First of Long Island Corp (FLIC) 2023 Q3 法說會逐字稿

Welcome to the First of Long Island Corporation's third quarter 2023 earnings conference call. On the call today are: Chris Becker, President and Chief Executive Officer; Jay McConie, Chief Financial Officer; and Janet Verneuille, Chief Risk Officer.

歡迎參加長島公司 2023 年第三季財報電話會議。今天參加電話會議的有：總裁兼執行長 Chris Becker；傑伊‧麥考尼，財務長；和首席風險官 Janet Verneuille。

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 call web page at https://www.cstproxy.com/fnbli/earnings/2023/q3.

今天的通話正在錄音。收益發布的副本可在公司網站 fnbli.com 和收益電話會議網頁 https://www.cstproxy.com/fnbli/earnings/2023/q3 上取得。

Before we begin, the company would like to remind everyone that the 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.

在我們開始之前，公司想提醒大家，電話會議可能包含某些陳述，這些陳述構成根據1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。此類陳述受到風險、不確定性和不確定性的影響。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其他因素，包括公司向美國證券交易委員會提交的文件中所述的因素。

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 impact -- that could cause actual results to differ materially from those indicated or implied by such statements.

投資者還應參考我們於 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。有關可能影響實際結果的風險因素清單與此類聲明所顯示或暗示的內容有重大差異。

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

我現在想把電話轉給克里斯·貝克爾。

Thank you. Good afternoon, and welcome to The First of Long Island Corporation earnings call for the third quarter of 2023. I'm pleased to report that third quarter net income of $6.8 million and earnings per share of $0.3 were consistent with the prior quarter. Most importantly, our net interest margin only decreased four basis points from the previous quarter after averaging declines of 27 basis points over the prior three quarters.

謝謝。下午好，歡迎參加長島公司 2023 年第三季財報電話會議。我很高興地報告，第三季淨利為 680 萬美元，每股收益為 0.3 美元，與上一季持平。最重要的是，在前三個季度平均下降 27 個基點之後，我們的淨利差僅比上個季度下降了 4 個基點。

Assuming the fed is done raising short-term rates which may not be the correct assumption, internal projections anticipate that the margin should bottom out over the next two quarters. Average total assets, average total loans and average total deposits all increased when comparing the third quarter of 2023 to the linked quarter. These averages all decreased during the second quarter of 2023 after the shock of some large regional bank failures.

假設聯準會完成提高短期利率（這可能不是正確的假設），內部預測預計利率將在未來兩季觸底。與上一季相比，2023 年第三季的平均總資產、平均貸款總額和平均存款總額均有所增加。在一些大型地區性銀行倒閉的衝擊之後，這些平均值在 2023 年第二季全部下降。

Our wholesale funding consisting of Federal Home Loan Bank borrowings and brokered deposits remained consistent from the end of the second quarter to the end of the third quarter. Overall, wholesale funding is down $28 million from the prior year end. Commercial customers continue to consider higher-yielding options such as short-term treasuries for funds in excess of the normal operating needs.

從第二季末到第三季末，我們的批發融資（包括聯邦住房貸款銀行借款和經紀存款）保持穩定。總體而言，批發資金比上年末減少了 2,800 萬美元。商業客戶繼續考慮收益率較高的選擇，例如超出正常營運需求的資金的短期國庫券。

Consumer customers looking for higher rates are generally satisfied with our certificate of deposit offerings, but some have moved money to our first investments program or other non-deposit investment providers. While our banking teams have been able to replace funding that has moved out of deposit accounts with new relationship-based deposits, net growth remains challenging in the current environment.

尋求更高利率的消費者客戶通常對我們的存款證產品感到滿意，但有些客戶已將資金轉移到我們的第一個投資計劃或其他非存款投資提供者。雖然我們的銀行團隊已經能夠用新的基於關係的存款取代從存款帳戶中移出的資金，但在當前環境下，淨增長仍然具有挑戰性。

Expense management is a continued focus. We recently announced another branch consolidation coming in December of this year. Our Manhasset branch is closing and consolidating into our Great Neck branch, which is approximately two miles away. This branch closing with be the 15th under our ongoing branch optimization strategy. In prior consolidations, we retained over 90% of the deposits.

費用管理是持續關注的焦點。我們最近宣布將於今年 12 月進行另一次分行合併。我們的曼哈塞特分行即將關閉，並併入距我們約兩英里的 Great Neck 分行。根據我們正在進行的分行優化策略，該分行關閉是第 15 個。在先前的合併中，我們保留了90%以上的存款。

Earlier this year, we adjusted branch hours including eliminating Saturday hours in several branches that did not have justifiable activity. Staffing levels are being adjusted down through attrition based on these changes.

