First Merchants Corp (FRME) 2024 Q4 法說會逐字稿

Thank you for standing by and welcome to the First Merchants Corporation's Fourth Quarter 2024 Earnings Conference Call.

感謝您的支持，歡迎參加第一商人公司 2024 年第四季財報電話會議。

Before we begin, management would like to remind you that today's call contains forward-looking statements with respect to the future performance or financial condition of First Merchants Corporation that involve risks and uncertainties. Further information is contained within the press release, which we encourage you to review.

在我們開始之前，管理層想提醒您，今天的電話會議包含有關 First Merchants Corporation 未來業績或財務狀況的前瞻性陳述，其中涉及風險和不確定性。新聞稿中包含更多信息，我們鼓勵您查看。

Additionally, management may refer to non-GAAP measures which are intended to supplement but not substitute for most directly comparable GAAP measures. The press release available on the website contains financial and other quantitative information to be discussed today, as well as reconciliation of GAAP to non-GAAP measures. As a reminder, today's call is being recorded.

此外，管理階層可能會參考非 GAAP 指標，這些指標旨在補充但不能取代大多數直接可比較的 GAAP 指標。網站上的新聞稿包含今天要討論的財務和其他定量信息，以及 GAAP 與非 GAAP 指標的對帳。提醒一下，今天的通話正在錄音。

And now, I'd like to hand the program over to Mr. Hardwick, CEO. Mr. Hardwick, you may begin.

現在，我想將這個項目交給執行長哈德威克先生。哈德威克先生，你可以開始了。

Good morning and welcome to the First Merchants Fourth Quarter 2024 Conference Call. Thanks for the introduction and for covering the forward-looking statement on page 2. We released our earnings today at approximately 8 AM Eastern Time. You can access today's slides by following the link on the third page of our earnings release. On page 3 of our slides, you will see today's presenters and our bios, including President, Mike Stewart; Chief Credit Officer, John Martin; and Chief Financial Officer, Michele Kawiecki.

早上好，歡迎參加 First Merchants 2024 年第四季電話會議。感謝您的介紹以及第 2 頁的前瞻性聲明的報導。我們今天東部時間上午 8 點左右公佈了我們的收益。您可以透過我們收益報告第三頁上的連結存取今天的幻燈片。在我們幻燈片的第 3 頁，您將看到今天的演講者和我們的簡歷，包括總裁 Mike Stewart；首席信貸官約翰·馬丁 (John Martin)；和首席財務官 Michele Kawiecki。

Please turn to page 4. We're quite pleased with the fourth quarter results and the focused momentum that we're building. 2024 in many respects was a great year for the bank. We certainly had our challenges, but the team was resilient and stayed focused on the many tasks at hand.

請翻到第 4 頁。我們對第四季度的業績以及我們正在建立的集中勢頭感到非常滿意。從許多方面來看，2024 年對該銀行來說都是偉大的一年。我們確實面臨挑戰，但團隊堅韌不拔，專注於手邊的眾多任務。

During 2024 and in order, we completed our voluntary early retirement program, the upgrade to our in-branch account origination platform to Terafina, the upgrade of our online and mobile platform for both consumer and then commercial clients. We upgraded our private wealth platform to SS&C InnoTrust and Black Diamond. We completed the sale of five non-core Illinois branches and the corresponding restructure of a portion of our securities portfolio. And even though the work slipped into the first quarter of 2025, we just upgraded our wire platform to a real-time system powered by Finastra.

2024 年期間，我們按計劃完成了自願提前退休計劃、將分行帳戶發起平台升級到 Terafina、為消費者和商業客戶升級了線上和行動平台。我們將私人財富平台升級為 SS&C InnoTrust 和 Black Diamond。我們完成了伊利諾伊州五家非核心分支機構的出售以及部分證券投資組合的相應重組。儘管工作推遲到了 2025 年第一季度，但我們剛剛將我們的電報平台升級為由 Finastra 提供支援的即時系統。

You will notice on the branch map that we are now down to 110 locations, and we're highly focused on delivering top quartile financial results in 2025 with minimal or no distractions. The tighter focus on our core markets, Indiana, Ohio, and Michigan will drive new and innovative customer acquisition strategies, which are proving to be rewarding and fun.

您會在分行地圖上註意到，我們現在已減少到 110 個地點，並且我們高度專注於在 2025 年實現最高四分位的財務業績，並且盡量減少或完全不受影響。我們更加關注核心市場印第安納州、俄亥俄州和密西根州，這將推動新的創新客戶獲取策略，事實證明這是有益且有趣的。

On slide 5, you can see our earnings per share for the quarter totaled $1.10, or $1 even per share after adjusting for a $20 million gain on the sale of the Chicago branches, offset by an $11.6 million bond loss related to security sales.

在第 5 張投影片上，您可以看到本季我們的每股收益總計 1.10 美元，即在調整了芝加哥分公司出售所得的 2,000 萬美元收益（抵銷了與證券銷售相關的 1,160 萬美元債券損失）後，每股收益為 1 美元。

Loan growth totaled 6% for the quarter, consistent with our 2025 expectations. Net interest margin also improved by 5 basis points Q4 over Q3, and helped drive PPNR growth of 4% on a linked basis, and again supported a sub 54% efficiency ratio for the quarter.

本季貸款成長率為 6%，符合我們對 2025 年的預期。第四季淨利差較第三季提高了 5 個基點，並幫助推動 PPNR 環比增長 4%，並再次支持本季效率比率低於 54%。

Our tangible common equity ratio has continued to build and is now 8.81%. Fourth quarter tangible book value per share, which is reported on slide 10, was $26.78 per share, and it has increased by $5.33 per share or 25% over the last two years. Net income totaled $200 million for the full year of 2024, and earnings per share totaled $3.41.

我們的有形普通股權益比率持續上升，目前為 8.81%。幻燈片 10 報告的第四季每股有形帳面價值為 26.78 美元，在過去兩年中每股增加了 5.33 美元，即 25%。2024 年全年淨收入總計 2 億美元，每股盈餘總計 3.41 美元。

Our Q3 and Q4 momentum is very satisfying, and we feel like we're now back to pre-Silicon Valley performance metric levels. Now, Mike Stewart will discuss our line of business momentum. Mike?

我們的第三季和第四季的發展勢頭非常令人滿意，我們感覺現在已經回到了矽谷之前的績效指標水平。現在，麥克·史都華將討論我們的業務發展勢頭。麥克風？

Yeah, thank you, Mark, and good morning to all. Our business strategy, which is summarized on slide 6, remains unchanged. We're a commercially focused organization across all these business segments and our primary markets of Indiana, Michigan and Ohio.

是的，謝謝你，馬克，大家早安。我們的業務策略（第 6 張投影片中進行了總結）保持不變。我們是一家以商業為中心的組織，業務範圍涵蓋所有業務部門，主要市場為印第安納州、密西根州和俄亥俄州。

And throughout 2024, we remained focused on building earnings momentum by executing our strategic imperatives of organic loan deposit, fee income growth, and taking market share by engaging and rewarding and retaining our teammates and by implementing the new technology platforms that Mark talked about that have enhanced our client experience. So you heard Mark summarize on slide 4, we delivered on this earnings momentum throughout the year.

在整個 2024 年，我們將繼續專注於建立盈利勢頭，透過執行有機貸款存款、費用收入增長和透過吸引、獎勵和留住我們的團隊成員來佔領市場份額的戰略要務，以及透過實施馬克談到的增強客戶體驗的新技術平台。所以，正如馬克在第 4 張投影片上總結的那樣，我們全年都保持了這一盈利勢頭。

Let's turn to slide 7. Loan growth was strong for the fourth quarter across both the commercial and consumer segments, reaching nearly 6% on an annualized basis and bringing the full year growth to 3%. The $9.7 billion commercial segment was the primary driver of the growth by increasing $148 million during the quarter, with the C&I portfolio growing 66 million or 3%, and the investment real estate portfolio growing over $80 million. For the full year, our commercial segment grew over $250 million or 3%, with the C&I portfolio growing over 300 million, offsetting the decline that we've talked about throughout the year in the investment real estate portfolio.

