Financial Institutions Inc (FISI) 2024 Q4 法說會逐字稿

Hello, everyone, and welcome to the Financial Institutions Inc fourth-quarter and year-end 2024 earnings call. My name is [Chatch], and I'll be coordinating your call today. (Operator Instructions)

大家好，歡迎參加金融機構公司 2024 年第四季和年終收益電話會議。我的名字是 [Chatch]，今天我將協調您的通話。（操作員指令）

I'd now like to hand over to your host, Kate Croft, Director of Investor Relations to begin. Please go ahead.

現在我想把主持人、投資者關係總監凱特·克羅夫特 (Kate Croft) 交給他開始發言。請繼續。

Thank you for joining us for today's call. Providing prepared comments will be President and CEO, Martin Birmingham; and CFO, Jack Plants. It will be joined by additional members of the company's leadership team during the question-and-answer session.

感謝您參加今天的電話會議。總裁兼執行長 Martin Birmingham 將提供準備好的評論；和財務長 Jack Plants。在問答環節中，公司領導團隊的其他成員也將加入討論。

Today's prepared comments and Q&A will include forward-looking statements. Actual results may differ materially from forward-looking statements due to a variety of risks, uncertainties and other factors. We refer you to yesterday's earnings release and investor presentation as well as historical SEC filings which are available on our Investor Relations website where Safe Harbor description and a detailed discussion of the risk factors relating to forward-looking statements.

今天的準備好的評論和問答將包括前瞻性陳述。由於各種風險、不確定性和其他因素，實際結果可能與前瞻性聲明有重大差異。我們請您參閱昨日的收益報告和投資者介紹以及歷史 SEC 文件，這些文件可在我們的投資者關係網站上查閱，其中有安全港說明和與前瞻性陳述有關的風險因素的詳細討論。

We'll also discuss certain non-GAAP Financial measures intended to supplement and not substitute for comparable GAAP measures. Reconciliations of these measure, the GAAP financial measures were provided in the earnings release found in this exhibit to Form 8-K or in our latest investor presentation available on our IR website www.fisi-investors.com. Please note that this call includes information that may only be accurate as of today's date, January 31, 2025.

我們還將討論某些非 GAAP 財務指標，這些指標旨在補充而不是替代可比較 GAAP 指標。這些指標的對帳表，即 GAAP 財務指標，已在本 8-K 表附件中的收益報告中或我們最新的投資者介紹中提供，該介紹可在我們 IR 網站 www.fisi-investors.com 上找到。請注意，本次通話中包含的資訊可能僅截至今天（2025 年 1 月 31 日）準確。

I'll now the call over to President and CEO, Martin Birmingham.

現在我將電話轉給總裁兼執行長馬丁伯明翰。

Thank you, Kate. Good morning, everyone, and thank you for joining us today.

謝謝你，凱特。大家早安，感謝大家今天的參與。

Our fourth quarter was busy and highly productive highlighted by our successful equity offering and subsequent restructuring of our available for sale investment securities portfolio. We sold $653.5 million of low yielding securities and reinvested the proceeds into higher yielding agency wrapped securities. The result is a balance sheet that we expect to contribute to a much stronger earnings profile moving forward.

我們的第四季忙碌而高效，亮點是我們的成功股票發行以及隨後對可供出售投資證券組合的重組。我們出售了 6.535 億美元的低收益證券，並將收益重新投資於收益更高的機構包裝證券。結果就是，我們預期資產負債表將為未來更強勁的獲利狀況做出貢獻。

Including expanded net interest income, net interest margin, return on average assets and an improved efficiency ratio. We recorded a $100.2 million pre-tax loss associated with the securities repositioning, which resulted in net loss available to common shareholders for the fourth quarter of $66.1 million or $4.02 per diluted share and $26 million and $1.66 per diluted share for 2024. The after-tax impact of the securities loss was about $75 million, and this was fully offset by a portion of the capital we raised.

包括淨利息收入、淨利差、平均資產報酬率及效率比率的提高。我們記錄了與證券重新定位相關的 1.002 億美元稅前損失，導致第四季度普通股股東淨虧損 6,610 萬美元或每股攤薄虧損 4.02 美元，2024 年普通股股東淨虧損 2,600 萬美元或每股攤薄虧損 1.66 美元。證券損失的稅後影響約為 7,500 萬美元，這被我們籌集的部分資金完全抵消。

Market reception was very positive to our common equity offering which was more than four times oversubscribed. And we were pleased to see that the overallotment was executed quickly. And result, we issued $115 million of new capital to many new shareholders and several existing ones through the offering, generating net proceeds of $108.5 million.

市場對我們的普通股發行反應非常積極，超額認購了四倍多。我們很高興地看到超額配售很快就完成了。結果，我們透過發行向許多新股東和一些現有股東發行了 1.15 億美元的新資本，產生了 1.085 億美元的淨收益。

We intend to thoughtfully deploy the remaining dry powder in a way that supports shareholder value and may elect to call a portion of our sub debt that is set to reprice this year. We believe our stronger capital position and improved earnings outlook position us well to drive sustainable and profitable growth even as we invest in people, process and technology to support our vision of being a high performing financial institution.

