First of Long Island Corp (FLIC) 2023 Q2 法說會逐字稿

Welcome to the First of Long Island Corporation's second quarter 2023 earnings conference call. On the call today are Chris Becker, President and Chief Executive Officer; Jay McConie, Chief Financial Officer. Today's call is being recorded. A copy of the earnings release is available on the corporation's website at fnbli.com and on the earnings web call page at https://www.cstproxy.com/fnbli/earnings/2023/q2.

歡迎參加長島公司 2023 年第二季度財報電話會議。今天參加電話會議的是總裁兼首席執行官克里斯·貝克爾 (Chris Becker)；傑伊·麥科尼，首席財務官。今天的通話正在錄音。收益發布的副本可在公司網站 fnbli.com 和收益網絡電話頁面 https://www.cstproxy.com/fnbli/earnings/2023/q2 上獲取。

Before we begin, the company would like to remind everyone that this call may contain certain statements that constitute forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. Such statements are subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those contained in any such statements, including as set forth in the company's filings with the US Securities and Exchange Commission. Investors should also refer to our 2022 10-K filed on March 9, 2023, as supplemented by our 10-Q for the quarter ended March 31, 2023. For a list of risk factors that could cause actual results to differ materially from those indicated or implied by such statements.

在我們開始之前，公司想提醒大家，本次電話會議可能包含某些構成根據 1995 年美國私人證券訴訟改革法案安全港條款做出的前瞻性陳述的陳述。此類陳述受到風險、不確定性、以及其他可能導致實際結果與任何此類聲明中包含的內容存在重大差異的因素，包括公司向美國證券交易委員會提交的文件中所述的內容。投資者還應參閱我們於2023 年3 月9 日提交的2022 年10-K 報告，以及我們截至2023 年3 月31 日結束的季度的10-Q 報告。有關可能導致實際結果與所示結果存在重大差異的風險因素列表或此類陳述所暗示的。

I would now like to turn the call over Chris Becker.

我現在想把電話轉給克里斯·貝克爾。

Thank you.

謝謝。

Good afternoon, and welcome to the First of Long Island Corporation's earnings call for the second quarter of 2023. As the volatility of the first quarter settled down, I'm pleased to report that total assets, total loans and total deposits all increased when comparing the end of the second quarter to the end of the first quarter in 2023. Most important, our deposit franchise has remained strong. Deposit levels were only $12 million below year end 2022, which has allowed us to avoid adding more costly borrowings and brokered deposits. Regulators have generally frowned on continually funding loan growth through brokered channels. Our business model has allowed us to avoid that formula, which we believe speaks to the strength of our franchise.

下午好，歡迎參加長島公司 2023 年第二季度財報電話會議。隨著第一季度的波動穩定下來，我很高興地報告，總資產、總貸款和總存款均有所增長。 2023 年第二季度末到第一季度末。最重要的是，我們的存款業務仍然強勁。存款水平僅比 2022 年底低 1200 萬美元，這使我們能夠避免增加成本更高的借款和經紀存款。監管機構普遍不贊成通過經紀渠道持續為貸款增長提供資金。我們的商業模式使我們能夠避免這種模式，我們相信這體現了我們特許經營的實力。

While some customers have moved money to higher-yielding options, such as short-term treasuries, our banking teams have been able to replace that funding with new relationship-based deposits. We remain focused on our key strategic initiatives of improving our balance sheet mix, optimizing our branch network, and enhancing our technology as we manage for long-term success.

雖然一些客戶已將資金轉移到收益率更高的選擇，例如短期國債，但我們的銀行團隊已經能夠用新的基於關係的存款取代這些資金。我們仍然專注於改善資產負債表結構、優化分支機構網絡和增強技術等關鍵戰略舉措，以實現長期成功。

With that in mind, in the second quarter, we added a deposit-gathering team to our Rockville Centre market and celebrated the relocation of three legacy branches. Our branch optimization plan has resulted in the closing of 14 branches since 2020 and the relocation of four others. After a decade of rapid branch expansion, the current management team is getting the right number of branches in the right locations with the right people.

