First Horizon Corp (FHN) 2024 Q2 法說會逐字稿

Yes, good afternoon, all, and thanks for joining us for the First Horizon second quarter 2024 our earnings conference call. My name is Carly, and I'll be coordinating your call today. (Operator Instructions) I will now hand over to Natalie Flanders, Head of Investor Relations to begin.

是的，大家下午好，感謝您參加我們的 2024 年第二季 First Horizo​​n 收益電話會議。我叫卡莉，今天我將協調您的電話。 （操作員指示）我現在請投資者關係主管 Natalie Flanders 開始。

Thank you, Carly, and good morning. Welcome to our second quarter 2024 results conference call and thank you for joining us. Today our Chairman, President and CEO, Bryan Jordan, and Chief Financial Officer, Hope Dmuchowski will provide prepared remarks after which we'll be happy to take your questions. We're also pleased to have our Chief Credit Officer, Susan Springfield, and our Deputy Chief Credit Officer, Thomas Hung here to do have questions with you as well.

謝謝你，卡莉，早安。歡迎參加我們的 2024 年第二季業績電話會議，感謝您加入我們。今天，我們的董事長、總裁兼首席執行官布萊恩·喬丹(Bryan Jordan) 和首席財務官霍普·德穆喬夫斯基(Hope Dmuchowski) 將發表事先準備好的講話，之後我們將很樂意回答您的問題。我們也很高興邀請我們的首席信貸官 Susan Springfield 和副首席信貸官 Thomas Hung 來向您提問。

Our remarks today will reference our earnings presentation, which is available on our website at ir.firsthorizon.com. As always, I need to remind you that we will make forward-looking statements that are subject to risks and uncertainties therefore we ask you to review the factors that may cause our results to differ from our expectations on page 2 of our presentation and in our SEC filings.

我們今天的言論將參考我們的收益報告，該報告可在我們的網站 ir.firsthorizo​​n.com 上取得。像往常一樣，我需要提醒您，我們將做出前瞻性陳述，這些陳述存在風險和不確定性，因此我們要求您審查可能導致我們的結果與我們簡報第2 頁和我們的預期不同的因素。

Additionally, please be aware that our comments will refer to adjusted results, which exclude the impact of notable items. These are non-GAAP measures so it's important for you to review the GAAP information in our earnings release and on page 3 of our presentation. And last but not least, our comments reflect our current views and you should understand that we are not obligated to update them.

此外，請注意，我們的評論將涉及調整後的結果，其中排除了值得注意的項目的影響。這些是非 GAAP 衡量標準，因此您務必查看我們的收益報告和簡報第 3 頁中的 GAAP 資訊。最後但並非最不重要的一點是，我們的評論反映了我們當前的觀點，您應該明白我們沒有義務更新它們。

And with that, I'll turn things over to Bryan.

有了這個，我會把事情交給布萊恩。

Thank you Natalie, good morning, everyone, and thank you for joining our call. I'm pleased with the results we achieved in another solid quarter. We continue to demonstrate our ability to produce consistent return for our shareholders while also providing unparalleled service to our clients. As I look back at the last couple of months, there has been a significant uptick in the competitive landscape, especially promotional deposit officers, as banks compete for growth against the backdrop of a higher for longer interest rate environment and a shrinking deposit base.

謝謝娜塔莉，大家早安，謝謝您加入我們的通話。我對我們在又一個堅實的季度所取得的成果感到滿意。我們繼續證明我們有能力為股東創造持續的回報，同時為客戶提供無與倫比的服務。回顧過去幾個月，競爭格局顯著加劇，尤其是促銷存款員，因為銀行在長期較高的利率環境和存款基礎萎縮的背景下爭奪成長。

I'll start on slide 5, where we have shared some of the financial highlights for the quarter. We delivered adjusted EPS of $0.36 per share, which was a $0.01 increase from the prior quarter, with pre-provision net revenue increasing by $1 million. Adjusted return on tangible common equity improved to 12%, driven by the benefit of returning excess capital to shareholders. We repurchased $212 million of stock in the second quarter and over $365 million year to date, ending the quarter with an 11% tangible common equity Tier one ratio, achieving 11% common equity Tier one ratio.

我將從幻燈片 5 開始，我們在其中分享了本季的一些財務亮點。我們的調整後每股收益為 0.36 美元，比上一季增加 0.01 美元，撥備前淨收入增加 100 萬美元。由於向股東返還多餘資本的好處，調整後的有形普通股股本回報率提高至 12%。我們在第二季回購了 2.12 億美元的股票，今年迄今回購了超過 3.65 億美元的股票，本季末有形普通股一級比率為 11%，實現了 11% 的普通股一級比率。

We intend to continue to stack one good quarter on top of the next. We accomplished that this quarter through modest improvement to net interest income and traditional banking fees, while simultaneously managing the expense base and maintaining strong credit performance. I remain incredibly optimistic that First Horizon will continue to deliver strong results quarter after quarter, while serving our customers and communities. Just as we have for over the past 160 years.

我們打算繼續將一個好的季度疊加在下一個季度之上。本季度，我們透過淨利息收入和傳統銀行費用的適度改善，同時管理費用基礎並維持強勁的信貸表現，實現了這一目標。我仍然非常樂觀地認為，First Horizo​​n 將繼續一個又一個季度地交付強勁的業績，同時為我們的客戶和社區提供服務。正如我們過去 160 年所做的那樣。

We have an attractive footprint, a competitive product set, a strong credit culture and strong credit culture that will allow us to profitably navigate whatever scenarios we encounter over the second half of the year.

我們擁有有吸引力的足跡、有競爭力的產品組合、強大的信用文化和強大的信用文化，這將使我們能夠在下半年遇到的任何情況下獲利。

With that, I'll hand the call over to Hope to run through our financial results in more detail.

接下來，我會將電話轉給 Hope，以便更詳細地了解我們的財務表現。

Thank you, Bryan, and good morning, everybody. On slide 6, you will find our adjusted financials and key performance metrics for the quarter. We generated adjusted earnings per share of $0.36 up a penny from the prior quarter. Pre-provision net revenue was stable to the prior quarter as net interest income and traditional banking fees offset the moderation in the fixed income business.

謝謝布萊恩，大家早安。在投影片 6 上，您將看到我們調整後的本季財務數據和關鍵績效指標。調整後每股收益比上一季增加 0.36 美元一美分。由於淨利息收入和傳統銀行費用抵消了固定收益業務的放緩，撥備前淨收入與上一季持平。

Credit performance continues to be within our expectations with net charge-offs of 22 basis points and a slight increase in ACL coverage ratio to 1.41%. We achieved our near term target of 11% and CET 1 this quarter in part by returning $212 million of capital to shareholders through share repurchases. This return of excess capital, further improvement in adjusted return on tangible common equity to 12%.

信貸表現持續符合我們的預期，淨沖銷為 22 個基點，ACL 覆蓋率小幅上升至 1.41%。我們透過股票回購向股東返還 2.12 億美元資本，部分實現了本季 11% 和 CET 1 的近期目標。此超額資本的返還，進一步提高了調整後的有形普通股權益回報率至12%。

On slide 8, you will see that NII increased by $5 million as the margin slightly expanded by 1 basis point from the prior quarter to 3.38%. The loan portfolio continues to be a tailwind to both NII and margin. Average loans are up 1.4% from the prior quarter. Roughly two-thirds of that growth is in loans to mortgage companies, which is our highest yielding loan portfolio.

在投影片 8 中，您將看到 NII 增加了 500 萬美元，利潤率較上一季小幅擴大 1 個基點至 3.38%。貸款組合仍然是NII 和利潤率的推動力。平均貸款較上一季成長 1.4%。大約三分之二的成長來自抵押貸款公司的貸款，這是我們收益率最高的貸款組合。

Loan yields also continued to improve up 6 basis points from first quarter, benefiting from new and renewing floating rate spreads and repricing of fixed rate cash flows. Funding mix partially offset that benefit on the asset side, non-interest bearing balances were down on average, but encouragingly, those balances have been relatively stable since March. Deposit costs increased 2 basis points as late cycle mix shift continues within the interest-bearing portfolio.

受益於新的和更新的浮動利率利差以及固定利率現金流的重新定價，貸款收益率也繼續比第一季提高6個基點。資金組合部分抵消了資產方面的收益，無息餘額平均下降，但令人鼓舞的是，這些餘額自 3 月以來相對穩定。隨著計息投資組合內週期後期組合轉移的持續，存款成本增加了 2 個基點。

We dive further into deposits on slide 9. Seasonality and continued contraction of supply drove a 1% reduction in balances in line with the industry H8 data. Despite this we have been successful in retaining our clients with a 95% retention versus the prior year. We have seen stabilization in non-interest bearing book balances for the first time in several quarters, which is illustrated with both average and period end balances totaling $16.3 billion. The average rate paid on interest-bearing deposits increased 2 basis points to 3.3%. During the quarter, over $1 billion of balances migrated from lower cost base rate accounts into higher rate retention offers, which increased the spot rate to approximately 3.35%, 7 basis points from the end of first quarter.