我們打算以支持股東價值的方式慎重部署剩餘的資金，並可選擇贖回部分將於今年重新定價的次級債務。我們相信，我們更強勁的資本狀況和改善的盈利前景使我們能夠推動可持續和盈利的成長，即使我們投資於人才，流程和技術以支持我們成為高績效金融機構的願景。

Jack will provide more details on our financial results in 2025 expectations shortly. But I would like to first touch on a few highlights. Regulatory and tangible capital ratios expanded meaningfully, our common equity tier 1 ratio increased 60 basis points from September 30 and 145 basis points for year-end 2023. While our TCE ratio increased 147 and 240 basis points respectively. Accumulated other comprehensive loss was $52.6 million at year end, down from $102 million at September 30, 2024, reflecting the balance sheet restructuring. [Argen] expansion continued, up two basis points from the third quarter to 2.91% in the fourth quarter. Full year NIM of 2.86% was on the low end of our guided range.

傑克很快就會提供有關我們 2025 年財務業績預期的更多詳細資訊。但我首先想談一些亮點。監管和有形資本比率大幅提升，我們的普通股一級資本比率較 9 月 30 日增加了 60 個基點，預計 2023 年底將增加 145 個基點。我們的TCE比率分別增加了147個基點和240個基點。截至年底，累計其他綜合損失為 5,260 萬美元，低於 2024 年 9 月 30 日的 1.02 億美元，反映了資產負債表重組。 [Argen]擴張持續，較第三季上升兩個基點至第四季的2.91％。全年淨利差為 2.86%，位於我們指導範圍的低端。

Commercial loan growth was strong, up 3.8% during the quarter and 4.5% during the full year 2024. Asset quality results remain relatively stable including annual net charge offs to average loans of 20 basis points, consistent with 2023.

商業貸款成長強勁，本季成長 3.8%，2024 年全年成長 4.5%。資產品質結果保持相對穩定，包括平均貸款年度淨沖銷額為 20 個基點，與 2023 年一致。

Turning to deposits, we remain committed to core in market deposit gathering with relationship-based accounts and the wind down of our bass offering as deposits were approximately $100 million at year-end 2024 or less than 2% of total deposits. We have one live bass partner and three in the offboarding phase given the progress made in developing migration plans and the partner's success in identifying new banking providers. We expect the majority of these deposits to outflow in the first half of the year.

談到存款，我們仍然致力於透過基於關係的帳戶來收集市場存款的核心，並逐步減少我們的低利率產品，因為到 2024 年底存款約為 1 億美元，佔總存款的不到 2%。鑑於制定遷移計畫所取得的進展以及合作夥伴在尋找新銀行服務提供者方面取得的成功，我們擁有一個現有合作夥伴，另有三個處於離職階段的合作夥伴。我們預計這些存款大部分將在今年上半年流出。

Deposits totaled $5.1 billion at the end of 2024, finding $202 million from September 30, primarily the typical seasonal reductions in public deposit accounts which should be plenished with normal first quarter tax collection and financing inflows. From the end of 2023, the $108 million decline in total deposits is attributed to reductions in broker deposits and more reciprocal balances.

2024 年底存款總額為 51 億美元，其中 9 月 30 日減少 2.02 億美元，主要是公共存款帳戶的典型季節性減少，應透過第一季的正常稅收和融資流入來補充。從 2023 年底起，總存款減少 1.08 億美元，因為經紀人存款減少和互惠餘額增加。

Overalls were up 1.7% from September 30 and relatively flat with year-end 2023 and solid commercial loan growth during both the quarter and year was partly offset by a planned reduction in our consumer indirect portfolio. As we shared previously, we manage our indirect portfolio based on a blend of demand and spread maintenance. And intentionally allow runoff to outpace originations while we maintain a strong focus on profitability and stable credit mix.

總體而言，較 9 月 30 日上漲 1.7%，與 2023 年年底基本持平，本季度和全年商業貸款穩健增長，但我們計劃減少消費者間接投資組合，從而部分抵消了這一增長。正如我們之前所分享的，我們根據需求和利差維持的組合來管理我們的間接投資組合。並有意讓貸款流失速度超過貸款發放速度，同時我們將繼續專注於盈利能力和穩定的信貸組合。

With respect to commercial, growth for both the quarter and year was led by commercial mortgage. As you'll see in our earnings release, we've added additional portfolio, granularity of construction, multifamily, non-owner occupied and owner-occupied commercial mortgage loans. New CRE production of $74.3 million in the fourth quarter was led by multifamily, office, hospitality and land development. We saw notable draws on existing industrial land development as well. From a geographic standpoint, fourth-quarter CRE production was basically an even split between our upstate New York and the Atlantic markets.

