Finwise Bancorp (FINW) 2023 Q3 法說會逐字稿

Greetings, welcome to FinWise Bancorp's third quarter 2023 earnings conference call. (Operator Instructions) Please note, this conference is being recorded. I'll now turn the conference over to Nathan Mills, Investor Relations. Thank you. You may begin.

大家好，歡迎參加 FinWise Bancorp 的 2023 年第三季財報電話會議。 （操作員說明）請注意，本次會議正在錄製中。我現在將會議交給投資者關係部門的內森米爾斯 (Nathan Mills)。謝謝。你可以開始了。

Thank you, operator. Good afternoon, and welcome to FinWise Bancorp's third quarter 2023 conference call. The earnings press release is available on the Investor Relations section of the company's website at investors.finwisebancorp.com. Note that this conference call is being recorded. I would like to remind you that certain statements made in the course of this call are not based on historical information and may constitute forward-looking statements covered by the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

謝謝你，接線生。下午好，歡迎參加 FinWise Bancorp 的 2023 年第三季電話會議。收益新聞稿可在公司網站的投資者關係部分取得：investors.finwisebancorp.com。請注意，本次電話會議正在錄音。我想提醒您，本次電話會議中所做的某些陳述並非基於歷史信息，可能構成 1995 年《私人證券訴訟改革法案》安全港條款所涵蓋的前瞻性陳述。

These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

這些陳述是基於管理層目前的預期和信念，並受到許多趨勢和不確定性的影響，這些趨勢和不確定性可能導致實際結果與前瞻性陳述中描述的結果有重大差異。

I refer you to the company's filings made with the SEC, including its earnings press release issued earlier today, for more detailed discussion of the risks and factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. The company undertakes no duty to update any forward-looking statements that may be made during the course of this call.

我建議您參閱該公司向美國證券交易委員會提交的文件，包括今天早些時候發布的收益新聞稿，以更詳細地討論可能導致實際結果與任何前瞻性聲明中明示或暗示的結果存在重大差異的風險和因素今天。該公司不承擔更新本次電話會議期間可能做出的任何前瞻性陳述的責任。

Additionally, certain non-GAAP financial measures will be discussed on this conference call. Our presentation of this information is not intended to be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Reconciliation of these non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP can be accessed through our filings with the SEC, including our earnings press release issued earlier today at www.sec.gov.

此外，本次電話會議也將討論某些非公認會計準則財務指標。我們提供的這些資訊並非旨在被孤立地考慮或作為根據 GAAP 提供的財務資訊的替代品。這些非 GAAP 財務指標與根據 GAAP 制定的最具可比性的指標的對帳可以透過我們向 SEC 提交的文件獲得，包括我們今天早些時候在 www.sec.gov 上發布的收益新聞稿。

Hosting the call today are Mr. Kent Landvatter, CEO and President of FinWise Bancorp; Mr. Javvis Jacobson, Chief Financial Officer; and Mr. James Noone President of FinWise Bank. With that, I will turn the call over to Mr. Landvatter.

今天主持電話會議的是 FinWise Bancorp 執行長兼總裁 Kent Landvatter 先生； Javvis Jacobson 先生，財務長；以及 FinWise 銀行行長 James Noone 先生。這樣，我會將電話轉給蘭德瓦特先生。

Good afternoon, everyone, and thank you for joining us on our third quarter 2023 earnings conference call. On today's call, we will discuss our third quarter financial results, provide color on, how we navigated the turbulence in the macro economy and share progress on our strategic priorities. We delivered yet another quarter of solid results, driven by 16.2% quarter over quarter growth in our loans held for investment portfolio, coupled with steady originations in our strategic programs line of business.

大家下午好，感謝您參加我們的 2023 年第三季財報電話會議。在今天的電話會議上，我們將討論第三季的財務業績，介紹我們如何應對宏觀經濟的動盪，並分享我們的策略重點的進展。我們又一個季度取得了穩健的業績，這得益於我們為投資組合持有的貸款環比增長 16.2%，以及我們的戰略計劃業務線的穩定起源。

Our third party focused business model, along with prudent underwriting, effective portfolio management and exceptional execution in our core competencies have remained sources of strength for us. During the third quarter, FinWise remain profitable and our loan portfolios continued to perform generally as anticipated.

我們以第三方為中心的業務模式，加上審慎的承保、有效的投資組合管理和核心競爭力的卓越執行，仍然是我們的力量來源。第三季度，FinWise 保持獲利，我們的貸款組合繼續按預期表現。

Our credit quality remains solid as evidenced in the relatively low charge-offs for the quarter, notwithstanding an expected rise in non-performing loans. These factors, along with our above peer average capital, enabled us to continue investing in our core competencies and laying the groundwork for future growth.

儘管不良貸款預計會增加，但本季沖銷相對較低就證明了我們的信貸品質仍然穩固。這些因素，加上我們高於同業平均的資本，使我們能夠繼續投資於我們的核心競爭力，並為未來的成長奠定基礎。

For the third quarter of 2023, we generated revenue of $22.4 million, led by interest from our growing loan portfolio and loan originations of $1.1 billion. This resulted in net income of $4.8 million or diluted earnings per share of $0.37, with a return on average equity of 12.8%.

2023 年第三季度，我們的收入為 2,240 萬美元，主要得益於不斷增長的貸款組合的利息和 11 億美元的貸款發放。淨利潤為 480 萬美元，稀釋後每股收益為 0.37 美元，平均股本回報率為 12.8%。

Well, we are pleased with these results, we believe that the higher for longer interest rate outlook and tight capital markets will continue to weigh on industry-wide loan originations and that this softness may persist throughout the remainder of 2023 and potentially well into 2024. Despite these macro challenges, we continue to actively manage what we can control.

我們對這些結果感到滿意，我們認為，長期利率前景的走高和資本市場的緊張將繼續對全行業的貸款發放造成壓力，而且這種疲軟狀態可能會持續到2023 年剩餘時間，甚至可能持續到2024年。儘管存在這些宏觀挑戰，我們仍繼續積極管理我們可以控制的事情。

Our focus on providing reliable and uninterrupted services with our current third party relationships remain strong and we are actively forging new relationships. This is integral to our strategy and is expected to continue to drive our success. Importantly, we have demonstrated our ability to perform well in this current environment and believe we remain well positioned for growth, as the economy begins to recover.