今年早些時候，我們調整了分行的營業時間，包括取消了幾個沒有正當活動的分店的周六營業時間。根據這些變化，人員配置水準正在透過人員流失進行調整。

We recently announced a new co-marketing referral agreement with Rocket Mortgage, the nation's leading mortgage lender. This partnership is a timely response to industry changes in demand while still providing our 1N clients with best-in-class solutions to meet their mortgage needs. As a result of this new relationship, we eliminated our residential mortgage department saving nearly $1 million in annual expense going forward. Should the bank want to add residential mortgages to its portfolio that can be done through purchases.

我們最近宣布與美國領先的抵押貸款機構 Rocket Mortgage 達成一項新的聯合行銷推薦協議。這種合作關係是對行業需求變化的及時回應，同時仍為我們的 1N 客戶提供一流的解決方案，以滿足他們的抵押貸款需求。由於這種新的關係，我們取消了住宅抵押貸款部門，從而節省了近 100 萬美元的年度費用。銀行是否希望將住宅抵押貸款添加到其投資組合中，可以透過購買來完成。

We previously reported the sale of six buildings in Glen Head reducing our future occupancy expense. And the large majority of our rebranding expenses are behind us. The expense savings just outlined should offset pressure to maintain competitive salaries and benefits, upgrade technology to meet customer expectations and protect against cybersecurity threats, pay rising corporate insurance rates, as well as other general and administrative expense increases due to higher inflation rates over the past two years.

我們之前報告稱，出售了格倫黑德的六棟建築，減少了我們未來的入住費用。我們的品牌重塑費用大多已經過去了。剛才概述的費用節省應該抵消維持有競爭力的薪資和福利、升級技術以滿足客戶期望並防範網路安全威脅、支付不斷上漲的企業保險費率以及由於過去通膨率上升而導致的其他一般和行政費用增加的壓力兩年。

Our planned technology upgrades for this quarter have been postponed until 2024, but when implemented will bring additional back-office efficiencies. While we are just beginning our 2024 budget process, our goal is to reduce noninterest expenses below 2023 actual. We will provide more specific guidance on 2024 noninterest expenses in our year-end earnings call.

我們計劃在本季進行的技術升級已推遲到 2024 年，但實施後將帶來額外的後台效率。雖然我們剛開始 2024 年預算流程，但我們的目標是將非利息支出減少到 2023 年實際支出以下。我們將在年終財報電話會議上提供有關 2024 年非利息支出的更具體指引。

I will now address the upcoming executive management changes announced in our earnings release. Jay McConie has been an excellent Chief Financial Officer for the company over the past four years. While the Board of Directors and I had all the confidence in the world in Jay when we named him to the position in January of 2020, he still exceeded our expectations especially as we have navigated through one of the most difficult banking environments in over 40 years.

我現在將討論我們的收益發布中宣布的即將到來的執行管理層變動。過去四年來，傑伊·麥康尼 (Jay McConie) 一直是公司出色的財務長。雖然董事會和我在 2020 年 1 月任命 Jay 擔任該職位時對他充滿信心，但他仍然超出了我們的預期，尤其是在我們經歷了 40 多年來最困難的銀行環境之一的情況下。

Unfortunately that environment along with other personal reasons have caused Jay to rethink his desire to continue in his role as our Chief Financial Officer. We are grateful for all he has accomplished for the company. And that he has agreed to continue in a consulting role through at least March of 2024 but with no defined end date.

不幸的是，這種環境以及其他個人原因導致傑伊重新考慮他是否希望繼續擔任我們的財務長。我們感謝他為公司所取得的一切。他同意至少在 2024 年 3 月之前繼續擔任諮詢職務，但沒有明確的結束日期。

On the positive side, we have a strong executive bench and will move forward without missing a step. Janet Verneuille is highly qualified to take over the Chief Financial Officer role. She has been a trusted executive partner of mine for over 20 years both here and at two previous institutions including as my Chief Financial Officer when we worked together at Bridge Bancorp. In her role as the Chief Risk Officer, Janet works closely with Jay and the other executives. As a Senior Executive Vice President and our next Chief Financial Officer, she will continue to build on Jay's advancements and move the company forward.

從正面的一面來看，我們擁有強大的執行團隊，並將不遺餘力地向前邁進。 Janet Verneuille 非常有資格接任財務長一職。 20 多年來，她一直是我值得信賴的執行合夥人，無論是在這裡還是在之前的兩家機構，包括我們在Bridge Bancorp 共事時擔任我的財務長。在擔任首席風險長期間，Janet 與Jay 和其他高階主管。作為高級執行副總裁和下一任首席財務官，她將繼續在 Jay 的基礎上取得進步並推動公司向前發展。

Tan Ansari will take over as our new Chief Risk Officer. Tan works closely with Janet on an everyday basis and over the past eight years also worked directly with me. As a seasoned banker and our in-house counsel, he is well prepared for this opportunity and excited to take on the additional responsibilities.

