First Merchants Corp (FRMEP) 2023 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to First Merchants Corporation Second Quarter 2023 Earnings. (Operator Instructions) Be advised that today's conference is being recorded.

美好的一天，感謝您的支持。歡迎閱讀第一招商局 2023 年第二季度收益。 （操作員指示）請注意，今天的會議正在錄製中。

Before we begin, management would like to remind you that today's call contains forward-looking statements with respect to the future performance and financial condition of First Merchants Corporation that involve risk 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第一商業公司未來業績和財務狀況的前瞻性陳述，涉及風險和不確定性。更多信息包含在新聞稿中，我們鼓勵您查看。

Additionally, management may refer to non-GAAP measures, which are intended to supplement, but not substitute for the 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.

此外，管理層可能會參考非公認會計準則衡量標準，這些衡量標準旨在補充但不能替代最直接可比的公認會計準則衡量標準。網站上提供的新聞稿包含今天討論的財務和其他定量信息，以及 GAAP 與非 GAAP 指標的對賬。

I would now like to hand the conference over to the Chief Executive Officer, Mark Hardwick. Please proceed.

現在我想將會議交給首席執行官馬克·哈德威克 (Mark Hardwick)。請繼續。

Well, good morning, and welcome to the First Merchants Second Quarter 2023 Conference Call. Carmen, thank you for the introduction and for covering the forward-looking statement on Page 2. We released our earnings today at approximately 8:00 a.m. Eastern and you can access today's slides by following the link on the second page of our earnings release or by going to our website through the Investor Relations section.

早上好，歡迎參加 First Merchants 2023 年第二季度電話會議。卡門，感謝您的介紹和第二頁前瞻性聲明的報導。我們今天於東部時間上午 8:00 左右發布了我們的財報，您可以通過我們財報第二頁上的鏈接訪問今天的幻燈片，或者通過投資者關係部分訪問我們的網站。

On Page 3, you will see today's presenters and our bios to include President, Mike Stewart, Chief Credit Officer, John Martin; and Chief Financial Officer, Michele Kawiecki.

在第 3 頁上，您將看到今天的演講者和我們的簡介，其中包括總裁 Mike Stewart、首席信貸官 John Martin；和首席財務官 Michele Kawiecki。

On Page 4, you will see a map representing the geographic locations of our 119 banking centers as well as a few financial highlights as of 06/30 -- June 30, 2023.

在第 4 頁上，您將看到一張地圖，顯示我們 119 個銀行中心的地理位置以及截至 2023 年 6 月 30 日（即 2023 年 6 月 30 日）的一些財務亮點。

Turning to Slide 5. I'm happy to report that our performance remains healthy and strong, and our teams continue to meet the demands of our communities and our client base. We reported second quarter 2023 earnings per share of $1.02 compared to $0.63 per share in the second quarter of 2022 or $1.01 when adjusted for a couple of extraordinary items last year to include our acquisition of Level One.

轉向幻燈片 5。我很高興地向大家報告，我們的業績保持健康強勁，我們的團隊繼續滿足社區和客戶群的需求。我們報告的 2023 年第二季度每股收益為 1.02 美元，而 2022 年第二季度每股收益為 0.63 美元，去年根據包括我們收購 Level One 在內的一些特殊項目進行調整後為 1.01 美元。

Net income was just over $60 million for the quarter. Our return on tangible common equity totaled 18.04% and return on assets totaled 1.34% for the quarter. Year-to-date, we've earned $124 million or $2.09 per share. We remain committed to mid-single-digit loan growth and our continued low 50s efficiency ratio through the remainder of 2023 as we manage through what's left of continued modest margin compression.

該季度淨利潤略高於 6000 萬美元。本季度我們的有形普通股回報率總計 18.04%，資產回報率總計 1.34%。今年迄今為止，我們的盈利為 1.24 億美元，即每股盈利 2.09 美元。在 2023 年剩餘時間內，我們仍致力於實現中等個位數的貸款增長，並維持 50 多歲的低效率效率，同時我們將應對持續適度的利潤率壓縮帶來的影響。

Now Mike Stewart will provide more insight on our balance sheet to include a small noncore loan sale, and Michele and John will cover their respective areas. We did see an uptick in nonaccruals that I know John will be covering in detail. Mike?

現在，邁克·斯圖爾特將提供有關我們資產負債表的更多見解，包括小型非核心貸款銷售，米歇爾和約翰將負責各自的領域。我們確實看到非應計費用有所上升，我知道約翰將詳細介紹這一點。麥克風？

Yes. Thank you, Mark, and good morning to all. Slide 6 remains unchanged and as a reminder that our financial results represent the durability of our business model within these markets we serve. And if you visualize the map on Slide 4, we primarily operate within these 3 states, the heart of the Midwest. Our markets include growing metropolitan cities like Indianapolis, Columbus and Detroit with many midsized cities and communities in between.

是的。謝謝你，馬克，祝大家早上好。幻燈片 6 保持不變，並提醒我們，我們的財務業績代表了我們的業務模式在我們所服務的這些市場中的持久性。如果你想像一下幻燈片 4 上的地圖，我們主要在這 3 個州（中西部的中心）開展業務。我們的市場包括印第安納波利斯、哥倫布和底特律等不斷發展的大都市，以及其間的許多中型城市和社區。

As the last bullet point under the consumer banking header states, we serve diverse locations in stable rural metro markets. First Merchants has a granular and diverse customer base of deposits and loans derived from these 4 listed banking segments.

正如消費者銀行業務標題下的最後一個要點所述，我們為穩定的農村都市市場的不同地點提供服務。第一招商銀行擁有來自這 4 個上市銀行部門的精細且多樣化的存款和貸款客戶群。

Through the second quarter of 2023, these markets have remained resilient to the broad economic environment with stable unemployment rates and with businesses continuing to seek ways to expand and optimize their operations. We remain committed to our business strategy and we remain committed to our strategic direction of organic growth, continuing to invest in our team, continuing to invest in our technology platforms and top-tier financial metrics.

到 2023 年第二季度，這些市場對大的經濟環境仍然保持彈性，失業率穩定，企業繼續尋求擴大和優化運營的方法。我們仍然致力於我們的業務戰略，我們仍然致力於有機增長的戰略方向，繼續投資於我們的團隊，繼續投資於我們的技術平台和頂級財務指標。

So if we turn to Page 7, the top of the page offers a breakdown of our core loan growth by business units. The total annualized loan growth for the second quarter was 1.5% and 4.7% for the first 6 months of 2023. As noted on the page, we chose to sell a $116 million commercial loan portfolio that was not core to our relationship banking expectations as there was no ability to cross-sell or gain depository balances from those clients.

因此，如果我們翻到第 7 頁，頁面頂部會按業務部門列出我們的核心貸款增長情況。 2023 年前 6 個月第二季度的年化總貸款增長率為 1.5% 和 4.7%。正如頁面上所述，我們選擇出售 1.16 億美元的商業貸款組合，這不是我們關係銀行預期的核心，因為沒有能力交叉銷售或從這些客戶那裡獲得存款餘額。

That portfolio had been aggregated over the years through bank acquisitions and through direct origination. The portfolio was managed centrally and had a secondary market valuations that allowed for an effective sell.

該投資組合多年來通過銀行收購和直接發起進行了匯總。該投資組合進行集中管理，並具有二級市場估值，可以進行有效的出售。

So as the footnote states, when adjusting for that $116 million sale, our annualized second quarter loan growth was 4.7% and 6.9% for the first 6 months of 2023. Moreover, when adjusting for the sale, the commercial segment loan growth for the quarter was 4.1% versus the 0.9% decline on the top right-hand side of the slide. All the commercial loan growth during the quarter was within the commercial industrial sector as our investment real estate portfolio showed a small decline.