考慮到這一點，在第二季度，我們在羅克維爾中心市場增加了一個存款收集團隊，並慶祝了三個傳統分支機構的搬遷。自 2020 年以來，我們的分行優化計劃已關閉 14 家分行，並搬遷了另外 4 家分行。經過十年的快速分支機構擴張，目前的管理團隊正在正確的地點和合適的人員中建立正確數量的分支機構。

In October, we plan to roll out upgrades to our business online banking, including a new business mobile app. And our branches and back office will also see significant efficiencies from new systems. Our loan pipeline was $135 million at the end of the second quarter, an increase from $96 million reported last quarter. That reflects new commercial opportunities from the recent disruption in the market. Our pipeline could be higher, but we have passed on several CRE deals that did not offer an acceptable spread over the cost of new borrowings at over 5%.

十月，我們計劃推出企業網上銀行升級，包括新的企業移動應用程序。我們的分支機構和後台也將看到新系統的顯著效率。截至第二季度末，我們的貸款渠道為 1.35 億美元，較上季度報告的 9600 萬美元有所增加。這反映了近期市場混亂帶來的新商業機會。我們的渠道可能會更高，但我們已經放棄了幾筆 CRE 交易，這些交易並未提供超過 5% 的新借款成本可接受的利差。

Our lending focus is meeting the needs of our current relationships and pursuing new commercial relationships with deposits attached. Our earnings release refers to originating loans of $76 million with a weighted average rate of just under 6% during the second quarter. Please note that is the outstanding amount at quarter end. Given the fact that certain originations are lines that were not fully drawn at quarter end, the all-in number is higher. Total originations for the quarter were $101 million with a gross weighted average rate of 6.32%. As expected from First National Bank LI, credit quality continues to be excellent with non-accruals again at zero at the end of the second quarter.

我們的貸款重點是滿足我們當前關係的需求，並尋求附加存款的新商業關係。我們發布的財報顯示，第二季度發放的貸款金額為 7600 萬美元，加權平均利率略低於 6%。請注意，這是季度末的未清金額。鑑於某些起源是在季度末未完全繪製的線，因此總投注數更高。該季度的總發起額為 1.01 億美元，總加權平均利率為 6.32%。正如第一國民銀行 LI 的預期，信貸質量繼續保持優異，第二季度末非應計費用再次為零。

Jay McConie will now discuss our financial results for the quarter. Jay?

傑伊·麥康尼現在將討論我們本季度的財務業績。傑伊？

Thank you, Chris. Good afternoon, everyone. As discuss last quarter, the bank completed two balance sheet repositioning transactions in March of 2023. Purpose of the two transactions was to help reduce the bank's liability-sensitive position to rising rates.

謝謝你，克里斯。大家下午好。正如上季度討論的那樣，該銀行於 2023 年 3 月完成了兩筆資產負債表重新定位交易。這兩筆交易的目的是幫助降低銀行對利率上升的負債敏感狀況。

To briefly recap, the first transaction was a $300 million interest rate swap that converted fixed rate residential mortgage loans to floating rate for a period of three years. The bank pays a fixed rate of 3.82% who receives a floating rate based on the SOFR overnight rate. This transaction provided an additional $765,000 of interest income and helped increase our margin by seven basis points in Q2 2023.

簡單回顧一下，第一筆交易是一筆 3 億美元的利率掉期交易，將固定利率住宅抵押貸款轉換為浮動利率，為期三年。銀行支付 3.82% 的固定利率，銀行收到基於 SOFR 隔夜利率的浮動利率。這項交易額外提供了 765,000 美元的利息收入，並幫助我們在 2023 年第二季度將利潤率提高了 7 個基點。

In the second transaction, the bank sold $149 million in fixed rate municipal securities, earning a tax-equivalent yield of approximately 3.32% and purchased $135 million of floating rate SBA securities with a projected yield of approximately 5.38% over the life of the bonds. This transaction increased securities income by approximately $900,000 in the second quarter when compared to the first quarter of 2023. In total, these two transactions improved interest income by $1.7 million in the second quarter of 2023.