Tan Ansari 將接任我們新任首席風險長。 Tan 每天都與 Janet 密切合作，在過去的八年裡也直接與我合作。作為一名經驗豐富的銀行家和我們的內部法律顧問，他已為這次機會做好了充分準備，並很高興承擔額外的職責。

Chris Hilton is a key leader in our transformation to make the bank more commercially focused. Under his guidance, the bank improved organic growth in our small and mid-size business relationships resulting in an improved loan product mix and funding position. With this well-deserved promotion to Senior Executive Vice President, he will be assuming additional sales responsibilities over digital banking and cash management.

克里斯希爾頓 (Chris Hilton) 是我們轉型的關鍵領導者，致力於使銀行更加重視商業化。在他的指導下，該銀行改善了中小型業務關係的有機成長，從而改善了貸款產品組合和融資狀況。隨著他當之無愧地晉升為高級執行副總裁，他將承擔數位銀行和現金管理的額外銷售職責。

With that, I would like to have Janet Verneuille make a few comments.

在此，我想請 Janet Verneuille 發表一些評論。

Good afternoon. While I have not had the pleasure of addressing the investor community since joining the company as Chief Risk Officer in mid-2019, I work closely with Chris and Jay commenting on the press releases and other investor communications, reviewing our SEC filings, and enhancing our control environment.

午安.雖然自2019 年中期加入公司擔任首席風險官以來，我一直沒有愉快地向投資者群體發表講話，但我與Chris 和Jay 密切合作，對新聞稿和其他投資者溝通發表評論，審查我們向SEC 提交的文件，並加強我們的控制環境。

My banking experience started in the branches years ago. Subsequently, I transferred into the loan back office. Later, became a small business lender. And after a stint with KPMG to obtain my CPA license, I returned to banking mainly in treasury and finance. I spent years as a Chief Financial Officer in banking and for three years also served as lead Financial Officer in two different municipalities.

我的銀行業務經驗是幾年前從分行開始的。隨後，我調入貸款後台。後來，成為小企業貸款人。在畢馬威工作一段時間並獲得註冊會計師執照後，我回到銀行業，主要從事財務和金融業務。我在銀行業擔任了多年的財務官，並在兩個不同的城市擔任了三年的財務長。

When Chris contacted me about moving into the Chief Risk Officer position and first of all around, it was both an opportunity and a challenge. The CRO views the company through a different lens. And the role allowed me to use my diverse experience to augment positive changes. Returning to the CFO role now will be another challenge especially in the current environment.

當克里斯聯絡我詢問擔任首席風險長職位時，首先，這既是機會也是挑戰。 CRO 從不同的角度看待公司。這個角色讓我能夠運用自己豐富的經驗來促進正向的改變。現在重返財務長職位將是另一個挑戰，尤其是在當前環境下。

In my years as the CRO here at the bank, I became intricately familiar with our risk appetite, corporate governance and bank-wide processes. Jay and I will work together closely these upcoming weeks. And he leaves me with a strong team to further support the transition. I am confident in my ability to also develop strong and mutually respectful relationships outside the bank with analysts and the investor community.

在擔任銀行首席風險長的這些年裡，我對我們的風險偏好、公司治理和整個銀行的流程非常熟悉。在接下來的幾周里，傑伊和我將密切合作。他給我留下了一支強大的團隊來進一步支持這項過渡。我對自己在銀行外部與分析師和投資者群體建立牢固且相互尊重的關係的能力充滿信心。

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

吉姆·麥康尼現在將討論我們本季的財務表現。傑伊？

Thank you, Janet. Good afternoon, everyone.

謝謝你，珍妮特。大家下午好。

Adding to Chris' comments on the margin, the bank's net interest margin was 2.13% in the current quarter compared to 2.17% in the second quarter of 2023. The four-basis point decline was a significant improvement from margin declines of 40 basis points and 17 basis points in the first and second quarters of 2023 respectively. The slowdown in margin compression also resulted in a much smaller decline in net interest income of $409,000 or 1.9% when compared to the linked quarter.

加上克里斯對利潤率的評論，該銀行本季的淨息差為 2.13%，而 2023 年第二季度為 2.17%。四個基點的下降與利潤率下降 40 個基點和2023年第一季度和第二季分別上漲17個基點。利潤壓縮放緩也導致淨利息收入下降幅度小得多，為 409,000 美元，即 1.9%，與上一季相比。

Quarterly net income of $6.8 million was down slightly from the second quarter of 2023 as a credit provision for credit losses of $171,000. A decline in non-interest expense of $350,000 and lower income tax expense partially offset lower net interest income and non-interest income. The company's ROA and ROE were 63 base points and 7.34% respectively for the quarter.

由於信貸損失的信貸準備金為 171,000 美元，季度淨利潤為 680 萬美元，較 2023 年第二季略有下降。非利息支出減少了 35 萬美元，所得稅支出下降部分抵消了淨利息收入和非利息收入的下降。該公司本季的 ROA 和 ROE 分別為 63 個基點和 7.34%。

The decline in net interest income continues to be fuelled by the Federal Reserve Bank's aggressive monetary policy, which has increased short-term rates by over 550 basis points. The yield curve has been inverted for over 15 months making it difficult for the bank to utilize its excess capital to increase net interest income by adding leverage to our balance sheet. The bank's quarterly non-interest income was $2.2 million, which is consistent with prior guidance and prior quarters. This current run rate is anticipated to continue in the fourth quarter.