我們在投影片 9 上進一步深入研究存款。儘管如此，我們還是成功地留住了客戶，與前一年相比，留存率高達 95%。我們看到無息帳面餘額幾季以來首次趨於穩定，平均餘額和期末餘額總計 163 億美元就說明了這一點。計息存款平均利率上升2個基點至3.3%。本季度，超過 10 億美元的餘額從較低成本基本利率帳戶轉移至較高利率保留報價，從而將即期利率提高至約 3.35%，較第一季末上升 7 個基點。

On slide 10, you will see that the period-end loans were up $1 billion or 2% from the prior quarter. The spring home buying season drove an increase in consumer real estate as we continue to focus on balance sheet production around the medical doctor program. Seasonality impacted loans to mortgage companies as well, but we also benefited from competitive disruption disruption in this industry opening or increasing lines for more than 50 clients.

在投影片 10 上，您將看到期末貸款比上一季增加了 10 億美元，即 2%。由於我們繼續專注於圍繞醫生計劃的資產負債表生產，春季購房季節推動了消費房地產的成長。季節性也影響了抵押貸款公司的貸款，但我們也受益於該行業開放或增加 50 多個客戶的貸款額度的競爭中斷。

CRE loans also continued to fund up, though the pace of that is expected to slow in the coming quarters. As previously mentioned, loan yields were up 6 basis points from first quarter due to wider spreads and fixed cash flow repricing. Spreads on new loans increased 42 basis points year over year. We continue to expect fixed-rate loan cash flows to provide opportunity over the next year with a roll-off yield of approximately 4.6% on over $1 billion of cash flows.

商業房地產貸款也持續增加資金，但預計未來幾季成長將放緩。如前所述，由於利差擴大和固定現金流重新定價，貸款收益率較第一季上升 6 個基點。新貸款利差較去年增加42個基點。我們繼續預期固定利率貸款現金流將在明年提供機會，超過 10 億美元的現金流的滾存收益率約為 4.6%。

On slide 11, you can see that the growth in our banking fees helped offset the anticipated moderation within our fixed income business. Fee income, excluding deferred compensation, decreased $3 million from first quarter average daily revenue in our fixed income business stepped down to $4,88.000, resulting in a $12 million decrease to fee income. Moderation this quarter was driven by reduction in the market's rate cut expectation and lower portfolio restructuring activity. From a rate cut we expect the rest of the year to be similar to this quarter, mortgage fees increased $2 million due to home buying seasonality.

在投影片 11 中，您可以看到我們銀行費用的成長幫助抵消了我們固定收益業務的預期放緩。不包括遞延薪酬的費用收入比第一季固定收益業務的日均收入減少了 300 萬美元，降至 4,88.000 美元，導致費用收入減少了 1,200 萬美元。本季的放緩是由於市場降息預期的減弱和投資組合重組活動的減少。從降息來看，我們預計今年剩餘時間與本季類似，由於購屋季節性，抵押貸款費用增加了 200 萬美元。

Service charges, card and digital fees are both up $1.1 million each due to the seasonal volume trends that tend to be higher in second quarter. We saw a $2 million increase in brokerage trust and insurance fees as second quarter includes incremental fees for tax filing services within our trust department and our wealth management fees benefited this quarter from a higher market index.

由於第二季的季節性流量趨勢往往更高，服務費、卡費和數位費均上漲了 110 萬美元。我們看到經紀信託和保險費用增加了 200 萬美元，因為第二季包括我們信託部門內報稅服務的增量費用，而我們的財富管理費用本季受益於較高的市場指數。

Lastly, other noninterest income increased $3 million mostly due to incremental swap fees and a gain from a tax credit investments.

最後，其他非利息收入增加了 300 萬美元，主要是由於互換費用增加和稅收抵免投資的收益。

On slide 12, we show that excluding deferred compensation, adjusted expenses increased less than $1 million. Personnel excluding deferred comp was down $11 million from last quarter, mostly due to reduction in incentives and commissions. The $9 million reduction to the incentives was driven by lower fixed income revenue and a step down in retention awards. Offsetting the personal decrease was a reinvestment into outside services, which increased $10 million from last quarter related to marketing for the new checking account campaigns and third party services for strategic investments.

在投影片 12 中，我們顯示，不包括遞延薪酬，調整後的費用增加不到 100 萬美元。不包括遞延薪酬的人員費用比上季減少了 1,100 萬美元，主要是由於激勵和佣金的減少。固定收益收入減少和保留獎勵減少導致激勵措施減少 900 萬美元。抵銷個人減少額的是對外部服務的再投資，與上季相比增加了 1000 萬美元，涉及新支票帳戶活動的營銷和策略投資的第三方服務。

As we have shared before, we still expect expenses related to our technology investments to moderately increase over the remainder of the year and we plan to offset those costs by continuing to identify and implement operational efficiencies, which will allow us to keep the business that stays flat to down in the back half of the year.

正如我們之前所分享的，我們仍然預計與技術投資相關的費用在今年剩餘時間內將適度增加，我們計劃通過繼續確定和實施運營效率來抵消這些成本，這將使我們能夠保持業務不變下半年持平轉為下降。

Credit continues to perform very well. As you can see on slide 13, net charge-offs decreased by $6 million to $34 million or 22 basis points of average loans. Non-performing loans increased $69 million with declines in C&I, offset by an increase in CRE. Though NPLs have increased. Clients are still managing through the higher rate environment with approximately 50% of commercial NPLs, still current on their payments. Loan loss provision was $55 million this quarter, increasing ACL coverage slightly to 1.41% coverage on the CRE portfolio increased from 1.26% in first quarter to 1.51%, largely driven by the office sector. Overall, we are pleased with how our balance sheet has performed in this cycle and continue to believe credit feels very manageable.

信貸持續表現良好。正如您在投影片 13 中看到的那樣，淨沖銷減少了 600 萬美元，降至 3,400 萬美元，即平均貸款減少了 22 個基點。由於 C&I 的下降，不良貸款增加了 6,900 萬美元，但被 CRE 的增加所抵消。儘管不良貸款增加。客戶仍在較高的利率環境中進行管理，大約 50% 的商業不良貸款仍在按期付款。本季貸款損失準備金為 5,500 萬美元，ACL 覆蓋率小幅提高至 1.41%，CRE 投資組合的覆蓋率從第一季的 1.26% 上升至 1.51%，這主要是由辦公部門推動的。整體而言，我們對本週期資產負債表的表現感到滿意，並繼續相信信貸感覺非常可控。

On slide 15, we've revisited our NII 2024 outlook at the end of last quarter, we guided to the lower end of our previous range. However, due to mix shift and increased deposit competition that we saw late in the quarter, we are updating our expectations for net interest income range to flat to down 2%. We are assuming a relatively flat balance sheet in the back half of the year as we continue to remain disciplined on loan pricing and client selection.

在投影片 15 上，我們重新審視了上季末的 NII 2024 年展望，我們將目標定為先前範圍的下限。然而，由於我們在本季末看到的混合轉變和存款競爭加劇，我們將淨利息收入範圍的預期更新為持平至下降 2%。我們假設今年下半年的資產負債表相對平坦，因為我們繼續在貸款定價和客戶選擇方面保持嚴格的紀律。

The higher for longer environment, in addition to heightened competition from new entrants into our markets has pressured funding mix and deposit costs more than anticipated. As I previously mentioned, we are pleased to see stability in our non-interest bearing deposits for the first time in several quarters. However, we've continued to see more mix shift than expected within the interest-bearing portfolio. During the quarter, over $1 billion of balances migrated from lower cost base rate accounts into higher rate retention offers.

長期環境越高，除了新進者進入市場的競爭加劇之外，融資組合和存款成本的壓力也超出了預期。正如我之前提到的，我們很高興看到我們的無息存款幾個季度以來首次保持穩定。然而，我們繼續看到有息投資組合中的組合轉變比預期更多。本季度，超過 10 億美元的餘額從較低成本基本利率帳戶轉移到較高利率保留優惠。

Our average base rate account yields approximately 50 basis points, while our retention offer is roughly 4%. All other guidance remains unchanged and we will continue to seek efficiencies to help offset revenue pressures and improve shareholders' return. Lastly, you can see that we've achieved our near term CET 1 target of 11%. We plan to maintain the CET 1 around that 11% level and we can reassess moving towards our longer-term target of 10% to 10.5% as we gain more certainty around the macro, economic and regulatory environment.

我們的平均基本利率帳戶收益率約為 50 個基點，而我們的保留率約為 4%。所有其他指導保持不變，我們將繼續尋求效率，以幫助抵消收入壓力並提高股東回報。最後，您可以看到我們已經實現了 11% 的近期 CET 1 目標。我們計劃將 CET 1 維持在 11% 左右的水平，隨著我們在宏觀、經濟和監管環境方面獲得更多確定性，我們可以重新評估向 10% 至 10.5% 的長期目標邁進。

As we turn to slide 16, I'll give my closing thoughts. I am extremely proud of the work that our company has accomplished in the first half of this year. The macro economic outlook for 2024 has changed significantly in the last six months, while there were previous expectations heading into the year of four or more rate cuts, now we are looking at one to two. But despite all the changes around us, we continue to grow earnings per share quarter after quarter. I believe that the experience and knowledge of our bankers, our teams and our leaders give First Horizon the flexibility to efficiently and effectively navigate navigate any economic cycle.