我們仍然致力於透過目前的第三方關係提供可靠且不間斷的服務，並且我們正在積極建立新的關係。這是我們策略的一部分，預計將繼續推動我們的成功。重要的是，我們已經證明了我們在當前環境下表現良好的能力，並相信隨著經濟開始復甦，我們仍處於成長的有利位置。

Turning to capital, at the end of the third quarter, the company's tangible book value per common share was $12.04 as compared to $11.59 at the end of the prior quarter. Our bank capital level remains significantly above well-capitalized guidelines with the bank leverage ratio of 22.1%. While our total shareholders' equity to total assets ratio remains high. It is important to note that since the end of 2022, the ratio is declined as our balance sheet continued to grow and we repurchased our stock.

談到資本，第三季末，該公司每股普通股的有形帳面價值為 12.04 美元，而上一季末為 11.59 美元。我們的銀行資本水準仍遠高於資本充足的指導方針，銀行槓桿率為 22.1%。而我們的股東權益總額與總資產的比率仍然很高。值得注意的是，自 2022 年底以來，隨著我們的資產負債表持續成長以及我們回購股票，該比率有所下降。

During the third quarter, we repurchased all remaining shares under the Board approved buyback plan. While management, our Board of Directors are always evaluating our use of capital. Our primary focus has been the deployment of capital to support organic growth opportunities to expand the business and to maintain balance sheet flexibility during what is an uncertain economic and geopolitical environment.

第三季度，我們根據董事會批准的回購計畫回購了所有剩餘股份。在管理過程中，我們的董事會始終評估我們的資本使用。我們的主要重點是部署資本，以支持有機成長機會，以擴大業務並在不確定的經濟和地緣政治環境中保持資產負債表的靈活性。

I will now provide an update on our key objectives as we move through the remainder of 2023 and beyond. Our strategic lending programs have been a key driver of our revenues and our support for existing platforms continued throughout the quarter. Our teams have also been actively working to bring new relationships through due diligence to expand and diversify revenue in this business line.

現在，我將介紹 2023 年剩餘時間及以後我們主要目標的最新情況。我們的策略貸款計劃一直是我們收入的關鍵驅動力，我們在整個季度繼續對現有平台提供支援。我們的團隊也一直積極致力於透過盡職調查建立新的關係，以擴大該業務線的收入並使收入多樣化。

Our SBA 7(a) lending continued to be a key driver of our portfolio growth, and we are pleased with both the growth and performance in the quarter. While our expected increase in nonperforming loans in the quarter was primarily attributable to our SBA loans. We are confident in our teams, underwriting and collateral management expertise, and historically managed credit performance quite effectively.

我們的 SBA 7(a) 貸款仍然是我們投資組合成長的關鍵驅動力，我們對本季的成長和業績感到滿意。而我們預計本季不良貸款的增加主要歸因於我們的 SBA 貸款。我們對我們的團隊、核保和抵押品管理專業知識充滿信心，並且歷史上管理信用表現相當有效。

Expenses remain well managed with the third quarter efficiency ratio of 51.3% compared to 52.7% in the previous quarter at 42.3% in the same period last year. However, it is important to note that the approximate $0.6 million of miscellaneous income recognized on the resolution of forbearance agreement related to a previously reported nonaccrual SBA loan played a part in the improved efficiency ratio during the quarter.

費用管理良好，第三季效率為 51.3%，上一季為 52.7%，去年同期為 42.3%。然而，值得注意的是，在解決與先前報告的非應計 SBA 貸款相關的暫緩協議時確認的約 60 萬美元雜項收入在本季度提高效率方面發揮了一定作用。

While this level of miscellaneous income is not expected on a recurring basis, it does demonstrate the expertise of our portfolio and collateral management teams and maximizing bank proceeds related to the nonaccrual balances. As previously noted, we expect our efficiency ratio to fluctuate remain elevated as we bring our new initiatives online.

雖然這種雜項收入水平預計不會經常出現，但它確實證明了我們的投資組合和抵押品管理團隊的專業知識，以及最大限度地提高與非應計餘額相關的銀行收益。如前所述，隨著我們將新舉措上線，我們預計我們的效率比率將保持在較高水平波動。

We believe this investment is critical to expanding our business relationships and will serve to further diversify and support our revenue in the years ahead. In summary, we continue to be excited about our pipeline of potential lending programs, the growth and performance of our SBA portfolio and continuous progress we have made on expansion of our banking as a service initiative.

我們相信這項投資對於擴大我們的業務關係至關重要，並將有助於在未來幾年進一步實現收入多元化並支持我們的收入。總而言之，我們仍然對我們的潛在貸款計劃管道、我們的 SBA 投資組合的成長和績效以及我們在擴展銀行即服務計劃方面取得的持續進展感到興奮。

We remain disciplined and focused on items that we can control, including risk management and third party prevents capital management, our underwriting, and collateral management, and investment for future growth opportunities of bank. With that, let me turn the call over to James Noone, our Bank President, who will provide you with more detail on strategic program initiatives and credit performance.

我們保持紀律並專注於我們可以控制的項目，包括風險管理和第三方阻止資本管理、我們的承銷和抵押品管理以及對銀行未來成長機會的投資。接下來，讓我將電話轉給我們的銀行行長詹姆斯·努恩（James Noone），他將為您提供有關戰略計劃舉措和信貸績效的更多詳細信息。

Thank you, Kent, and good afternoon. I will take a few minutes to walk you through our lending card and payment initiatives, as well as the details of the loan portfolio growth and credit performance. During the quarter, the bank continued to invest in strategic programs business line by hiring professionals and building on our strengths in the areas of business development, product, and marketing, along with compliance, third party risk operations, change management and IT.