聯準會激進的貨幣政策繼續推動淨利息收入下降，該政策已將短期利率提高了 550 個基點以上。殖利率曲線已經倒掛超過 15 個月，使得銀行很難利用其過剩資本透過增加資產負債表槓桿來增加淨利息收入。該銀行的季度非利息收入為 220 萬美元，與先前的指導和前幾季度一致。目前的運行速度預計將在第四季繼續下去。

The bank's non-interest expense was $16.1 million during the third quarter. A decrease of $353,000 when compared to the linked quarter. We expect non-interest expense to remain between $16 million to $16.5 million in Q4 of 2023. As Chris noted in his comments, management is ever mindful of expense control given the current environment. And the bank is making every effort to lower the run rate as we move into 2024.

第三季該銀行的非利息支出為 1,610 萬美元。與上一季相比減少了 353,000 美元。我們預計 2023 年第四季非利息支出將保持在 1,600 萬美元至 1,650 萬美元之間。正如克里斯在評論中指出的那樣，在當前環境下，管理層一直注重費用控制。進入 2024 年，該銀行正在盡一切努力降低運作率。

The bank's efficiency ratio was 65.3% for the nine months ended September 30, 2023, up from 49.7% in the prior year period. The increase is mostly attributable to a decline in net interest income. The bank's ratio of non-interest expense to average total assets remained flat at 1.55% for the nine months ended September 30, 2023, and 2022, respectively.

截至2023年9月30日止九個月，該銀行的效率為65.3%，高於去年同期的49.7%。增加的主要原因是淨利息收入下降。截至2023年9月30日及2022年9月30日的九個月，該銀行的非利息支出與平均總資產的比率分別維持在1.55%。

The bank's effective tax rate decreased to 11.5% in the third quarter of 2023 from 18.01% in the third quarter of 2022. The decline in effective tax rate is mainly due to an increase in the percentage of pre-tax income derived from the bank's real estate investment trust and bank owned life insurance. We anticipate our effective tax rate for the full year of 2023 to be between 11.50% to 12.0%.

該銀行的有效稅率從2022年第三季的18.01%下降至2023年第三季的11.5%。有效稅率下降的主要原因是銀行實際稅前收入佔比增加。房地產投資信託和銀行擁有的人壽保險。我們預計 2023 年全年的有效稅率在 11.50% 至 12.0% 之間。

On the asset side of the balance sheet, the bank continues to deploy approximately $90 million in quarterly cash flows from our securities and loan portfolios into new assets at current market rates. The bank purchased approximately $35 million in mortgage-backed securities with yields of approximately 6% during the third quarter. The bank also originated approximately $50 million in mortgage loans with a gross weighted average rate of 6.23% for the quarter. The bank has approximately $840 million or 20% of interest-earning assets maturing or repricing within one year but remains liability sensitive.

在資產負債表的資產方面，銀行繼續將證券和貸款投資組合中約 9,000 萬美元的季度現金流按當前市場利率部署到新資產中。該銀行在第三季購買了約 3,500 萬美元的抵押貸款支持證券，收益率約為 6%。該銀行還發放了約 5,000 萬美元的抵押貸款，該季度的總加權平均利率為 6.23%。該銀行約有 8.4 億美元或 20% 的生息資產在一年內到期或重新定價，但仍對負債敏感。

On the funding side of the balance sheet, total deposits remain very stable at approximately $3.4 billion in 2023. But the mix of deposits has changed with approximately $136 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 on interest-bearing deposits by 153 basis points to 2.58% when comparing the third 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。但存款結構發生了變化，隨著客戶尋求更高的利率，約1.36 億美元從無息活期存款轉向有息存款。與 2023 年第三季和 2022 年第四季相比，這一轉變使計息存款的平均融資成本增加了 153 個基點，達到 2.58%。

The bank's cumulative deposit beta on non-maturity deposits was approximately 38% through September 30, 2023, which close to our historical average in a rising rate environment. However given both the pace and size of the increases, our deposit betas could be higher when this rising rate cycle finally ends.

截至 2023 年 9 月 30 日，該銀行非到期存款的累計存款貝塔約為 38%，接近利率上升環境下的歷史平均值。然而，考慮到升息的速度和規模，當這個升息週期最終結束時，我們的存款貝塔係數可能會更高。

The bank's total wholesale funding including brokered deposits was $559 million or 13% of total assets on September 30, 2023, and had a weighted average cost of funds of 4.53% an average maturity of 8 months. In addition, the bank has $366 million in retail deposits that mature over the next 15 months with an average cost of funds of 4.08%.

