相關的紀律處分。這就是我們看到更多損失的地方。

All right. Thanks for taking my questions.

好的。感謝您回答我的問題。

Thank you.

謝謝。

Our next question is from Catherine Mealor with KBW. Please proceed.

我們的下一個問題來自 KBW 的 Catherine Mealor。請繼續。

Thanks. Good afternoon. One more follow-up to the margin. As we think about the NII guide towards for the year, do you think and just a little bit of follow-up you've already answered, but do you think you'll continue to see NIM expansion through the back half of the year kind of equal to the pace we've seen? Or does that expansion start to moderate in the back half of the year but maybe the average earning asset growth kind of moderates or maybe even grows a little bit. How do we think about the balance between those two things?

謝謝。午安.又一後續的保證金。當我們思考今年的 NII 指南時，您是否認為您已經回答了一些後續行動，但您認為您會在今年下半年繼續看到 NIM 擴張嗎？或者這種擴張會在今年下半年開始放緩，但平均獲利資產成長可能會放緩，甚至可能會略有成長。我們如何考慮這兩件事之間的平衡？

Yes. No, I think the rate of growth would be quicker or higher in the first half of the year and slower in the second half of the year.

是的。不，我認為上半年的成長率會更快或更高，下半年會更慢。

Yes. We're

是的。是

But still an upward trending margin you think?

但您認為利潤率仍呈上升趨勢嗎？

Exactly. Yes. Yes.

確切地。是的。是的。

Catherine Mealor

凱瑟琳·梅勒

And then the price and as we start to price in cuts in the back half of the year or as we get into 2025 whenever that comes. What is your outlook on how the margin kind of initially react when we start to see that cut?

然後是價格，當我們在今年下半年或進入 2025 年時開始定價削減。當我們開始看到這種削減時，您對利潤率最初的反應有何看法？

Again, it depends on timing. But I think based on our current assumptions starting in September, that's really what my guidance was based on. So we still see some upticks. Again that kind of slows down the growth. But we do continue to see that sort of growth projected out through the rest of this year.

同樣，這取決於時機。但我認為，根據我們目前從 9 月開始的假設，這確實是我的指導的基礎。所以我們仍然看到一些上升。這再次減緩了成長。但我們確實會繼續看到今年剩餘時間的這種成長。

Great. Is it still an expansion but just the last as we get cut to that kind of $1.5 million that you were talking about?

偉大的。這仍然是一個擴張，但只是最後一次，因為我們被削減到你所說的 150 萬美元？

Right. Yes. I mean that's the thing. Like I said, we do have some investments as I mentioned the big part of it is the $500 million. So if you're reinvesting stuff, that $500 million treasuries is at 96 bps. But even the rest of the fundings are probably in the three handles on them or high-2s. And so, all those will provide you with some upside. And again given what happens with the fixed rate loans at reprice we'll have some pickup there as well.

正確的。是的。我的意思是，就是這樣。正如我所說，我們確實有一些投資，正如我所提到的，其中很大一部分是 5 億美元。因此，如果您進行再投資，那麼 5 億美元的國債利率為 96 個基點。但即使是其餘的資金也可能在他們的三個手柄或高 2 中。因此，所有這些都會為您帶來一些好處。再次考慮到固定利率貸款重新定價時發生的情況，我們也會有一些回升。

And then any color on just the new growth. The new loans you're putting on relative to new deposits you're putting on what would you say those two rates are so new loan yields and the new deposit costs today that spread?

然後新生長的任何顏色。您所發放的新貸款相對於您所發放的新存款，您認為這兩個利率是新貸款收益率和新存款成本的差額嗎？

Well, the new deposit costs are going to be the same, right? They're really going to mirror whatever is going on in the existing portfolio. We do very minimal exception pricing on the loan -- excuse me, on the deposit side. So you have some but you're not going to have a lot of that. And as far as the back book and we're probably right now in the weighted average rate of, say, a 670 or something in that range is the back book at current stuff going on north of 8.

那麼，新的存款成本將是相同的，對吧？他們確實會反映現有投資組合中發生的一切。我們對貸款的例外定價非常低——對不起，在存款方面。所以你有一些，但你不會有很多。就背書而言，我們現在的加權平均利率可能是 670 左右，在這個範圍內的背書是目前在 8 之上的東西。

All right. Thank you. Appreciate it.

好的。謝謝。欣賞它。

Sure.

當然。

Our next question is from Jon Arfstrom with RBC Capital Markets. Please proceed.

我們的下一個問題來自加拿大皇家銀行資本市場的喬恩‧阿夫斯特羅姆 (Jon Arfstrom)。請繼續。

Thanks. Good afternoon.

謝謝。午安.

Hey, Jon.

嘿，喬恩。

Hey, Jon.

嘿，喬恩。

A little bit of cleanup here. But Phil, you talked about the mortgage business opportunity earlier in the call. And it looks like those volumes have really picked up. Can you talk a little bit about the driver of that and where this can all go and when it shows up in a material way?

這裡稍微清理一下。但是菲爾，您在電話會議的早些時候談到了抵押貸款業務機會。看起來這些銷量確實有增加。您能否談談其驅動因素以及這一切會走向何方以及何時以物質方式出現？

Jon, I go back to when we announced that effort actually just over a year ago. And I believe we said, we expected that the mortgage book would be in excess of the consumer book that we had at that time and so over a five-year period. So, I don't think we have come off of that. And it's a new thing and we're getting our people used to making recommendations on it. You're getting the realtor community understanding what it is. And we've got just great service. And I think it's just going to be a great asset class for us.