因此，正如腳註所述，在調整1.16 億美元的銷售額時，我們的第二季度貸款年化增長率在2023 年前6 個月分別為4.7% 和6.9%。此外，在調整銷售額時，本季度的商業部門貸款增長下降了 4.1%，而幻燈片右上角下降了 0.9%。本季度所有商業貸款增長都集中在商業工業領域，因為我們的投資房地產投資組合出現小幅下降。

The Commercial segment, as we've talked about before, represents over 75% of our total loan portfolio and the new loan generation during the quarter was approximately $142 million when adjusting for that non-relationship loan sale and over $300 million year-to-date.

正如我們之前討論過的，商業部門占我們總貸款組合的 75% 以上，根據非關係貸款銷售進行調整後，本季度新增貸款約為 1.42 億美元，同比超過 3 億美元。日期。

While the Consumer segment on this page contracted this quarter by 0.6%, that dollar amount was less than $2 million, and all of that decline was within our private banking clientele.

雖然本頁上的消費者部分本季度收縮了 0.6%，但金額不到 200 萬美元，而且所有下降都發生在我們的私人銀行客戶範圍內。

The mortgage portfolio growth during the quarter was approximately $80 million in adjustable rate loans. And as we discussed last quarter, we have modified our mortgage approach and have pivoted back to an originating cell model with a target of 70% of originations to be sold.

本季度抵押貸款組合的可調整利率貸款增長約為 8,000 萬美元。正如我們上季度討論的那樣，我們修改了抵押貸款方法，並轉向原始單元模型，目標是出售 70% 的原始產品。

Page 15, the noninterest income highlights page reflects that continued growth in gain on sale fee income.

第 15 頁，非利息收入亮點頁面反映了銷售費用收入收益的持續增長。

So overall, the commercial segment continues to be the loan growth engine of the bank, and we continue to get higher spreads on our new loan generation. Within investment real estate segment, the spreads continue to widen up to 50 basis points on a similar risk profile from the second half of 2022. And within the C&I space, the spreads have widened up to 25 basis points with a strong emphasis on relationship strategies, deposits and fees.

因此，總體而言，商業部門仍然是銀行的貸款增長引擎，我們的新貸款利差繼續提高。在投資房地產領域，從 2022 年下半年開始，在類似的風險狀況下，利差繼續擴大至 50 個基點。在 C&I 領域，利差已擴大至 25 個基點，重點關注關係策略、押金和費用。

The commercial and consumer loan pipelines ended the quarter at consistent levels to prior quarters. So like I said before, we are committed to continued organic loan growth with our clients and with prospective clients. Our balance sheet is positioned for that growth and our underwriting remains consistent and disciplined across all of our markets.

本季度末商業和消費者貸款渠道與前幾個季度持平。正如我之前所說，我們致力於與我們的客戶和潛在客戶一起實現持續的有機貸款增長。我們的資產負債表已針對這種增長做好了準備，並且我們的承保在所有市場上保持一致和嚴格。

The overall economic environment coupled with our current loan pipeline affirms my expectation of single-digit loan growth moving forward through 2023 with commercial driving the bulk of that growth.

整體經濟環境加上我們目前的貸款渠道，證實了我對 2023 年貸款將實現個位數增長的預期，其中商業驅動了大部分增長。

Let me talk a little bit about deposits, which is in the bottom half of that page. Deposit balance contracted roughly 3% on an annualized rate for the second quarter, but through the first 6 months of 2023, total deposits have grown nearly 3%. The commercial and consumer decline is primarily due to clients using their excess liquidity within their working capital cycles or their capital plans to minimize debt usage or to optimize their capital structures. These clients with -- the clients that have excess deposits have been active in taking advantage of money market and CD rates, specifically municipalities and private wealth clients.

讓我談談存款，它位於該頁面的下半部分。第二季度存款餘額按年率計算收縮約 3%，但到 2023 年前 6 個月，存款總額增長了近 3%。商業和消費者的下降主要是由於客戶利用其營運資金周期內的過剩流動性或他們的資本計劃來最大限度地減少債務使用或優化其資本結構。這些擁有超額存款的客戶，特別是市政當局和私人財富客戶，一直積極利用貨幣市場和定期存款利率。

On a unit basis, we continued to grow our commercial and consumer households throughout the quarter and year-to-date.

從單位數量來看，我們的商業和消費者家庭在整個季度和今年迄今都在持續增長。

I'll turn the call over to Michele to review in more detail the composition of our balance sheet and the drivers of our income statement. Michele?

我會將電話轉給米歇爾，以更詳細地審查我們的資產負債表的構成和損益表的驅動因素。米歇爾？

Thanks, Mike. Slide 8 covers our second quarter results and that is followed by the year-to-date results on Slide 9. As Mike touched on in his remarks, loan growth totaled $163.2 million this quarter, which was offset by the sale of $116.6 million of loans, which netted to our stated loan growth of $46.7 million for the quarter.

謝謝，邁克。幻燈片8 介紹了我們第二季度的業績，幻燈片9 介紹了今年迄今的業績。正如邁克在講話中提到的那樣，本季度貸款增長總額為1.632 億美元，但被出售的1.166 億美元貸款所抵消，這使得我們所說的本季度貸款增長了 4670 萬美元。

The investment portfolio declined $165.9 million during the quarter, which included sales of bonds totaling $101 million. Despite a deposit decline of $122.1 million, we were able to reduce Federal Home Loan Bank advances by $100 million and kept broker deposits flat this quarter. All of this demonstrates good liquidity and balance sheet management while maintaining the ability to support our customers' credit needs despite the industry's liquidity tightening.

該季度投資組合減少了 1.659 億美元，其中債券銷售總額為 1.01 億美元。儘管存款減少了 1.221 億美元，但本季度我們仍將聯邦住房貸款銀行預付款減少了 1 億美元，並使經紀人存款持平。所有這些都表明了良好的流動性和資產負債表管理，同時在行業流動性緊縮的情況下仍保持支持客戶信貸需求的能力。

Our loan-to-deposit ratio increased slightly to 84.3% this quarter compared to 83.3% in the prior quarter. Pretax pre-provision earnings totaled $71.6 million this quarter. Pretax pre-provision return on assets was 1.58% and pretax pre-provision return on equity was a strong 13.38%, all of which reflect strong profitability metrics.

本季度我們的貸存比率小幅上升至 84.3%，而上一季度為 83.3%。本季度稅前撥備前盈利總計 7160 萬美元。稅前撥備資產回報率為 1.58%，稅前撥備股本回報率為 13.38%，所有這些都反映了強勁的盈利指標。

Tangible book value per share totaled $23.34, an increase of $0.41 over prior quarter and $2.89 over the last year.

每股有形賬面價值總計 23.34 美元，比上一季度增加 0.41 美元，比去年增加 2.89 美元。

Details of our investment portfolio are disclosed on Slide 10. The sale of $101 million in bonds that I mentioned resulted in a realized loss of $1.4 million or 1.4%. The effective duration of the portfolio remains stable at 6.5 years. Expected cash flows from scheduled principal and interest payments and bond maturities through the remainder of 2023 totals $150 million. Since quarter end, we have sold approximately $35 million in bonds and we will continue to sell bonds where we see opportunity, creating additional cash flow.

我們的投資組合的詳細信息在幻燈片 10 中披露。我提到的 1.01 億美元債券的出售導致了 140 萬美元或 1.4% 的已實現損失。投資組合的有效久期穩定在6.5年。截至 2023 年剩餘時間，預計本金和利息支付以及債券到期產生的現金流總計為 1.5 億美元。自季度末以來，我們已出售了約 3500 萬美元的債券，我們將繼續在看到機會的地方出售債券，創造額外的現金流。

Slides 11 and 12 show some details of our loan portfolio and our allowance for credit losses. The total loan portfolio yield increased meaningfully, up 34 basis points to 6.34%. New and renewed loan yields averaged 3. -- 7.3% for the quarter, an increase of 22 basis points from last quarter. New commercial loan yields are generally higher with yields in the high 7s and low 8s.