截至 2023 年 9 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 4.53%，平均期限為 8 個月。此外，該銀行還有 3.66 億美元的零售存款將在未來 15 個月內到期，平均資金成本為 4.08%。

As this funding matures in coming quarters, it could result in some additional upward cost pressure in each of these categories. However management believes the additional interest expense from liability repricing will largely be offset as interest income from asset repricing leads to margin stabilization.

隨著這筆資金在未來幾季到期，可能會導致這些類別中的每一個類別都面臨額外的成本上升壓力。然而，管理層認為，負債重新定價帶來的額外利息支出將在很大程度上被抵消，因為資產重新定價帶來的利息收入會導致利潤率穩定。

The bank's uninsured and uncollateralized deposits remained stable at 38% of total deposits on September 30, 2023. The same percentage as on June 30, 2023. The bank continues to have ample liquidity. We maintained $1.3 billion in collateralized borrowing lines with the Federal Home Loan Bank of New York and the Federal Reserve Bank. We also had $271 million in unencumbered cash and securities. In total, we have approximately $1.6 billion of available liquidity at the end of the quarter, which is well in excess of our uninsured and uncollateralized deposits.

截至2023年9月30日，該銀行的無保險和無抵押存款佔存款總額的比例穩定在38%。該比例與2023年6月30日相同。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聯邦儲備銀行保持 13 億美元的抵押借款額度。我們還有 2.71 億美元的未支配現金和證券。截至本季末，我們總共擁有約 16 億美元的可用流動資金，遠遠超過我們的無保險和無抵押存款。

Our capital position remains strong with the leverage ratio of 10% compared to 10.1% on June 30, 2023. The bank did not repurchase any shares during the third 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 cents per share on September 28, 2023.

我們的資本狀況依然強勁，槓桿率為10%，而2023 年6 月30 日的槓桿率為10.1%。銀行在2023 年第三季沒有回購任何股票。根據董事會最新批准的股票，我們仍有約1500 萬美元的授權回購計畫。該銀行於 2023 年 9 月 28 日宣布季度現金股利為每股 0.21 美分。

With that I turn it back to the operator for any questions.

如有任何問題，我會將其轉回給接線生。

Alex Twerdahl, Piper Sandler.

亞歷克斯·特沃達爾，派珀·桑德勒。

Good afternoon.

午安.

Good afternoon, Alex.

下午好，亞歷克斯。

Hi, Alex.

嗨，亞歷克斯。

Yeah. First off Jay, it's been a pleasure working with you over the last couple of years. Wish you the best in the next chapter for you. And Janet, I look forward to meeting and working with you over the next -- in the future from now.

是的。首先，傑伊，過去幾年與您合作非常愉快。祝您在下一章一切順利。珍妮特，我期待著從現在開始的未來與您見面並合作。

Thank you.

謝謝。

Yeah. Thank you, Alex. It's been a pleasure working with you as well and attending some of the conferences and so forth. Thank you.

是的。謝謝你，亞歷克斯。很高興與您合作並參加一些會議等。謝謝。

When I look at the -- I guess some of the things that you're doing, some of the reorganization with the Rocket Mortgage and then seeing the loan growth numbers this quarter. Can you just talk about your appetite to grow assets and loans, particularly over the next couple of quarters?

當我看時，我猜你正在做一些事情，火箭抵押貸款的一些重組，然後看到本季的貸款成長數字。您能否談談您對增加資產和貸款的興趣，特別是在接下來的幾季？

I know the funding is obviously a challenge. I'm just trying to figure out if the plan should be to go through it, or if it's just churning in place or how we should be thinking about that?

我知道資金顯然是一個挑戰。我只是想弄清楚該計劃是否應該完成它，或者它只是在原地攪動，或者我們應該如何考慮這個問題？

I think certainly for now kind of staying in place. And it's just largely because of the yield curve. If you're able to bring in new relationship deposits that have a good blended yield low enough, it certainly makes sense to grow. But the challenge remains as I said in my comments, you do have depositors that their strong relationship. Let's say some excess funds.

我認為目前肯定會留在原地。這很大程度上是因為殖利率曲線。如果您能夠引入新的關係存款，並且其混合收益率足夠低，那麼成長當然是有意義的。但正如我在評論中所說，挑戰仍然存在，儲戶確實與他們有著密切的關係。比如說一些多餘的資金。

And they're saying, well gee I can get 5.5% in short term treasury. I'm going to move some of the excess funds into that. And we're not really interested in paying 5.5% on deposits. So you lose some money there. And it's difficult with some of those movements to grow again just repeating what I said earlier.

他們說，天哪，我可以從短期國債中獲得 5.5% 的利率。我將把一些多餘的資金投入其中。而且我們對支付 5.5% 的存款利率並不真正感興趣。所以你在那裡損失了一些錢。僅重複我之前所說的話，其中一些運動很難再次增長。

So really for the foreseeable future the next quarter or two, it's probably going to be similar to what you've seen in the past quarters where you might have a little bit of growth one quarter. A little bit of contraction one quarter but fairly flat as far as total assets.