在第二筆交易中，該銀行出售了1.49 億美元的固定利率市政證券，獲得了約3.32% 的稅收等值收益率，併購買了1.35 億美元的浮動利率SBA 證券，在債券期限內預計收益率約為5.38%。與 2023 年第一季度相比，這筆交易使第二季度的證券收入增加了約 90 萬美元。總的來說，這兩筆交易使 2023 年第二季度的利息收入增加了 170 萬美元。

These two transactions also increased the amount of securities and loans that reprice within one year to $832 million or 20% of total assets on June 30, 2023. We also anticipate approximately $90 million in quarterly cash inflows from both the securities and mortgage loan portfolios, which will be reinvested into new assets at current market rates over the next 12 months. Quarterly cash inflows represents approximately 8% of total assets on an annualized basis.

這兩筆交易還將一年內重新定價的證券和貸款金額增加到8.32 億美元，即2023 年6 月30 日總資產的20%。我們還預計來自證券和抵押貸款組合的季度現金流入約為9000萬美元，這筆資金將在未來 12 個月內按當前市場利率再投資於新資產。按年化計算，季度現金流入約佔總資產的8%。

The bank purchased approximately $36 million in securities with an average yield of 5.23% during the second quarter. Management will continue to add various government agency securities, high yield, and some rate lock protection over the next several quarters.

該銀行在第二季度購買了約 3600 萬美元的證券，平均收益率為 5.23%。管理層將在未來幾個季度繼續增加各種政府機構證券、高收益債券和一些利率鎖定保護。

These proactive steps taken by management have slowed the pace of decline in net interest margin from 40 basis points in the first quarter to 17 basis points in the second quarter. While the slow pace, margin decline will likely continue through the second half of 2023 and potentially into early 2024, unless the Federal Reserve reduces short-term rates and the yield curve begins to steepen again.

管理層採取的這些積極措施減緩了淨息差下降的速度，從第一季度的40個基點放緩至第二季度的17個基點。儘管步伐緩慢，但利潤率下降可能會持續到 2023 年下半年，甚至可能持續到 2024 年初，除非美聯儲降低短期利率並且收益率曲線再次開始變陡。

On the funding side of the balance sheet, total deposits have remained very stable at approximately $3.4 billion in 2023. The mix of deposits has changed with approximately $100 million moving from non-interest-bearing demand deposits to interest-bearing deposits as customers seek higher rates. This shift increased the average cost of funding and interest-bearing deposits by 112 basis points to 2.17% when comparing the second quarter of 2023 to the fourth quarter of 2022.

在資產負債表的資金方面，存款總額保持非常穩定，到2023 年約為34 億美元。存款結構發生了變化，隨著客戶尋求更高的利率，約1 億美元從無息活期存款轉向有息存款。費率。與 2023 年第二季度和 2022 年第四季度相比，這一轉變使融資和帶息存款的平均成本增加了 112 個基點，達到 2.17%。

The bank's cumulative deposit beta on non-maturity deposits was approximately 34% through June 30, 2023, which is close to our historical average in a rising rate environment. However, since the both the pace and size of increases, has not been seen in over 40 years. Our deposit fees could be higher in this rising rate cycle, especially given the fact that the Fed Reserve has indicated that there could be additional rate hikes in 2023, and that rates could remain elevated well into 2024.

截至 2023 年 6 月 30 日，該銀行非到期存款的累積存款貝塔約為 34%，接近利率上升環境下的歷史平均水平。然而，增長的速度和規模是 40 多年來所未見的。在這個加息週期中，我們的存款費用可能會更高，特別是考慮到美聯儲已表示 2023 年可能會進一步加息，並且利率可能會在 2024 年保持較高水平。

The bank's total wholesale funding, including brokered deposits, was $559 million or 13% of total assets at June 30, and had a weighted average cost of funds of 4.49% and an average maturity of nine months. In addition, the bank has $330 million in retail time deposits that mature over the next 18 months with an average cost of funds of 3.67%. As this funding matures, it could result in some additional upward cost pressure in each of these categories.

截至6月30日，該銀行的批發資金總額（包括經紀存款）為5.59億美元，佔總資產的13%，加權平均資金成本為4.49%，平均期限為9個月。此外，該銀行還有 3.3 億美元的零售定期存款，將在未來 18 個月內到期，平均資金成本為 3.67%。隨著這筆資金的成熟，可能會給每個類別帶來一些額外的成本上漲壓力。

The bank's uninsured and uncollateralized deposits were 38% of total deposits on June 30, the same percentage as on March 31, 2023. The bank continues to have ample liquidity. We maintain $1.4 billion in collateralized borrowing lines with the Federal Home Loan Bank, New York and the Federal Reserve. We also have $173 million in unencumbered cash and securities. In total, we have approximately $1.6 billion of available liquidity, which is well in excess of our uninsured and uncollateralized deposits.