幻燈片 11 和 12 顯示了我們的貸款組合和信貸損失準備金的一些詳細信息。貸款組合總收益率顯著上升，上升34個基點至6.34%。本季度新增和續簽貸款收益率平均為 3.-7.3%，較上季度上升 22 個基點。新的商業貸款收益率普遍較高，收益率在高 7 和低 8 之間。

Mortgage construction loans that were locked in a lower rate environment offset those higher commercial loan yields impacting the overall new loan yield. $8.2 billion of loans or 67% of our portfolio are variable rate with 38% of the portfolio repricing in 1 month and 54% repricing in 3 months. So we will continue to benefit from loan repricing throughout the remainder of the year.

在較低利率環境下鎖定的抵押貸款建設貸款抵消了商業貸款收益率上升對整體新貸款收益率的影響。 82 億美元的貸款（占我們投資組合的 67%）為浮動利率，其中 38% 的投資組合在 1 個月內重新定價，54% 在 3 個月內重新定價。因此，我們將在今年剩餘時間內繼續受益於貸款重新定價。

The allowance for credit losses on Slide 12 remains robust at 1.8% of total loans, along with $26.9 million at fair value accretion remaining. We did not book any provision expense this quarter, but we'll continue to monitor economic forecast changes, loan growth and credit quality to determine provision needs in the future.

幻燈片 12 中的信貸損失準備金仍然強勁，佔貸款總額的 1.8%，並且剩餘公允價值增值 2,690 萬美元。本季度我們沒有記入任何撥備費用，但我們將繼續監控經濟預測變化、貸款增長和信貸質量，以確定未來的撥備需求。

Slide 13 shows details of our deposit portfolio. We continue to have a strong core deposit base with 43% of deposits yielding 5 basis points or less. The percentage of uninsured deposits declined to 25.5% and the average deposit account balance is only $34,000, reflecting a diversified deposit franchise. Our noninterest-bearing deposits were 18% of total deposits at the end of the quarter, which was down from 20% in the prior quarter, reflecting the continued mix shift driven by our commercial customers.

幻燈片 13 顯示了我們的存款組合的詳細信息。我們繼續擁有強大的核心存款基礎，43% 的存款收益率為 5 個基點或更低。未投保存款比例下降至 25.5%，平均存款賬戶餘額僅為 34,000 美元，反映出存款業務多元化。截至本季度末，我們的無息存款佔存款總額的 18%，低於上一季度的 20%，反映出我們的商業客戶推動的持續結構轉變。

Although total deposits were down $122 million at quarter end, they have increased by $168 million since June 30. Our total cost of deposits increased 58 basis points to 1.99% this quarter, reflecting the competitive pricing environment. Our interest-bearing deposit cycle-to-date beta at quarter end was 47%, which was up from 37% last quarter. Note that our deposit betas do include time deposits. Although we expect the cost of deposits to continue to increase through the remainder of the year, we expect the pace will be slower than what we've experienced this quarter.

儘管季末總存款減少了 1.22 億美元，但自 6 月 30 日以來增加了 1.68 億美元。本季度我們的總存款成本增加了 58 個基點，達到 1.99%，反映了競爭性的定價環境。截至季度末，我們的計息存款週期至今貝塔值為 47%，高於上季度的 37%。請注意，我們的存款測試版確實包括定期存款。儘管我們預計存款成本將在今年剩餘時間內繼續增加，但我們預計增長速度將慢於本季度的情況。

Next, I will cover some notable income statement items beginning with net interest income on Slide 14. Net interest income on a fully tax equivalent basis of $143.7 million declined $6.7 million from the prior quarter, but was $8.9 million higher than the second quarter of 2022. The decline in net interest income reflects the margin compression we're experiencing as the rising earning asset yield shown on line 5 was offset with higher funding costs shown on line 6.

接下來，我將介紹一些值得注意的損益表項目，從幻燈片14 上的淨利息收入開始。按完全稅額計算的淨利息收入為1.437 億美元，比上一季度下降670 萬美元，但比2022年第二季度增加890 萬美元淨利息收入的下降反映了我們正在經歷的利潤率壓縮，因為第 5 行顯示的盈利資產收益率上升被第 6 行顯示的更高的融資成本所抵消。

The resulting stated net interest margin on line 7 totaled 3.39% for the quarter, a decline of 19 basis points. Despite the decline, we did see some stability in margin in the back half of the quarter with June margin ending at 3.4%.

本季度第 7 行公佈的淨息差總計為 3.39%，下降了 19 個基點。儘管有所下降，但我們確實看到本季度後半段的利潤率有所穩定，6 月份的利潤率最終達到 3.4%。

Noninterest income on Slide 15 increased $1.3 million, driven primarily by a $1.2 million increase in gains on the sale of mortgage loans. In previous quarters, we were portfolioing about 70% of mortgage production and selling 30% but that has flipped and we are now selling 70% of the production and only portfolio in approximately 30%. So we will be able to sustain a higher level of mortgage sale gains going forward.

幻燈片 15 上的非利息收入增加了 130 萬美元，主要是由於出售抵押貸款的收益增加了 120 萬美元。在前幾個季度，我們將大約70% 的抵押貸款產量進行了投資組合，並出售了30%，但現在情況發生了逆轉，我們現在出售了70% 的抵押貸款產量，而僅將大約30%進行了投資組合。因此，我們未來將能夠維持更高水平的抵押貸款銷售收益。

Moving to Slide 16. Total expenses were in line with our guidance and totaled $92.6 million for the quarter. Salaries and benefits expense decreased $2.7 million compared to prior quarter due to lower incentives and an annual benefit plan expense that was recorded in Q1 of $1.3 million, thereby elevating Q1 expenses.

轉到幻燈片 16。本季度總費用為 9,260 萬美元，符合我們的指導。由於激勵措施減少以及第一季度記錄的年度福利計劃費用為 130 萬美元，工資和福利費用與上一季度相比減少了 270 萬美元，從而增加了第一季度的費用。

FDIC assessment costs increased $1.3 million to a total of $2.7 million this quarter. We expect our FDIC assessment costs to normalize to a run rate of $3.1 million next quarter, given we have now recognized all of our FDIC assessment credits in the first half of the year.

本季度 FDIC 評估成本增加了 130 萬美元，總計 270 萬美元。鑑於我們現已在今年上半年確認了所有 FDIC 評估信貸，我們預計下季度 FDIC 評估成本將正常化至 310 萬美元。

Our low core efficiency ratio is 52.21% for the quarter and 51.96% year-to-date, which is reflected in the top right of the slide shows that we continue to achieve strong operating leverage despite rising funding costs and continued investments in our business.

本季度核心效率較低，本季度核心效率為52.21%，年初至今為51.96%，這反映在幻燈片的右上角，表明儘管融資成本不斷上升且業務持續投資，但我們仍繼續實現強勁的運營槓桿。

Slide 17 shows our capital ratios. Our strong earnings growth this quarter drove capital expansion in all ratios. The tangible common equity ratio increased 24 basis points, totaling 7.99% back to our internal target despite the impact of increased unrealized loss valuation on the available-for-sale portfolio due to changes in rates during the quarter.