讓我們翻到第 7 張投影片。第四季商業和消費領域的貸款成長強勁，年化成長率達到近 6%，全年成長率達 3%。價值 97 億美元的商業部門是成長的主要推動力，本季增加了 1.48 億美元，其中 C&I 投資組合成長 6,600 萬美元（3%），投資房地產投資組合成長超過 8,000 萬美元。全年來看，我們的商業部門成長超過 2.5 億美元，增幅 3%，其中 C&I 投資組合成長超過 3 億美元，抵消了我們全年談到的投資房地產投資組合的下降。

Another pleasing bullet point on this page is the year end pipeline. It's at a consistent level from the prior quarter after such a strong balance sheet growth. The growth has been shared across all the regions, with Indiana, Michigan, and the sponsor teams driving the bulk of the increase.

本頁上另一個令人高興的要點是年終管道。在資產負債表如此強勁增長之後，其水準與上一季保持一致。所有地區都實現了成長，其中印第安納州、密西根州和贊助商球隊推動了大部分成長。

Some of the consistent trends across the C&I spectrum are generally evident, like the M&A and CapEx spending, which was slow during the first three quarters of 2024, but has begun to thaw, particularly as it relates to acquisition and/or ownership transitions. That activity drove quite a bit of commercial lending during the last two months of the year and carried into the pipelines.

商業與工業領域中的一些一致趨勢總體上是顯而易見的，例如併購和資本支出，在 2024 年前三個季度增長緩慢，但已開始回暖，特別是在收購和/或所有權轉移方面。這項活動推動了去年最後兩個月的大量商業貸款，並進入了貸款管道。

Fed rate reductions have had a positive impact on loan demand, specifically with investment real estate projects. New production for our investment real estate team has been strong, and the end of the year pipeline demonstrates some of that as well. All of these are positive indicators for future balance sheet growth.

聯準會降息對貸款需求產生了積極影響，特別是對投資房地產項目。我們的投資房地產團隊的新產品開發一直表現強勁，年底的交付情況也證明了這一點。所有這些都是未來資產負債表成長的正面指標。

What about the benefits of easing inflationary pressures are also benefiting our clients. In particular, the stability of auto trends and orders, along with solid demand for workers in construction and infrastructure industries. So far, the response to proposed tariffs hasn't had a significant impact on inventory margins. Having said that, revolver usage is up across most industries, along with the use of cash reserves.

緩解通膨壓力帶來的好處也使我們的客戶受益。特別是汽車趨勢和訂單的穩定，以及建築和基礎設施行業對工人的強勁需求。到目前為止，對擬議關稅的回應尚未對庫存利潤產生重大影響。話雖如此，大多數行業的循環信用額度使用量以及現金儲備的使用量都在增加。

The agribusiness segment remains a little challenged. While commodity prices have reverted to more historic levels over the past four years, input costs have not declined as much, and equipment purchase remain soft. FMB carries almost no exposure to the impacts of the bird flu as the bulk of our focus has been on crop production.

農業綜合企業領域仍面臨一些挑戰。儘管過去四年大宗商品價格已恢復至歷史水平，但投入成本並未下降太多，設備採購依然疲軟。FMB 幾乎不受禽流感的影響，因為我們的主要精力都集中在農作物生產上。

Our commercial focus has always been the primary driver of our balance sheet growth, and the commercial and industrial segment is the largest part of our portfolio. C&I comprises 50% of the total First Merchants loan portfolio, and two-thirds of the commercial.

我們的商業重點一直是我們資產負債表成長的主要驅動力，商業和工業部門是我們投資組合中最大的一部分。C&I 佔 First Merchants 貸款總額的 50%，佔商業貸款總額的三分之二。

A few comments on the consumer portfolio, loan portfolio. Year-to-date growth reached $125 million, with the on-balance sheet residential portfolio driving over 50% of that increase or $65 million. We utilize our balance sheet for variable rate, short term fixed rate, or construction loans. As the 10-year treasury has continued to decline during the quarter, our mortgage production has remained strong throughout. Michele will review the year-over-year growth our mortgage team delivered through the gain on sale activities. We have a really strong team of mortgage bankers throughout our footprint helping us continue that growth.

關於消費者組合、貸款組合的一些評論。年初至今的成長達到了 1.25 億美元，其中資產負債表內的住宅投資組合推動了該成長的 50% 以上，即 6,500 萬美元。我們利用資產負債表來計算浮動利率、短期固定利率或建築貸款。儘管本季十年期公債持續下降，但我們的抵押貸款產量始終保持強勁。Michele 將回顧我們的抵押貸款團隊透過銷售收益活動所實現的年成長。我們擁有一支非常強大的抵押貸款銀行家團隊，幫助我們繼續成長。

Let's turn to slide 8, deposits. The story of this slide is mix, mix of our product set and our goal of managing deposit cost. Michele will be reviewing the improvement of our net interest margin, and this slide represents the work our teams have accomplished in managing and building core deposit relationships while reducing deposit cost on public funds and maturity deposit categories.

讓我們翻到第 8 張投影片，存款。這張投影片的故事是混合，我們的產品組合的混合以及我們管理存款成本的目標。Michele 將檢視我們的淨利差的改善情況，這張投影片代表了我們的團隊在管理和建立核心存款關係同時降低公共基金和到期存款類別的存款成本方面所完成的工作。

So for the quarter, total deposits grew at a 4.4% annualized rate. And for the full year, our total deposit balances were essentially flat. Excuse me. The commercial segment grew deposits during the quarter by $50 million, with the non-public fund balances, what we would call operating accounts, growing $27 million. Year-to-date, commercial deposit balances declined 1%, but the non-public fund account balances or operating accounts grew by 1% or $87 million. Public fund balances declined 6% throughout 2024.

因此本季總存款的年增率為 4.4%。全年來看，我們的總存款餘額基本上持平。打擾一下。本季商業部門的存款增加了 5,000 萬美元，非公共基金餘額（我們稱之為營運帳戶）增加了 2,700 萬美元。今年迄今，商業存款餘額下降了 1%，但非公共基金帳戶餘額或營運帳戶增加了 1%，即 8,700 萬美元。2024年全年公共基金餘額下降了6%。

Public funds are an important segment, yet one of our highest cost of depository categories. The overall story is we improved our mix of commercial deposits throughout the year by growing operating accounts.

公共基金是重要部分，也是我們存款成本最高的類別之一。整體而言，我們透過增加營運帳戶，全年改善了商業存款組合。

We also continued our pricing discipline within our consumer segment, specifically maturity deposits or CDs. The chart at top states that consumer deposit balances declined during the quarter 22% on an annualized basis, which they did, but the maturity deposit balance decline was essentially the entirety of it at $346 million. So core or primary consumer account deposit balances were flat during the quarter, but grew $127 million in 2024 or roughly 2%. Maturity deposits, CD balances, declined over $430 million through 2024.

我們也在消費者領域繼續推行定價原則，特別是定期存款或存單。頂部的圖表顯示，本季消費者存款餘額按年率計算下降了 22%，事實確實如此，但到期存款餘額的下降基本上佔了全部下降，達到 3.46 億美元。因此，核心或主要消費者帳戶存款餘額在本季持平，但到 2024 年將成長 1.27 億美元，增幅約為 2%。到 2024 年，到期存款、CD 餘額將減少 4.3 億美元以上。

The mix of deposit categories has been a focus of our teams, a focus on primary accounts, and a focus on deposit cost. So overall, I'm pleased with the active engagement our teams are having with their clients as we manage the mix and deposit costs.