謝謝你，肯特，下午好。我將花幾分鐘時間向您介紹我們的貸款卡和付款計劃，以及貸款組合成長和信貸績效的詳細資訊。本季度，該銀行繼續投資於策略計畫業務線，聘請專業人員，並增強我們在業務開發、產品和行銷以及合規、第三方風險營運、變革管理和 IT 領域的優勢。

Our lending programs pipeline remains strong, and we have been working to potentially launch additional lending programs prior to this calendar year end. With regard to product rollouts, we are excited about our work on building the card sponsorship business and payments of which we expect to be operational in the first half of 2024, and we anticipate that our first customers will be onboarded in the second half of 2024.

我們的貸款計劃管道仍然強勁，我們一直在努力在今年年底前推出更多貸款計劃。關於產品推出，我們對建立卡贊助業務和支付方面的工作感到興奮，我們預計該業務和支付將在 2024 年上半年投入運營，我們預計第一批客戶將在 2024 年下半年加入。

As we have noted, we believe that integrated banking as a service remains an important aspect of our strategy and meeting the needs of the market and in our positioning for the future. Our SBA 7(a) loan originations were strong during the third quarter, and we maintained our strategy of not selling the guaranteed portions of these loans.

正如我們所指出的，我們相信綜合銀行即服務仍然是我們策略、滿足市場需求以及我們未來定位的一個重要面向。第三季我們的 SBA 7(a) 貸款發放量強勁，我們維持不出售這些貸款的擔保部分的策略。

While the level of phone inquiries was more tempered than in previous quarters. Our SBA pipeline remained stable. The decision to retain substantially all of the guaranteed portions of our SBA 7(a) loans has been the primary factor in the 16.2% increase in our loans held for investment portfolio quarter over quarter. We continued to be comfortable with the strategy of holding a higher balance of government guaranteed loans as a way to generate meaningful and recurring growth in our interest income with minimal credit risk.

但電話諮詢的數量較前幾季有所緩和。我們的 SBA 管道保持穩定。決定保留我們 SBA 7(a) 貸款的幾乎所有擔保部分，是我們為投資組合持有的貸款環比增長 16.2% 的主要因素。我們仍然對持有較高政府擔保貸款餘額的策略感到滿意，以此作為在信用風險最小化的情況下實現利息收入有意義和經常性增長的一種方式。

Especially while the secondary market premiums remain subdued and the underlying loan interest rates remained elevated. Now turning to credit, the company's provision for credit losses was $3.1 million for the quarter compared to $2.7 million for the second quarter and a provision for loan losses of $4.5 million for the same quarter last year.

尤其是在二級市場溢價仍低迷且基礎貸款利率仍較高的情況下。現在轉向信貸，該公司本季的信貸損失準備金為 310 萬美元，而第二季為 270 萬美元，去年同期的貸款損失準備金為 450 萬美元。

The increase in provision over the prior quarter was primarily attributable to management's election to increase the qualitative factor adjustments based primarily on the Q3 growth of special mention nonaccrual and nonperforming assets, which related primarily to the banks SBA loan portfolio. The improvement in provision over the same quarter last year was primarily due to the continued reduction in the balance of our strategic program loans held for investment.

撥備較上一季增加主要歸因於管理層選擇增加定性因素調整，主要基於特別關注非應計資產和不良資產第三季度的增長，這主要與銀行的 SBA 貸款組合有關。撥備較去年同季有所改善，主要是由於本行用於投資的戰略計畫貸款餘額持續減少。

We have discussed the repositioning of the strategic program HFI portfolio, which started roughly 18 months ago, and that was substantially no change to this strategy. During the quarter net charge-offs with $2.2 million compared to $2.4 million in the second quarter and $3.1 million during the same quarter last year. The decrease compared to the prior quarter was primarily due to a large recovery in the SBA portfolio.

我們已經討論了大約 18 個月前開始的策略計畫 HFI 投資組合的重新定位，而該策略基本上沒有變化。本季淨沖銷額為 220 萬美元，而第二季為 240 萬美元，去年同期為 310 萬美元。與上一季相比的下降主要是由於 SBA 投資組合的大幅復甦。

Year over year decrease was primarily due to lower net charge-offs from strategic programs in a large recovery in the SBA portfolio. The company's net charge off rate as a percentage of average loans held for investment was 2.8% compared to 3.4% in the second quarter and 5.8% during the same quarter last year. We believe we are well reserved for potential loan losses within allowance as a percentage of total loans held for investment at 3.8% in the quarter compared to 4.2% last quarter and 5.6% in the same quarter last year.

年比下降主要是由於 SBA 投資組合大幅復甦期間戰略計劃的淨沖銷減少。該公司的淨沖銷率占平均投資貸款的百分比為2.8%，而第二季為3.4%，去年同期為5.8%。我們認為，我們對準備金範圍內的潛在貸款損失做好了準備，本季佔投資持有貸款總額的百分比為 3.8%，而上季為 4.2%，去年同期為 5.6%。

Our decision to retain most of the originated guaranteed portions in our SBA 7(a) loan program has been the primary factor in the decrease in this ratio from the prior quarter and year. Nonperforming loans for the quarter were $10.7 million compared to $1.8 million in the second quarter and none from the same quarter last year.

我們決定保留 SBA 7(a) 貸款計劃中的大部分原始擔保部分，這是該比率較上季度和上年下降的主要因素。本季不良貸款為 1,070 萬美元，而第二季為 180 萬美元，去年同期無不良貸款。

Of the $10.7 million, $4.7 million is guaranteed by the SBA, this compares to $1.1 million in SBA guaranteed NPL balances in the second quarter and none during the same quarter last year. The increase in NPLs compared to the prior quarter and year was primarily driven by increases in NPLs in our SBA portfolio. As we discussed in prior quarters, our SBA portfolio is comprised of variable rate loans, which adjust on a calendar quarterly basis.

在這 1,070 萬美元中，有 470 萬美元由 SBA 擔保，而第二季 SBA 擔保的不良貸款餘額為 110 萬美元，而去年同期則沒有。與上一季和去年相比，不良貸款的增加主要是由於我們的 SBA 投資組合中的不良貸款增加所致。正如我們在前幾個季度所討論的，我們的 SBA 投資組合由浮動利率貸款組成，按日曆季度進行調整。

And we had seen some informal and formal stress in this portfolio resulting from the series of increases in the primary over the last 18 months. Consistent with our policies, we moved several loans to nonaccrual status during the quarter when an SBA loan is 90 days past due, whereas management determined that the borrower is not expected to repay the principal and interest on the loan from operating cash flow.