幻燈片 17 顯示了我們的資本比率。本季度我們強勁的盈利增長推動了所有比率的資本擴張。儘管由於本季度利率變化導致可供出售投資組合的未實現損失估值增加，但有形普通股比率增加了 24 個基點，總計 7.99%，回到了我們的內部目標。

The comments and the highlights communicate the strength of our capital ratios after reflecting the impact of unrealized losses in our bond portfolio. The common equity Tier 1 ratio for the quarter was 11.07% and total risk-based capital ratio is now at 13.48%.

這些評論和要點在反映了我們債券投資組合中未實現損失的影響後，傳達了我們資本比率的實力。本季度普通股一級資本比率為 11.07%，總風險資本比率目前為 13.48%。

Overall, we are pleased with our balance sheet strength and the sustainability of our business model as this reflected in our Q2 results. Our earning asset mix continues to trend in a favorable direction, and we feel our balance sheet is well positioned heading into the third quarter to support the growth of our company.

總體而言，我們對我們的資產負債表實力和業務模式的可持續性感到滿意，這反映在我們第二季度的業績中。我們的盈利資產組合繼續朝著有利的方向發展，我們認為我們的資產負債表在進入第三季度時處於有利位置，可以支持我們公司的增長。

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

我的發言到此結束，現在我將把它交給我們的首席信貸官約翰·馬丁來討論資產質量。

Thanks, Michele, and good morning. My remarks start on Slide 18. I'll highlight the loan portfolio, touch on the expanded portfolio insights slides, review asset quality and the nonperforming asset role forward before turning the call back to Mark.

謝謝，米歇爾，早上好。我的講話從幻燈片 18 開始。在將電話轉回給 Mark 之前，我將重點介紹貸款組合、擴展投資組合見解幻燈片、回顧資產質量和不良資產角色。

So turning to Slide 18. On line 1, C&I Regional Banking reflects the sale of the $116 million term loan B portfolio that Mike Stewart mentioned earlier. Backing this out, Regional Banking grew by $18 million, roughly 2.5% annualized. The decision to liquidate the term loan B portfolio was related to non-relationship that -- to the non-relationship nature of these assets and the liquid nature of the portfolio. The entire portfolio was liquidated with a $128,000 gain.

因此轉向幻燈片 18。在第 1 行，C&I Regional Banking 反映了 Mike Stewart 之前提到的 1.16 億美元定期貸款 B 投資組合的出售。支持這一點的是，區域銀行業務增長了 1,800 萬美元，年增長率約為 2.5%。清算定期貸款 B 投資組合的決定與非關係有關——這些資產的非關係性質和投資組合的流動性質。整個投資組合被清算，收益為 128,000 美元。

C&I Sponsor Finance grew $124 million driven by increased relationship management market coverage and slower than expected payoffs with sponsors who are being patient given the market. We have maintained consistent underwriting and continue to see stable to improved loan pricing.

由於關係管理市場覆蓋​​範圍擴大以及對市場保持耐心的讚助商的回報低於預期，C&I Sponsor Finance 增長了 1.24 億美元。我們保持了一致的承保，並繼續看到貸款定價穩定並有所改善。

Moving down to Slide 9. We slowed balance sheet growth of 1 to 4 family mortgage loans with $81 million added to the portfolio in the quarter. We've completed the origination transition strategy. We discussed last quarter by adjusting loan rates to return to our historical levels.

轉到幻燈片 9。我們放慢了 1 至 4 個家庭抵押貸款的資產負債表增長，本季度投資組合增加了 8100 萬美元。我們已經完成了創始轉型戰略。我們上季度討論了通過調整貸款利率來恢復到我們的歷史水平。

Turning to Slide 19. I've included and updated the portfolio insights slide to provide additional transparency. In the commercial space, the C&I classification includes sponsor finance as well as owner-occupied CRE associated with the business. Our C&I portfolio is representative of our markets and has a 19% concentration in manufacturing.

轉向幻燈片 19。我添加並更新了投資組合見解幻燈片以提供額外的透明度。在商業領域，C&I 分類包括贊助商融資以及與業務相關的業主自用 CRE。我們的 C&I 產品組合代表了我們的市場，其中 19% 集中在製造業。

Our current line utilization remained consistent around 41% with commitments increasing $162 million. We participate in roughly $600 million of Shared National Credits across various industries, down from $782 million last quarter associated with the term loan B sale just mentioned. These are generally relationships where we have taken a position and there is access to management and revenue opportunities beyond the credit exposure.

我們當前的生產線利用率保持在 41% 左右，承諾增加 1.62 億美元。我們參與了各個行業約 6 億美元的共享國家信貸，低於剛剛提到的與定期貸款 B 銷售相關的上一季度的 7.82 億美元。通常在這些關係中，我們已採取立場，並且可以獲得超出信用風險的管理和收入機會。

We also have roughly $65 million of SBA guaranteed loans in the sponsored finance portfolio. I continue to highlight key portfolio metrics. There are 80 relationships with 68% having a fixed charge coverage ratio of 1.5x. This has trended down with higher borrowing costs, but still healthy with the current classified loan portfolio of 3.8% as compared to 3.5% in the prior quarter. Far is platform companies owned by private equity firms with an eventual expectation of sale. We review the individual relationships quarterly for changes, including leverage, cash flow coverage and borrower condition.

我們的讚助融資組合中還有大約 6500 萬美元的 SBA 擔保貸款。我繼續強調關鍵的投資組合指標。有 80 個關係，其中 68% 的固定費用覆蓋率為 1.5 倍。隨著借貸成本上升，這一數字已呈下降趨勢，但仍保持健康，當前分類貸款組合為 3.8%，而上一季度為 3.5%。 Far 是私募股權公司擁有的平台公司，最終預期會被出售。我們每季度審查個人關係的變化，包括槓桿、現金流覆蓋率和借款人狀況。

Then moving to Construction Finance. We have limited exposure to residential development and we are primarily focused on 1 to 4 family nontracked individual build residential construction loans through our mortgage department. For commercial construction, we continue to have a bias towards multifamily construction. We've continued to give detail into our nonowner-occupied commercial real estate portfolio. Since the Great Recession, we have focused on multifamily CRE lending, while selectively adding projects in other segments. Office exposure is broken out. The chart represents 2.1% of total loans with the highest concentration outside of general office being in Medical.

然後轉到建築財務。我們對住宅開發的投資有限，我們主要通過抵押貸款部門專注於 1 至 4 個家庭的非軌道式個人建造住宅建設貸款。對於商業建築，我們仍然偏向多戶住宅建築。我們繼續詳細介紹我們的非業主自用商業房地產投資組合。自大衰退以來，我們一直專注於多戶型商業地產貸款，同時有選擇地增加其他領域的項目。辦公室曝光已打破。該圖表顯示，總貸款中 2.1% 的貸款集中度最高，一般辦公室以外的領域為醫療行業。

From a historical perspective, the portfolio has performed well, much like the rest of the portfolio. The office portfolio is well diversified by tenant type and geographic mix. We continue to periodically review our larger office exposures and view the exposures as mitigated and acceptable given the current market conditions.

從歷史角度來看，該投資組合表現良好，就像投資組合的其他部分一樣。寫字樓組合根據租戶類型和地理組合而多樣化。我們繼續定期審查我們較大的辦公室風險，並認為鑑於當前的市場狀況，這些風險已得到緩解且可以接受。

On Slide 21, I highlight our asset quality trends and current position. NPAs and 90 days -- greater than 90 days past due, loans increased 13 basis points this quarter. We had 2 larger commercial relationships, which moved to nonaccrual totaling $26.6 million, accounting for much of the change.

在幻燈片 21 中，我強調了我們的資產質量趨勢和當前狀況。 NPA 和 90 天——逾期超過 90 天，貸款本季度增加了 13 個基點。我們有 2 個較大的商業關係，其轉為非應計總額 2,660 萬美元，佔了大部分變化。

The first credit was what I would term asynchronous caused by a fraud that impacted our borrowers' ability to repay, while the second was driven by a pullback in industrial construction in a segment of the market in which the borrower focused. On line 3, the $6.6 million decline in 90 days past due resulted from the resolution of 2 separate relationships immediately following the first quarter and were not related to the relationships I just mentioned.