存款類別的組合一直是我們團隊關注的重點，關注主要帳戶，關注存款成本。總的來說，我很高興看到我們的團隊在管理組合和存款成本時與客戶進行了積極的互動。

So I'm going to turn the call over to Michele so she can review in more detail the composition of our balance sheet and the drivers of our income statement. Michele.

因此，我將把電話轉給 Michele，以便她可以更詳細地審查我們的資產負債表的組成以及損益表的驅動因素。米歇爾。

Thanks, Mike. Slide 9 covers our fourth quarter performance. Line 1 shows a small decline in total assets. Below that, you can see it was derived from the decline in investments, reflecting the sale of bonds as we continue to reposition the portfolio. That was offset by the loan growth of $185 million that Mike discussed in his remarks.

謝謝，麥克。幻燈片 9 涵蓋了我們第四季的業績。第 1 行顯示總資產小幅下降。在其下方，您可以看到它源於投資的下降，反映了我們繼續重新定位投資組合時債券的出售。這被麥克在演講中提到的 1.85 億美元的貸款成長所抵消。

Moving down to the income statement in the middle of the page, net interest income on line 11 continued its growth trajectory, with an increase of $3.3 million sequentially. Non-interest income on line 13 increased by $17.9 million, which reflected the gain on the sale of our Illinois branches of $20 million, offset by an increase in realized losses on the sale of bonds over the prior quarter of $2.5 million.

移至頁面中間的損益表，第 11 行的淨利息收入持續維持成長軌跡，季增 330 萬美元。第 13 行的非利息收入增加了 1,790 萬美元，這反映了我們出售伊利諾伊州分支機構的 2,000 萬美元收益，但被上一季度出售債券的已實現損失增加 250 萬美元所抵消。

When normalized for those non-core items, non-interest income remained strong, totaling $34.4 million. As a result, pre-tax pre-provision earnings grew linked quarter by nearly $2.7 million and totaled $73.2 million, reflecting strong core franchise performance. That performance fueled tangible book value growth during the quarter, despite higher interest rates negatively impacting AOCI.

當非核心項目正常化後，非利息收入依然強勁，總計 3,440 萬美元。因此，稅前撥備前收益環比成長近 270 萬美元，達到 7,320 萬美元，反映出核心特許經營業務表現強勁。儘管利率上升對 AOCI 產生了負面影響，但這一業績推動了本季有形帳面價值的成長。

Slide 10 shows our annual results. You can see at the top the balance sheet lines show the favorable change in earning asset mix, reflecting a decrease of $350 million in the lower-yielding investment portfolio, and an increase of $368 million in higher-yielding loans. The decline in deposits on line 4 was due to the sale of the five Illinois branches that was closed in early December.

幻燈片 10 展示了我們的年度業績。您可以在頂部看到資產負債表線條顯示了盈利資產組合的有利變化，反映出低收益投資組合減少了 3.5 億美元，而高收益貸款增加了 3.68 億美元。第四行存款的下降是由於12月初關閉了伊利諾伊州的五家分行。

Operating earnings for the year were strong, with pre-tax pre-provision earnings totaling $272.4 million. Tangible book value per share benefited from the strong earnings, increasing $1.72 or 7% to $26.78 at year end. We achieved strong tangible book value growth while returning value to shareholders through dividend payments and share buybacks totaling $138 million during the year.

全年營業利潤強勁，稅前撥備前利潤總計 2.724 億美元。每股有形帳面價值受益於強勁的盈利，年底增加 1.72 美元或 7%，至 26.78 美元。我們實現了強勁的有形帳面價值成長，同時透過股息支付和股票回購向股東返還了總額達 1.38 億美元的價值。

Slide 11 shows details of our investment portfolio. The security sold during the fourth quarter had a book value of $109.6 million and were sold for a loss of $11.6 million. The bonds had a weighted average yield of 2.31% and an average life of 6.88 years. The total bond portfolio repositioning, including the bonds sold in the third quarter, resulted in a year-to-date total of $268.5 million sold for a loss of $20.8 million. Expected cash flows from scheduled principal and interest payments and bond maturities in the next 12 months totaled $270 million, with the roll-off yield of approximately 2.22%, which will have a positive impact on the overall portfolio yield through next year.

投影片 11 展示了我們的投資組合的詳細資訊。第四季出售的證券帳面價值為 1.096 億美元，出售虧損 1,160 萬美元。該債券的加權平均收益率為2.31%，平均期限為6.88年。包括第三季出售的債券在內的整個債券投資組合重新配置導致年初至今共售出 2.685 億美元的債券，損失 2,080 萬美元。未來 12 個月內預定的本金和利息支付以及債券到期預計現金流總計 2.7 億美元，滾動收益率約為 2.22%，這將對明年的整體投資組合收益率產生積極影響。

Slide 12 shows some details on our loan portfolio. The total loan portfolio yield decreased by 31 basis points to 6.55%, as our variable rate portfolio repriced in response to lower short-term rates. New and renewed loans were priced with a 7.12% yield. These strong new loan yields, along with the benefit of fixed rate loan repricing, helped to offset the variable rate loan repricing, and will continue to do so going forward in 2025.

幻燈片 12 顯示了我們貸款組合的一些詳細資訊。由於我們的浮動利率組合根據較低的短期利率進行重新定價，總貸款組合收益率下降了 31 個基點，至 6.55%。新增和續貸的收益率為 7.12%。這些強勁的新貸款收益率，加上固定利率貸款重新定價的好處，有助於抵消浮動利率貸款重新定價的影響，並將在 2025 年繼續發揮作用。

The allowance for credit losses is shown on slide 13. This quarter, we had net charge offs of only $800,000. We recorded $5.7 million of provision for credit losses on loans, which was offset by a reduction of reserves for unfunded commitment balances of $1.5 million. The result was net provision expense of $4.2 million recorded in the income statement.

信貸損失準備金如第 13 頁投影片所示。本季度，我們的淨沖銷額僅 80 萬美元。我們記錄了 570 萬美元的貸款信用損失準備金，但被 150 萬美元的未撥付承諾餘額準備金減少所抵消。結果是損益表中記錄了 420 萬美元的淨撥備支出。

The reserve at quarter end was $192.8 million, and the coverage ratio was 1.5%. In addition to the ACL, we have $17.4 million of remaining fair value marks on acquired loans. When including those marks, our coverage ratio is 1.64%. Overall, we are still more than adequately reserved, as our allowance remains well above peer levels.

季末的準備金為 1.928 億美元，覆蓋率為 1.5%。除 ACL 外，我們還有 1,740 萬美元的已收購貸款剩餘公允價值標記。如果包括這些標記，我們的覆蓋率為 1.64%。總體而言，我們的儲備還是綽綽有餘的，因為我們的限額仍然遠高於同行水準。

Slide 14 shows details of our deposit portfolio. The total cost of deposits declined meaningfully by 26 basis points to 2.43% this quarter. Our interest-bearing deposit costs declined 31 basis points, reflecting a downward deposit beta of 46%.

投影片 14 顯示了我們的存款組合的詳細資訊。本季存款總成本大幅下降26個基點至2.43%。我們的計息存款成本下降了 31 個基點，反映存款貝塔係數下降了 46%。

As a reminder, deposits included in the sale of the Illinois branches of $267.4 million were reclassed to held for sale in the third quarter and were not reflected in the total deposit balance at the end of the third quarter. Therefore, deposits grew $156.5 million or 4.4% annualized linked quarter.

提醒一下，出售伊利諾州分行時包含的 2.674 億美元存款在第三季被重新歸類為持有待售，並且未反映在第三季末的總存款餘額中。因此，存款環比成長 1.565 億美元，年化成長率為 4.4%。

On slide 15, net interest income on a fully tax equivalent basis of $140.2 million increased $3.2 million from prior quarter. Although yield on earning assets declined 19 basis points linked quarter, it was outpaced by the decline in funding costs of 24 basis points, shown on line 5. The result was a meaningful expansion of stated net interest margin of 5 basis points and an increase of 18 basis points from the first quarter of the year.