因此，在可預見的未來，下一兩個季度，它可能會與過去幾個季度的情況類似，一個季度可能會有一點成長。一季略有收縮，但總資產相當平穩。

Yeah, Alex. When you look on a linked quarter, our ROA has stabilized at about 60 base points ROE in the mid seven range and so forth. So we really want to call this stabilization until we start seeing a positively slope yield curve then we can take advantage of some of our excess leverage ratio at 10%. We don't want to leverage up at such a low margin right now or low spread in the curve.

是的，亞歷克斯。當你觀察一個關聯季度時，我們的 ROA 已穩定在 60 個基點的 ROE 左右，處於 7 個中間的範圍內，依此類推。因此，我們確實希望將這種穩定稱為穩定，直到我們開始看到正斜率的殖利率曲線，然後我們可以利用 10% 的部分超額槓桿率。我們現在不想以如此低的利潤率或曲線上的低利差加槓桿。

Yeah. It makes sense. I guess -- I mean on the same lines and maybe this comes a little bit out of left field. But I just -- I know the FDIC is currently selling some loans in your market. You guys are uniquely positioned with expertise in some of the categories in which they might be selling some of these pools.

是的。這說得通。我想──我的意思是同樣的道理，也許這有點超越了我們的想像。但我只是 - 我知道 FDIC 目前正在你們市場上出售一些貸款。你們在某些類別中擁有獨特的專業知識，他們可能會銷售其中一些池。

And who knows what the pricing could look like. But there's some pretty interesting structures. I mean is participating in something like that something you'd ever consider doing?

誰知道定價會是什麼樣子。但有一些非常有趣的結構。我的意思是你曾經考慮過參與類似的事情嗎？

We would consider purchasing assets again if the spread was reasonable. If we have to go out and purchase something at a 50 basis points spread, that's not really attractive to us. If you can get something obviously in line with the current margin or ideally better than your current margin, we absolutely would consider something like that.

如果利差合理，我們會考慮再次購買資產。如果我們必須出去以 50 個基點的價差購買東西，這對我們來說並沒有真正的吸引力。如果您可以獲得明顯符合當前利潤率或理想情況下優於當前利潤率的產品，我們絕對會考慮類似的產品。

Okay. Can you -- I think in the past Jay, you mentioned in your prepared remarks the yield on new production during the quarter. Can you just let us know where the pipeline is and how the loan yields have progressed over the course of the quarter.

好的。你能——我想在過去，傑伊，你在準備好的演講中提到了本季度新產量的產量。您能否讓我們知道通路在哪裡以及本季貸款收益率的進展。

Yeah. It's about 126 million of pipeline, predominantly commercial with us stepping out of the residential business. We'll still purchase residential mortgages but not originate. And with the yield curve steepening in the five year and ten year getting up into the 480 range and we originate with a spread, you're starting to see those yields being a high sixes to low sevens.

是的。大約有 1.26 億條管道，主要是商業管道，我們不再涉足住宅業務。我們仍將購買住宅抵押貸款，但不會發放。隨著五年期和十年期殖利率曲線陡峭上升至 480 區間，並且我們從利差開始，您開始看到這些殖利率從高 6 點到低 7 點。

On the flip side, you're starting to see demand really come down as you get into the seven handles as obviously there's no refinancing activity going on. It's new purchases. And those people looking for new purchases are get a little bit cold feet in the seven handles.

另一方面，當您進入七個手柄時，您開始看到需求確實下降，因為顯然沒有再融資活動正在進行中。都是新買的。那些想要購買新產品的人對這七個手柄有點臨陣退縮。

Yeah. Okay. Makes sense. And then you mentioned that you guys are still liability sensitive. I mean is the goal over time to become more neutral? I know you did a little balance sheet restructuring, which I think looking back was a pretty good move back earlier this year. Are you looking at additional similar types of transactions to help boost NIM in the future?

是的。好的。說得通。然後你提到你們仍然對責任敏感。我的意思是，隨著時間的推移，目標是變得更中立嗎？我知道你們做了一些資產負債表重組，我認為回顧今年早些時候這是一個非常好的舉措。您是否正在尋找其他類似類型的交易來幫助提高未來的淨利差？

Right now, probably not. We felt those two moves, the securities restructuring and the swap where we converted 300 million of residential to floating were timed right. We do feel that we're in the eighth and ninth inning of this rising rate cycle. And we're going to take it quarter by quarter. We think NIM has stabilized. We think a lot of our wholesale for the most part have repriced. And take it quarter by quarter and see what the fed does before we make any decisions to do any larger type of restructurings or additional swaps.

現在，可能不會。我們認為這兩項舉措，即證券重組和將 3 億住宅資金轉換為浮動資金的互換，時機恰到好處。我們確實覺得我們正處於利率上升週期的第八和第九局。我們將一個季度一個季度地進行。我們認為淨利差已經穩定。我們認為我們的許多批發產品大部分已經重新定價。在我們做出任何更大規模的重組或額外互換的決定之前，先看看聯準會會做什麼。

Great. Thanks for taking my questions.