就商業而言，本季和全年的成長均由商業抵押貸款推動。正如您在我們的收益報告中看到的，我們增加了額外的投資組合、建築粒度、多戶型、非自住和自住商業抵押貸款。第四季新商業地產產值為 7,430 萬美元，主要由多戶住宅、辦公、旅館和土地開發所構成。我們也看到現有工業用地開發的吸引力明顯增強。從地理角度來看，第四季的CRE產量基本上在紐約州北部和大西洋市場之間平均分配。

Commercial business loans are up about $11 million or 1.7% from September 30, 2024. It's a highly competitive market. We see good opportunities to drive credit discipline, commercial business loan growth in 2025.

商業貸款自 2024 年 9 月 30 日起增加約 1,100 萬美元，即 1.7%。這是一個競爭激烈的市場。我們看到了2025年推動信貸紀律、商業貸款成長的良好機會。

There is significant economic development activity taking place across our New York footprint. The Syracuse, Rochester Buffalo Corridor was recognized as a tech hub by the federal government for the region's coordinated focus on semiconductor manufacturing and our branch network is well situated in that geography.

我們在紐約的業務範圍內正在進行重大的經濟發展活動。錫拉丘茲、羅徹斯特布法羅走廊被聯邦政府認定為科技中心，因為該地區重點協調發展半導體製造，我們的分支機構網絡位於該地區的優越位置。

More of the opportunity stemming from these investments will come to fruition in 2026 and beyond. Given that the most significant project is effective to break ground in November, it could start to see some impact later this year.

這些投資帶來的更多機會將在 2026 年及以後實現。鑑於這一最重要的項目將於11月破土動工，它可能會在今年稍後開始產生一些影響。

As the quality metrics were fairly stable in the approximately $41 million of non-performing loans we reported year-end continue to relate to the two separate commercial relationships that we previously discussed. We continue to work closely with all parties involved but do expect that resolution will take time.

由於我們報告的年末約 4,100 萬美元不良貸款的品質指標相當穩定，因此繼續與我們之前討論過的兩個獨立的商業關係相關。我們將繼續與所有相關方密切合作，但預計解決問題將需要時間。

Commercial and residential net charge offs were essentially non-existent in 2024. Consumer indirect net charge offs did increase from the third quarter but remained lower than the levels we reported at year-end 2023.

2024 年商業和住宅淨沖銷基本上不存在。消費者間接淨沖銷額確實較第三季有所增加，但仍低於我們在 2023 年底報告的水平。

We recorded a provision for credit losses of $6.5 million in the fourth quarter of 2024 compared to $3.1 million in the third quarter. A higher provision for loan losses in the fourth quarter as compared to the third quarter is attributed to a combination of factors, including higher loan growth, as well as increases in net charge offs and qualitative factors.

我們在 2024 年第四季記錄了 650 萬美元的信貸損失準備金，而第三季則為 310 萬美元。第四季的貸款損失準備金較第三季有所增加，這歸因於多種因素，包括貸款成長率更高，以及淨沖銷和定性因素的增加。

The higher quality data factors were primarily associated with elevated indirect delinquencies comparing the third and fourth quarters which is somewhat seasonal. As a result, the allowance for credit losses on loans to total loans increased six basis points to 1.07% as compared to September 30. We remain comfortable given the health of our portfolios and commitments to credit discipline lending.

與第三季和第四季相比，更高品質的數據因素主要與間接違約率上升有關，這在一定程度上具有季節性。結果，貸款損失準備金佔總貸款比率較 9 月 30 日增加了 6 個基點，至 1.07%。考慮到我們的投資組合的健康狀況和對信貸紀律貸款的承諾，我們仍然感到放心。

I would like to now turn the call over to Jack for additional commentary on our financial results and 2025 expectations.

現在，我想將電話轉給傑克，請他對我們的財務表現和 2025 年預期提出進一步評論。

Thank you, Marty. Good morning, everyone.

謝謝你，馬蒂。大家早安。

As expected, fourth-quarter and full year 2024 financial results reflect the recent capital raise and the securities restructuring. All the core business continued to perform solidly. Considering the challenges we faced during the last 12 months, the strategic actions we executed on, I'm proud of what our team accomplished. I'd like to start by laying out some of our 2025 expectations and providing a bit more color on how our historical performance, balance sheet composition and local market dynamics inform our expectations around these metrics.

如預期，2024 年第四季和全年財務表現反映了最近的資本籌集和證券重組。所有核心業務持續表現穩健。考慮到我們在過去 12 個月中面臨的挑戰以及我們執行的策略行動，我為我們團隊所取得的成就感到自豪。首先，我想概述我們對 2025 年的一些期望，並詳細介紹我們的歷史績效、資產負債表組成和當地市場動態如何影響我們對這些指標的期望。

From a profitability standpoint for the full year 2025, we're targeting return on average assets of at least 110 basis points, return on average equity of at least 11.25% and an efficiency ratio below 60%. The balance sheet restructuring we completed in late December will create a meaningful lift in our net interest margins starting in the first quarter. The security so had an average yield of 1.74% and those purchased were 5.26%, resolving in an overall yield on the portfolio of 425 basis points.