在投影片 15 上，以完全稅收等值計算的淨利息收入為 1.402 億美元，較上一季增加了 320 萬美元。儘管生息資產收益率環比下降了 19 個基點，但融資成本下降 24 個基點（如第 5 行所示）的幅度超過了生息資產收益率。結果是淨利差大幅擴大了 5 個基點，較今年第一季增加了 18 個基點。

Next, slide 16 shows the details of non-interest income. Non-interest income totaled $42.7 million, and when normalized for the gain on the sale of the Illinois branches and realized loss on securities, was $34.4 million, an increase of $0.4 million over prior quarter. Customer-related fees remained robust at $29.4 million, reflecting strong wealth management fees and gains on sales of mortgage loans, along with higher customer loan level hedge fees.

接下來，投影片 16 展示了非利息收入的詳細資訊。非利息收入總計 4,270 萬美元，如果將伊利諾州分公司的出售收益和證券實現損失標準化，則為 3,440 萬美元，比上一季增加 40 萬美元。客戶相關費用保持強勁，達到 2,940 萬美元，反映了強勁的財富管理費用和抵押貸款銷售收益，以及更高的客戶貸款水準對沖費用。

Moving to slide 17, non-interest expense for the quarter totaled $96.3 million, an increase of $1.7 million over prior quarter due to higher marketing costs and other one-time operating expenses. We maintained our expense discipline and achieved positive operating leverage again this quarter and adjusting for non-core items and delivered a 53.6% core efficiency ratio.

轉到第 17 張投影片，本季非利息支出總計 9,630 萬美元，由於行銷成本和其他一次性營運費用增加，比上一季增加了 170 萬美元。我們本季保持了費用控制，再次實現了正營運槓桿，並根據非核心項目進行了調整，實現了 53.6% 的核心效率率。

Slide 18 shows our capital ratios. We continue to grow capital this quarter with Common Equity Tier 1 climbing to 11.43%. The tangible common equity ratio ended the year at 8.81%. These strong capital ratios provide us with strategic flexibility going into 2025.

投影片 18 顯示了我們的資本比率。本季我們持續增加資本，一級普通股本比率攀升至 11.43%。年底有形普通股權益比率為 8.81%。這些強大的資本比率為我們邁向 2025 年提供了策略彈性。

That concludes my remarks, and I will now turn it over to our Chief Credit Officer, John Martin, to discuss asset quality.

我的演講到此結束，現在我將把時間交給我們的首席信貸官約翰馬丁 (John Martin) 來討論資產品質。

Thanks, Michelle, and good morning. My remarks start on slide 19. I'll begin by highlighting loan portfolio growth, touch on the updated insight slides, review asset quality and the non-performing asset roll forward, before turning the call back over to Mark.

謝謝，米歇爾，早安。我的發言從第 19 張投影片開始。我將首先強調貸款組合的成長，談到更新後的洞察幻燈片，審查資產品質和不良資產的滾動，然後將電話轉回給馬克。

Turning to slide 19, we had continued strong mid-single-digit commercial and industrial loan growth, shown on line 4, which includes owner-occupied commercial real estate and sponsor finance. Regional C&I, which you can see on line 1, grew the most, while the sponsor finance portfolio on line 2 declined. As the sponsor finance portfolio matures, we would expect to see periodic payoffs as portfolio companies are sold and sponsor funds mature.

翻到第 19 張投影片，我們持續維持中位數個位數的商業和工業貸款強勁成長，如第 4 行所示，其中包括自住商業房地產和贊助商融資。您可以在第 1 行看到區域 C&I 成長最快，而第 2 行的贊助商融資組合則有所下降。隨著發起人融資組合的成熟，我們預計隨著投資組合公司出售和發起人資金成熟，將看到定期回報。

Total investment real estate or CRE non-owner occupied on line 7 includes both stabilized or stabilizing properties and construction, land, and land development, which was mostly unchanged. We continue to have ample room to grow this portfolio, and view this as an opportunity for future growth, depending on market conditions.

第 7 行的總投資房地產或非自住 CRE 包括穩定或正在穩定的房地產以及建築、土地和土地開發，基本上保持不變。我們仍然有足夠的空間來擴大這一投資組合，並根據市場情況將此視為未來成長的機會。

Moving down to line 9, there was strong quarter-over-quarter growth in public finance, which was up $77 million. Part of this growth was due to our willingness and ability to move quickly in the fourth quarter, which resulted in some very attractive and less competitive lending opportunities. The originations were all high-quality municipal transactions geographically concentrated in Indiana.

第 9 行顯示，公共財政環比成長強勁，增加了 7,700 萬美元。這一成長部分歸功於我們願意並且有能力在第四季度迅速採取行動，從而帶來了一些非常有吸引力且競爭力較低的貸款機會。這些交易均為高品質的市政交易，且地理位置集中在印第安納州。

The loan portfolio insights, slides on pages 20 and 21, are intended to provide transparency into the portfolio. As mentioned on prior calls, the C&I classification shown on slide 20 includes sponsor finance as well as owner-occupied CRE. 21% of our C&I loans support manufacturing businesses.

貸款組合洞察（第 20 和 21 頁的幻燈片）旨在提高投資組合的透明度。如同先前的電話會議中所提到的，第 20 張投影片上顯示的 C&I 分類包括贊助商融資以及自住 CRE。 21% 的 C&I 貸款用於支持製造業。

Our current line utilization increased again for the quarter. Line utilization rose by 1% to 46%, contributing roughly $90 million to C&I growth, with total C&I commitments rising roughly $91 million this quarter. We participate in roughly $890 million of shared national credits across various industries. These are generally relationships where we have access to management and revenue opportunities that go beyond the credit exposure.

本季我們的現有生產線利用率再次增加。線路利用率上升 1% 至 46%，為 C&I 成長貢獻約 9,000 萬美元，本季 C&I 總承諾金額增加約 9,100 萬美元。我們參與了各行業約 8.9 億美元的共享國家信貸。透過這些關係，我們通常可以獲得超出信貸風險的管理和收入機會。

In the sponsor finance portfolio, I've highlighted key credit portfolio metrics. There are 85 platform companies with active sponsors in an assortment of industries. 66% have a fixed charge coverage ratio of greater than 1.5 times based on Q3 borrower information. This portfolio generally consists of single bank deals for platform companies or private equity firms, as opposed to large, widely syndicated leverage loans from money center bank trading desks. We review the individual relationships quarterly for changes in borrower condition, including leverage and cash flow coverage.

在贊助商融資組合中，我強調了關鍵的信貸組合指標。平台公司共有 85 家，擁有來自各行各業的活躍贊助商。根據第三季借款人信息，66% 的固定費用覆蓋率超過 1.5 倍。該投資組合通常由單一銀行針對平台公司或私募股權公司的交易組成，而不是貨幣中心銀行交易部門提供的大規模、廣泛銀團的槓桿貸款。我們每季檢視一次個人關係，以了解借款人狀況的變化，包括槓桿率和現金流覆蓋率。

On slide 21, we break out the investment or non-owner occupied commercial real estate portfolio. Our office portfolio, our office loans are detailed on the bottom half of the slide and represent 1.9% of total loans, with the highest concentration outside of general office in the medical office space.

在第 21 張投影片上，我們列出了投資或非自住商業房地產投資組合。我們的辦公室組合，我們的辦公室貸款詳細列在幻燈片的下半部分，佔總貸款的 1.9%，其中除一般辦公室外，醫療辦公空間的集中度最高。

The wheel chart on the bottom right details office portfolio maturities. Loans maturing in less than a year represent 25% of the portfolio or $60.7 million, up from 15% last quarter. The office portfolio is well diversified by tenant type and geographic mix. We continue to periodically review our larger office borrowers and view the exposure as reasonably mitigated through a combination of loan-to-value guarantees, tenant mix, and other consideration.