我們已經看到，由於過去 18 個月中初選的一系列增加，該投資組合中出現了一些非正式和正式的壓力。根據我們的政策，當 SBA 貸款逾期 90 天時，我們在本季度將幾筆貸款轉為非應計狀態，而管理層確定借款人預計不會從經營現金流中償還貸款本金和利息。

The loan becomes collateral dependent is evaluated for charge down or charge-off and any net balances placed into nonaccrual status. We believe we will continue to see some stress to the extent rates stay elevated and the consumer spending slowdown continues to affect a segment of our small business customers.

貸款依賴抵押品，並對其進行沖銷或沖銷評估，並將任何淨餘額置於非應計狀態。我們相信，如果利率保持在高位，而消費者支出放緩繼續影響我們的部分小型企業客戶，我們將繼續面臨一些壓力。

While the increase in our nonaccrual loan balances was expected, our gross charge-offs within the SBA portfolio during the quarter were slightly lower than each of the prior two quarters and we would point to the additional miscellaneous income recognized from a previously reported nonaccrual account as evidence of the expertise of our portfolio and collateral management teams and maximizing bank proceeds related to nonaccrual balances.

雖然我們的非應計貸款餘額增加是預期的，但本季我們SBA 投資組合內的總沖銷額略低於前兩個季度，我們將指出從先前報告的非應計帳戶中確認的額外雜項收入為我們的投資組合和抵押品管理團隊的專業知識以及最大化與非應計餘額相關的銀行收益的證據。

We feel confident in our team's experience managing this portfolio even as the rate environment may continue to stress a segment of our borrowers. Looking ahead, we expect NPLs to trend higher due to the rate increases and associated increases in borrowing monthly payments, customary loan seasoning and the general impact of the persistent and ongoing macroeconomic headwinds.

儘管利率環境可能繼續給部分借款人帶來壓力，但我們對團隊管理該投資組合的經驗充滿信心。展望未來，我們預計，由於利率上升、每月借款還款額相應增加、習慣性貸款調整以及持續存在的宏觀經濟逆風的總體影響，不良貸款將呈上升趨勢。

Overall, we believe we are well positioned to continue to manage growth and credit performance in our portfolio due to our experienced team, proven underwriting, and portfolio management capabilities, and significant capital, and reserve levels. Now let me turn the call over to Javvis, who will provide more detail on our financial results.

總體而言，我們相信，由於我們經驗豐富的團隊、成熟的承保和投資組合管理能力以及顯著的資本和儲備水平，我們有能力繼續管理投資組合的成長和信貸績效。現在讓我把電話轉給賈維斯，他將提供有關我們財務表現的更多詳細資訊。

Thank you and good afternoon. I plan to discuss our financial results for the third quarter relative to the prior quarter and the third quarter of the prior year. Loan originations totaled $1.1 billion for the third quarter compared to $1.2 billion in the second quarter, and $1.5 billion in the prior year.

謝謝你，下午好。我計劃討論第三季相對於上一季和去年第三季的財務表現。第三季的貸款發放總額為 11 億美元，而第二季為 12 億美元，去年同期為 15 億美元。

As we expected and communicated last quarter, the decrease in originations relative to the previous quarter was due to a return to more typical origination volumes in our strategic programs from better than anticipated performance of the second quarter, that was primarily driven by a single strategic platform that benefit from additional funding during the quarter.

正如我們上季度所預期和傳達的那樣，相對於上一季的發起量減少是由於我們的戰略計劃中的發起量從第二季度好於預期的業績恢復到更典型的發起量，這主要是由單一策略平台推動的受益於本季的額外資金。

The decreased from the prior year was primarily due to a continued contraction in capital markets for certain loan assets due to the challenging macro environment and changes in underwriting in our strategic lending program to manage credit risk, average loan balances comprising held for sale and held for investment loans were up 9.4% to $354.6 million during the quarter from $324.1 million last quarter and up 34.5% from $263.6 million in the prior year.

較上年減少的主要原因是，由於充滿挑戰的宏觀環境以及我們管理信用風險的策略貸款計劃的承保變化，導致某些貸款資產的資本市場持續收縮，平均貸款餘額包括持有待售和持有待售的貸款餘額。本季投資貸款從上一季的 3.241 億美元增長 9.4% 至 3.546 億美元，比上年同期的 2.636 億美元增長 34.5%。

The increase from the previous quarter and the prior year period was primarily driven by the continued growth in our SBA 7(a) program. Despite industry-wide liquidity pressure, our balance sheet and liquidity position remained strong during the quarter. Average interest bearing deposits were [$235.8] million compared to [$219.1] million in the second quarter and [$104.8] million during the prior-year period.

上一季和去年同期的成長主要是由我們的 SBA 7(a) 計畫的持續成長所推動的。儘管全行業面臨流動性壓力，但我們的資產負債表和流動性狀況在本季仍然強勁。平均計息存款為 [2.358] 億美元，而第二季為 [2.191] 億美元，去年同期為 [1.048] 億美元。

The sequential quarter increase was driven primarily by an increase in brokered interest-bearing demand deposits and certificates of deposits. The year-over-year increase was due mainly to increases in certificates of deposits and interest-bearing demand deposits. As we have noted previously, non-interest bearing deposit levels had historically had a high correlation with loan balances held for sale and origination volume from our strategic programs.

環比增長主要是由於經紀有息活期存款和存款證的增加所致。年成長主要是由於存單和計息活期存款增加。正如我們先前指出的，無利息存款水準歷來與待售貸款餘額和我們策略計畫的發放量具有高度相關性。

Our differentiated business model has provided us with a stable and sticky deposit base. Specifically, the origination platforms have been contractually obligated to maintain certain levels of deposits that FinWise, while a significant portion of the uninsured deposits on the bank's balance sheet have built our own capital. [Taking] together, as of the end of the quarter, approximately 86% of the bank deposits are either insured our own capital or are contractually required in our strategic lending business.