從 2025 年全年獲利能力的角度來看，我們的目標是平均資產回報率至少達到 110 個基點，平均股本回報率至少達到 11.25%，效率比率低於 60%。我們在去年 12 月底完成的資產負債表重組將從第一季開始顯著提升我們的淨利差。因此，該證券的平均收益率為 1.74%，而購買的證券收益率為 5.26%，投資組合的總收益率為 425 個基點。

Continued lift in margin the remaining quarters of 2025 is expected to come from a combination of low production and mix, as well as downward deposit pricing and largely the maturities and renewals of time deposits. As a result, we expect a full year 2025 net interest margin of between 345 and 355 basis points. Using a spot rate forecast as of year-end, it does not factor in future rate cuts.

預計 2025 年剩餘幾季的利潤率將繼續上升，這得益於低產量和組合，以及存款價格下降以及定期存款的到期和續期。因此，我們預計 2025 年全年淨利差將在 345 至 355 個基點之間。採用截至年底的現貨匯率預測，不考慮未來的降息因素。

And looking at our fourth-quarter 2024 experience, interest earning asset yields decreased 8 basis points. While our overall cost of funds decreased 10 basis points, reflecting the impact of rate cuts in the latter part of 2024. While approximately 40% of our loan portfolio is floating, with the majority price off of prime and silver indices, management was successful in addressing deposit repricing across all higher cost concentrations in retail, commercial and public deposit sectors.

從我們 2024 年第四季的經驗來看，生息資產殖利率下降了 8 個基點。而我們的整體資金成本下降了 10 個基點，反映了 2024 年下半年降息的影響。雖然我們的貸款組合中約有 40% 是浮動的，且大部分價格均來自優質和白銀指數，但管理層成功解決了零售、商業和公共存款領域所有成本集中度較高的存款重新定價問題。

In terms of loan growth, we're expecting low-single digit growth of between 1% and 3%. We're not discounting the possibility of returning to a healthier mid-single digit total loan growth rate in the future given our fourth-quarter performance and the size of our pipeline.

就貸款成長而言，我們預期成長率在 1% 至 3% 之間。考慮到我們第四季度的業績和貸款管道規模，我們不排除未來貸款總額成長率恢復到更健康的中等個位數的可能性。

But we have chosen to be conservative in our estimates for this year. Increased competition, uncertainty about the impact the proposed policy changes from Washington will have on business operating supply and labor costs, as well as the expected timing of some of the chips manufacturing investments.

但我們對今年的估計選擇比較保守。競爭加劇、華盛頓擬議的政策變化對企業營運供應和勞動力成本的影響的不確定性，以及一些晶片製造投資的預期時間。

Let us to take a more conservative approach to our 2025 modeling. Commercial lending is expected to be the driving force of 2025 growth. The portfolio expansion towards the mid-single digit rate with CRE, C&I and business making all contributing.

讓我們對 2025 年建模採取更保守的方法。預計商業貸款將成為2025年成長的驅動力。在商業房地產、工商業和商業的共同貢獻下，投資組合擴張至中等個位數。

I would also like to note that we're currently projecting $1.2 billion in total cash flow over the next 12 months from the loan and security portfolios combined, which we will seek to redeploy in the credit discipline lending.

我還想指出，我們目前預計未來 12 個月貸款和證券組合的總現金流將達到 12 億美元，我們將尋求將其重新部署到信貸紀律貸款中。

Residential loans and consumer indirect portfolios are expected to remain fairly flat through the year. On the residential side, production is expected to be matched by an anticipated runoff. Competition is very high in this space and while interest rates have come down somewhat, we believe we're still several quarters away from notable refinancing activity.

預計全年住宅貸款和消費者間接投資組合將保持相當穩定。在居民生活方面，預計產量將與預期徑流相符。這個領域的競爭非常激烈，雖然利率有所下降，但我們認為距離顯著的再融資活動仍需要幾個季度的時間。

Consumer indirect balances are expected to end the year relatively flat. Runoff may continue to outpace production in the first quarter of the year, which is typically a bit slower due to the seasonality of loan demand, But we expect that to shift in the middle of the year.

預計到年底消費者間接餘額將保持相對穩定。今年第一季度，貸款流失可能繼續超過生產速度，由於貸款需求的季節性，生產速度通常會稍微慢一些，但我們預計這種情況將在年中發生變化。

Deposit balances are expected to remain somewhat flat for the year with vast related deposit outflows partially offsetting anticipated growth in other categories. Our marketing efforts are focused around core, non-public deposit growth. We're prepared to supplement that with short-term borrowings and brokered deposits as needed. So well, the levels we've carried in the past.

今年存款餘額預計將保持基本平穩，大量相關存款流出將部分抵消其他類別的預期成長。我們的行銷工作集中在核心非公開存款成長。我們準備根據需要透過短期借款和經紀存款來補充。那麼，我們過去所達到的水準。

We are projecting quarterly non-interest income of $9.5 million, $10 million in 2025. Excluding losses on investment securities, impairment on tax credits and other categories that are difficult to predict, such as limited partnership income. Fourth-quarter 2024 non-interest income was impacted by the restructuring as well as discrete events like the sale of our insurance subsidiary which created additional noise and full year results. And looking at what we consider to be recurring non-interest income, it's all for $8.8 million for the quarter compared to $9.1 million in the third quarter and $8.9 million in the year ago period.