截至6月30日，該銀行的無保險和無抵押存款佔總存款的38%，與2023年3月31日的比例相同。該銀行繼續擁有充裕的流動性。我們與紐約聯邦住房貸款銀行和美聯儲保持著 14 億美元的抵押借款額度。我們還有 1.73 億美元的未支配現金和證券。總的來說，我們擁有約 16 億美元的可用流動資金，遠遠超過我們的未保險和無抵押存款。

The bank had net income of $6.9 million and earnings per share of $0.31 for the second quarter of 2023 compared to $12.5 million or $0.54 per share for the same period in 2022. The bank's return on assets and equity were 66 basis points and 7.44%, respectively. The decline in net interest income continues to be caused by the Federal Reserve's aggressive monetary policy which has increased short-term rates by 550 basis points and cause further inversion of the yield curve.

該銀行2023 年第二季度的淨利潤為690 萬美元，每股收益為0.31 美元，而2022 年同期為1,250 萬美元，每股收益為0.54 美元。該銀行的資產和股本回報率為66 個基點和7.44%，分別。淨利息收入下降繼續是由於美聯儲激進的貨幣政策將短期利率提高了550個基點，導致收益率曲線進一步倒掛。

The spread between the three months and a 10-year US bond is currently inverted by approximately 140 basis points. The bank's interest expense increased $13.1 million when compared to the second quarter of 2023 to same quarter last year and was only partially offset by $5.2 million increase in interest income. The bank's quarterly noninterest income was $2.7 million, which was consistent with expectations. The current run rate should continue throughout 2023.

三個月期美國債券與十年期美國債券之間的利差目前倒掛了約 140 個基點。與 2023 年第二季度和去年同期相比，該銀行的利息支出增加了 1,310 萬美元，但僅被利息收入增加的 520 萬美元部分抵消。該銀行季度非利息收入為270萬美元，與預期一致。目前的運行速度應該會持續到 2023 年。

The bank's noninterest expense was $16.5 million during the second quarter, flat when compared to both the linked and prior year quarter. We expect noninterest expense to remain near the current level for the remainder of 2023. Management is very mindful of expense control, given the current environment and is making every effort to keep the run rate steady or decreasing as we move forward.

該銀行第二季度的非利息支出為 1,650 萬美元，與上一季度和去年同期持平。我們預計，在 2023 年剩餘時間內，非利息支出將保持在當前水平附近。考慮到當前環境，管理層非常注重費用控制，並正在盡一切努力保持運行率穩定或隨著我們的前進而下降。

Bank's efficiency ratio was 64.3% for the six months ended June 30, 2023, up from 49.4% in the prior year. This increase mostly attributable to a decline in net interest income. The bank's ratio of noninterest expense to average total assets remained fairly flat at 1.57 and 1.52 for the six months ended June 30, 2023, and 2022, respectively.

截至2023年6月30日止六個月，銀行效率率為64.3%，高於上一年的49.4%。這一增長主要歸因於淨利息收入下降。截至2023年6月30日和2022年6月30日的六個月，該銀行的非利息支出與平均總資產的比率分別保持在1.57和1.52，相當平穩。

Our capital position remains strong with the leverage ratio of 10.11% from June 30, 2023, an increase of 17 basis points from 9.94 on March 31, 2023. The bank did not repurchased any shares during the second quarter of 2023. We still have approximately $15 million authorized under the most recent Board approved stock repurchase plan. The bank declared its quarterly cash dividend of $0.21 to shareholders on June 29, 2023. The Board and management continue to evaluate dividends and repurchases to provide the best opportunity to maximize shareholder value.

我們的資本狀況依然強勁，自2023年6月30日起槓桿率為10.11%，較2023年3月31日的9.94增加17個基點。該銀行在2023年第二季度沒有回購任何股票。我們仍有大約董事會最近批准的股票回購計劃授權 1500 萬美元。該銀行於2023年6月29日宣布向股東派發季度現金股息0.21美元。董事會和管理層繼續評估股息和回購，以提供實現股東價值最大化的最佳機會。

Bank's effective tax rate decreased to 13.8% in the second quarter of 2023 from 19.81% in the second quarter of 2022. The decline in the effective tax rate is mainly due to an increase in the percentage of pretax income derived from the bank's real estate investment trust and bank owned life insurance. We anticipate our tax rate for 2023 to be between 11% to 13%.