我們的差異化業務模式為我們提供了穩定且有黏性的存款基礎。具體來說，根據合同，發起平台有義務維持 FinWise 一定水平的存款，而銀行資產負債表上的大部分未保險存款都建立了我們自己的資本。 [總而言之]，截至本季末，大約 86% 的銀行存款要么是我們自有資本的保險，要么是我們戰略貸款業務的合約要求。

Now turning to the income statement. Net income for the quarter was $4.8 billion compared to $4.6 million last quarter and $3.7 million in the same quarter last year. The improvement from the prior quarter was primarily due to an increase in net interest income driven by growth in our loans held for investment portfolio.

現在轉向損益表。本季淨利為 48 億美元，上季淨利為 460 萬美元，去年同期淨利為 370 萬美元。較上一季的改善主要是由於我們為投資組合持有的貸款成長帶動了淨利息收入的增加。

The increase from the prior year period was primarily due to an increase in net interest income and a decrease of the provision for credit losses, partially offset by higher noninterest expense, lower gain on sale of loans, and lower strategic program fees. Net interest income for the quarter grew 5.4% to $14.4 million compared to $13.7 million last quarter and was up 15.1% over the $12.5 million in the second quarter last year.

與去年同期相比的成長主要是由於淨利息收入的增加和信貸損失準備金的減少，部分被非利息支出的增加、貸款銷售收益的減少和戰略計劃費用的減少所抵消。本季淨利息收入成長 5.4%，達到 1,440 萬美元，較上一季的 1,370 萬美元成長，較去年第二季的 1,250 萬美元成長 15.1%。

The improvement relative to the prior quarter and year was primarily due to increases in the bank's average balances on the loans held for investment portfolio, partially offset by an increase in the interest expense being paid in average interest-bearing liability balances over the same periods. Net interest margin for the quarter was 37 basis points lower at 11.77% compared to 12.14% last quarter and 316 basis points lower than 14.93% in the prior year period.

與上一季和去年同期相比的改善主要是由於銀行為投資組合持有的貸款平均餘額增加，部分被同期平均帶息負債餘額支付的利息費用的增加所抵消。本季淨利差為 11.77%，較上季的 12.14% 下降 37 個基點，較去年同期的 14.93% 下降 316 個基點。

The decrease from the prior quarter was mainly due to a loan mix shift towards loans carrying lower yields in the held for investment portfolio, and then the increase in the volume of certificates of deposits. The decreased from the prior year period was primarily due to a reduction in average balances in our loans held for sale portfolio, along with the shift in our deposit portfolio mix from lower to higher costing deposits, partially offset by an increase in average balances in our loans held for investment portfolio.

環比下降的主要原因是貸款結構轉向投資組合中收益率較低的貸款，以及存款證數量的增加。與去年同期相比下降的主要原因是我們持有待售貸款組合的平均餘額減少，以及我們的存款組合結構從成本較低的存款轉向成本較高的存款，但部分被我們的待售貸款平均餘額的增加所抵銷。投資組合所持有的貸款。

Non-interest income was $5.2 million in the quarter compared to $5.3 million in the second quarter and $7.5 million in the same quarter last year. The decrease from the prior quarter was primarily due to the change in the fair value of our investment in BFG, along with a decrease in the number of SBA 7(a) loans sold and was partially offset by an increase in other miscellaneous income, primarily related to a $0.6 million gain on the resolution of a forbearance agreements in our SBA lending program.

本季非利息收入為 520 萬美元，而第二季為 530 萬美元，去年同期為 750 萬美元。較上一季的下降主要是由於我們對 BFG 投資的公允價值發生變化，以及出售的 SBA 7(a) 貸款數量減少，但部分被其他雜項收入的增加所抵消，主要是由於與解決我們的SBA貸款計劃中的暫緩協議而獲得的60 萬美元收益有關。

The decrease from the prior year period was mainly due to a reduction in gain on sale of loans, primarily attributable to our increased retention of the guaranteed portion of SBA loans to increase interest income, which resulted in a corresponding decrease in gain on sale income. Lower fees associated with originations of strategic program loans and a decrease in the fair value of our investment in BFG also contributed to the decrease from the prior year period.

較上年同期減少的主要原因是銷售貸款收益減少，這主要是由於我們增加保留SBA貸款的擔保部分以增加利息收入，導致銷售收入收益相應減少。與策略計畫貸款發放相關的費用降低以及我們對 BFG 投資公允價值的下降也導致了與去年同期相比的下降。

We expect that the fair value of our investment in BFG will continue to experience quarterly fluctuations. Non-interest expense during the quarter was $10.1 million compared to $10 million in the prior quarter and $8.5 million in the same quarter last year. The increase from the prior quarter was primarily due to an impairment of our SBA servicing assets, partially offset by a reduction in professional services expense, primarily from a reduction in consulting fees.

我們預期BFG投資的公允價值將持續經歷季度波動。本季非利息支出為 1,010 萬美元，上一季為 1,000 萬美元，去年同期為 850 萬美元。與上一季相比的成長主要是由於我們的 SBA 服務資產減值，但部分被專業服務費用的減少（主要是諮詢費的減少）所抵消。

The increased from the prior year period was primarily due to an increase in salaries and employee that if it's related to a higher number of employees, an impairment on our SBA servicing asset, which did not occur in the prior year period and an increase in other operating expenses, primarily related to occupancy and equipment expense and was partially offset by a decrease in professional service expense, primarily from a reduction in consulting fees.

與去年同期相比增加的主要原因是薪資和員工的增加（如果與員工人數增加有關），我們的 SBA 服務資產會出現減損（上年期間未發生這種情況），以及其他支出的增加營運費用主要與佔用和設備費用有關，並被專業服務費用的減少（主要是諮詢費的減少）所部分抵消。

The company's efficiency ratio was 51.3% for the third quarter compared to 52.7% for the prior quarter and 42.3% for the prior year period. For the third quarter's efficiency ratio certainly benefited from the additional miscellaneous income related to our SBA loan portfolio. We've noted in past calls, we expect the company's efficiency ratio to remain elevated as we continue to build out our infrastructure to position the company for sustainable long-term growth.