第一個信用是我所說的異步，是由影響借款人還款能力的欺詐行為引起的，而第二個信用是由借款人重點關注的市場領域的工業建設回落推動的。在第 3 行中，逾期 90 天減少了 660 萬美元，這是由於第一季度之後立即解決了 2 個單獨的關係，與我剛才提到的關係無關。

Classified loans remained stable at 2.09% of loans below historical and pre-pandemic levels. And finishing out the slide, we had net charge-offs of $1.9 million or 6 basis points for the quarter.

分類貸款保持穩定，佔貸款的 2.09%，低於歷史和疫情前的水平。完成幻燈片後，我們本季度淨沖銷 190 萬美元，即 6 個基點。

Then moving on to Slide 22, where I began to roll forward the migration of nonperforming loans, charge-offs, ORE and 90 days past due. For the quarter, we added nonaccrual loans on line 2 of $33.2 million, including the new nonaccruals I just mentioned, a reduction from payoffs or changes in accrual status of $8.3 million on line 3 and a reduction from gross charge-offs of $2.3 million.

然後轉到幻燈片 22，我開始滾動不良貸款、沖銷、ORE 和逾期 90 天的遷移。對於本季度，我們在第2 行增加了3320 萬美元的非應計貸款，包括我剛才提到的新的非應計貸款、第3 行的應計狀態付款或變化減少了830 萬美元，以及總沖銷減少了230 萬美元。

Dropping down to line 11, 90 days past due decreased $6.6 million, which resulted in NPAs plus 90 days past due up $15.9 million for the quarter.

下降到第 11 行，逾期 90 天減少了 660 萬美元，這導致本季度的不良資產加上逾期 90 天增加了 1,590 萬美元。

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

感謝您的關注，我現在將把電話轉給馬克·哈德威克。

Great. Thanks, John, Mike and Michele. We hear from you, our investors all the time that you value the level of transparency that we share and just appreciate the time to tell our story.

偉大的。謝謝約翰、邁克和米歇爾。我們經常聽到您，我們的投資者的來信，表示您重視我們所分享的透明度，並且非常感謝您花時間講述我們的故事。

If you turn to Slide 23 and 24, we highlight our 10-year CAGRs for growth and returns.

如果您翻到幻燈片 23 和 24，我們會重點介紹我們的 10 年復合年增長率和回報率。

And on Slide 25, we have a reminder of our vision, mission and our team's statement, along with the strategic imperatives that guide our decision-making.

在幻燈片 25 上，我們提醒了我們的願景、使命和團隊聲明，以及指導我們決策的戰略要務。

We do appreciate your time and attention. And at this point, we're happy to take questions.

我們非常感謝您的時間和關注。此時，我們很樂意回答問題。

(Operator Instructions) All right. In our line of Ben Gerlinger with Hovde Group.

（操作員指示）好的。在我們的 Ben Gerlinger 與 Hovde Group 的產品線中。

I was curious if you could just touch base on deposits. Seems like across the bank space, the second quarter is probably the most amount of pain and then starting to alleviate in the back half. I was curious if you could give any clarity towards like the end of quarter, if not July deposit costs and how things have trended over the past, call it, 60 days in terms of pricing?

我很好奇你是否可以只接觸存款。似乎在銀行領域，第二季度可能是最痛苦的，然後在後半段開始緩解。我很好奇您是否可以澄清季度末（如果不是 7 月的存款成本）以及過去（稱之為 60 天）定價方面的趨勢如何？

Yes, Ben, I can give you -- start off and give you some information. So our June interest-bearing deposit costs were 2.6%. So hopefully, that gives you some color. We do expect that there will still be some pressure on deposit costs, but we do think it will slow from here on out. It already feels like it's slowing a bit and as kind of felt like that through particularly through the back half of the quarter.

是的，本，我可以給你——開始給你一些信息。所以我們6月份的帶息存款成本是2.6%。希望這能給你一些色彩。我們確實預計存款成本仍將面臨一些壓力，但我們確實認為從現在開始壓力將會放緩。感覺已經有點放緩了，尤其是在本季度的後半段。

Got you. That makes a lot of sense. And it seems like from a credit perspective, everything is fine but loan growth itself is probably a little bit softer in the back half of the year. I was curious just what are some of the puts and takes that your clients are saying or potential frustrations or why they might not be lending? Or is this entirely just you guys pulling back a little bit on the reins to adhere to pristine credit?

明白你了。這很有意義。從信貸角度來看，似乎一切都很好，但今年下半年貸款增長本身可能會有點疲軟。我很好奇您的客戶所說的一些看跌期權或看跌期權是什麼，或者潛在的挫折是什麼，或者為什麼他們可能不貸款？或者這完全只是你們放鬆一點控制力以堅持原始信用？

Mike, Stewart here. I'll try to give you a point of view on that. We've been very focused on our relationships. So we're very willing to continue to work with our clients. Our underwriting, like I've noted, hasn't changed. We talked about a non-core relationship sales. So that's really not a point of view around our willingness to continue to be active in capital formation of our clients and our prospective clients. And we're continuing to make sure that as we think about relationship and pricing during this period of time that we get a nice balance on that.

邁克，斯圖爾特在這裡。我將盡力向您提供對此的看法。我們一直非常注重我們的關係。所以我們非常願意繼續與我們的客戶合作。正如我所指出的，我們的承保沒有改變。我們談到了非核心關係銷售。因此，這確實不是我們願意繼續積極參與客戶和潛在客戶資本形成的觀點。我們將繼續確保在這段時間考慮關係和定價時我們能夠在這方面取得良好的平衡。

So clients or prospective clients have to assure that they've got a capital structure and income statement of repayment capacity that not only can work through the inflationary pressures that might be in their business absent interest rate increases, but now they've got to make sure that they can cover the absolute increases in interest rates.

因此，客戶或潛在客戶必須確保他們的資本結構和還款能力損益表不僅能夠應對在沒有加息的情況下其業務可能出現的通脹壓力，而且現在他們必須做出確保它們能夠覆蓋利率的絕對增長。

So all, I think there's a combination of businesses really evaluating their capital structures and their real need to use loans and be really judicious with that use because they want to get the right return on those. Might require more equity on transactions if you're in investment real estate or if you're doing an acquisition. But our point of view is our underwriting standards and our willing to extend our balance sheet is the same.

總而言之，我認為企業會真正評估其資本結構和使用貸款的真正需要，並在使用貸款時非常明智，因為他們希望獲得適當的回報。如果您從事投資房地產或正在進行收購，可能需要更多的交易股權。但我們的觀點是我們的承保標準和我們延長資產負債表的意願是一樣的。

Got you. That's helpful. If I just -- sorry, just to circle back on the cost of deposits real quick. Michele, when you think about just the back half of the year, looking at your average balance sheet versus the 2.6% you referenced, it doesn't seem like it's that much of an uptick.

明白你了。這很有幫助。如果我只是——抱歉，只是快速回顧一下存款成本。米歇爾，當你想想今年下半年的情況時，看看你的平均資產負債表與你提到的 2.6% 相比，似乎並沒有那麼大的上升。

So hopefully, we are beyond the worst of it here. But when you think about the next 6 months or even 12 months, do you think the biggest portion is just mix shift that drives it higher? Or do you think that there's potentially some people waiting for the, "All right, we're at the top here with the Fed rate hikes, let me get the best rate to possibly can and shop it that could drive a little bit more cost." Like what I'm really getting at is CD pricing and the time deposit pricing at its peak? Or do you think that, that could also be a factor outside of just mix shift to loans?