我們預計季度非利息收入為 950 萬美元，2025 年為 1,000 萬美元。不包括投資證券損失、稅收抵免減損和其他難以預測的類別，例如有限合夥收入。2024 年第四季的非利息收入受到重組以及出售保險子公司等個別事件的影響，這產生了額外的噪音和全年業績。看看我們所認為的經常性非利息收入，本季為 880 萬美元，而第三季為 910 萬美元，去年同期為 890 萬美元。

Investment advisory revenue is a key contributor of non-interest income for us and primarily comes from career capital. Assets managed by our wealth management subsidiary associated revenues were down on a linked quarter basis.

投資諮詢收入是我們非利息收入的主要來源，主要來自職業資本。我們的財富管理子公司管理的資產相關收入按季下降。

Due to some organizational changes, we saw the departure of two advisers during the quarter. However, we recently hired a new team and has already brought in business which more than offsets the outflow we experienced.

由於一些組織變動，本季有兩位顧問離職。然而，我們最近僱用了一個新團隊，並且已經帶來了業務，這足以彌補我們所經歷的資金流出。

We expect non-interest expense of approximately $35 million per quarter in 2025. This represents a 5% increase in core annual operating expenses versus 2024. Included in this are expenses for in process initiatives that we believe will support incremental performance. Well from a revenue perspective such as enhancements to our treasury management capability, as well as enhanced efficiency, including service software to facilitate effective change management and prioritize head count. We believe we will be able to effectively manage expenses even as we invest in our people, processes and technology to support our future growth and performance, including a sub 60% efficiency ratio.

我們預計 2025 年每季非利息支出約為 3,500 萬美元。這意味著核心年度營運費用與 2024 年相比增加了 5%。其中包括我們認為將支持增量績效的正在進行的計劃的費用。從收入角度來看，例如增強我們的財務管理能力以及提高效率，包括服務軟體以促進有效的變更管理和優先考慮員工人數。我們相信，即使我們投資於人才、流程和技術來支持我們未來的成長和業績，包括低於 60% 的效率率，我們也將能夠有效地管理費用。

I do want to address the elevated fourth-quarter 2024 expenses. The primary driver of this was a $1.3 million pension plan settlement accounting charge that was triggered in the fourth quarter as a result of lump sum withdrawals during the year. We had amended the plan in the four curve of 2023 to remove a lump sum distribution threshold and several terminated vested participants took advantage of the opportunity in 2024. This will ultimately reduce the size and scale of our pension plan going forward. And while we may see settlement charges in future years, they're not expected to be at this level. The computer and data processing expense increase of about $1.3 million related to some of the ongoing initiatives I mentioned which are factored into our 2025 guidance.

我確實想解決 2024 年第四季費用增加的問題。造成這一現象的主要原因是第四季度因年度內一次性提款而產生的 130 萬美元退休金計劃結算會計費用。我們已在 2023 年四曲線中修改了該計劃，取消了一次性分配門檻，幾位已終止的既得利益參與者在 2024 年利用了這一機會。這最終將減少我們未來退休金計劃的規模。儘管我們可能會在未來幾年看到和解費用，但預計不會達到這個水平。電腦和資料處理費用增加了約 130 萬美元，這與我提到的一些正在進行的計劃有關，這些計劃已計入我們的 2025 年指引。

FDIC Assessment expense was about a half a million higher than in the third quarter as a result of an increase in the assessment rate given the fourth-quarter securities loss. For this reason, FDIC expense is expected to remain elevated through 2025. So, to a lesser degree than in the recent quarter and this is also reflected in our guidance. The 2025 effective tax rate is expected to be between 17% and 19% including the impact of amortization of tax credit investments placed in service in recent years.

由於第四季的證券損失導致評估率增加，FDIC 評估費用比第三季高出約 50 萬美元。因此，預計到 2025 年，FDIC 支出仍將維持在高點。因此，與最近一個季度相比，程度較輕，這也反映在我們的指導中。預計 2025 年有效稅率將在 17% 至 19% 之間，其中包括近年來投入使用的稅收抵免投資攤銷的影響。

Year budgeting full year net charge offs of between 25 to 35 basis points of average loans. Our experience in each of the last two years has been lower than this. We're being conservative with our outlook at the start of the year.

年度預算全年淨沖銷平均貸款25至35個基點之間。我們過去兩年的經驗每年都低於這個水準。我們在年初對我們的前景持保守態度。

Overall, our performance targets in 2025 are focused on profitability first and foremost. We're not focused simply on growth; we are focused on profitable growth. We're not just focused on expense management. We are prioritizing investments that support incremental revenue generation and efficiency and how we operate. With the success of the capital raise and restructuring in the recent quarter, we are very well-positioned to execute on those objectives in 2025.