偉大的。感謝您回答我的問題。

Thanks, Alex.

謝謝，亞歷克斯。

Chris O'Connell, KBW.

克里斯·奧康奈爾，KBW。

Hey. Good afternoon. I just want to echo the same sentiment. It's been great working with you, Jay. And wish you luck in your next step and look forward to working with you, Janet.

嘿。午安.我只是想表達同樣的感受。和你一起工作真是太好了，傑伊。祝您下一步好運，並期待與您合作，珍妮特。

Thank you.

謝謝。

Thank you, Chris.

謝謝你，克里斯。

So yeah. I was hoping to start off in the margin. I mean obviously the compression this quarter was a lot less onerous than the past couple. I think in prior quarters you've sometimes given the monthly margins. I was wondering if you had that for the July, August, September periods?

嗯是的。我希望從邊緣開始。我的意思是，顯然本季的壓縮比過去幾季輕鬆得多。我認為在前幾個季度，您有時會給出每月利潤。我想知道你們七月、八月、九月期間有嗎？

We do. In July, it was 216. In August, it was 220. In September was 202. 202 is a little obviously lower than you want to see. But we did have some prepayments on some of the SBA floaters we have in the investment portfolio, which caused that yield to be considerably lower that month which put on pressure in that 30-day month. And that's the other issue in a 30-day month. Our margins throughout the year in a 30-day month, it always a little bit lower. So we don't want that 202 to be overly indicative of going forward but to be seen.

我們的確是。 7月份是216。8月份是220。9月份是202。202明顯比你想看到的要低。但我們確實對投資組合中的一些 SBA 浮動利率進行了一些預付款，這導致該月的收益率大幅降低，從而給 30 天的月份帶來了壓力。這是 30 天一個月內的另一個問題。我們全年的利潤率在一個月 30 天的時間內，總是會低一些。因此，我們不希望 202 過度指示前進，而是希望被看見。

Got it. And I know you guys mentioned the margin hoping to bottom all else equal on rates here over the next couple of quarters. Any sense as to the magnitude of the pressure of where that could bottom? Either just on a trajectory for Q4 or the ultimate level of bottom.

知道了。我知道你們提到了利潤率，希望在接下來的幾個季度內將利率降至最低。對於觸底的壓力有多大意義嗎？要么只是在第四季度的軌跡上，要么是最終的底部水平。

Yeah. It's been hard as you know, Chris, throughout this cycle to try to give very good guidance on the margin. And I think you've seen that there's been a lot of misses on that throughout the year for many banks. But what we're seeing as we're looking at our internal projections is that so much of our liability side has repriced. So even if there's still some small repricing in things that have already repriced but maybe come up again over the next few quarters, there's obviously not as much upside from where they are now.

是的。克里斯，你知道，在整個週期中，試圖就利潤率提供非常好的指導是很困難的。我認為您已經看到，許多銀行全年都在這方面出現了很多失誤。但當我們查看內部預測時，我們發現我們的大部分負債已經重新定價。因此，即使已經重新定價但可能在未來幾季再次出現的產品仍存在一些小幅重新定價，但與現在相比，顯然沒有那麼大的上漲空間。

So as that's being fully priced in, now we see the asset side. Those 90 million and quarterly cash flows that Jay talked about. We see those starting to be able to offset the liability pricing. And that's why we see the margin bottoming out over the next two quarters. What that exactly means is it the same in the fourth quarter and the first quarter? Does it bottom out in one or the other?

因此，隨著價格的充分反映，現在我們看到了資產方面。傑伊談到的那些9000萬和季度現金流。我們看到那些開始能夠抵銷負債定價。這就是為什麼我們看到利潤率在未來兩季觸底。這到底意味著什麼，第四季和第一季是一樣的嗎？它會在其中一個或另一個中觸底嗎？

It's hard to get that specific on it. But we do see over the next two quarters, we see that trough. And then the liability side assuming again the fed stops with their rate increases, we see the liability side being done and the asset side little by little can start to tick up. And obviously if the fed makes some moves in the other direction and we get some steepness in the yield curve, that's when you'll see it turn around more rapidly.

很難具體說明這一點。但我們確實看到在接下來的兩個季度，我們會看到這個低潮。然後，負債方再次假設聯準會停止升息，我們看到負債方正在完成，而資產方則可以開始逐漸上升。顯然，如果聯準會朝另一個方向採取一些行動，而殖利率曲線變得有些陡峭，那麼你就會看到它更快地轉向。

So, it's difficult to tell where that bottom is. Best guess scenario and you hate to say guess, but looking at the best data we have at this point and using certain assumptions. Could it go down? Bottom out over the next two quarters another 5 to 10 basis points maybe a little bit more. It could. It's just very difficult to tell. But we just have to see what the fed does and what the market does.