所以希望我們已經超越了最糟糕的情況。但是，當您考慮未來 6 個月甚至 12 個月時，您是否認為最大的部分只是推動其走高的混合轉變？或者你認為可能會有一些人在等待，“好吧，美聯儲加息已經到了頂峰，讓我盡可能獲得最好的利率，然後購買它，這可能會增加一點成本”。就像我真正想要了解的是 CD 定價和定期存款定價處於頂峰？或者您是否認為，這也可能是混合轉向貸款之外的一個因素？

Yes, it's a good question given that the Fed is probably going to do another raise here and some forecasts have them doing 2. And so whether that drives CDs up a tick more or not. I feel like we're getting to a peak. And I think there may be some customers that still -- that may be still looking for some rate and I think the mix shift will have a part of it, too. I think it might be a combination of all those things but I do feel like we're getting closer to a peak. We do think, like I said, that we feel like there could be just a bit more pressure through the end of the year. I don't think we're at the peak yet, but.

是的，這是一個很好的問題，因為美聯儲可能會再次加息，而且一些預測顯示他們會加息兩次。那麼這是否會推動 CD 進一步上漲。我感覺我們已經達到了頂峰。我認為可能還有一些客戶仍然在尋求一定的利率，我認為混合轉變也將是其中的一部分。我認為這可能是所有這些因素的結合，但我確實覺得我們正在接近頂峰。正如我所說，我們確實認為到年底可能會面臨更多的壓力。我認為我們還沒有達到頂峰，但是。

I also just give a point of the daily routines of our bankers working with clients. The pace of play, the conversations around deposit pricing and assuring that clients are maximizing their deposit pricing has also started to slow. So I think that the general bank environment and where we're at is kind of at a level where we're all within the same deposit pricing channel markers and we might all be getting there.

我還簡單介紹了我們銀行家與客戶打交道的日常工作。圍繞存款定價以及確保客戶最大化存款定價的討論節奏也開始放緩。因此，我認為，總體銀行環境和我們所處的水平是，我們都處於相同的存款定價渠道標記內，並且我們可能都會到達那裡。

Right. It feels that way, at least some commentary thus far this earnings period. So I appreciate the color and insights. Good luck on the latter half of the year.

正確的。感覺是這樣，至少本財報期迄今為止的一些評論是這樣的。所以我很欣賞它的色彩和見解。祝下半年好運。

Yes, Ben, thank you. It does feel that we've -- we're kind of getting to the end of this process. And we were encouraged by June. I'd love to see the same kind of results in July and August. But at least for now, optimistic based on the second half of the quarter.

是的，本，謝謝你。確實感覺我們已經——我們即將結束這個過程。六月讓我們深受鼓舞。我希望在七月和八月看到同樣的結果。但至少就目前而言，基於本季度下半年的情況是樂觀的。

And it comes from the line of Nathan Race with Piper Sandler.

它來自內森·雷斯 (Nathan Race) 和派珀·桑德勒 (Piper Sandler) 的血統。

A question on just some of the deposit growth expectations going forward. I think Michele indicated that deposits were up about 1% thus far in 3Q. So the plan for funding future loan growth just a combination of some of the securities portfolio cash flow coming off and future deposit growth? And also curious if there's -- if you could maybe size up a portion of the securities portfolio that's maybe near par that could also be sold to support future loan growth?

關於未來一些存款增長預期的問題。我認為 Michele 表示第三季度迄今為止存款增長了約 1%。那麼，為未來貸款增長提供資金的計劃只是一些證券投資組合現金流量的減少和未來存款增長的結合？我們還想知道是否可以擴大證券投資組合中可能接近票面價值的一部分，並將其出售以支持未來的貸款增長？

Yes. I do think that's the way we'll fund our loan growth. I think it will be a combination of deposit growth as well as cash flows from the securities portfolio. And we still think that we'll be able to continue to sell some securities. We do find opportunities where we get good pricing.

是的。我確實認為這就是我們為貸款增長提供資金的方式。我認為這將是存款增長以及證券投資組合現金流的結合。我們仍然認為我們將能夠繼續出售一些證券。我們確實找到了獲得良好定價的機會。

In Q1, we sold $200 million. In Q2, we sold $100 million. We've sold $35 million so far this quarter. I'd say that within that range of Q1 and Q2, would be a good expectation going forward.

第一季度，我們賣出了 2 億美元。第二季度，我們賣出了 1 億美元。本季度到目前為止，我們已售出 3500 萬美元。我想說，在第一季度和第二季度的範圍內，未來將是一個良好的預期。

Okay. Great. And I think just given that the June margin was kind of ahead of the quarter, come out of June. Is it possible to expect just the margin compression slowing? Is that kind of what was alluded to in your prepared remarks? And if you could maybe size up kind of the future pressure that we can expect in 3Q?

好的。偉大的。我認為，考慮到 6 月份的利潤率有點領先於本季度，請從 6 月份得出。是否有可能預期利潤壓縮速度會放緩？您準備好的講話中是否提到了這一點？您能否評估一下我們在第三季度預計將面臨的未來壓力？

Yes. Sure. We do expect the decline in net interest margin to slow through the rest of the year. Using the forward curve, our models are suggesting that we could see potentially maybe another 10 basis points of margin compression through the end of the year. And that's assuming that we see just a bit higher deposit beta. Cumulative interest-bearing deposit beta as well.

是的。當然。我們確實預計今年剩餘時間淨息差的下降將放緩。使用遠期曲線，我們的模型表明，到今年年底，我們可能會看到利潤率可能再壓縮 10 個基點。這是假設我們看到存款貝塔值稍高一點。累積計息存款貝塔也是如此。

Okay. Great. And then just on expenses, I thought it was very well controlled in the quarter. I think last quarter, we were thinking to $95 million to $96 million in terms of the run rate going forward. Does that still hold for the 3Q and 4Q this year?

好的。偉大的。然後就費用而言，我認為本季度控制得很好。我認為上個季度，我們考慮將未來的運行率提高到 9500 萬至 9600 萬美元。今年第三季度和第四季度仍然如此嗎？

Yes, I probably would reinforce the guidance that we gave last quarter of the $94 million to $95 million on the expense side on a quarterly basis for the remainder of the year.

是的，我可能會強化我們上季度給出的指導，即今年剩餘時間內按季度支出 9400 萬至 9500 萬美元。

Okay. Great. And then if I could just ask one more on credit. It sounds like there was some fraud related in the specialty finance company credit that moved to nonaccrual in the quarter. Are there any charge-offs that we should be thinking about tied to that credit in 3Q? And just any other additional details on that credit in particular I think results?

好的。偉大的。然後我是否可以賒賬再問一個。聽起來專業金融公司信貸中存在一些與應計信貸相關的欺詐行為，這些信貸在本季度轉為非應計信貸。我們是否應該考慮與第三季度的信貸相關的任何沖銷？我認為關於該信用的任何其他附加細節特別是結果？

Yes. So the potential loss content of that loan and that relationship has not been fully identified at this point. We continue to review the -- what happened in this situation and establish our specific reserve against that. But into the next quarter, what we saw in the first quarter, we'll probably see a little bit more in the third quarter related to that name than we saw in the second quarter.

是的。因此，目前尚未完全確定該貸款和該關係的潛在損失內容。我們將繼續審查在這種情況下發生的事情，並針對這種情況建立我們的具體儲備。但進入下一個季度，我們在第一季度看到的情況，我們可能會在第三季度看到與該名稱相關的內容比第二季度看到的更多。

Yes. It was interesting we found out about the situation pretty late in the quarter and we're still actively trying to establish where we stand. And given the -- that it was a fraudulent situation, it takes a while to peel back all the layers. And so we're anticipating some loss in Q3 but at this point, we don't have a number.