該公司第三季的效率為51.3%，上一季為52.7%，去年同期為42.3%。第三季的效率比率無疑受益於與我們的 SBA 貸款組合相關的額外雜項收入。我們在過去的電話會議中指出，隨著我們繼續建立基礎設施以使公司實現可持續的長期成長，我們預計公司的效率比率將保持在較高水準。

With respect to capital levels with a 22.1% leverage ratio for the bank remains significantly above the 9% well-capitalized requirement, as Kent mentioned, as part of our effort to be good stewards of capital during the quarter, we bought 230,978 shares for $2.4 million at a discount to book value and completed the share buyback program announced in August 2022.

正如Kent 所提到的，就資本水準而言，銀行槓桿率為22.1%，仍遠高於9% 的資本充足要求，作為我們在本季度做好資本管理工作的一部分，我們以2.4 美元的價格購買了230,978 股股票以較帳面價值折扣的價格籌集了 100 萬美元，並完成了 2022 年 8 月宣布的股票回購計畫。

We continue to deploy capital to grow our balance sheet responsibly, invest in our business for long-term growth opportunities and maintain flexibility for potential strategic and accretive transactions. The company's effective tax rate was 26.1% for the third and second quarters. This compares to 48.7% for the same quarter last year.

我們繼續負責任地部署資本來擴大我們的資產負債表，投資我們的業務以獲得長期成長機會，並為潛在的策略和增值交易保持靈活性。該公司第三季和第二季的有效稅率為26.1%。相比之下，去年同期為 48.7%。

With that, we would like to open up the call for Q&A, operator.

至此，我們想開始詢問接線生的問答。

Thank you. (Operator Instructions)

謝謝。 （操作員說明）

Andrew Terrell, Stephens.

安德魯·特雷爾，史蒂芬斯。

Hey, good afternoon.

嘿，下午好。

Hello Andrew.

你好安德魯。

Maybe just start, I think I might have missed this in the prepared remarks, but the left and the nonaccruals this quarter about 10 million and how much of that specifically with SBA and how much specifically has guaranteed versus non-guaranteed?

也許只是開始，我想我可能在準備好的發言中錯過了這一點，但是本季度的左翼和非應計費用約為1000 萬，其中有多少是專門針對SBA 的，有多少具體是有保證的與無保證的？

Yes, Andrew, this is Jim. So $10.4 of the $10.7 is attributable to the SBA portfolio and then on $4.7 is guaranteed by SBA.

是的，安德魯，這是吉姆。因此，10.7 美元中的 10.4 美元歸屬於 SBA 投資組合，然後 4.7 美元由 SBA 擔保。

Got it. Okay, thank you. I appreciate that. And then maybe just [thinking] with you here on the commentary about the card programs and the payments of sounds like rollout first half of 2024. Just wanted to get a sense of as you've kind of progressed and gone down this path, just how the how the effort there is going any major roadblocks or kind of early successes you've experienced to date and then it might be too early to talk about what you might expect for revenue contribution or targets you might be laying out there, but would love to get any color you have on that point?

知道了。好的謝謝。我很感激。然後也許只是[思考]與您一起討論有關卡計劃和支付的評論，聽起來像是 2024 年上半年推出。只是想了解一下您在這條道路上的進展和情況，只是迄今為止，您所經歷的任何重大障礙或早期成功，現在談論您可能期望的收入貢獻或您可能設定的目標可能還為時過早，但會喜歡在這一點上得到任何顏色嗎？

Yes, sure. So just like as a reminder on the product initiatives and kind of why we feel that a comprehensive best solution is important to the future of the bank. It allows for stickier relationships with our current programs. We can attract more mature programs generally, which means higher overall volumes for each product, it helps diversify our revenue and our funding sources. And finally, we're still highly profitable even in the downturn and believe by reinvesting in our strengths now.

是的，當然。就像提醒我們的產品計劃以及為什麼我們認為全面的最佳解決方案對銀行的未來很重要。它可以與我們目前的專案建立更緊密的關係。我們通常可以吸引更成熟的項目，這意味著每種產品的整體銷售量更高，這有助於使我們的收入和資金來源多樣化。最後，即使在經濟低迷時期，我們仍然可以獲得高額利潤，並相信現在可以透過對我們的優勢進行再投資。

We're building a leadership position in the market. And then as far as like the update on both the card sponsorship and the payments sub on, like we said in the remarks, we'll be operational in the first half of '24 with the first customers soon thereafter in the second half of next year. A lot of the work that's occurred has been kind of expanding the third party risk and program oversight policies and procedures scoping and bring on new vendors through bank due diligence and then risk assessments commensurate with regulatory requirements.

我們正在建立市場領導地位。然後就卡贊助和支付子的更新而言，就像我們在評論中所說的那樣，我們將在 24 年上半年開始運營，很快就會在下個下半年迎來第一批客戶年。所做的許多工作都是擴大第三方風險和專案監督政策和程序的範圍，並透過銀行盡職調查引入新的供應商，然後進行符合監管要求的風險評估。

The early successes really are the staffing additions. We've been the recipient of excellent staff additions here at the bank. I think just because of our reputation in the market because of our history in regulatory exams. So both business development and compliance operations, change management, and IT are all departments that have benefited from those additions.

早期的成功其實是人員的增加。我們已經在銀行招募了優秀的員工。我認為這只是因為我們在市場上的聲譽以及我們在監管考試方面的歷史。因此，業務開發和合規營運、變革管理和 IT 部門都從這些新增功能中受益。

Last thing I would just touch on quickly, Andrew, is [wild] cards and the payments hub are kind of the next phase of our growth. We've been working really hard to bring a couple of lending programs through due diligence and potentially launch these buy by year end here. And so business development, compliance and operations teams have been heavily involved to launch a couple of new programs by the end of this year, and we still feel really good and that we'll be able to accomplish that goal.