銀行有效稅率從2022年第二季度的19.81%下降至2023年第二季度的13.8%。有效稅率下降的主要原因是銀行房地產投資產生的稅前收入比例增加信託和銀行擁有的人壽保險。我們預計 2023 年的稅率將在 11% 至 13% 之間。

With that, I'll turn it back to our operator for question.

這樣，我會將其轉回給我們的接線員詢問。

Thank you. Alex Twerdahl, Piper Sandler.

謝謝。亞歷克斯·特沃達爾，派珀·桑德勒。

Hey, good afternoon, guys.

嘿，下午好，伙計們。

Hi, Alex.

嗨，亞歷克斯。

Hi, Alex.

嗨，亞歷克斯。

I think, Jay, last quarter you were able to give us the NIM by month and the exit NIM for the quarter. And I was wondering if you had that handy. And really what I'm trying to figure out is, I guess, sort of the trajectory of the decline this quarter and whether or not there is maybe some more stabilization to come later this year?

我想，傑伊，上個季度您能夠向我們提供按月劃分的淨息差和本季度的退出淨息差。我想知道你是否有那個方便。我想，我真正想要弄清楚的是，本季度的下滑軌跡，以及今年晚些時候是否會出現更多的穩定？

Yes, for -- on a monthly basis, April was 219, May was 223, and June was 210. Maybe in a little bit higher because of the extra day you get hit a little bit higher margin on 31 days.

是的，按月計算，4 月是 219，5 月是 223，6 月是 210。也許會更高一點，因為多了一天，你在 31 天的利潤率會更高一些。

Okay. And I guess as I think about trying to figure out the NIM is going to be for the next couple of quarters or where it could shake out. Just in terms of the deposit rates that you're paying -- I mean are the, I guess, exit rates from the quarter similar to what's the average rate for the quarter? Are they much higher? And I guess for the two categories you guys break out in the average balance sheet?

好的。我想，當我考慮嘗試弄清楚未來幾個季度的淨息差或它可能會出現變化時。就您所支付的存款利率而言，我猜該季度的退出率是否與該季度的平均利率相似？他們高得多嗎？我想你們在平均資產負債表中劃分了兩個類別？

On the average balance sheet, a little bit higher. I mean, when you look at it -- I look at it this way, Alex, we're very happy with the pace of increase on non-maturity deposit funding has slowed significantly this quarter. It was 40 basis points of NIM contraction in Q1, 17 basis this quarter, and the monthly pace on non-maturity deposits was probably about, I'd say, on average 17 basis points in Q1 and for July we're down to about 7 basis points.

在平均資產負債表上，略高一些。我的意思是，當你看它時 - 我是這樣看的，亞歷克斯，我們對本季度非到期存款融資的增長速度顯著放緩感到非常高興。第一季度淨息差收縮40 個基點，本季度收縮17 個基點，我想說，第一季度非到期存款的月度收縮速度可能平均為17 個基點，而7 月份則降至約17 個基點。 7個基點。

So we've definitely seen in non-maturity deposits a very significant slowdown in the rate of increase, which we're happy with. But we're just cautious about providing guidance because obviously, we just had the rate increase yesterday. They're saying higher for longer and we just don't know where if there's going to be additional rate hikes or at the end of this cycle. It seems to be kind of -- is a good inflation point today, but it just seems to be a 50:50 chance. And market, assuming we're near the end and the Fed is really trying to push that, there's still some work to be done to tackle inflation.