當我們轉向投影片 16 時，我將給出我的結束語。我對我們公司今年上半年所取得的工作感到非常自豪。 2024 年的宏觀經濟前景在過去六個月中發生了重大變化，而先前的預期是今年將有四次或更多降息，現在我們正在考慮一到兩次降息。但儘管我們周圍發生了這些變化，我們的每股盈餘仍在逐季成長。我相信，我們的銀行家、團隊和領導者的經驗和知識使 First Horizo​​n 能夠靈活且有效率地駕馭任何經濟週期。

As we advance to the second half of the year, we continue to expect strong performance from our diversified business model, we will continue to identify operational efficiencies to counter headwinds in revenue. We will also remain diligent on managing our capital, our balance sheet and our credit performance in order to deliver attractive returns near term and into the future.

隨著下半年的到來，我們繼續期望多元化業務模式取得強勁表現，我們將繼續提高營運效率，以應對收入逆風。我們也將繼續努力管理我們的資本、資產負債表和信用表現，以便在短期和未來提供有吸引力的回報。

Now I'll give it back to Bryan.

現在我會把它還給布萊恩。

Thank you Hope. I echo Hope's sentiments, we have demonstrated our ability to execute and changing economic and competitive environments. We know how to pull the necessary levers in order to operate profitably. I have complete confidence in our ability to continue doing so over the back half of '24 and beyond. I firmly believe that one of First Horizon's greatest attributes is our Southeastern footprint and our established client base.

謝謝你希望。我同意霍普的觀點，我們已經證明了我們執行和改變經濟和競爭環境的能力。我們知道如何利用必要的槓桿來獲利。我對我們在 24 年下半年及以後繼續這樣做的能力充滿信心。我堅信，First Horizo​​n 最大的特點之一是我們在東南部的足跡和我們既定的客戶群。

While that attracts some of the greatest competition. I remain confident that we have the associates, the client relationships and the dedication to maintaining an unparalleled banking franchise in the South. As always, I'm grateful for the great work of our associates and serving their customers and their communities. In particular, our thoughts are with those in Houston impacted by Hurricane barrel and the thousands that dealt with tens of thousands, hundreds of thousands at dealt for a long period without power. We remain committed to supporting our associates, clients and the greater community as they recover. Carley, we can now open it up for question.

雖然這吸引了一些最激烈的競爭。我仍然相信，我們擁有同事、客戶關係以及在南方維持無與倫比的銀行業務的奉獻精神。一如既往，我感謝我們的員工所做的出色工作以及為他們的客戶和社區提供的服務。我們特別關心休士頓受颶風影響的人們，以及數以萬計、數十萬人長期斷電的人們。我們仍然致力於支持我們的員工、客戶和更大的社區復健。卡利，我們現在可以開始提問了。

(Operator Instructions)

（操作員說明）

Jon Arfstrom, RBC Capital Markets.

喬恩‧阿夫斯特羅姆 (Jon Arfstrom)，加拿大皇家銀行資本市場部。

Hey, thanks. Good morning, can you talk a little bit more about the deposits, pricing competition you're seeing you flagged late in the quarter and what are you seeing give us some examples of that? And what do you think changes or eases that environment?

嘿，謝謝。早安，您能多談談存款、您在本季末看到的定價競爭以及您看到的情況，請給我們一些例子嗎？您認為什麼會改變或緩解這種環境？

Yes, I'll start. And then I Hope pickup from there. It's it's interesting to see the impact it had on our balance sheet. There have been an increasing number of deposit offers that are specials across our footprint. We sell from large and medium and small competitors, and it had the effect of driving a higher cost in our existing customer base. The number of customers who came in with the offer from somebody else at a higher rate than our need to match or come close to matching that rate picked up over the last month or so of the quarter.

是的，我要開始了。然後我希望從那裡接載。看到它對我們的資產負債表的影響很有趣。在我們的足跡中，有越來越多的特價存款優惠。我們從大、中、小型競爭對手那裡銷售產品，這導致我們現有客戶群的成本上升。在本季度最後一個月左右的時間裡，以高於我們需要匹配或接近匹配的比率獲得其他人提供的報價的客戶數量。

And there was know north of probably a billion billion and a half dollars of that occurring in the in the third, the back half of the second quarter, third month of the quarter, have you if you looked at deposit costs early in the quarter. Our aggregate cost of deposits dropped early in the quarter was flattish in May and then really accelerated in the June timeframe and the approximate calls is competitive environment, which in the most narrow sense, we had to match the competitive offer to maintain and defend customer relationships.

如果你看看本季初的存款成本，你就會知道，其中可能有十億五億美元發生在第三季、第二季後半段、第三個月。我們的總存款成本在本季度初下降，5 月份持平，然後在6 月份時間範圍內真正加速，並且近似的呼叫是競爭環境，從最狹義的意義上來說，我們必須匹配有競爭力的報價以維持並捍衛客戶關係。

Jon, I'll add to what Brian said. You asked about the offers. We have a very competitive offer from a marketing perspective from kind of a new entrance to the southeast of a 530 guarantees through year end. And that's been aggressively marketed walked into most of our branches than many of our employees here have been kind enough to interop as mandates me when they've gotten their houses.

喬恩，我將補充布萊恩所說的話。您詢問了優惠。從行銷角度來看，我們提供了非常有競爭力的報價，從某種意義上說，到年底為止，我們將提供 530 個保證的東南部新入口。這已經被積極地推銷到我們的大多數分支機構，我們這裡的許多員工在拿到房子後都非常友善地按照我的要求進行互操作。

And so we saw kind of mid corps, as Brian mentioned, that competitive environment going into the quarter, we expected a rate cut this quarter, highly anticipated rate cuts and everyone had pulled back on their promotional rates. The rate guarantees were that we were seeing was really three months. We were at a three month rate guarantee and as the forward curve moved to a really late in Q3 expectation for the first rate cut, we saw the offers, the marketing, the digital marketing from competitors significantly increase the longer-term and higher rate in the second half of the quarter.

因此，正如布萊恩所提到的，我們看到了中型企業，進入本季度的競爭環境，我們預計本季度會降息，備受期待的降息，每個人都取消了促銷利率。我們看到的利率保證實際上是三個月。我們有三個月的利率保證，隨著遠期曲線在第三季的首次降息預期中移動到非常晚的時候，我們看到競爭對手的報價、行銷和數位行銷顯著增加了長期和更高的利率本季後半段。

Okay. If we don't get a cut, Hope do you expect this kind of pressure to persist? And I guess, um, you know, to kind of clean this up was talk a little bit about the higher end of the lower end of the NII guide and kind of what gets you to the higher end or lower end.

好的。如果我們沒有被削減，你希望這種壓力會持續下去嗎？我想，嗯，你知道，為了解決這個問題，我們需要談談 NII 指南的高端或低端，以及如何讓你到達高端或低端。

Thank you.

謝謝。

Jon, I do think that we don't get a cut in Q3 or this year. The further out that cut gets the more competitive environment stays as the money supply continues to shrink out of the economy. I have and I'm hopeful that with that first cut, we'll start to see consumption come back. But as I mentioned, one of the major rate offers that our clients are bringing in. It is a guarantee through year-end. And so even if we were if you recut September, there's still an offer out there that is valid through December at [530].

喬恩，我確實認為我們在第三季或今年不會削減。隨著貨幣供給量持續從經濟中縮減，降息幅度越大，競爭環境就越激烈。我已經這麼做了，我希望透過第一次削減，我們將開始看到消費回升。但正如我所提到的，我們的客戶帶來的主要利率優惠之一。因此，即使我們重新削減 9 月的報價，仍然有報價在 12 月之前有效，價格為 [530]。

But hopeful that that will start to subside with the most rate cut and hopefully a second one not too far behind that. As far as the guidance, absolutely a rate cut we hope will offset the deposit pressure, but we are asset sensitive and the way they're earlier that we get the cut in the year. The more that in you will be able to kind of see the deposit costs come down to match the loan side repricing with Colombia, 58% of our loan book will recover, you know, for them in the months, and we'll have to work that deposits cost back. They'll be able to little bit of lag as we walk that deposit pricing back as well as promos that come off of three month, six month break offers?