右下角的輪狀圖詳細顯示了辦公室投資組合的到期情況。一年內到期的貸款佔投資組合的 25%，即 6,070 萬美元，高於上一季的 15%。辦公室組合依租戶類型和地理分佈十分多樣化。我們將繼續定期審查較大的辦公室借款人，並認為可以透過貸款價值擔保、租戶組合和其他考慮因素等方式合理地降低風險。

Our largest less-than-a-year maturing office loan is roughly $25 million, has a credit tenant, and is under a long-term lease. We expect this loan to be renewed in due course later this year.

我們最大的一筆不到一年到期的辦公室貸款約為 2500 萬美元，擁有一位信用良好的租戶，並且是長期租約。我們預計這筆貸款將在今年稍後適時續期。

On slide 22, we highlight this quarter's asset quality trends and position. Our non-accrual loans were up $14.7 million, while 90-day past due loans declined to $5.9 million after the renewal of the $13 million matured relationship discussed during last quarter's call. The increase in non-accruals resulted largely from a $22 million multifamily housing loan to a developer that is involved in a dispute unrelated to our project. Our project is headed to a sale, and we expect to be paid out later in the first quarter or early in the second quarter with no anticipated loss. Finishing out, classified loans leveled for the quarter, while net charge offs were roughly $800,000.

在投影片 22 上，我們重點介紹了本季的資產品質趨勢和狀況。我們的非應計貸款增加了 1,470 萬美元，而 90 天逾期貸款在續簽上一季度電話會議上討論的 1,300 萬美元到期關係後下降至 590 萬美元。非應計項目增加的主要原因是向開發商提供了 2200 萬美元的多戶住宅貸款，而該開發商捲入了一場與我們的項目無關的糾紛。我們的項目即將出售，我們預計將在第一季末或第二季初收到付款，並且不會出現預期的損失。最後，本季分類貸款持平，而淨沖銷額約為 80 萬美元。

Then moving to slide 23, we've again rolled forward the migration of non-performing loans, charge offs, ORE, and 90-days past due. In the column 4Q24, we had more movement than in recent quarters with inflows of non-accrual loans on line 2 of $42.9 million, the largest of which was the $22 million multifamily project I just mentioned.

然後轉到投影片 23，我們再次推進了不良貸款、沖銷、ORE 和 90 天逾期的遷移。在 4Q24 欄中，我們的變動比最近幾季要大，第 2 行的非應計貸款流入為 4,290 萬美元，其中最大的一筆就是我剛才提到的 2,200 萬美元的多戶型專案。

We had a reduction from payoffs or changes in accrual status on line 3 of $25.5 million, with the largest outflow from the exit of a $13 million hospitality credit taken to non-accrual in Q1 2024, and a reduction from gross charge offs of $2.6 million.

第 3 行的支出或應計狀態變化減少了 2550 萬美元，其中最大一筆流出來自 2024 年第一季 1300 萬美元的酒店信貸退出，該信貸轉為非應計，總沖銷減少了 260 萬美元。

Dropping down to line 11, 90-day delinquent loans decreased by $8.2 million, with the renewal of the relationship from last quarter resulting in NPAs plus 90-day delinquent loans ending the quarter at $84.6 million.

降至第 11 行，90 天逾期貸款減少了 820 萬美元，上一季關係的延續導致不良資產加上 90 天逾期貸款在本季度末達到 8,460 萬美元。

So to summarize, asset quality remains stable, classified loan balances have leveled with nominal charge offs, we had a solid quarter of C&I loan growth combined with robust public finance activity. And with the refinance and sale activity in commercial real estate abating, we hope to see traction and growth in the construction loan portfolio.

總而言之，資產品質維持穩定，分類貸款餘額與名目沖銷持平，本季商業和工業貸款成長穩健，公共財政活動強勁。隨著商業房地產再融資和銷售活動的減弱，我們希望看到建築貸款組合的牽引力和成長。

I appreciate your attention, and now we'll turn the call back over to Mark Hardwick.

感謝您的關注，現在我們將電話轉回給馬克哈德威克。

Thanks, John. Turning to slide 24, the 10-year compound annual growth rate of earnings per share is 7.5%, and it's helped support the 7% growth rate we've seen in tangible book value per share. As you know, those numbers are post dividends, post M&A activity, or the dilution from those acquisitions. And it also includes the AOCI impact that is in our total equity calculation.

謝謝，約翰。翻到第 24 張投影片，每股盈餘的 10 年複合年增長率為 7.5%，這有助於支撐我們所看到的每股有形帳面價值 7% 的成長率。如您所知，這些數字是股息後、併購活動後或收購稀釋後的數字。它還包括我們總權益計算中的 AOCI 影響。

Slide 25 shows our total asset CAGR of 12% during the last 10 years and highlights meaningful acquisitions that have materially added to our footprint and help fuel our growth. There are no changes to slide 27, as we continue to live both our vision and our strategic imperatives.

投影片 25 顯示了我們過去 10 年的總資產複合年增長率為 12%，並重點介紹了那些實質擴大了我們的業務範圍並有助於推動我們成長的有意義的收購。第 27 張投影片沒有變化，因為我們將繼續實現我們的願景和策略要務。

So in summary, I'm proud of this team. I'm proud of all 2,000-plus employees that we have. And I'm really proud of the accomplishments that we delivered in 2024. And yet, I'm very happy to turn the page on a year of repositioning. Our teams worked very hard last year to put the bank in a position to grow, and we have never been positioned better to meet the financial needs of the clients that we serve.

總而言之，我為這支球隊感到驕傲。我為我們擁有的 2,000 多名員工感到自豪。我為我們在 2024 年所取得的成就感到非常自豪。然而，我很高興翻過重新定位的一年。去年，我們的團隊非常努力地工作，使銀行處於成長的地位，我們從未像現在這樣能夠更好地滿足我們所服務的客戶的財務需求。

Thanks for your attention and your investment, and I hope you share the same optimism that all of us around this table share. So at this point, we're happy to take questions.

感謝您的關注和投入，我希望您能和我們在座的各位一樣，抱持著同樣的樂觀態度。因此，現在我們很樂意回答問題。

Brandon Nosal, Hovde Group.

布蘭登‧諾薩爾 (Brandon Nosal)，霍夫德集團 (Hovde Group)。

Maybe starting off here on kind of asset repricing dynamics as we move through the year. I think 60% of your book floats on [either SOFR prime]. But for the other 40% of the loan book, can you remind us how much that book asset repricing you have across the year and how much you'll pick up -- you're looking to achieve on that paper?

也許我們可以從這裡開始了解一年來資產重新定價的動態。我認為你的書有 60% 的內容[任一 SOFR 優惠利率]。但是對於貸款帳簿的其餘 40%，您能否提醒我們，您全年的帳簿資產重新定價是多少，以及您將獲得多少收益 - 您希望在帳簿上實現這一目標？

I think our fixed rate securities, we probably have about $250 million in fixed rate securities. They're going to be repricing in the next 12 months. And I believe they're at like maybe about a 4.5% yield, so we've got some good pick up there. I think that'll be a nice tailwind for us.

我認為我們的固定利率證券，我們可能有大約 2.5 億美元的固定利率證券。他們將在未來 12 個月內重新定價。我相信它們的收益率大概在 4.5% 左右，所以我們可以從中獲得一些好處。我認為這對我們來說是一個很好的順風。

And then what about the loan side? I think you said that was securities.

那麼貸款方面又如何呢？我認為您說的是證券。

Oh, I'm sorry. And that was the loan book. I apologize.