整體來說，我們2025年的業績目標首先是獲利能力。我們不只是專注於成長；我們專注於獲利成長。我們不只關注費用管理。我們優先考慮那些支持增量收入和效率以及營運方式的投資。隨著最近一個季度的融資和重組成功，我們已準備好在 2025 年實現這些目標。

That concludes my prepared remarks. I'll now turn the call back to Martin.

我的準備好的發言到此結束。我現在將電話轉回給馬丁。

Thank you, Jack.

謝謝你，傑克。

We've been on a journey to transform this company into a more efficient and profitable institution. Over the past 18 months, we have looked closely at our organizational structure, our business lines and the composition of our balance sheet, taking necessary action to ensure all are contributing to our success in both the near and long terms. We believe we are poised to deliver on our performance goals that will support the long-term value creation objectives that our management team and Board are focused on.

我們一直致力於將這家公司轉變為一個更有效率、更有利潤的機構。在過去的 18 個月裡，我們密切關注了我們的組織結構、業務線和資產負債表的組成，並採取了必要的行動，確保所有這些都有助於我們近期和長期的成功。我們相信，我們已準備好實現我們的績效目標，這將支持我們的管理團隊和董事會所關注的長期價值創造目標。

With respect to our Board, earlier this week, we were pleased to announce the appointment of a new director, Angela Panzarella. Panzarella brings extensive business and non-profit leadership experience both globally and in upstate New York, as well as past public company Board experience. As we continue to grow and above as a company, we look forward to benefiting from her perspective and counsel.

關於我們的董事會，本週早些時候，我們很高興地宣布任命新董事 Angela Panzarella。Panzarella 擁有全球和紐約州北部豐富的商業和非營利領導經驗，以及過去的上市公司董事會經驗。隨著我們公司不斷發展壯大，我們期待從她的觀點和建議中受益。

That concludes our prepared remarks. Operator, please open the call for question.

我們的準備好的演講到此結束。接線員，請打開電話詢問。

(Operator Instructions)

（操作員指令）

Damon DelMonte, KBW.

達蒙·德爾蒙特（Damon DelMonte），KBW。

Hey, good morning, everyone. I hope everybody's doing well, and thanks for taking my questions.

嘿，大家早安。我希望大家一切順利，感謝你們回答我的問題。

Just a quick question loan growth and the outlook. You know, kind of given some of the commentary about the positive trends in the market. The fact that indirect auto is not going to be paying off at the same level as it has been recently. Just wondering the thoughts behind the conservative 1% to 3% growth, kind of feels like it could be more towards the middle single digits. So, just kind of curious as to how you guys are looking at that.

只是想快速問一下貸款成長和前景。您知道，這有點給出了有關市場積極趨勢的一些評論。事實是，間接汽車的回報不會像最近那樣保持相同的水平。只是想知道保守的 1% 到 3% 成長背後的想法，感覺它可能更接近中間個位數。所以，我只是有點好奇你們是如何看待這個問題的。

Hey, Damon. This is Jack to answer that question.

嘿，達蒙。我是傑克，來回答這個問題。

So looking at the portfolio as a whole, I think you're spot on on the single-digit range and the commercial portfolio. We do have some pent-up demand that's still on the sidelines for construction lending where there's we're waiting for some additional rate cuts to come to fruition before that activity heats up.

因此，從整體上看，我認為你對個位數範圍和商業投資組合的看法是正確的。對於建築貸款，我們確實有一些被壓抑的需求，我們正在等待一些額外的降息來實現，然後這種活動才會升溫。

The activity that we're seeing in the Syracuse market, it is more towards the back half of the year, primarily in the fourth quarter of 2026. So, we're just conservative with loan growth estimates at this stage of the game, but we're optimistic that they'll heat up in that half of the year with some great cuts and then some of that activity that we're talking about from economic development in Syracuse region.

我們在錫拉丘茲市場看到的活動更集中在下半年，主要是在 2026 年第四季。因此，在現階段我們對貸款成長預測仍比較保守，但我們樂觀地認為，隨著貸款大幅削減，以及我們所說的錫拉丘茲地區經濟發展的一些活動，貸款成長將在下半年升溫。

Got it. Okay. That's helpful. Thank you.

知道了。好的。這很有幫助。謝謝。

And then with respect to the margin, I look, I appreciate the guidance for the full year. I think at the time of the offering, we kind of estimated about 38 basis point benefit to the margin. Just given the modest increase here in the fourth quarter, is it fair to assume something in the high 320s for a starting point in the first quarter of '25 and then kind of a march towards a level that gets you to a full year in that 345 to 355?

然後關於利潤率，我看，我很欣賞全年的指導。我認為在發行時，我們估計利潤率收益約為 38 個基點。鑑於第四季度的溫和增長，是否可以合理地假設 2025 年第一季的起點為 325 多點，然後逐漸達到全年 345 到 355 的水平？

Yeah, we're actually looking at the first quarter margin, the 330 range, and then expansion beyond that. And that's really driven by the cash flow that's coming off the loan portfolio. If you look at our investor presentation, there's a slide in there that shows roll off yield versus roll on yield and how that contributes to to earning asset improvement over time. That's a contributing factor.