但希望這種情況會隨著最大幅度的降息而開始消退，並希望第二次降息不會太遠。就指導而言，我們絕對希望降息能夠抵消存款壓力，但我們對資產敏感，而且我們今年降息的時間較早。你越能看到存款成本下降，以匹配哥倫比亞的貸款方重新定價，你知道，我們的貸款賬簿的 58% 將在幾個月內為他們收回，我們將不得不押金成本回收的工作。當我們降低存款定價以及三個月、六個月的中斷優惠的促銷活動時，他們會有點滯後嗎？

Jon, I think it's it's largely a gut call at this point. What happens I think it really depends on what happens with loan demand, how the Fed normalizes balance sheet, most importantly and particularly what impact that has on on deposits across the industry. The deposit market is still very tight and I don't think the cut or two is likely to change that very much in the short term. I don't think it makes it very much different if rates stay are. But I think it's going to be a competitive environment because the Fed is going through this normalization process and that's going to keep deposit costs probably on the whole it's more more competitive than we might have thought three months ago, two months ago.

喬恩，我認為目前這很大程度上是一個直覺決定。我認為這實際上取決於貸款需求的變化、聯準會如何實現資產負債表正常化，最重要的是，特別是這對整個產業的存款有何影響。存款市場仍然非常緊張，我認為一兩次降息不太可能在短期內改變這種狀況。我認為如果保持利率不變，情況不會有太大不同。但我認為這將是一個競爭性的環境，因為聯準會正在經歷正常化過程，這將保持存款成本總體上比我們三個月前、兩個月前想像的更具競爭力。

Okay. All right. Thank you very much. Appreciate it.

好的。好的。非常感謝。欣賞它。

Thank you.

謝謝。

Michael Rose of Raymond James.

雷蒙德詹姆斯的邁克爾羅斯。

Good morning, everyone. Thanks for taking my questions. I'm just if I use the midpoint of the guidance you guys are looking at negative operating leverage this year. I know maybe a little too early to kind of count talking about 2025, but do you think positive return to positive operating leverage next year is in the cards and kind of what are the factors rates, improvement in fixed income and momentum and fees, stuff like that would kind of get you there assume a little bit more balance sheet growth and as well?

大家早安。感謝您回答我的問題。我只是說，如果我使用你們今年正在考慮的負營運槓桿指導的中點。我知道談論 2025 年可能有點為時過早，但您認為明年是否有可能實現正營運槓桿的積極回報，以及利率、固定收益的改善以及動量和費用等因素是什麼假設資產負債表增長一點點，那會不會讓你到達那裡？

Michael. Our goal is always to start with the intent as we put together a budget to have positive operating leverage to manage our mix, our efficiency ratio year over year. And so at this point, it's really hard to say what's going to happen with 2024 the rate cut environment right now, the forward curve has two this year and three to four in the next year. We went into this year thinking four to segments, and we might end up one to two.

麥可.我們的目標始終是從我們制定預算的意圖開始，以獲得積極的營運槓桿來管理我們的組合和逐年的效率比。所以在這一點上，現在真的很難說2024年的降息環境會發生什麼，遠期曲線今年有兩次，明年有三到四次。今年我們考慮了四個部分，最後可能會分成一到兩個部分。

So I expect 2025, we will work hard and we will set a budget that has positive operating leverage but I think that there's going to be a lot of uncertainty on going through 2025 on deposit costs as well as money fly. We still have an inverted curves are countercyclical and specifically our capital markets, fixed income fees, nice to see that curve steepen and there will be a huge help for us. We can see that calm start to flatten out steepenat the end of next year.

因此，我預計到 2025 年，我們將努力工作，我們將制定具有積極營運槓桿的預算，但我認為 2025 年存款成本和資金流動將存在許多不確定性。我們仍然有一條反週期的反向曲線，特別是我們的資本市場、固定收益費用，很高興看到曲線變陡，這將對我們有巨大的幫助。我們可以看到這種平靜的局面到明年年底就會變得更加平緩。

Okay, great. Maybe just as a follow-up, as we do think about, hopefully a better growth environment for you you've clearly benefited from some little bit momentum in mortgage warehouse just as rates come down a little bit, and we're back to a normal seasonal market. But C&I loan utilization is still relatively low you've had some fund up some multi-family construction, things like that just Bryan, can you can you discuss kind of the demand outlook and what you're hearing from your customers is it going to take a couple of rate cuts to keep that utilization move up and see some better loan growth?

好的，太好了。也許只是作為後續行動，正如我們所考慮的那樣，希望為您提供更好的增長環境，您顯然從抵押貸款倉庫的一些動力中受益，就像利率略有下降一樣，我們又回到了正常的季節性市場。但工商業貸款利用率仍然相對較低，你已經有一些資金用於一些多戶住宅建設，就像布萊恩一樣，你能討論一下需求前景嗎？採取幾次降息以保持利用率上升並看到更好的貸款成長？

Yes, particularly as a backup to the first question in a macro sense to the extent that the Fed is reducing, rate, we think on the whole that will help our countercyclical businesses. As I've said, philosophically, we start with always trying to drive positive operating leverage. And we have these countercyclical businesses. In particular, I think our mortgage businesses will be helped as rates set and then the yield curve a reset in the yield curve starts to normalize, particularly and if and when it starts to drive refinancing activity, which is likely to occur occur as the short end comes down and adjustable ARMs become more affordable.

是的，特別是作為宏觀意義上第一個問題的支持，Fed正在降低利率，我們認為這總體上將有助於我們的反週期業務。正如我所說，從哲學上講，我們首先要始終努力推動積極的營運槓桿。我們有這些反週期業務。特別是，我認為，隨著利率的設定，我們的抵押貸款業務將得到幫助，然後收益率曲線的重置開始正常化，特別是當它開始推動再融資活動時，這種情況很可能發生短期內。

I think is we ended the quarter something like 18%, 19%, 20% of mortgage warehouse lending activity was actually refinance. The rest was purchase money mortgage. That tends to be more balanced over time.

我認為本季結束時，大約 18%、19%、20% 的抵押倉庫貸款活動實際上是再融資。剩下的就是購屋款抵押。隨著時間的推移，這種情況往往會更加平衡。

So to that point, I think you can see a significant pickup in mortgage warehouse lending. And I think in all likelihood, you'll see a pickup in mortgage lending as the rate curve begins to normalize. And broadly speaking, loan demand is more tepid than we would have thought at this point in the cycle, people are generally cautious about investing, I think the, you know, the twin mountains of change out there. What does the FED and do what's going to happen in the in the presidential and congressional elections and what does that mean in terms of economic policy because of that?

因此，到目前為止，我認為您可以看到抵押倉庫貸款大幅增加。我認為，隨著利率曲線開始正常化，您很可能會看到抵押貸款的增加。從廣義上講，貸款需求比我們想像的要溫和，人們普遍對投資持謹慎態度，我認為，你知道，那裡存在著巨大的變化。聯準會會做什麼，在總統和國會選舉中會發生什麼，這對經濟政策意味著什麼？

There is a lot of divergence between where our two presidential candidates are. So at the end of the day, people are a little more tepid, but I think as rates begin to fall, I think people will become more optimistic both on a consumer level, particularly in the mortgage space as well as in the commercial lending space.

我們的兩位總統候選人的立場有很大分歧。因此，歸根結底，人們會變得更加不溫不火，但我認為隨著利率開始下降，我認為人們在消費者層面上會變得更加樂觀，特別是在抵押貸款領域以及商業貸款領域。

Thanks. I appreciate you taking my questions.

謝謝。感謝您回答我的問題。

Steven Alexopoulos, JPMorgan.

史蒂文‧阿萊克索普洛斯，摩根大通。

Hi, good morning. This is Anthony Elian on for Steve. Just to follow up on the question on loan growth for Michael. So your updated NII outlook assumes a relatively flat balance sheet in the back half of the year. Can you just talk about the drivers of the slowdown in loan growth you expect following a pretty solid quarter. You saw second quarter. I know you mentioned CRE fund notes were slowing.

嗨，早安。這是史蒂夫的安東尼·埃利安。只是為了跟進邁克爾的貸款增長問題。因此，您更新後的國家資訊基礎設施展望假設今年下半年資產負債表相對平坦。您能否談談您預計在相當穩定的季度之後貸款成長放緩的驅動因素？你看到了第二季。我知道你提到商業地產基金票據正在放緩。

Elian, one thing that we've got that you need to look at. It is the seasonality of mortgage warehouse. So about two thirds of the or half the increase a little bit more quarter over quarter on average is mortgage warehouse, which seasonally increases into quarter two and quarter three during the home buying season and then kind of significantly tailed off in Q4 and Q1.

埃利安，我們有一件事情你需要看看。就是抵押倉的季節性。因此，平均每季度增加一點點的大約三分之二或一半是抵押貸款倉庫，在購房季節期間季節性增加到第二季度和第三季度，然後在第四季度和第一季顯著減少。

As a part of that is just the normal increase we have in loan growth. We are reaching the end of or near the end of the large fund ups. We had some loans we originated the last two years in the [Procuri] market. We're not really seeing a whole lot of originations in CRE as we continue. So we're kind of going to tread water in the back half of the year as we see paydowns, cash flows come in with what new lending will be.