噢，對不起。這就是貸款簿。我很抱歉。

Oh, okay, okay. That makes a great deal of sense. Okay. Perhaps one more from me, just kind of on the pace of investments and expenses overall. I mean, you did a ton of work in 2024 investment spend on your four major initiatives. Any early thoughts on the project slate for 2025, where dollars need to be allocated, or whether you kind of pulled that forward into '24? And then tie that commentary into overall thoughts on the cost base for this year.

噢，好的，好的。這很有道理。好的。我可能還想再問一個問題，關於整體投資和支出的速度。我的意思是，你們在 2024 年四大投資計畫上做了大量工作。您對於 2025 年的專案計劃有什麼初步想法，需要分配資金的地方，或者您是否將其提前到 2024 年？然後將該評論與今年成本基礎的整體想法聯繫起來。

I'll let Michele speak to the overall cost base, but the pull forward of those projects, it's amazing we were able to upgrade the quality of our technology, really, without any increased expense. The -- where it really showed up in our income statement for the actual conversion charges, the one-time kind of expense related to changing platforms, and even carrying technology over where we were maybe duplicating expense for a short amount of time. But the 2025 numbers related to all those technology projects really is not an increase, so it comes back to just what's the core increase in our investment, really, in people, as we move forward.

我會讓米歇爾談談整體成本基礎，但這些項目的推進，令人驚訝的是，我們確實能夠在不增加任何費用的情況下提升我們的技術品質。它確實出現在我們的損益表中，包括實際轉換費用、與更換平台相關的一次性費用，甚至是技術轉移費用，我們可能會在短時間內重複這些費用。但與所有這些技術項目相關的 2025 年數字實際上並沒有增加，因此，隨著我們不斷前進，問題又回到了我們對人才投資的核心成長。

And then Brendan, maybe I'll kind of answer the second part of that. When you look at just our total expenses for 2024, looking to 2025, we think we can keep expense growth pretty minimal. Really, I would say somewhere in the 1% to 3%, probably leaning more towards the low end of that range. Our efficiency ratio continues to be low, and we do have no doubt that we'll continue to maintain that expense discipline and deliver a sub-55% efficiency ratio in 2025 as well.

然後布倫丹，也許我會回答第二部分。如果只看我們 2024 年的總支出，展望 2025 年，我們認為可以將支出成長保持在相當低的水平。實際上，我會說在 1% 到 3% 之間，可能更傾向於該範圍的低端。我們的效率比率仍然很低，我們毫不懷疑，我們將繼續保持這種費用紀律，並在 2025 年實現低於 55％ 的效率比率。

All right, fantastic. That's helpful color. Thanks for taking the questions.

好的，太棒了。這是很有幫助的顏色。感謝您回答這些問題。

Terry McEvoy, Stephens Inc.

麥克沃伊（Terry McEvoy），史蒂芬斯公司（Stephens Inc.）

Maybe the cost of total deposits in Q4, 2.43%, I'm just wondering, maybe where was that at the end of December? Or if you don't have that handy, where do you see those deposit costs heading over the next couple quarters?

也許第四季的總存款成本為 2.43%，我只是想知道，12 月底這個數字是多少？或者如果您手頭上沒有這些信息，您認為未來幾季這些存款成本將走向何方？

Our December deposit costs were 2.33%, so we'd actually made quite a bit of progress in the fourth quarter -- through the end of the fourth quarter, really, cutting those deposit costs. And overall, we believe that we can continue that momentum. As I said in my remarks, we had a down deposit beta of 46%. So our commitment is to continue to move forward. If the Fed cuts rates in 2025, we're going to go grab more of our share. It'll all be dependent on competition, as it always is, and so we'll make adjustments as needed.

我們 12 月的存款成本為 2.33%，因此我們在第四季度實際上取得了相當大的進展——到第四季度末，我們確實削減了這些存款成本。總的來說，我們相信我們可以保持這種勢頭。正如我在發言中所說，我們的首付貝塔係數為 46%。因此，我們的承諾是繼續前進。如果聯準會在 2025 年降息，我們將會獲得更多的份額。一切都將取決於競爭，一如既往，因此我們將根據需要做出調整。

Thanks, Michele. And then Mike, it sounds like the momentum in the C&I area will continue in the first half of the year, just based on the conversations and some of your comments. There's certain sectors, industries you think are better positioned to support that growth?

謝謝，米歇爾。然後麥克，根據談話和您的一些評論，聽起來 C&I 領域的勢頭將在今年上半年繼續下去。您認為某些行業或領域更適合支持這種成長嗎？

And then as a follow up, just since I'm asking the loan portfolio, you highlight the ample opportunities to -- or ample real estate capacity. What's your desire to build out commercial real estate, given that comment, in your low relative exposure?

然後作為後續問題，由於我詢問的是貸款組合，您強調了充足的機會 - 或充足的房地產容量。鑑於上述評論，在您相對較低的曝光率下，您希望建立商業房地產嗎？

On the that C&I outlook, it's a couple of things inside the manufacturing segment. We're sitting here, as you know, in these three states, manufacturing is a big part of what we're doing. And that outlook inside the business plans of those companies is what gives me the -- in addition to what we see in the pipeline today, gives me the bullish outlook for the next quarter, maybe even two.

從 C&I 前景來看，製造業內部存在一些問題。如你所知，我們坐在這裡，在這三個州，製造業是我們工作的重要組成部分。這些公司商業計劃中的前景讓我看到了——除了我們今天看到的情況之外，還讓我對下一季度，甚至兩季度的前景感到樂觀。

Also, I would just remind you, we're really gaining our momentum in our Michigan market. We're -- I can't say we're new there anymore, but when you think about what we've done in the last three years to build our personal brand up there and our approach, that team is making really great strides and growth. So we're trying to get our fair share of that marketplace so that in and of itself, is taking market share offers some of that additional runway of growth.

另外，我還要提醒您，我們在密西根市場確實發展勢頭強勁。我們——我不能說我們在那裡還是新手，但是當你想到我們在過去三年裡為在那裡建立個人品牌和我們的方法所做的努力時，你會發現這個團隊正在取得長足的進步和成長。因此，我們正努力在該市場中爭取公平的份額，這樣一來，佔領市場份額本身就能帶來一些額外的成長空間。

What John points out, and what I point out with this, the real state portfolio is just really -- it's just to say we're balanced. We have really strong core developers we work with. They're doing a lot inside the projects that we -- asset classes that we like. Could still be in the multi family segment, the industrial warehouse. You hear us talking about things we might be doing in the student housing, even though that's gotten cool a little bit. But what it's really saying is that we've got capacity to continue to grow.

約翰指出的以及我指出的，實際狀態投資組合實際上只是——只是說我們是平衡的。我們擁有非常強大的核心開發人員。他們在我們喜歡的資產類別的項目內做了很多工作。可能仍屬於多戶住宅領域、工業倉庫。您會聽到我們談論我們可能在學生宿舍裡做的事情，儘管這已經變得有點酷了。但它實際上表明我們有能力繼續成長。

And we're just trying to differentiate ourselves from other banks that might already be more full with real estate assets. And as we build out and as we continue to earn our reputation with syndications, and we've got the ability to continue to do more in that space with developers that like our underwriting, our approach, and our consistency into the closed process. So we just have the ability to take advantage of that if the project pencil out and if we like the underwriting.

我們只是想將自己與其他可能已經擁有更多房地產資產的銀行區分開來。隨著我們的發展以及我們在聯合發行方面聲譽的不斷提升，我們有能力與喜歡我們的承保、我們的方法以及我們在封閉流程中的一致性的開發商在該領域繼續做更多的事情。因此，如果專案順利進行並且我們喜歡承保，我們就有能力利用這一點。

Perfect. Appreciate all the color. Thank you.