是的。有趣的是，我們在本季度末就發現了這種情況，並且我們仍在積極努力確定我們的立場。考慮到這是一種欺詐情況，需要一段時間才能揭開所有層。因此，我們預計第三季度會出現一些損失，但目前我們還沒有具體數字。

Okay. Understood. And then just maybe more broadly on the reserve going forward. Obviously, you guys are operating from a well above average level coming out of the second quarter. Any thoughts on maybe kind of where that bottoms over the next few quarters? Or is there kind of an ACL level that you want to stay above relative to loans or NPLs or anything within that context?

好的。明白了。然後也許更廣泛地討論未來的儲備。顯然，你們第二季度的運營水平遠高於平均水平。對於未來幾個季度的觸底有什麼想法嗎？或者您是否希望相對於貸款或不良貸款或該背景下的任何事物保持高於某種 ACL 水平？

Yes, I don't think we have like a bright line threshold. I think we're just going to continue to monitor the changes in the economic scenarios and how that informs the model along with balancing information on our loan growth. Right now, we don't see any systemic credit deterioration, which is good, but then we'll also monitor the level of charge-offs that we have. And I just think taking -- we'll just have to take it quarter-by-quarter, take all that into account to determine whether we decide to book any provision or not.

是的，我認為我們沒有明確的界限。我認為我們將繼續監控經濟情景的變化以及它如何影響模型以及平衡貸款增長的信息。目前，我們沒有看到任何系統性信用惡化，這是一件好事，但隨後我們還將監控我們的沖銷水平。我只是想——我們只需按季度進行，考慮所有這些因素，以確定我們是否決定預訂任何條款。

Has answered this in the past, but we've talked about our KPIs, our key performance indicators, and we've gone back to look at prior quarters. And we tend to think of the reserve as staying at 150 or above, but you still have to get through all the CECL models and make sure that it works.

過去已經回答過這個問題，但我們已經討論了我們的 KPI、關鍵績效指標，並且我們回顧了之前的季度。我們傾向於認為保留量保持在 150 或以上，但您仍然必須完成所有 CECL 模型並確保其有效。

And it comes from the line of Daniel Tamayo with Raymond James.

它來自丹尼爾·塔馬約（Daniel Tamayo）和雷蒙德·詹姆斯（Raymond James）的血統。

So most of my questions have been asked at this point but I jumped on a little late, so I apologize if I missed this, but just on the fee income outlook, I'm curious if you had an idea for where that may go and if there was anything unusual in the quarter related to the wealth business that brought that number down a bit.

所以我的大部分問題都在這一點上被問到，但我有點晚了，所以如果我錯過了這個，我很抱歉，但就費用收入前景而言，我很好奇你是否知道它可能會走向何方，如果本季度有任何與財富業務相關的異常情況導致該數字略有下降。

Yes. I don't think that there was really anything unusual related to the wealth business but I would say like our overall level of fee income, it was a little higher this quarter over last quarter and I really think this quarter's fee income level is a good run rate. We had a few things. The mortgage gains definitely was a plus. But -- and I think we'll be able to maintain that level of mortgage gains going forward. So I think this is a good run rate to use.

是的。我認為財富業務確實沒有什麼不尋常的地方，但我想說的是，就像我們的整體費用收入水平一樣，本季度的費用收入水平比上季度要高一些，我真的認為本季度的費用收入水平很好運行速度。我們有一些事情。抵押貸款收益絕對是一個優勢。但是——我認為我們未來將能夠維持抵押貸款收益的水平。所以我認為這是一個很好的運行率。

Just a little more color. We're so pleased that we've made that shift from using the portfolio to get back to where we have historically been, which is more of a fee-for-service model. And getting to 70% sales, 30% portfolio really does change the fee income dynamic of the income statement.

多一點顏色就可以了。我們很高興我們已經從使用產品組合回到了我們歷史上的狀態，這更像是一種按服務收費的模式。達到 70% 銷售額、30% 投資組合確實改變了損益表的費用收入動態。

It comes from the line of Terry McEvoy with Stephens Inc.

它來自 Terry McEvoy 和 Stephens Inc. 的血統。

First question, on Page 20, how much of that $261 million office portfolio will mature over the next 6 to 12 months? And what are your thoughts on the impact of updated appraisals and overall higher interest rates on that portfolio and the possibility of either reserves or charge-offs having to be taken?

第 20 頁的第一個問題是，2.61 億美元的辦公樓投資組合中有多少將在未來 6 到 12 個月內到期？您對更新的評估和整體較高利率對該投資組合的影響以及必須採取準備金或沖銷的可能性有何看法？

Yes. So when I look at the office portfolio, Terry, the largest names or relationships in that portfolio have primary tenant who is, I'll call it, relationships. So it's kind of owner-occupied-ish, but they occupy less than half. So it's not an office building that is in a downtown metropolitan sort of configuration. It's a suburban location where we've got a tenant that's occupied a higher portion of the total.

是的。因此，當我查看辦公室組合時，特里，該組合中最著名的人物或關係有主要租戶，我稱之為關係。所以這有點像業主自住，但他們佔用的面積還不到一半。因此，它不是一座位於市中心的大都市配置的辦公樓。這是一個郊區，我們的租戶佔總數的比例較高。

So the concern over a maturity and a reappraisal and a write-down as we've kind of gone through that portfolio is relatively low. I don't have the actual what matures in the next year or so. But we've been through the portfolio last year and feel pretty good about what we see in there.

因此，當我們瀏覽該投資組合時，對到期日、重新評估和減記的擔憂相對較低。我不知道明年左右成熟的實際情況。但我們去年已經瀏覽了這個投資組合，對我們在其中看到的東西感覺非常好。

And Michele, a question for you. Did the outflow of noninterest-bearing deposits, did that slow throughout the second quarter? And if we get a 25 basis point rate hike, all things being equal, is that a positive or negative for the net interest margin?

米歇爾，問你一個問題。第二季度無息存款流出是否放緩？如果我們加息 25 個基點，在所有條件相同的情況下，這對淨息差是有利還是不利？

So on the noninterest bearing, it did slow some in the second quarter. And in fact, even just looking at June's noninterest-bearing. And even what we've seen so far through July, it has slowed as well. That remix has. In fact, in July, we haven't really seen the remix change at all. So we could still see a bit of remix. I would expect that we would through the end of the year. But we've kind of -- the theme I think of our call is that we're starting to see some slowness in that area, which is great.

因此，就非利息而言，第二季度確實放緩了一些。事實上，即使只看六月的無息。即使我們從 7 月至今所看到的情況，它也有所放緩。那個混音有。事實上，在七月份，我們還沒有真正看到混音發生任何變化。所以我們仍然可以看到一些混音。我預計我們會持續到今年年底。但我認為我們這次電話會議的主題是，我們開始看到該領域出現一些緩慢的情況，這很好。

And I would say that on the -- your -- the second part of your question, given that we have 2/3 of our loan portfolio reprice typically when we see rates increase. And I think with the slowness of deposit rates increasing, I would think that will be a benefit to the margin.

我想說的是，關於你的問題的第二部分，考慮到當我們看到利率上升時，我們通常有 2/3 的貸款組合會重新定價。我認為，隨著存款利率增長緩慢，我認為這將對利潤率有利。

And then one last quick one. The 2 new nonaccrual loans, either of them shared national credits?

然後是最後一個快速的。這 2 筆新的非應計貸款是否共享國家信貸？

Well, it's a...

嗯，這是一個...

Were they shared national credits? No, neither of them were.

他們共享國家信用嗎？不，他們都不是。

And it comes from the line of Brian Martin with Janney.