其中一部分只是貸款成長的正常成長。我們正處於大型基金上漲的尾聲或接近尾聲。過去兩年我們在 [Procuri] 市場發放了一些貸款。隨著我們的繼續，我們並沒有真正看到 CRE 的大量起源。因此，我們將在今年下半年停滯不前，因為我們將看到還款、現金流和新貸款的增加。

Do you think as we go into 2025. And I know Michael's question earlier about if there's a better growth environment, if you get some rate cuts and the outlooks are better, I do think some of those are specifically, C&I clients who may have put capital projects on the back burner will move those back to the front burner. And you'll see some opportunities with with clients who may want to reengage in some lending activity, and we stand ready to come to work with those clients assuming they meet our risk profile.

當我們進入2025 年時，你認為嗎？客戶，他們可能已經把處於次要位置的資本項目將使這些項目重新回到首要位置。您會看到一些可能想要重新參與某些貸款活動的客戶的機會，我們隨時準備與這些客戶合作，假設他們符合我們的風險狀況。

Thank you.

謝謝。

And then my follow-up, can you provide more color on the increase in outside services contribute in the press release. This is this is tied to deposit marketing campaigns and third party services for strategic investments. I guess how much of the $10 million increase you saw sequentially is sticky versus onetime in nature?

然後我的後續問題是，您是否可以在新聞稿中提供有關外部服務貢獻增加的更多資訊。這與存款行銷活動和策略性投資的第三方服務有關。我猜你看到的 1000 萬美元的連續增長中有多少是粘性的，而不是一次性的？

Thank you.

謝謝。

Marketing is a seasonal spend there at year end and going into the new year marketing tends not to be a very effective, especially with the checking accounts. It just doesn't tend to be a seasonal time where we see a lot of movement between banks and so Q2 and Q3 are typically where we see more effective direct to client marketing. And so I think, yes, I wouldn't say sticky as in year over year as there is some seasonality there. We did mention in multiple previous calls that our technology investments were a little slower to get started the end of last year. And this year, what I would say than we had originally anticipated. So I think that the technology spend kind of hitting its run right now and the marketing being seasonal throughout the year, typical in past years. When you look past back to last year's earnings, you'll see the same type of seasonality increase in marketing in Q2 and towards the end of Q3.

行銷是年底的季節性支出，進入新年行銷往往不是很有效，尤其是對於支票帳戶。這往往不是我們看到銀行之間發生大量變動的季節性時期，因此第二季和第三季通常是我們看到更有效的直接客戶行銷的地方。所以我認為，是的，我不會說逐年黏性，因為那裡有一些季節性。我們確實在之前的多次電話會議中提到，去年年底我們的技術投資啟動速度有點慢。今年，我所說的超出了我們最初的預期。因此，我認為技術支出現在正在達到預期目標，而行銷全年都是季節性的，這在過去幾年中很常見。當您回顧去年的收益時，您會發現第二季和第三季末的行銷活動出現了同樣類型的季節性成長。

Thank you.

謝謝。

Ebrahim Poonawala of Bank of America.

美國銀行的易卜拉欣·普納瓦拉。

Thank you and good morning. I guess maybe first question is just around Bryan and Hope on fixed income, I think you said the $40 million seems like a good run rate for the back half from what I can recall just in prior cycles, rate cuts, it is counter-cyclical. You should see a lot more bond book restructurings that your clients, et cetera. So I would assume that if the September rate cut outlook firms up and the steepening in the yield curve should push that to pretty strong levels, would be my understanding as well. Am I missing something there or are you just being conservative when you talk about the cap markets outlook.

謝謝你，早安。我想也許第一個問題是圍繞布萊恩和霍普關於固定收益的，我想你說過，從我在之前週期中的記憶來看，4000萬美元似乎是後半段的一個不錯的運行率，降息，它是反週期的。您應該會看到比您的客戶等更多的債券帳簿重組。因此，我認為，如果 9 月降息前景堅定，並且殖利率曲線的陡峭應將其推至相當強勁的水平，這也是我的理解。我是否遺漏了一些東西，或者您在談論資本市場前景時只是保守。

Yes, I'll point you to there's a very pretty graphs that Natalie put in the appendix, it sort of shows Fed funds and what it does to average daily revenues that your instincts are right to the extent that rates are moving down, you're likely to see an impact on average daily revenue being up and what we've talked about there is a more steady environment. We're not making any broad assumptions about the Fed making significant rate cuts basically following the forward curve. But on the whole, if the Fed is more aggressive in moving rates down is likely it would be better than we've talked about for our fixed income business.

是的，我會向你指出，娜塔莉在附錄中放了一張非常漂亮的圖表，它顯示了聯邦基金及其對平均每日收入的影響，在利率下降的情況下，你的直覺是正確的，你'我們可能會看到對平均每日收入上升的影響，並且我們所討論的是一個更加穩定的環境。我們不會對聯準會基本上按照遠期曲線大幅降息做出任何廣泛的假設。但總體而言，如果聯準會更積極地降低利率，那麼對於我們的固定收益業務來說，情況可能會比我們討論的要好。

And I guess the other side of the on the countercyclical business and on mortgage warehouse if we get fed cuts, but mortgage rates remain around 7%. Is that enough based on what you're hearing from your mortgage warehouse clients to ticket activity and a pickup in balances? Or is there a level of rates on the mortgage front that needs to get that business sort of momentum going?

我猜想，如果聯準會降息，反週期業務和抵押貸款倉庫的另一面就會發生變化，但抵押貸款利率仍保持在 7% 左右。根據您從抵押倉庫客戶那裡聽到的票務活動和餘額增加的情況，這是否足夠？或者抵押貸款方面是否需要一定的利率水準來推動該業務的發展？

Yes, I think you've got to see mortgage rates drop more significantly to see any real pickup in refinance activity. I think you'll still continue to see a steady flow of purchase activity, but I think to see anything meaningful in terms of refinance activity, you're going to see rates drop more than that. We have had a opportunity to pick up a little bit of share by increasing lines. And we think that that will help maintain some stability in balances there. And we're optimistic that that's a business that's going to pick up nicely as a base rate environment does normalize and get a normally shape yield curve.

是的，我認為你必須看到抵押貸款利率大幅下降才能看到再融資活動真正回升。我認為您仍然會繼續看到穩定的購買活動，但我認為要看到再融資活動方面任何有意義的事情，您會看到利率下降的幅度更大。我們有機會透過增加線路來獲得一點份額。我們認為這將有助於維持那裡的平衡的某種穩定性。我們樂觀地認為，隨著基本利率環境確實正常化並獲得正常形狀的殖利率曲線，這項業務將會很好地復甦。

Got it. And one last question, if I may. Your mexican deposit pricing. So there's a lot more, I think, circumspect relative to what I've heard from the banks so far this earnings season. So one, I think the minus is the loan to deposit ratio that you're managing to, which is causing First Horizon to be a lot more active in bringing in deposits or retaining deposits. And am I overstating it because what we're hearing from most banks is some cooling in deposit pricing, things repricing lower from three, six, nine months ago. So I just want to make sure I'm not missing anything?

知道了。如果可以的話，還有最後一個問題。您的墨西哥存款定價。因此，我認為，與本財報季迄今為止我從銀行聽到的消息相比，還有更多的謹慎之處。因此，我認為負數是您所管理的貸存比率，這導致 First Horizo​​n 在吸收存款或保留存款方面更加積極。我是否誇大了這一點，因為我們從大多數銀行那裡聽到的是存款定價有所降溫，重新定價比三、六、九個月前更低。所以我只是想確保我沒有遺漏任何東西？

Yes, I think, but I think a couple of thoughts. One is we are attentive to our loan to deposit ratio, but that's not driving the deposit pricing strategy as much as it is protecting defending the existing customer relationships. So we're thinking about it from a relationship side of things in and that would driving the activity.

是的，我想，但我有幾個想法。一是我們關注貸存比，但這並沒有推動存款定價策略，而是保護現有的客戶關係。因此，我們從事物的關係方面來考慮它，這將推動活動。

If you look underneath the covers, I quoted some numbers about our existing customer relationships. It would be our price. We also had a significant balance of customers where we were able to move right back is just on the whole because of competitive dynamics in certain sectors, we saw a net aggregate increase in deposit costs, but it was really driven by our desire to defend customer relationship.

如果您深入了解一下，我引用了一些有關我們現有客戶關係的數據。這將是我們的價格。我們還擁有顯著的客戶平衡，總體而言，由於某些行業的競爭動態，我們能夠立即恢復，我們看到存款成本總體淨增加，但這實際上是由我們保護客戶的願望驅動的關係。

Clearly, as I said, we will pay attention to our loan to deposit ratio, but we think we have the flexibility in our balance sheet to support attractively block of fixed fees for me to say attractively priced well, structured credit and then through any cycles. So is not really constraining our ability in the near term, not to say that that won't change. But in the near term, we feel like we're well positioned to fund customer relationships that make sense for our balance sheet.