喬恩，我回想起一年多前我們宣布這項努力的時候。我相信我們說過，我們預計抵押貸款帳簿將超過我們當時以及五年內的消費者帳簿。所以，我認為我們還沒有擺脫這個困境。這是一個新事物，我們正在讓我們的員工習慣就此​​提出建議。您正在讓房地產經紀人社區了解它是什麼。我們提供優質的服務。我認為這對我們來說將是一個很好的資產類別。

Just another thing to add is that 30% of our mortgage borrowers are new to the bank. So this opens up an opportunity to bring in new customers through this incredible product and then the credible experience.

另一件需要補充的是，我們 30% 的抵押貸款借款人是銀行的新手。因此，這提供了一個機會，可以透過這款令人難以置信的產品以及可靠的體驗來吸引新客戶。

Okay. Question for maybe Phil or Dan, what is the significance of the plan when you talk about the performance of the new branches? It looks like all are either on plan or ahead of plan, but as an outsider what does that really mean? And what's the benchmark that we can use there?

好的。也許向 Phil 或 Dan 提問，當您談論新分支機構的績效時，該計劃的意義是什麼？看起來一切要么在計劃中，要么提前，但作為局外人，這到底意味著什麼？我們可以在那裡使用的基準是什麼？

Well, when we started John, you might recall, we started this strategy and we looked at the performance of the 40 branches that we have opened up over the last eight years prior to that time.

好吧，您可能還記得，當我們啟動 John 時，我們啟動了這一策略，並研究了在此之前的過去八年中我們開設的 40 個分支機構的績效。

And we said that we looked at the average of that. And we said, if we could do the average of that in the markets that we were going to be in we felt like we would have a really successful strategy for our shareholders.

我們說我們查看了平均值。我們說，如果我們能夠達到我們將要進入的市場的平均水平，我們覺得我們將為股東制定一個真正成功的策略。

And so that's what we based it on. And then we began measuring what our performance was versus that. We kept it fairly consistent although I know that we've changed that sum. Dan, you might talk about that.

這就是我們的基礎。然後我們開始衡量我們的表現與此相比。儘管我知道我們已經更改了該金額，但我們保持了相當一致。丹，你可以談談這個。

Yeah. I mean, we've tweaked it with Dallas. We learned a lot from Houston 1.0 and as much as it pains me Dallas is outperforming Houston at the same time period but it goes back to our blue book of continuous improvement. And so we learned what work could we do better? And Dallas is just doing a great job as you can see from their performance. And so I would expect the same from Austin as well.\

是的。我的意思是，我們已經與達拉斯進行了調整。我們從休士頓 1.0 中學到了很多東西，雖然讓我很痛苦，但達拉斯在同一時期的表現優於休士頓，但這可以追溯到我們持續改進的藍皮書。這樣我們就知道哪些工作可以做得更好？達拉斯的表現非常出色，你可以從他們的表現中看出這一點。所以我對奧斯汀也有同樣的期望。

Okay. That helps.

好的。這有幫助。

But Jon, I would say it's fairly consistent. I mean we'll move it up in an upon a particular market but we want to keep it somewhat consistent because we want to be able to compare just like Dan did andhe's kind of only half joking, but Dallas is outperforming Houston so that makes a bad but we can have a consistent comparison in these markets. And I think that's helpful to us. And it's we'll try and keep it that way. Again making adjustments for the markets that we're in, but we'll sort of keep it fairly consistent.

但是喬恩，我想說這是相當一致的。我的意思是，我們將在特定市場上提高它，但我們希望保持一定的一致性，因為我們希望能夠像丹所做的那樣進行比較，他只是半開玩笑，但達拉斯的表現優於休斯頓，因此這使得不好，但我們可以在這些市場上進行一致的比較。我認為這對我們有幫助。我們將盡力保持這種狀態。再次針對我們所在的市場進行調整，但我們會保持相當一致。

And some of those adjustments are the timing ,what we learned in Houston is the timing of when loans and deposits and new households. So we've looked at those trends to make sure that again that we're being consistent but we're being fair.

其中一些調整是時間安排，我們在休士頓了解到的是貸款和存款以及新家庭的時間表。因此，我們研究了這些趨勢，以再次確保我們保持一致，但我們是公平的。

Yeah. Okay. Well, the growth numbers are great. So that's impressive. Jerry, 10 years it's probably 40 earnings calls, so thank you for everything. And I was just going to say I'm wondering what the 40-year retirement gift is like at Cullen/Frost does still get you a belt buckle or boots or a watch or?

是的。好的。嗯，成長數字是龐大的。這令人印象深刻。Jerry，10 年可能有 40 次財報電話會議，所以謝謝你所做的一切。我只是想說，我想知道 Cullen/Frost 的 40 年退休禮物是什麼樣的，你還能得到皮帶扣、靴子、手錶還是？

We'll have to see. I'll let you know, Jon. Thanks for bringing it up to them.

我們得看看。我會讓你知道的，喬恩。感謝您向他們提出這個問題。

All right. Thanks for everything.

好的。感謝一切。

Thank you.

謝謝。

Sure.

當然。

We have reached the end of our question-and-answer session. I would like to turn the conference back over to management for closing remarks.

我們的問答環節已經結束。我想將會議轉回管理階層進行閉幕致詞。

Phil Green

菲爾·格林

All right. Well thanks everyone for your support and for your questions and interest and we'll be adjourned.

好的。好的，感謝大家的支持以及大家的提問和興趣，我們將休會。

Thank you. This will conclude today's conference. You may disconnect your lines at this time. And thank you for your participation.

謝謝。今天的會議到此結束。此時您可以斷開線路。並感謝您的參與。