因此，我們確實看到非到期存款增長率非常顯著放緩，我們對此感到滿意。但我們對提供指導持謹慎態度，因為顯然，我們昨天才加息。他們說加息時間會更長，但我們只是不知道在哪里或在本週期結束時是否會進一步加息。今天似乎是一個不錯的通脹點，但似乎只是 50:50 的機會。市場認為，假設我們已接近尾聲，並且美聯儲確實在努力推動這一進程，那麼應對通脹仍有一些工作要做。

Understood. And then maybe, Chris, you can give us just a little bit more on sort of the outlook for loan growth. It looks like the pipeline actually did increase a decent amount into the end of the quarter relative at least to the from the end of March. I guess first sort of what you're seeing for the demand out there, what -- if anything, change in the market obviously there's a big player that's gone away, how that's impacted you? And then just sort of the complexion, I guess of the pipeline would be the third part of the question. Just a little surprised to see that overall yield, I guess, of the pipeline looked like it came down a little bit. I'm wondering if that's just a function of mix shift in there.

明白了。克里斯，也許你可以給我們更多關於貸款增長前景的信息。看起來，至少相對於 3 月底，到本季度末，管道實際上確實增加了相當多的數量。我想首先你看到的需求是什麼——如果有的話，市場發生變化，顯然有一個大玩家消失了，這對你有何影響？然後只是膚色，我想管道將是問題的第三部分。我猜想，看到管道的總體產量似乎有所下降，我感到有點驚訝。我想知道這是否只是其中混合轉換的功能。

Yeah. So the -- as I said, the pipeline's up a little bit. And that's from some additional opportunities that have come from the disruption in the market. So we're pleased to see that. When you look at our pipeline, it's closer to what we close in the upcoming quarter and that kind of tracks historically. And if you look at last quarter's pipeline, when we gave a $96 million pipeline and our actual closings for the month were $101 million. I know, as I said, that's a little higher than what's in the release. What's in the release is how much was funded, but we have lines of credit that are unfunded.

是的。正如我所說，管道已經啟動了一點。這是來自市場混亂帶來的一些額外機會。所以我們很高興看到這一點。當您查看我們的管道時，您會發現它更接近我們在下個季度關閉的管道以及歷史記錄。如果你看一下上季度的管道，當我們提供了 9600 萬美元的管道時，我們當月的實際結賬額為 1.01 億美元。我知道，正如我所說，這比發行版中的內容要高一些。發布的內容是提供了多少資金，但我們的信貸額度尚未提供資金。

And again, those lines that are unfunded generally carry a higher rate than some of the mortgages that were funded. So that's why that raised a little bit higher. So around 6% as far as outstanding is because that's -- all your mortgages are fully outstanding, but lines that might be at prime or prime plus that aren't fully drawn, not fully outstanding. So there is a little discrepancy there.

同樣，那些無資金支持的貸款額度通常比一些有資金支持的抵押貸款利率更高。這就是為什麼漲幅略高的原因。因此，大約 6% 的未償還貸款是因為——你所有的抵押貸款都完全未償還，但貸款額度可能處於最佳或最佳加上未完全提取、未完全未償還的水平。所以這裡存在一點差異。

But looking at our whole year originations, the weighted average growth rate on those is more like it's north of 6.5%, it's about 6.61%. So we're not disappointed with where those numbers are coming in. And as the lines are drawn, that will certainly help improve our yield because those are the higher rate items. So overall, the pipeline looks good. It's mainly relationship-based business, not doing as much CRE right now, as we said. And so we were -- I would kind of look at that pipeline as a pretty good proxy of where we think closings would be in the third quarter. Obviously, things come in during the quarter, that get closed during the quarter, that weren't there at quarter end, and obviously other things can fall out. But I think that would be a pretty good proxy where the closings will be a little bit higher in the third quarter than the second quarter.

但從我們全年的初始數據來看，這些數據的加權平均增長率更像是 6.5% 以上，約為 6.61%。因此，我們對這些數字的出現並不感到失望。隨著界限的劃定，這肯定有助於提高我們的產量，因為這些是利率較高的項目。總的來說，管道看起來不錯。正如我們所說，它主要是基於關係的業務，目前沒有做那麼多的商業地產業務。所以我們——我會將該管道視為我們認為第三季度關閉情況的一個很好的代表。顯然，有些事情是在本季度發生的，有些事情在本季度結束的，有些事情在季度末還沒有發生，顯然還有其他事情可能會消失。但我認為這將是一個非常好的指標，第三季度的成交量將比第二季度略高。

Okay. So I guess all in all --.