顯然，正如我所說，我們將關注我們的貸存比率，但我們認為我們的資產負債表具有靈活性，可以支持有吸引力的固定費用塊，我可以說價格有吸引力的結構性信貸，然後通過任何週期。因此，短期內並沒有真正限制我們的能力，並不是說這不會改變。但在短期內，我們認為我們有能力為對我們的資產負債表有意義的客戶關係提供資金。

Ebrahim, I still think we'll add to that we are a Southeast regional bank. And I think everyone with the exception of one that's releases a national bank, but most everybody is coming talking about the Southeast being their target for growth. And so we are competing differently than the national banks. As you know, when you look at multiple of our competitors and they talk about their growth opportunities, they're talking about the Southeast are announcing new branches. They're announcing hiring new teams. And so I think the Southeast allows us to grow more than the average on loans, but it's also become more competitive on both the loan and deposit side as more banks are trying to increase their footprint or enter here.

易卜拉欣，我仍然認為我們會補充一點，我們是一家東南地區銀行。我認為除了成立國家銀行的銀行之外，每個人都在談論東南部是他們的成長目標。因此，我們的競爭方式與國家銀行不同。如您所知，當您觀察我們的多個競爭對手時，他們談論自己的成長機會，他們談論的是東南部正在宣布新的分支機構。他們宣布僱用新團隊。因此，我認為東南部使我們的貸款成長超過平均水平，但隨著越來越多的銀行試圖擴大業務或進入這裡，它在貸款和存款方面也變得更具競爭力。

Second, on the loan to deposit ratio as mortgage warehouse funds up in Q2 and Q3. We only see that drift up. As I've mentioned before, we may have to go deeper into brokered or wholesale during that time of being a 300 basis point yielding asset, I'm okay with that match funding and that loan deposit ratio going up during the two quarters, their high end line increases.

二是貸存比，二、三季抵押倉資金上升。我們只看到這種漂移。正如我之前提到的，我們可能必須在成為 300 個基點收益資產的時期更深入地進行經紀或批發業務，我對匹配資金和貸款存款比率在這兩個季度上升的情況感到滿意，他們的高端線增加。

300 basis points.

300個基點。

Good catch, Brian.

很好，布萊恩。

All right. Thanks a lot for taking my questions.

好的。非常感謝您回答我的問題。

Chris McGratty of KBW.

KBW 的克里斯麥克格拉蒂。

Good morning maybe a run to help them in terms of the spot margin, do you have as of June 30? I'm trying to think about exit exit velocity as you go into next year with what you do with the deposits?

早安，也許可以在現貨保證金方面幫助他們，截至 6 月 30 日你們有嗎？我正在嘗試考慮明年您如何處理存款時的退出速度？

We didn't have spot margin, but we do have on slide 9 the spot rate for the quarter, which was 3.35.

我們沒有即期保證金，但我們在投影片 9 上有該季度的即期匯率，即 3.35。

Okay. Great, I must have missed that. Thank you.

好的。太棒了，我一定是錯過了。謝謝。

And then, Bryan, on capital, you're at the [11] you talked about clarity on regulation and clarity on the economy being the keys to going down to [10, 10.5]. Do you think it's a possibility that you could you could have that clarity in the back half of the year? Is that probably a 2025 event to take down the capital ratios?

然後，布萊恩，關於資本，您在 [11] 中談到了監管的明確性和經濟的明確性是下降到 [10, 10.5] 的關鍵。您認為下半年有可能實現這種清晰的思維嗎？這可能是 2025 年降低資本比率的事件嗎？

Yes, I still think it's a 2025 question. We're not planning on own change in our thinking about that in the near term. We want to see the path of rates and what the economy's doing. And it is most everybody. We're hopeful that the Fed creates a soft landing for the economy, but we're prepared for something different than that until we see greater clarity, we don't plan to reevaluate that.

是的，我仍然認為這是一個 2025 年的問題。我們不打算在短期內改變我們對此的想法。我們希望了解利率走勢以及經濟狀況。大多數人都是如此。我們希望聯準會能為經濟實現軟著陸，但我們已經做好了應對不同情況的準備，直到我們看到更清晰的情況為止，我們不打算重新評估這一點。

That's perfect. Thank you.

那很完美。謝謝。

Casey Haire, Jefferies.

凱西·海爾，杰弗里斯。

Good morning, everyone. From the board all up on NII Any any thoughts to using some of the capital towards a bond book restructure and improving the yield there? I know it's a small asset for you, but just wondering some updated thoughts there.

大家早安。來自 NII 的董事會 有任何想法使用部分資本進行債券帳簿重組並提高收益率嗎？我知道這對你來說是一筆小資產，但只是想知道一些最新的想法。

Yes, this is Bryan, Casey. And the short answer is probably not in our view, the restructuring of the bond portfolio really creates a lot of friction and doesn't really create anything other than a difference in the timing of earnings that discount or or from [AOCI] mark is going to accrete back to earnings or capital over time. And so it is unlikely that's something that we evaluate just simply because it creates friction that doesn't create a lot of economic. It doesn't create any economic value over time.

是的，這是布萊恩，凱西。我們可能不認為簡短的答案是，債券投資組合的重組確實造成了很多摩擦，除了折扣或[AOCI]標記的收益時間差異之外，並沒有真正產生任何其他東西。或資本。因此，我們不太可能僅僅因為它產生的摩擦而不會產生大量經濟而對其進行評估。隨著時間的推移，它不會創造任何經濟價值。

Got you. Okay. And then just switching to credit quality, the NPL migration sounds like it was driven by CRE I was wondering if you give any color on product or geography and what's driving that.

明白你了。好的。然後只是轉向信用質量，不良貸款的遷移聽起來像是由商業房地產驅動的，我想知道您是否對產品或地理位置以及推動其的因素給出了任何解釋。

Yes, Casey, this is Tom Hung. It was predominantly driven by our credit portfolio and that particular office. What I would point to, though is I think the underperformance is within the range of our expectations. I don't think there was anything that was surprising to us this is really kind of a just driven more by the higher for longer environment wherein the 12 macro macro economic environment.

是的，凱西，這是湯姆·洪。這主要是由我們的信貸投資組合和該特定辦公室推動的。不過，我想說的是，我認為表現不佳在我們的預期範圍內。我不認為有什麼讓我們感到驚訝的，這實際上只是由 12 月宏觀經濟環境中較高的長期環境所推動的。

What I would point to is within our office portfolio, we continue to believe we have strong client selection and I think that will certainly prove itself out in the long run. I'm just give kind of give you some high-level information 90% of our office portfolio by square footage does nine stories or less. So I think that speaks to kind of the profile of our office portfolio. In fact, we only have eight building better ten-plus stories. And so I believe where we're with the right projects, the right borrowers in the right portions of office to, they have a good long-term outcome.

我想指出的是，在我們的辦公室投資組合中，我們仍然相信我們擁有強大的客戶選擇，我認為從長遠來看，這肯定會證明自己。我只是向您提供一些高級信息，按平方英尺計算，我們的辦公室組合中 90% 的面積為九層或更少。所以我認為這說明了我們辦公室投資組合的概況。事實上，我們只有八個人在建造更好的十多層樓。因此，我相信，只要我們擁有正確的項目，正確的借款人在正確的辦公室位置，他們就會取得良好的長期成果。

Thank you.

謝謝。

Ben Gerlinger at Citigroup spend.

花旗集團的本傑林格 (Ben Gerlinger) 花錢。

Morning. I was curious if we could talk a little bit about share repurchase activity and other the CET 1, the 10 kind of add probably next year outcome are the banks at a pretty good month so far down just kind of curious how you guys think about the math on buybacks, kind of taking into consideration to that a relative valuation. And then also the total the math is a little bit different because the stocks have gone up. Just kind of curious if you do continue the buyback, could we theoretically see another reauthorization this calendar year? Because if it's viewed more accurate. So just kind of curious, thoughts on overall share repurchase activity.

早晨。我很好奇我們是否可以談談股票回購活動和其他 CET 1，明年可能出現的 10 種添加結果是銀行迄今為止的月份表現相當不錯，只是有點好奇你們如何看待回購數學，有點考慮到相對估值。而且總的數學計算也有點不同，因為股票漲了。只是有點好奇，如果您繼續回購，理論上我們可以在今年看到另一次重新授權嗎？因為如果它看起來更準確。所以只是有點好奇，對整體股票回購活動的想法。

Yes. The buyback activity, we are thoughtful about price and relative value and our expectations of long-term values. We think that even with this significant improvement in stock prices across the industry over the last few weeks, we think we're still at a relative discount and opportunistically we will continue to use capital to repurchase shares.

是的。在回購活動中，我們會考慮價格和相對價值以及我們對長期價值的預期。我們認為，即使過去幾週整個行業的股價出現顯著改善，我們認為我們仍然處於相對折扣狀態，並且機會主義地我們將繼續使用資本回購股票。

I don't know how to evaluate as we sit here today about whether we would reauthorize a buyback this year or next. That's a Board decision we have plenty of capacity under the authorization that we have that expires in January of this coming year 2025. And so we will evaluate that as appropriate. But we do think maintaining excess capital when we can return it to shareholders through a buyback is probably more appropriate that we put it in the hands of our shareholders. And so we will continue to be opportunistic. We will look at relative valuations, and we'll make decisions later on about whether we need to increase our authorization or not.