安德魯，我要快速提及的最後一件事是[通配符]卡，支付中心是我們成長的下一階段。我們一直在努力讓一些貸款計劃通過盡職調查，並可能在年底前推出這些購買計劃。因此，業務開發、合規和營運團隊已大力參與，到今年年底啟動了幾個新計劃，我們仍然感覺非常好，我們將能夠實現這一目標。

Yes, I appreciate all the all the extra added color there, Jim, that's very helpful. Specifically on the point of adding the new partners, potentially maybe benefit originations wanted to get a sense of relative to kind of the base you have today for the partners that are in the pipeline right now that you're working to get through by year end, just how incremental you think that could be in terms of overall dollar of originations? And maybe trying to marry that was one of the commentary, it sounds like originations could remain a little pressured throughout the balance of the year and into 2024, just given the backdrop?

是的，我很欣賞所有額外添加的顏色，吉姆，這非常有幫助。具體來說，在添加新合作夥伴方面，潛在的利益來源可能希望了解您目前正在籌備的合作夥伴的基礎情況，您正在努力在年底前完成這些合作夥伴的工作，您認為就發起總額而言，這可能會增加多少？也許試圖結婚是評論之一，考慮到這一背景，聽起來在今年餘下的時間裡直到 2024 年，起源可能仍然會面臨一些壓力？

Yes. So yes, on the originations front, we did $1.1 billion this quarter versus $1.2 in Q2 and roughly [$900] million in Q1 ,this quarter was better than expected. We didn't think we'd see the Q2 origination levels again, this year, but we were happy to see things rebound from the Q1 levels, which is still a low point. While most of the programs were stable quarter over quarter that delta against Q1, we're still from that single partner rather than a broader uptrend across all the programs. And so we continue to point to Q1 origination levels as the most appropriate for the next two to three quarters.

是的。所以，是的，在發起方面，我們本季的營收為 11 億美元，而第二季為 1.2 美元，第一季大約為 9 億美元，本季好於預期。我們認為今年不會再次看到第二季度的起始水平，但我們很高興看到情況從第一季的水平反彈，這仍然是一個低點。雖然大多數計劃與第一季的增量相比每個季度都保持穩定，但我們仍然來自單一合作夥伴，而不是所有計劃的更廣泛的上升趨勢。因此，我們繼續將第一季的起始水準視為未來兩到三個季度最合適的水平。

As far as the incremental lift from new programs that potentially launch by year end, you're more likely looking at a lift in the second half of next year from those programs. A lot of that has to do with just getting even once they're launched and live, there's a scaling up period. There may be seasonality with the underlying program. So we feel pretty good about where we're at with those potential launches. But as far as incremental lift to the top line is probably the second half of next year.

至於年底可能推出的新計劃帶來的增量提升，您更有可能看到這些計劃在明年下半年帶來提升。這在很大程度上與它們啟動並上線後的平衡有關，有一個擴展期。基礎計劃可能存在季節性。因此，我們對這些潛在發布的進展感到非常滿意。但就收入的增量提升而言，可能是明年下半年。

Yes, understood. Okay, and then and last one before I hop back in the queue. The loan growth this quarter on those SBA driven as maybe a little bit stronger than what I was expecting for the quarter. Anything unusual about the production you saw the opportunity you saw to bring a high-quality paper onto the balance sheet within the SBA group.

是的，明白了。好的，然後是我跳回隊列之前的最後一個。本季 SBA 推動的貸款成長可能比我對本季的預期要強一些。生產過程中的任何不尋常之處，您都看到了將高品質紙張帶入 SBA 集團資產負債表的機會。

I mean, can you just talk about ,what kind of targets you might have laid out over the next on the next 12 months or so, I mean, your capital is incredibly robust. What kind of balance sheet growth rate targets are you or are you contemplating over the next year?

我的意思是，您能談談您在未來 12 個月左右的時間內可能製定的目標嗎？我的意思是，您的資本非常強勁。您或正在考慮明年的資產負債表成長率目標是什麼？

So yes, so the two things the pipeline to date has been stable. But I would also mention we mentioned in the remarks, some of the kind of front end inquiries I'd say are a little bit more tempered than they were in previous quarters . So this quarter, we originated about $35, $36 million in SBA loans during the third quarter is about $24 million in Q2, $36 million in Q1 of this year.

所以是的，到目前為止，這兩件事的管道一直很穩定。但我還要提到，我們在評論中提到，我想說的一些前端查詢比前幾季要溫和一些。因此，本季度，我們在第三季度發放了約 3500 至 3600 萬美元的 SBA 貸款，第二季度約為 2400 萬美元，今年第一季約為 3600 萬美元。

So the pipeline's been stable ,but what I would point you to is, you know, it's possible you see SBA originations tick down a little bit over the next few quarters, just because there's less confidence in the economy right now, and that generally leads to a swing in the CapEx cycle. If you're a business owner, you're less confident you're less likely to secure financing for expansion. So we still feel really good, but I would just say we're cautious, Andrew.

因此，通路一直穩定，但我想向您指出的是，您知道，您可能會看到SBA 的發起在接下來的幾個季度中略有下降，只是因為目前對經濟的信心較低，而這通常會導致資本支出週期的波動。如果您是企業主，那麼您不太可能獲得擴張融資。所以我們仍然感覺很好，但我想說我們很謹慎，安德魯。

Yes, totally, totally appreciate that point. And thanks for all the color and I'll step back in the queue.

是的，完全、完全理解這一點。感謝所有的顏色，我會退到佇列。

(Operator Instructions)

（操作員說明）

Perfect, okay. I've got a couple of [molecules rolling through] on the capital side, just maybe following on from the last question here. Your [TSEs] still definitely very strong at 27%. Can you remind us just the guard rail of where you like to manage that to over time and what you're comfortable with running the [bank] and from a capital perspective and then also just any as you completed the buyback this quarter, obviously a very advantageous price, any thoughts on an incremental, incremental buyback in the coming quarters?

完美，好吧。我在資本方面有一些[分子滾動]，也許是從這裡的最後一個問題開始的。你們的 [TSE] 仍然非常強勁，為 27%。您能否提醒我們，隨著時間的推移，您希望在哪裡進行管理，以及您對運營[銀行]感到滿意，從資本的角度來看，然後還有您在本季度完成回購時的任何情況，顯然是非常有優勢的價格，對未來幾季增量回購有何想法？

Sure. So let me just take a first stab and then Javvis, you can maybe answer some of the questions as well. The capital, just we're noting that each quarter this year, the capital ratio has dropped as the balance sheet continues to grow and so we can see a trajectory toward that.