因此，很難判斷底部在哪裡。最佳猜測場景，你討厭說猜測，但看看我們目前擁有的最佳數據並使用某些假設。能跌嗎？未來兩季觸底可能還會再下降 5 到 10 個基點。它可以。這很難說。但我們只需要看看聯準會做什麼以及市場做什麼。

Yeah. No, I hear you. That's helpful though. Appreciate it. I know it's a difficult thing to discern at this point. And then just quickly so for the tax rate for this year, obviously the 11.5% to 12% range, is that where you think it will remain next year or should it tick up a bit?

是的。不，我聽到了。不過這很有幫助。欣賞它。我知道目前很難辨別。那麼，對於今年的稅率，顯然是 11.5％ 至 12％ 的範圍，您認為明年會保持在這個水平還是應該稍微提高一點？

Yeah. Working on that forecast now and have to go through that. I mean preliminary I would say probably budget between maybe 13% to 14% because as we come out of this and hopefully yield curve steepens. We can start to look for expanding margins if you get a steepening yield curve. But I would keep it around that 13% to 14%.

是的。現在正在研究該預測，並且必須經歷這一過程。我的意思是初步的，我想說預算可能在 13% 到 14% 之間，因為當我們走出這個困境時，希望殖利率曲線會變得陡峭。如果殖利率曲線變得陡峭，我們就可以開始尋求擴大利潤。但我會把它保持在 13% 到 14% 左右。

Okay, great. And you mentioned in the prepared remarks you pushed out some of the planned IT upgrades into 2024 that can bring some efficiencies. Can you just provide us a little bit of color as to what those upgrades are, and how you guys plan to bring those on?

好的，太好了。您在準備好的發言中提到，您將一些計劃中的 IT 升級推遲到 2024 年，這可以帶來一些效率。您能否向我們介紹一下這些升級是什麼，以及你們計劃如何進行這些升級？

Sure. We've been working on a core conversion, which also plans to upgrade our business online banking and our branch teller and platform systems. And along with that in the back office, our item processing would be outsourced. So the combination of all those things we believe certainly in the back office with the item processing brings about some staffing efficiencies.

當然。我們一直在進行核心轉換，也計劃升級我們的企業網路銀行以及分行櫃員和平台系統。除了後台辦公室之外，我們的物品處理也將外包。因此，我們相信後台辦公室的所有這些事情與專案處理的結合會帶來一定的人員配置效率。

And we just felt that this is a long project. These types of projects go on 18 to 24 months. And as we were getting closer to a target date, we felt working with our -- that it would be best to put it off a few months. So we're still evaluating. We haven't picked another date yet, but we anticipate that to be done in early 2024.

我們只是覺得這是一個漫長的項目。這些類型的項目持續 18 至 24 個月。隨著我們越來越接近目標日期，我們覺得最好將其推遲幾個月。所以我們還在評估。我們尚未選擇另一個日期，但我們預計將在 2024 年初完成。

Great. And then on the credit side, I mean everything on your individual metrics looks fantastic especially relative to the industry, which has seen a couple issues pop up this quarter. How are you guys seeing your credit on a go forward basis and things in your market? Is there any cracks anywhere, anything that you're concerned about?

偉大的。然後在信用方面，我的意思是，您的個人指標的所有內容看起來都很棒，尤其是相對於本季度出現了一些問題的行業而言。你們如何看待你們的信用以及你們市場上的情況？有沒有任何地方出現裂縫，有什麼您擔心的地方嗎？

No. We're not concerned with our portfolio and the whole is I think. In conversations with customers and in the market, you're starting to hear some things where maybe things are slowing down for certain businesses. I think people get a little bit nervous about what's going on in the economy and also the world in general.

不。我們不關心我們的投資組合，我認為整體是這樣的。在與客戶和市場的對話中，您開始聽到一些事情，某些企業的發展速度可能正在放緩。我認為人們對經濟以及整個世界正在發生的事情感到有點緊張。

But obviously our numbers are not showing any specific problems like that, any numbers ticking up. But even with us there's always a couple loans on the problem loan list something could happen, but nothing in a big sense that's concerning us.

但顯然我們的數據並沒有顯示出任何類似的具體問題，任何數字都在上升。但即使對我們來說，問題貸款清單上總有幾筆貸款可能會發生一些事情，但從大意義上來說，這與我們無關。

Got it. That's helpful. Okay, great. Thank you for taking my questions.

知道了。這很有幫助。好的，太好了。感謝您回答我的問題。

Thanks, Chris.

謝謝，克里斯。

Thank you.

謝謝。

Thank you. This concluded our question and answer session. I'll turn the floor back to Chris Becker for some final closing comments.

謝謝。我們的問答環節到此結束。我將請克里斯·貝克爾發表最後的總結評論。

Yes. Thank you all for your attention and participation on today's call. Janet Verneuille and I will look forward to talking to you at the end of the year. Have a good rest of the day.

是的。感謝大家對今天電話會議的關注與參與。 Janet Verneuille 和我期待在今年年底與您交談。好好休息一天吧。