完美的。欣賞所有的色彩。謝謝。

Damon Delmonte, KBW.

達蒙·德爾蒙特，KBW。

Just wanted to get a little bit more color on the margin outlook. Michele, I think you guys noted about $270 million of cash flows coming off the securities portfolio. Is the intent to reinvest that at the higher rates? Or are you going to maybe kind of split that with some reinvestment and some funding of loan growth?

只是想對利潤前景有更深入的了解。米歇爾，我想你們注意到了證券投資組合產生的約 2.7 億美元現金流。是否有意以更高的利率進行再投資？或者您打算透過一些再投資和一些貸款成長融資來分割它？

Our intention is to use it to fund the loan growth for our 2025 plan, so we'll see where growth goes. But just looking for margin for 2025, our plan is to grow margin. We do have two rate cuts that are in our plan, both in the early half of the year. I should say one in March and one in June is what we -- when we have them built in. And so although we do have -- we are asset sensitive and we'll have loans to reprice down, we've been very proactive in managing our deposit costs in '24. We think we can do it in '25.

我們的目的是用它來資助我們 2025 年計劃的貸款成長，所以我們將看看成長走向何方。但僅就 2025 年的利潤而言，我們的計劃是增加利潤。我們的計劃中確實有兩次降息，均在今年上半年。我應該說，一個在三月，一個在六月，這是我們—當我們把它們建好的時候。因此，儘管我們對資產很敏感，而且我們會降低貸款價格，但我們在 24 年一直非常積極地管理存款成本。我們認為我們可以在 25 年內實現這一目標。

And also, we've got really strong loan yields, our new loan yields. And so that, coupled with the fixed rate loans that Brendan asked about, we feel that we'll be able to achieve the margin growth. At the very minimum, stability, but we believe we can grow it.

而且，我們的貸款收益率、新貸款收益率都非常高。因此，再加上布倫丹詢問的固定利率貸款，我們認為我們將能夠實現利潤成長。至少，是穩定，但我們相信我們可以發展它。

Great. Okay, I appreciate that color. And then just to circle back on the loan commentary, so Mike, do you feel kind of a low-, mid-single-digit net growth is doable? Or do you think you could actually get to a more solid middle single-digit growth footing?

偉大的。好的，我很欣賞這個顏色。然後回到貸款評論，麥克，您是否認為低、中等個位數的淨增長是可行的？或者您認為您實際上可以實現更穩固的中位數個位數成長基礎嗎？

Yeah, I'm feeling middle single digits. We used to talk about high single digit. It might not be in the high, but I'm on the bullish side of that.

是的，我感覺自己處於中等個位數。我們過去常常談論高個位數。雖然它可能不是最高點，但我對此持樂觀態度。

And I made a comment, just in my opening, that the 6% this quarter is a really good number to think about for '25.

我在開頭就說過，本季的 6% 對 25 年來說是一個非常好的數字。

Got it. Okay, great. And then just lastly, any updated thoughts on capital management? Your capital levels are obviously very strong. There's been a thawing the M&A market and there's been some activities across your footprint. Just kind of wondering what your priorities are for deploying capital. Is it just to support organic growth? Do you think there's M&A opportunities? And if so, kind of geographically, do you feel the need to expand out of your core markets, or do you see opportunities to maybe enhance your positions in your core markets?

知道了。好的，太好了。最後，您對資本管理有什麼最新的想法嗎？您的資本水平顯然非常強勁。併購市場正在回暖，已經出現了一些涉及貴公司業務的活動。我只是有點想知道您在部署資本方面的優先事項是什麼。這只是為了支持有機成長嗎？您認為存在併購機會嗎？如果是這樣，從地理角度來看，您是否覺得有必要向核心市場以外擴張，或者您是否看到了提升您在核心市場地位的機會？

Yeah, we love our capital base, but I'm really happy with the levels where we are today. It provides a lot of flexibility that -- the power of our earnings stream into 2025, I would love to use as much of it as possible to grow the balance sheet.

是的，我們喜歡我們的資本基礎，但我對我們目前的水平感到非常滿意。它提供了很大的靈活性——我們的盈利流將持續到 2025 年，我很樂意盡可能多地利用它來擴大資產負債表。

As I mentioned, I kind of gave a mid- to high-single-digit number is kind of where I think we'll come in with loans. So arguably, we need about a third of our capital base to support the balance sheet growth. And we use about a third for dividends, and the rest will continue to accumulate.

正如我所提到的，我給了一個中高個位數的數字，我認為這就是我們貸款的金額。因此可以說，我們需要大約三分之一的資本基礎來支持資產負債表的成長。我們將大約三分之一用於分紅，其餘部分將繼續累積。

Our M&A focus is just in the -- like it has been for a long time, it's in the three states where we currently do business: Indiana, Ohio, and Michigan. And if something makes sense, we'll -- we're certainly in communication with banks. I don't know what their real appetite is going to be, but if there's something that makes sense where we feel like if we were to acquire an institution or two in that footprint over time that it would give us a nice new organic market where we may be able to grow into the future, but it's not a priority. Our focus is the prioritization of performing organically.

我們的併購重點一直在——就像長期以來一樣，我們目前開展業務的三個州：印第安納州、俄亥俄州和密西根州。如果事情有意義的話，我們一定會與銀行溝通。我不知道他們真正的興趣是什麼，但如果有什麼事情是有意義的，我們覺得如果我們隨著時間的推移收購一兩家該領域的機構，這將為我們提供一個很好的新有機市場，我們可能能夠在未來發展，但這不是優先事項。我們的重點是優先考慮有機表現。

Got it. Great. Appreciate that color. That's all that I had. Thank you very much.

知道了。偉大的。欣賞那種顏色。這就是我所擁有的一切。非常感謝。

Nathan Race, Piper Sandler.

內森·雷斯，派珀·桑德勒。

Just going back to the last line of questioning on capital. Look like you guys are active on share repurchases in the quarter, so just curious if that appetite remains heading into this year, just given some of the M&A commentary.

回到關於資本的最後一題。看起來你們在本季積極進行股票回購，所以只是好奇這種興趣是否會持續到今年，只是考慮到一些併購評論。

Yeah, I'm interested in share purchases where we're trading below historical averages. And when I say that, I just think about what are our earnings, apply a multiple, and if we're trading below the historical averages that are closer to [12.5 or 13], then I have an interest in being active where we're trading at our historical averages, and we believe that if we -- if the estimates et cetera are appropriate, then we're likely to stay out of share repurchase and just accumulate capital for future use.

是的，我對購買低於歷史平均的股票感興趣。當我這麼說的時候，我只是在想我們的收益是多少，應用一個倍數，如果我們的交易價格低於接近 [12.5 或 13] 的歷史平均水平，那麼我有興趣在我們以歷史平均水平交易時保持活躍，我們相信，如果我們 — — 如果估計等等是合適的，那麼我們可能會停止使用股票回購，而只是積累股票以備使用。

Okay, great. That's really helpful. And then, Michele, I think last quarter, we were talking about a run rate for fee income around [30 to 32] going for you guys. You guys obviously exceeded that here in the fourth quarter, but just kind of any thoughts on kind of the fee income growth run rate or trajectory to 2025?

好的，太好了。這真的很有幫助。然後，米歇爾，我想上個季度，我們討論的費用收入運行率對你們來說大約是 [30 到 32]。你們在第四季顯然超過了這個數字，但對於 2025 年的費用收入成長率或軌跡有什麼看法？

No, I mean we expect 2025 non-interest income to grow year over year, probably in the mid- to high-single digits. And the drivers of that growth that we're expecting to come from our wealth management and our mortgage team, they delivered exceptional performance in '24, and we think they can grow at a double-digit pace in '25. And so when you kind of couple that with the other components of fee income growth, we think that'll bring our overall non-interest income growth to that mid- to high-single digits when you look at it year over year.