當我們今天坐在這裡時，我不知道如何評估我們是否會在今年或明年重新授權回購。這是董事會的決定，我們擁有足夠的能力，授權將於 2025 年 1 月到期。但我們確實認為，當我們可以透過回購將多餘資本回饋給股東時，保留多餘資本可能比將其交到股東手中更合適。因此，我們將繼續保持機會主義。我們將考慮相對估值，稍後我們將決定是否需要增加授權。

Got it. Helpful. And then I hope I know you said expenses in your prepared remarks. I think you said flat to down in the second half of this year is kind of curious. It is always levers you can call it actually has a pretty sizable franchise as you guys have. But is that pushing anything out into 2025 that could be done today and just kind of curious on how you get down both on the cloud.

知道了。有幫助。然後我希望我知道你在準備好的發言中提到了費用。我認為你說今年下半年持平到下降有點奇怪。它始終是你可以稱之為的槓桿，它實際上擁有像你們一樣相當大的特許經營權。但這是否會將今天可以完成的事情推遲到 2025 年，只是有點好奇如何在雲端上實現這一點。

Yeah Ben good questions. We do expect to be flat to down in the second half of the year or part of that is that, you know, as we've spoken about before, bond business or any just Financial had a really good Q1 and we had a high revenue quarter and a high expense quarter. We expect that to come back down. We've had the TD. retention in the first step down in the back half of this year. We think we've hit the stride of our technology investments. And so we are looking at operational efficiencies. We have another adjustment, a restructuring costs as we continue to look at ways to reduce our costs with a low growth environment, how much headcount do you need where were you previously spending money with third parties that you don't need to anymore?

是的，本問得好。我們確實預計下半年會持平甚至下降，或者部分原因是，正如我們之前談到的，債券業務或任何金融業務第一季的業績都非常好，而且我們的收入很高季度和高費用季度。我們預計這一情況會回落。我們已經拿到了TD。今年下半年的第一次降級保留。我們認為我們的技術投資已經取得了重大進展。因此，我們正在考慮營運效率。我們還有另一個調整，即重組成本，因為我們繼續尋找在低成長環境下降低成本的方法，您需要多少員工，您以前在哪些地方向不再需要的第三方花錢？

The environment has significantly shifted over the last year. And we're looking at every opportunity we can to be as efficient as we can and make sure that we have, though we're buying less of it before we're very focused on our efficiency ratio, not letting that grow over time.

去年，環境發生了顯著變化。我們正在尋找每一個機會，盡可能提高效率，並確保我們擁有這樣的機會，儘管在我們非常關注我們的效率比率之前，我們會減少購買，而不是讓它隨著時間的推移而增長。

Okay. That's helpful. But there's nothing being push that. So I'm just trying to think what the hill to climb next year. It's not like in intentionally kind of maybe a little bit bigger by managing to that, correct?

好的。這很有幫助。但沒有什麼可以推動這一點。所以我只是想明年要爬哪座山。這不像是故意透過設法做到更大一點，對嗎？

Correct.

正確的。

Okay. Thank you.

好的。謝謝。

(Operator Instructions)

（操作員說明）

Samuel Varga of UBS.

瑞銀集團的塞繆爾·瓦爾加。

Good morning. I wanted to just go back to the NII guide for second. You assume a flattish balance sheet. And obviously with the loan growth year to date, you're kind of close to the middle of the guide you said and obviously seasonality and the LMC vertical isn't going to help for the second half of the year. So I'm just trying to ask, is there any sort of mix shift assumption within that flat balance sheet or should we think that that loans and securities and cash are all sort of staying relatively flat for second half of the year?

早安.我想再回到 NII 指南。您假設資產負債表平坦。顯然，從今年迄今為止的貸款成長來看，您已經接近您所說的指南的中間位置，顯然季節性和 ​​LMC 垂直領域不會對今年下半年有所幫助。所以我只是想問，在平坦的資產負債表中是否存在某種混合轉變假設，或者我們是否應該認為下半年貸款、證券和現金都保持相對平坦？

Sam, thanks for the question. Yes, when you when you change your guidance, you run a whole set of scenarios and to hopefully only two things at once in the year end. So the answer is zero. The flat to down 2% takes into account all of the things that could happen and increasing deposit costs, a flat balance sheet, slightly up slightly down balance sheet. And we feel that whatever is going to happen in the back half of the year, we will hit the new guidance being flattened 2%.

山姆，謝謝你的提問。是的，當你改變你的指導時，你會運行一整套場景，並希望在年底只同時做兩件事。所以答案是零。持平至下降 2% 考慮了所有可能發生的事情以及增加的存款成本、資產負債表持平、資產負債表小幅上升、小幅下降。我們認為，無論下半年會發生什麼，我們都將達到新的指導方針，即下降 2%。

Okay, understood. Thank you. And then just on the deposit side, I'm thinking about I'm late this year, probably 2025 on the sort of the bearing front. I wanted to get a sense for where would you expect that growth to return from the retail franchises of the commercial franchise and sort of what would have to happen for your commercial clients, to actually increase the dollars they hold in those IB accounts.

好的，明白了。謝謝。然後就存款方面而言，我在想今年我會遲到，可能是 2025 年。我想了解您期望從商業特許經營的零售特許經營中獲得什麼增長，以及您的商業客戶必鬚髮生什麼，才能真正增加他們在 IB 帳戶中持有的美元。

I think the answer is both as we've gotten front-footed on the checking account marketing campaign. We haven't done that in years really since the MOV and we saw a lot of success in the second quarter. And so we hope that that will continue, and we'll see stabilization in the non-interest bearing and also mentioned, as we look at that, there's there is a small amount of noninterest-bearing, but also interest bearing.

我認為答案是兩者兼而有之，因為我們在支票帳戶行銷活動上已經取得了先機。自從 MOV 以來，我們已經很多年沒有這樣做了，我們在第二季度看到了巨大的成功。因此，我們希望這種情況能夠持續下去，我們將看到非計息業務的穩定，我們也提到，當我們看到這一點時，有少量的非計息業務，但也有計息業務。

When we talk about the commercial clients, we've talked a lot about our technology investments. One of the biggest investments we're making is converting and upgrading our treasury management system and the back half of that. And we expect to convert that you complete that conversion in Q3 and some into Q4. We do expect that we'll be able to attract and retain retain clients and deepen relationships and attract new clients with our new and improved treasury management system.

當我們談論商業客戶時，我們談論了很多我們的技術投資。我們正在進行的最大投資之一是轉換和升級我們的財務管理系統及其後半部分。我們希望您在第三季完成轉換，並在第四季完成一些轉換。我們確實希望透過我們新的和改進的資金管理系統來吸引和留住客戶，加深關係並吸引新客戶。

Yes, I think the opportunities for growth exist on both sides and have been Fed shrinking its balance sheet world. That money is ultimately coming out of customer accounts, too. And if you look at customer accounts, they've been declining over the last several months and then really going back a year or so. But we think there are opportunities, as I said, to grow both on the consumer side, we've got a checking offer that is showing very good signs early in the process.

是的，我認為雙方都有成長機會，而且聯準會一直在收縮其資產負債表。這筆錢最終也將從客戶帳戶中流出。如果你看一下客戶帳戶，你會發現它們在過去幾個月裡一直在下降，然後實際上會回溯到一年左右。但我們認為，正如我所說，在消費者方面都有成長的機會，我們已經收到了一份檢查報價，在過程的早期就顯示出了非常好的跡象。

We think the completion of the treasury integration effort will be very significant in terms of our ability to continue to grow and to market that product. So we're optimistic on both sides. And as we said a number of times, we're in a bit of a very attractive footprint. It's competitive, but it's a very attractive footprint. And we think that gives us plenty of opportunity to invest in some of these higher growth markets where we have in many cases, smaller shares. And so we're optimistic about our ability to invest in growth across this in a 12 state footprint.

我們認為，財務整合工作的完成對於我們繼續發展和行銷該產品的能力將非常重要。所以我們對雙方都持樂觀態度。正如我們多次說過的，我們的足跡非常有吸引力。它具有競爭力，但它的足跡非常有吸引力。我們認為，這給了我們很多機會投資一些成長較高的市場，在許多情況下，我們在這些市場的份額較小。因此，我們對在 12 個州投資成長的能力持樂觀態度。

Got it. Thanks for all the color. I appreciate it.

知道了。感謝所有的顏色。我很感激。

Christopher Marinac of Janney Montgomery Scott.

詹尼·蒙哥馬利·斯科特的克里斯多福·馬裡納克。

Good morning, I had a question for you on me. I had a question on the CRE reserves and was curious if there's flexibility there now that those rose in the quarter and given that the lease renewals are very limited, as you had outlined in the slide?