是的，我們實際上正在關注第一季的利潤率，即 330 的範圍，然後再擴大。這實際上是由貸款組合產生的現金流推動的。如果你看一下我們的投資者演示文稿，其中有一張幻燈片展示了滾動收益率與滾動收益率，以及這如何隨著時間的推移促進盈利資產的改善。這是一個促成因素。

And then in the fourth quarter, we saw our cost of funds declined 10 basis from (inaudible) quarter with the first 75 basis points of cuts to come to fruition. And we were positively surprised by our ability to have a faster reaction to rate cuts across all deposit portfolios than originally anticipated. And there's some additional lag that's coming into play for catch up on deposit pricing in 2025 as well.

然後在第四季度，我們發現資金成本比（聽不清楚）季度下降了 10 個基點，首次 75 個基點的降幅已實現。我們對所有存款組合的降息做出的反應比最初預期的要快，這讓我們感到驚訝。到 2025 年，存款定價還會出現一些額外的延遲。

Got it. Okay. That's great color. Okay. That's all that I had. I'll step back for now. Thank you.

知道了。好的。顏色真棒。好的。這就是我所擁有的一切。我暫時退後一步。謝謝。

[Tyler Cashio Tori] from Stephens.

來自史蒂芬斯的 [Tyler Cashio Tori]。

Hey, good morning. This is [Tyler Cashio Tori]. I'm from Breese.

嘿，早安。這是[泰勒·卡西奧·托里]。我來自布里斯。

I just wanted to start off on the reserve build. I know you talked about it a little bit and saw that the reserve increased 6 basis points to 1.07. I was just hoping you could provide some more color on about what drove that and if we should expect to see some continued reserve build. And if so, do you have a targeted level in mind?

我只是想開始儲備建設。我知道您稍微談論了這一點，並且看到儲備金增加了 6 個基點，達到 1.07。我只是希望您能夠提供更多細節，說明推動這一趨勢的原因，以及我們是否應該預期看到儲備金的持續增加。如果是的話，您是否有一個目標水平？

This is Jack, I'll take that.

這是傑克，我接受。

So as we said on the call, the fourth quarter was largely influenced by the loan growth that we observed in the fourth quarter that we had to reserve for. On the qualitative side, a lot of our qualitative factors are influenced by quantitative behavior in the underlying loan portfolio. One of which is the delinquency rate on the indirect portfolio, which increased in the fourth quarter as expected from a seasonal perspective. However, it was lower than what we experienced in the fourth quarter of 2023.

因此，正如我們在電話會議上所說的那樣，第四季度很大程度上受到我們在第四季度觀察到的貸款成長的影響，我們必須為此做好儲備。從定性方面來看，我們的許多定性因素都受到基礎貸款組合中量化行為的影響。其中之一就是間接投資組合的拖欠率，從季節性角度來看，第四季的拖欠率如預期般上升。但它低於 2023 年第四季的水平。

And then on the commercial portfolio, the qualitative drivers are influenced by national portfolio metrics. So when you look at commercial real estate portfolio behavior at a national level, it experiences higher delinquency levels than what we have internally. So, we have to factor that in from a (inaudible) perspective, but we believe the credit quality of that portfolio is a little bit stronger. And we're comfortable with the 107 basis points coverage ratio that we're at right now. So if you think about provision modeling going into 2025, I would focus on our guidance on NCOs and that 25 to 35 basis point range, loan growth that we've projected as well as the coverage ratio maintenance at 107% -- 178.5%.

在商業投資組合中，定性驅動因素受到國家投資組合指標的影響。因此，當你從國家層級觀察商業房地產投資組合行為時，你會發現其拖欠率比我們內部的還要高。因此，我們必須從（聽不清楚）的角度考慮到這一點，但我們認為該投資組合的信用品質會更強一些。我們對目前的 107 個基點的覆蓋率感到滿意。因此，如果您考慮 2025 年的撥備模型，我將重點關注我們對 NCO 的指導以及 25 至 35 個基點的範圍、我們預測的貸款增長以及 107% - 178.5% 的覆蓋率維持。

Okay, great. Thanks. And then just one more for me. Tangible book came in a bit below what we were expecting, what was the period in AOCI?

好的，太好了。謝謝。然後對我來說再來一個。有形帳簿的銷售量比我們預期的要低一點，AOCI 的期間是怎樣的？

We saw AOCI pick up another $25 million at the end of the quarter just driven by end of period, increases in the belly of the curve around the five-year point which really impacts the mark on the portfolio. Yeah, the AOCI mark total I think was $50 million.

我們看到 AOCI 在本季末又獲得了 2500 萬美元的收益，這僅僅是受期末推動，曲線腹部在五年點左右增加，這對投資組合產生了真正的影響。是的，我認為 AOCI 總額為 5000 萬美元。

Okay, great. Thank you. Thank you for answering my questions. That's it for me.

好的，太好了。謝謝。感謝您回答我的問題。對我來說就是這樣了。

(Operator Instructions)

（操作員指令）

Frank Schiraldi, Piper Sandler.