不，我的意思是我們預計 2025 年非利息收入將逐年成長，可能達到中高個位數。我們預計成長的動力將來自我們的財富管理和抵押貸款團隊，他們在 24 年表現優異，我們認為他們可以在 25 年內實現兩位數的成長。因此，當你將其與費用收入成長的其他組成部分結合起來時，我們認為，從逐年來看，這將使我們的整體非利息收入成長率達到中高個位數。

And even treasury management should be in a similar range for -- with the use of Q2. When we think about our plan, the private wealth, commercial, or TM fees, the mortgage business, they're really strong drivers of performance. And I love the historical performance, and we think it can continue.

甚至財務管理也應該處於類似的範圍內——使用 Q2。當我們考慮我們的計劃時，私人財富、商業或 TM 費用、抵押貸款業務，它們是真正強大的業績驅動力。我喜歡這種歷史性的表現，我們認為它可以繼續下去。

Okay, that's really helpful. And then, any thoughts on the tax rate going forward?

好的，這確實很有幫助。那麼，對於未來的稅率有什麼想法嗎？

I would expect it to be maybe 13% to 14% for the year in '25.

我預計 25 年的成長率大概是 13% 到 14%。

Okay, great. And then maybe one last one for John. Obviously, it sounds like with some of the non-performing increase in the core, that's kind of transitory, just given what's going on with that specific client. In the past, we've talked about kind of a normalized charge off range, south of 20 basis points, but it just seems like, given some pretty benign credit trends in the fourth quarter, that maybe we're going to kind of trend below that level here in 2025.

好的，太好了。這也許是最後一個給約翰的。顯然，聽起來核心中的一些不良資產增加​​只是暫時的，只是考慮到特定客戶的情況。過去，我們討論過一種標準化的沖銷範圍，即 20 個基點以下，但考慮到第四季度一些相當溫和的信貸趨勢，似乎我們可能會在 2025 年跌至該水平以下。

I still think that the -- between 15 and 20 basis points is a good number. With classified being where they are, non-performers being where they are, and it is sort of transitory, but I still see that as being a reasonable range of expectations for charge offs.

我仍然認為 15 到 20 個基點是一個不錯的數字。由於分類情況如此，不良資產情況如此，而且這只是暫時現象，但我仍然認為這是沖銷預期的合理範圍。

Okay, great. I appreciate all the color. Congrats on a great quarter. Thank you.

好的，太好了。我欣賞所有的色彩。恭喜本季取得優異成績。謝謝。

Daniel Tamayo, Raymond James.

丹尼爾塔馬約、雷蒙詹姆斯。

Maybe first, just for Michele, on the details of the restructuring in the fourth quarter, just curious if those funds were reinvested in securities. I know you talked about reinvesting cash flows into loan growth, but just as it relates to those in particular, and then if you expect any further benefit depending on timing when that transaction happened on the margin in the first quarter.

首先，我想問 Michele 關於第四季重組的細節，我只是好奇這些資金是否被重新投資於證券。我知道您談到了將現金流再投資於貸款成長，但正如它與這些具體內容相關一樣，您是否預期會有任何進一步的收益，這取決於第一季該交易發生的時間。

Yeah, we did not reinvest those cash flows. We actually used the cash flows from the bonds, the sale of the bonds to replace the deposits that we sold with those Illinois branches. And so when you look at the yield on the bonds that we sold versus the yield on the deposits, it'll actually give us the margin pick up in 2025. I expect that to be maybe to the tune of 2 to 3 basis points of benefits.

是的，我們沒有重新投資這些現金流。我們實際上利用債券的現金流，即債券的銷售來取代我們向伊利諾伊州分支機構出售的存款。因此，當您查看我們出售的債券收益率與存款收益率時，它實際上會讓我們在 2025 年實現利潤率回升。我預計這可能會帶來 2 到 3 個基點的收益。

Okay. So you'll see 2 to 3 basis points here in the first quarter related to that restructuring, sounds like. Okay. Appreciate that.

好的。因此，您會看到第一季與該重組相關的 2 到 3 個基點，聽起來是這樣。好的。非常感謝。

And then maybe one for Mark here, bigger picture. You talked a lot about the investments you made last year. You guys talked about minimal expense growth here and sound pretty excited about 2025 and going forward. Curious kind of how you think about what would be a good type of ROA for the bank going forward. Pretty strong in the fourth quarter on an operating basis, about 1.25%. Is that an achievable number longer term, or? Just curious how you're thinking about that now, profitability, given the investments you've made as we get into a more normalized environment.

然後也許這裡有一張給馬克的，更大的圖景。您談了很多關於去年進行的投資。你們在這裡談到了最低限度的費用增長，並且對 2025 年及以後的發展感到非常興奮。我很好奇您如何看待未來銀行理想的 ROA 類型。第四季的營運成長相當強勁，約為 1.25%。從長遠來看，這是一個可以實現的數字嗎？我只是好奇，考慮到我們進入更正常化的環境後您所做的投資，您現在是如何看待盈利能力的。

It's a great question, Danny, and we have a whole series of key performance indicators that we use, and we target around 1.30%. I don't know whether we'll reach that in 2025, but the 1.25% number you just mentioned is a great place for us to be. You think about growth in mid- to high-single digit across the balance sheet. Fee income growth, that's kind of 10% is sort of our goal. Maintaining our expense level in the really low -- low-single-digit range. We are really happy with the margin numbers, the rebound that we've seen, we're kind of finally back to pre-Silicon Valley levels. And yeah, that efficiency ratio is going to stay under 55%. And we think with the ROA numbers, you just mentioned that it's a strong place for us to perform that we believe starts to look like top quartile performance. And then if our stock trades at a top quartile level, just gives us flexibility as we think about what's next.

丹尼，這是一個很好的問題，我們使用了一系列關鍵績效指標，我們的目標是 1.30% 左右。我不知道我們是否能在 2025 年實現這一目標，但您剛才提到的 1.25% 這個數字對我們來說已經很不錯了。您可以考慮整個資產負債表的中高個位數成長。費用收入成長 10% 是我們的目標。將我們的支出水準維持在非常低的水準—低個位數範圍內。我們對利潤率數字感到非常滿意，我們看到了反彈，我們終於回到了矽谷之前的水平。是的，效率比率將保持在 55% 以下。我們認為，根據您剛才提到的 ROA 數字，我們的表現處於強勁水平，我們相信這開始看起來像是頂級四分位數的表現。如果我們的股票交易價格處於最高四分位水平，那麼我們在考慮下一步行動時就會有彈性。

Okay, terrific. Well, thanks for all the color. That's it for me. Appreciate it.

好的，太棒了。好吧，謝謝你所有的色彩。對我來說就是這樣。非常感謝。

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Mark Hardwick for any further remarks.

謝謝。今天節目的問答環節到此結束。我想將程序交還給馬克·哈德威克，以便他可以做出進一步的評論。

Well, I know we have a broad audience here. We have employees, shareholders, customers that listen at times. And I just want to say thank you to all of our stakeholders. We appreciate your interest in First Merchants, your partnership with First Merchants, and the commitment going forward. So again, pleased with the year. And clearly, from the call, you can tell there's a sense of optimism around where 2025 lands. So thank you for your time, and have a great day. Thank you.

嗯，我知道我們這裡有廣泛的聽眾。我們的員工、股東和客戶都會不時地傾聽我們的意見。我只想向我們所有的利害關係人表示感謝。我們感謝您對 First Merchants 的關注、與 First Merchants 的合作以及未來的承諾。所以，我對這一年再次感到滿意。顯然，從通話中你可以看出大家對 2025 年的前景充滿樂觀。感謝您抽出時間，祝您有愉快的一天。謝謝。

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

女士們、先生們，感謝各位參加今天的會議。該計劃確實就此結束。您現在可以斷開連線。再會。