當然。所以讓我先簡單介紹一下，然後賈維斯，你也許也可以回答一些問題。資本，我們注意到，今年每個季度，隨著資產負債表的持續增長，資本比率都在下降，因此我們可以看到這一趨勢的軌跡。

The question you asked about the buyback is a great question. And I would just say that we continually assess the best uses of the capital. We include additional buybacks as part of that but we weigh that against other factors, such as continued growth of the balance sheet, build-out of the infrastructure on flexibility to take advantage of opportunities

你問的關於回購的問題是一個很好的問題。我只想說，我們不斷評估資本的最佳用途。我們將額外回購作為其中的一部分，但我們會根據其他因素進行權衡，例如資產負債表的持續成長、基礎設施的靈活性建設以利用機會

And we want to make certain that we have sufficient capital to take us through the growth that we're thinking may come over the next little while. Of course, not certain of how easy it will be able to raise capital next year, what have you if macroeconomic conditions don't improve. We also don't think it's a bad thing to have higher levels of capital in this current market. But, I would say once again, as we did last time, the Board takes into account all factors, market conditions, and if it is deemed the best option, yes, we would consider another buyback.

我們希望確保我們有足夠的資本來帶領我們實現我們認為可能在未來一段時間內實現的成長。當然，不確定明年籌措資金有多容易，如果宏觀經濟狀況沒有改善，那又怎麼樣呢？我們也不認為在當前市場上擁有更高水準的資本是一件壞事。但是，我想再次強調，正如我們上次所做的那樣，董事會會考慮所有因素、市場條件，如果認為這是最佳選擇，是的，我們會考慮再次回購。

And Andrew, as far as the capital ratio, total TSE, what we've talked about in the past really hasn't changed somewhere in the mid to upper teams level for our business model feels right to us.

安德魯，就資本比率、總 TSE 而言，我們過去討論過的內容在中高層團隊層級上確實沒有改變，因為我們的商業模式對我們來說是正確的。

Got it. Okay, I appreciate it. And then, Javvis, on the expense side, it looks like if I pull the SBA servicing asset impairment, aside, it looks like what I would deem kind of core expenses actually ticked down to maybe like a high $9 million range this quarter. Can you just talk about some expectation on the operating expense side heading into the fourth quarter?

知道了。好的，我很感激。然後，Javvis，在費用方面，如果我把 SBA 服務資產減值放在一邊，看起來我認為的核心費用實際上會在本季度下降到 900 萬美元的高位。您能否談談對第四季度營運費用的一些預期？

And then just more broadly, how we should think about the cadence of expense growth into 2024, just given some of the reinvestment you guys are doing or making into the franchise? And just maybe indebted I together with like the efficiency ratio, it's low 50% right now. Would you expect a creep up from here or do you think you can maintain a low [50s] territory?

然後更廣泛地說，考慮到你們正在對特許經營權進行的一些再投資，我們應該如何考慮到 2024 年費用增長的節奏？也許是因為我的效率比低，現在只有 50%。您是否預計會從這裡開始攀升，或者您認為您可以保持較低的 [50 秒] 領土？

Andrew, I think maybe the best place to start is just on the professional services line. You can see we've really come down quite a bit on that line of noninterest expense. This is primarily due as mentioned in the prepared remarks that the lack of consulting fees, we talked about a couple of quarters ago would be coming off by the end of the second quarter, that was what we're experts expecting.

安德魯，我認為也許最好的起點就是專業服務。您可以看到我們在非利息支出方面確實下降了很多。這主要是因為正如在準備好的評論中提到的那樣，我們在幾個季度前談到的諮詢費的缺乏將在第二季度末消失，這正是我們專家所期望的。

So growth wise from here, we believe that we're going to continue to build our infrastructure as we've talked about the pace probably similar to what you've been seeing between the first, second, and third quarter in the history is as long as conditions remain and similar, we'll likely see that level of continued expense growth. As far as the efficiency ratio, I think you gave pretty good goalposts on the efficiency ratio. We expect to see better efficiency than generally seen in the market.

因此，從現在開始，我們相信我們將繼續建造我們的基礎設施，因為我們已經討論過，其速度可能類似於您在歷史上第一、第二和第三季度之間看到的情況：只要情況保持相似，我們可能會看到費用持續成長。就效率比而言，我認為您在效率比方面給出了相當好的目標。我們期望看到比市場普遍看到的更高的效率。

But until we can start having the revenue come in from these new projects and endeavors, then you're going to see you're going to see some pressure on the efficiency ratio.

但在我們開始從這些新專案和努力中獲得收入之前，你會發現效率比會面臨一些壓力。

Okay. So maybe thinking about it near term, just modest lift in efficiency from here as you as you reinvest. And then maybe we can step back and reassess as we start talking more about revenue from some of the initiatives.

好的。因此，也許從短期來看，當你再投資時，效率會適度提升。然後，當我們開始更多地討論某些舉措的收入時，也許我們可以退一步重新評估。

That's right.

這是正確的。

Okay, great. Well, I appreciate all the time this afternoon.

好的，太好了。嗯，我很感激今天下午的時間。

That concludes question-and-answer session. I would like to turn it back over to Kent for closing comments.

問答環節到此結束。我想將其轉回肯特以徵求結束意見。

Thank you, and we appreciate everyone joining the call today, it's been a good quarter. We're very excited still about the initiatives that we're on are launching. We feel we're on track. We've got a great team and so we really appreciate the support of our investors and look for good things to come.

謝謝，我們感謝今天加入電話會議的每個人，這是一個美好的季度。我們對我們正在發起的舉措仍然感到非常興奮。我們感覺我們正在步入正軌。我們擁有一支優秀的團隊，因此我們非常感謝投資者的支持，並期待美好的未來。

Thank you. This will conclude today's conference. You may disconnect your lines and thank you for your participation.

謝謝。今天的會議到此結束。您可以斷開線路並感謝您的參與。