早安，我有一個關於我的問題想問你。我對商業房地產儲備金有一個疑問，並且很好奇現在該儲備金在本季度有所增加，並且考慮到租約續約非常有限（正如您在幻燈片中概述的那樣），那裡是否有靈活性？

Your question is [incorrect] Can you repeat the question, Chris?

你的問題[不正確]你能重複一下這個問題嗎，克里斯？

Is there flexibility on your reserve? Can you reserve for CRE grow less than we just saw just because you're kind of limited renewals and sort of address what you needed to this last quarter.

您的儲備有彈性嗎？您為 CRE 預留的成長是否會比我們剛剛看到的要少，只是因為您的續約有限，並且解決了上個季度所需的問題。

Yes, I do believe that especially as rates rates have continued, have they've been stable if they come down. And we're going to see, I think, a good bit of relief on commercial real estate. And I actually see and I think everybody and so we will see some healing there. I also think that we've been very proactive and on the conservative side, as we think about grading and we've done that for really the duration. And so as we've built some reserves over time, I believe we're adequately reserved at this time. At this time, we don't expect to build in and are there opportunities to release as things moderate. I absolutely think there could be great.

是的，我確實相信，特別是在利率持續上漲的情況下，如果利率下降，利率是否會保持穩定。我認為，我們將看到商業房地產的緩解。我實際上看到了，我想每個人都會看到一些治癒。我還認為，當我們考慮評分時，我們一直非常積極主動且保守，我們一直在這樣做。因此，隨著時間的推移，我們已經建立了一些儲備，我相信我們目前的儲備已經足夠了。目前，我們預計不會內置，並且隨著情況的緩和，是否有機會釋放。我絕對認為可能會很棒。

Thanks for that. And then I just had a question for Hope as it pertains to the technology spend I know you mentioned that there was sort of slow the pace, but as it accelerates, is it going to be treasury management things like you mentioned or would it be upping other initiatives back towards the core at the bank.

謝謝你。然後我有一個問題要問希望，因為它與技術支出有關，我知道你提到過步伐有點慢，但隨著它的加速，它會是像你提到的那樣的財務管理事情還是會加快其他舉措又回到了銀行的核心。

Early on, we have a three-year plan and early on, a lot of it was kind of what we're calling run the bank is end of life system like treasury management, NGL things that we had put on pause following the MOE integration. And following of the 15-months dating and courting, we had that didn't end up working out. Now as we're trying to get most of that run, the bank is getting through. We are doing more change the bank more client facing in the back half of our three year investment strategy next year, we'll be talking about this year. We're talking to the bank as to what your GL treasury management next year, we'll share with you some of the big ones we're doing as well.

在早期，我們有一個三年計劃，早期，很多都是我們所說的銀行運營，是生命週期結束的系統，如資金管理、NGL 等我們在教育部整合後暫停的事情。經過 15 個月的約會和求愛之後，我們並沒有最終成功。現在，當我們試圖完成大部分擠兌時，銀行正在渡過難關。在明年三年投資策略的後半段，我們將做更多的改變，讓銀行面對更多的客戶，我們將在今年討論。我們正在與銀行討論明年的總帳財務管理，我們也會與您分享我們正在做的一些重大工作。

Great. Thanks very much. I appreciate the time.

偉大的。非常感謝。我很感激時間。

Thanks, Chris.

謝謝，克里斯。

Jared Shaw of Barclays.

巴克萊銀行的賈里德·肖。

Well, this is John on for Jared. I guess just if we could get a little more color on that migration into NPLs and the office portfolio, I guess what portion of the increase in NPLs was from office in particular and on, has there been any differentiation across geographies just on overall performance within the office portfolio?

好吧，這是約翰替賈里德發言。我想，如果我們能夠對不良貸款和辦公室投資組合的遷移有更多的了解，我想不良貸款的增長中有多少部分來自於辦公室及其他方面，不同地區之間的整體表現是否存在差異？組合？

Hey, John, this is Tom. A large portion of the NPL increase is driven by office. I think that's probably not surprising, as I mentioned, I believe as of within the range of expectations that we had based on what we see from the information we have about kind of the broader environment and the rate environment that we're in. I would reiterate that I believe we've continued to show good underwriting and then client selection. And so even as we go into these deals, we certainly did always stress test the portfolio for potential rises in interest rates, interest rates, change in vacancy rates and so on. And so, you know, I think what you're seeing overall is just obviously, as rates have been higher, the cushion has been smaller.

嘿，約翰，這是湯姆。不良貸款成長的很大一部分是由辦公室推動的。我認為這可能並不奇怪，正如我所提到的，我相信，根據我們從我們所掌握的有關更廣泛的環境和我們所處的利率環境的信息中看到的信息，我認為這在我們的預期範圍內。因此，即使我們進行這些交易，我們確實總是對投資組合進行壓力測試，以了解利率的潛在上升、利率、空置率的變化等。所以，你知道，我認為你所看到的總體情況很明顯，隨著利率上升，緩衝變得更小。

And so we wanted to make sure we're always appropriately not conservatively grading our portfolio and hence why you see some negative grade migration.

因此，我們希望確保我們始終適當地而不是保守地​​對我們的投資組合進行評分，因此您會看到一些負面的評分遷移。

I'll add a few things to what Tom said. This is Susan and I think you're seeing this just in articles that are coming out from others and from commercial real estate databases, some of the geographies that have seen some weakness in the southeast around office would be Atlanta Raleigh. So a couple of areas and are some little bit in in some of the Texas cities. So but again, these are more at this point, we still think of these as kind of project by project and not indicative of a of an issue necessarily with a specific geography.

我將在湯姆所說的基礎上補充一些內容。這是蘇珊，我想您只是在其他人和商業房地產資料庫發表的文章中看到了這一點，在東南部辦公室周圍出現一些弱點的一些地區是亞特蘭大羅利。所以有幾個地區，在德克薩斯州的一些城市。所以，但同樣，這些更多的是在這一點上，我們仍然認為這些是一個又一個項目的項目，並不一定表明特定地理位置的問題。

And to reiterate what Tom said, we've been conservative in commercial real estate underwriting for many, many years. And so the upfront equity that we require across all types of commercial real estate projects is significant and so even with some drops in appraised values that we've seen as we've reappraised properties, either because they've been downgraded or there's a credit event maturity, we've not seen a lot of loss content there, but we could tell them we continue to evaluate on a loan-by-loan basis.

重申一下湯姆所說的，多年來我們在商業房地產核保方面一直持保守態度。因此，我們對所有類型的商業房地產項目所需的前期股本都是巨大的，因此，即使我們在重新評估房產時看到評估價值有所下降，要么因為它們被降級，要么有信用事件到期後，我們還沒有看到很多損失內容，但我們可以告訴他們，我們將繼續逐筆評估。

Yes, we do watch it closely. And I would just add that in our traditional office portfolio based on the information we currently have, we're looking at an average stabilized LTV of about 60% on an office club. So that still is a pretty significant amount of cushion for any softness.

是的，我們確實密切關注。我想補充一點，根據我們目前掌握的信息，在我們的傳統辦公室投資組合中，我們預計辦公室俱樂部的平均穩定 LTV 約為 60%。所以對於任何柔軟度來說，這仍然是相當大的緩衝量。

John, the other thing I'll reiterate what we said before. We reiterate our charge-off guidance. So NPLs are on this quarter, 50% of them are current on payments still stand behind our target on guidance for the full year.

約翰，另一件事我會重申我們之前說過的話。我們重申我們的沖銷指引。因此，本季的不良貸款中，其中 50% 正在償還，但仍落後於我們全年指導目標。

Okay, great. That's a good color. And then I guess just on the reserve, it sounded like on [CRE] reserves expanded mostly due to office. I just can you put a number out with the officers? There isn't one. What's the rest of the CRE portfolio from reserves there?

好的，太好了。這是一個很好的顏色。然後我想就儲備金而言，聽起來[CRE]儲備金的擴張主要是因為辦公室。我能告訴官員們一個電話號碼嗎？沒有一個。那裡的儲備中剩餘的商業房地產投資組合是多少？

We don't break it down by property type, but there is it the CRE coverages outlined overall in the materials that were provided.

我們不會按房產類型進行細分，但在所提供的資料中總體概述了 CRE 的覆蓋範圍。

Okay. Sounds good. That's all for me. Thanks for all the color.

好的。聽起來不錯。這就是我的全部。感謝所有的顏色。

We currently have no further questions. So I'll hand back to Brian Jordan, CEO for closing remarks.

目前我們沒有進一步的問題。因此，我將請執行長布萊恩喬丹 (Brian Jordan) 致閉幕詞。

Thank you, Carly. Thank you, everyone, for joining our call. We appreciate your time and attention. Please let us know if you have any further questions or need additional information. Again, thank you and have a great day.

謝謝你，卡莉。謝謝大家加入我們的電話會議。我們感謝您的時間和關注。如果您還有任何其他問題或需要更多信息，請告訴我們。再次感謝您，祝您有美好的一天。

This concludes today's call, and thank you to everyone for joining. You may now disconnect your line.

今天的電話會議到此結束，感謝大家的加入。現在您可以斷開線路。