弗蘭克·席拉爾迪，派珀·桑德勒。

Good morning. I just wanted to ask about the follow up on 2025 guide. Jack, just so you guys talk about the per expense -- quarterly expense of of roughly $35 million per quarter. Just wondering if you can -- following the 4Q where you had some a little bit of noise in terms of non-recurring items. If you could just talk through, maybe, the cadence of expense growth through the year that starting point of 35 and then you feel like you can hold it at those levels or any color there for modeling.

早安.我只是想詢問有關 2025 年指南的後續情況。傑克，你們討論一下每季的支出大約是 3500 萬美元。只是想知道您是否可以 - 在第四季度之後，您在非經常性項目方面遇到了一些麻煩。如果您可以簡單談談，也許，全年費用增長的節奏，即 35 的起點，然後您覺得您可以將其保持在這些水平或任何顏色以進行建模。

Yeah, I mean, the year-over-the year normalized NIE expense growth is expected to be about 5%. And there was a lot of noise in 2024, so I understand the question. When we look at fourth quarter NIE, if you back out the $1.3 million of pension settlement accounting expense that we had, we were right around a $35 million NIE mark. So, that quarterly guidance is fairly consistent with our fourth-quarter results on a normalized level.

是的，我的意思是，預計將年比標準化 NIE 費用成長率約為 5%。2024 年有很多噪音，所以我理解這個問題。當我們查看第四季度的 NIE 時，如果減去我們的 130 萬美元退休金結算會計費用，我們的 NIE 總額約為 3500 萬美元。因此，該季度指引與我們第四季的業績在正常水準上相當一致。

Okay. And then just in terms of the -- your confidence level in getting to that some of those profitability metrics and you mentioned the efficiency ratio of sub 60%. You know, I think it's incremental rate cuts would still help if you get them. And you're pretty conservative on your your long growth expectations. So just curious, maybe talk a little bit about your confidence level there. And then what is the primary risk do you think as you look at 2025 of kind of missing that mark?

好的。然後就—您對達到某些獲利指標的信心水準而言，您提到了效率比率低於 60%。你知道，我認為如果採取漸進式降息措施仍然會有所幫助。您對長期成長預期相當保守。只是好奇，也許可以談談你的信心程度。那麼，您認為到 2025 年，達不到這目標的主要風險是什麼？

So loan growth certainly influences our ability to achieve the efficiency ratio. We've demonstrated a very strong corporate responsibility as it pertains to expense management, but about 80% of our revenue stream is driven by non-interest income. And our margin expansion, as I mentioned earlier, is really influenced by the role on yield of the loan portfolio coming in above what's rolling off. However, I feel that our loan growth projections are conservative, so I'm fairly comfortable with our ability to achieve that sub 60 efficiency ratio.

因此貸款成長肯定會影響我們實現效率比率的能力。在費用管理方面，我們展現了非常強烈的企業責任感，但我們約 80% 的收入來源來自非利息收入。正如我之前提到的，我們的利潤率擴張實際上受到貸款組合收益率高於貸款滾存收益率的影響。不過，我覺得我們的貸款成長預測比較保守，因此我對於我們達到 60 以下效率比率的能力相當有信心。

Okay, great.

好的，太好了。

Did I answer the question?

我回答問題了嗎？

Yeah. And then just following up, I mean, I think you you've already answered this. Just clarification on that. Sounds like the 107 the reserve to loan ratio pretty comfortable there. Just curious, if you could talk about what the, I'm sorry if I missed it, what the reserve levels are on the new commercial to just maybe try to get a sense of any variability there going forward as you grow that book as opposed to consumer.

是的。然後繼續說，我的意思是，我想你已經回答了這個問題。只是想澄清一下。聽起來，107 的準備金與貸款比率相當舒適。只是好奇，如果你可以談談什麼，很抱歉我錯過了，新商業的儲備水平是多少，也許只是為了嘗試了解隨著這本書而不是消費者的增長，未來會出現什麼變化。

Yeah, they're north of 100 basis points on the commercial portfolio. I don't have that directly in front of me.

是的，他們的商業投資組合比率超過了 100 個基點。我面前並沒有這個東西。

Okay. But doesn't sound like you feel like that's going to put a lot more pressure on that or more pressure on the reserve to loan ratio necessarily going forward, but okay.

好的。但聽起來您並不覺得這會對此帶來更大的壓力，或者必然會對準備金與貸款比率帶來更大的壓力，但是好吧。

All right, I appreciate it. Thank you.

好的，我很感激。謝謝。

Yeah. Thanks, Frank.

是的。謝謝，弗蘭克。

We have no further questions. I'd like to hand back to Martin Birmingham to conclude.

我們沒有其他問題了。我想把演講的結尾交給馬丁·伯明罕。

I just want to thank everybody for their participation this morning. We look forward to continuing the conversation with our second-quarter results.

我只想感謝大家今天早上的參與。我們期待繼續討論第二季的業績。

This concludes today's call. Thank you for joining. You may now disconnect your lines.

今天的電話會議到此結束。感謝您的加入。現在您可以斷開線路了。