好的。所以我想總而言之——。

Alex, this is Jay, we're definitely seeing, though that rates for loans are starting to go up. The inversion was kind of keeping competition for CRE loans and loans to spreads a little bit lower and the rates you're getting and that's definitely starting to change as we go into the second half of the year with funding costs. I think just the industry itself is realizing that spreads have to go higher and you need to be paid for the risk that you're getting.

亞歷克斯，這是傑伊，我們肯定看到了，儘管貸款利率開始上升。這種倒掛使商業地產貸款和貸款利差以及利率的競爭保持在較低水平，隨著我們進入下半年的融資成本，這種情況肯定會開始發生變化。我認為只有行業本身才意識到利差必須更高，並且您需要為所承受的風險付出代價。

Got it. So I guess, it would it be fair to say, based on the pipeline today, that and assuming similar sort of payoff amortization activities you saw in the second quarter that the overall portfolio can show higher at kind of a mid-single digit annualized pace in the back half of the year?

知道了。因此，我想，可以公平地說，根據今天的管道，並假設您在第二季度看到的類似的回報攤銷活動，整體投資組合可以以中個位數的年化速度顯示更高的水平下半年？

We think that we can see some growth in the second half of the year. I don't know if it would be as high as mid-single digits. I would think that would probably be the top of it, but we're certainly optimistic to see some continued growth in the second half of the year as we saw a little bit of growth in the second quarter.

我們認為下半年可以看到一些增長。我不知道是否會達到中個位數。我認為這可能是最重要的，但我們當然樂觀地看到下半年的持續增長，因為我們在第二季度看到了一點增長。

And Alex, that's a little bit too, if we have a couple of demand lines and stuff for some of our larger customers. And depending where those footings kind of come out, they can kind of fluctuate up [$15 million, $20 million, $25 million]. And if they're outstanding and up then loan footing is obviously up at a higher yield and if they're paid off, that then a little bit lower. So that kind of drives a little bit, too. That's hard to predict for our customers.

亞歷克斯，如果我們為一些大客戶提供幾條需求線和其他東西，那也有點過分了。根據這些基礎的情況，它們可能會有所波動 [1500 萬美元、2000 萬美元、2500 萬美元]。如果它們未償付並且有所上升，那麼貸款基礎顯然會以更高的收益率上升，如果它們得到還清，那麼收益率就會低一點。所以這也有一點驅動力。這對我們的客戶來說很難預測。

Yeah. So our line usage, as we've said in previous quarters, obviously was way down in the pandemic. It came back a little bit, but line usage is lower than historically it's been. And we believe that's a reflection of the rates and some companies maybe just avoiding doing certain things, making certain purchases, maybe keeping inventory levels a little bit lower and trying not to use the line as much because of that current level of interest rates.

是的。因此，正如我們在前幾個季度所說的那樣，我們的線路使用量在大流行期間顯然大幅下降。它有所恢復，但線路使用量低於歷史水平。我們認為，這是利率的反映，一些公司可能只是避免做某些事情，進行某些採購，可能會保持庫存水平略低，並由於當前的利率水平而盡量不使用該額度。

Got it. That's helpful. All right. I appreciate you taking my questions.

知道了。這很有幫助。好的。感謝您回答我的問題。

Thanks, Alex.

謝謝，亞歷克斯。

Thank you. This concludes our question-and-answer session. So I will turn the call back over to Chris Becker for some final closing comments.

謝謝。我們的問答環節到此結束。因此，我會將電話轉回給克里斯·貝克爾（Chris Becker），以徵求最後的總結意見。

Thank you for your attention and participation on the call today. We are halfway through a challenging 2023 due to the interest rate environment and shocks to the banking system from recent bank failures. We believe these events have highlighted the strengths of our organization, our strong deposit franchise, strong asset quality, ample liquidity, and a proactive management team that continues to transition the bank for long-term success. We look forward to talking to you next quarter. Have a good rest of the day.

感謝您對今天電話會議的關注和參與。由於利率環境以及近期銀行倒閉對銀行體系的衝擊，充滿挑戰的 2023 年已經過去一半。我們相信，這些事件凸顯了我們組織的優勢、強大的存款專營權、強大的資產質量、充足的流動性以及積極主動的管理團隊，不斷推動銀行轉型以獲得長期成功。我們期待下個季度與您交談。好好休息一天吧。