它來自布萊恩·馬丁和珍妮的血統。

Just 1 follow-up, I guess, Michele, on the margin, and that was the -- I guess, if you look at the margin, I guess, dropping kind of all your guidance, I guess, my assumption assumes another rate hike in there for the next meeting here. But just as you think about the dollars of NII in the second half, I mean is your expectation with the growth outlook, and I joined late, so I haven't missed any comments on the loan growth outlook. But is the expectation that sequentially, you can grow the dollars of NII even if the margin is declining a bit here in the second half?

我想，米歇爾，只有 1 個後續行動，在邊際上，那就是——我想，如果你看看邊際，我想，放棄你所有的指導，我想，我的假設是再次加息在那裡參加下一次會議。但正如你考慮下半年NII的美元一樣，我的意思是你對增長前景的預期，而且我加入得很晚，所以我沒有錯過任何關於貸款增長前景的評論。但是，即使下半年利潤率略有下降，您是否仍可以繼續增加 NII 的美元？

I think with the margin declining, I think that there could be a bit of compression in net interest income that we would see. Really, the -- what we model is the net interest margin and about it -- right now, our models are telling us about a 10 basis point decline. And we'll see. I mean, there's a lot of assumptions that go into us determining all of that. And it's been a pretty challenged from quarter-to-quarter to try to determine where we think things are going to be. So -- but that's what our assumptions are today.

我認為，隨著利潤率下降，我們可能會看到淨利息收入有所壓縮。事實上，我們的模型是淨息差及其相關的，現在我們的模型告訴我們下降了 10 個基點。我們拭目以待。我的意思是，我們有很多假設來確定這一切。每個季度都面臨著很大的挑戰，試圖確定我們認為事情將會發展到什麼程度。所以——但這就是我們今天的假設。

Okay. Perfect. And then maybe just one for, I guess, on the credit side. I know there was one question on the Shared National Credits. But John, I guess just anything when you're looking out there today that I guess where you're focusing more attention on or just areas that maybe have a bit more concerned on? I mean the short nascent was one thought, but just anything else that we should be paying closer attention to on the credit side you are as you kind of look at the numbers and everything holding up still really well here.

好的。完美的。我想，也許只是信用方面的一個。我知道有一個關於共享國家信用的問題。但是約翰，我想，當你今天看到那裡時，我猜想你會更多地關注哪裡，或者只是可能更關心的領域？我的意思是，短期的新生是一種想法，但我們應該在信用方面更加密切地關注其他任何事情，因為你會看到數字，而且一切都在這裡仍然很好。

Yes. It's a good question, Brian. It's interesting. I look at -- we look at the portfolio in different cuts each quarter and there's nothing there from a macroeconomic perspective. Interest rates have impacted borrowers with higher borrowing costs. We focus a lot. We spend a lot of time with the commercial construction portfolio and the commercial real estate and the investor real estate portfolio. And so far, borrowers have been able to adjust to the higher rates, either through higher rents or just been able to absorb the increased interest costs. But that's really about the only thing I would say. We have had the senior living portfolio, but that's pretty well at this point. We hashed through it and really worked that to a point where I feel pretty good about that as well now. So that's how I'd respond to that.

是的。這是個好問題，布萊恩。這真有趣。我看——我們每個季度都會以不同的方式削減投資組合，從宏觀經濟的角度來看，沒有任何結果。利率影響了借貸成本較高的借款人。我們非常專注。我們花了很多時間研究商業建築投資組合、商業房地產和投資者房地產投資組合。到目前為止，借款人已經能夠通過提高租金或僅僅能夠吸收增加的利息成本來適應更高的利率。但這確實是我唯一要說的。我們已經有了老年生活投資組合，但目前還不錯。我們仔細研究了它，並真正做到了這一點，我現在對此也感覺很好。這就是我對此的回應。

Got you. Okay. And if I missed it, maybe just the loan growth outlook or just the pipeline in general. I don't know if, Mike, if you -- can you just run back to that just quickly, just high-level comments. If it's not, I can go back and listen to the transcript later.

明白你了。好的。如果我錯過了，也許只是貸款增長前景或總體管道。邁克，我不知道你能否——你能不能快速回到那一點，只是高層評論。如果不是的話，我可以稍後再回去聽錄音。

No, I hit them again. The bulk of our loan growth through the balance of the year will be coming through the commercial portfolio. We target that at that mid-single-digit run rate when you adjust for the portfolio sale that we did. The commercial segment grew a little bit over 4% annualized in this quarter. It's 5% year-to-date a little over that. And the pipeline in commercial is really the same as the pipeline ended going into this quarter.

這不，我又打他們了。今年剩餘時間裡我們的大部分貸款增長將來自商業投資組合。當您根據我們所做的投資組合銷售進行調整時，我們的目標是中個位數的運行率。本季度商業部門的年增長率略高於 4%。今年迄今為止的增長率為 5%，略高於這個數字。商業渠道實際上與本季度結束的渠道相同。

So I really feel good that the commercial business and our willingness to continue to be a relationship bank and extend our balance sheet, we'll continue to see the growth in that single -- mid-single-digit run rate.

因此，我對商業業務以及我們繼續成為關係銀行並擴大資產負債表的意願感到非常滿意，我們將繼續看到中個位數運行率的增長。

There is no absence of demand. It's -- we're clearly trying to make sure that in this environment, we're gaining the entire relationship and that we're getting paid for the extension of credit. And so we're pretty optimistic about the communication we're having with customers. The relationships are still very strong and just recognizing the environment has changed a little.

需求不存在。顯然，我們正在努力確保在這種環境下，我們能夠獲得整個關係，並且我們能夠因延長信貸而獲得報酬。因此，我們對與客戶的溝通非常樂觀。關係仍然非常牢固，只是認識到環境發生了一些變化。

And it comes from the line of Damon DelMonte with KBW.

它來自 Damon DelMonte 和 KBW 的血統。

Pretty much most of my questions have been asked and answered, but just looking for a little bit more color on the brokered CDs you guys put on, what's the average term of those as far as like the maturity dates?

幾乎我的大部分問題都已被提出和回答，但只是想在你們所放的經紀 CD 上尋找更多的色彩，就到期日而言，這些 CD 的平均期限是多少？

They tend to be more on the shorter end of the curve.

他們往往更多地處於曲線的較短一端。

So generally, like less than a year?

一般來說，不到一年？

Yes, less than a year or 2 years.

是的，不到一年或兩年。

Okay. And then just one kind of modeling question here. I think you guys noted you had a BOLI gain this quarter. Could you call out how much that was?

好的。這裡只是一種建模問題。我想你們注意到本季度你們獲得了 BOLI 收益。你能說出那是多少錢嗎？

Yes. It was actually just a couple of very small ones. And so I think there was -- it was under $800,000 of BOLI gains.

是的。實際上只是幾個非常小的。所以我認為 BOLI 的收益低於 80 萬美元。

Thank you. And this concludes the Q&A session. I would now like to turn the call over to Mark Hardwick for closing remarks.

謝謝。問答環節到此結束。我現在想將電話轉交給馬克·哈德威克（Mark Hardwick）發表結束語。

Thank you, Carmen. Thanks, everyone, for your participation. As you can tell, it's an interesting time for net interest margin. We're kind of at an inflection point and it's hard to give absolute guidance. But we just have looked back at our history. In the first quarter of '22, our margin was 3.03%. It did increase all the way to 3.72% as rates were rising rapidly, and we were benefiting from a variable rate loan portfolio and our ability to lag deposit rates. And eventually, that changed, and we had to start paying more for deposits. And we were additionally aggressive after the Silicon Valley failure that occurred. And so we landed at 3.39% for the quarter. We've got a 3.40% June.

謝謝你，卡門。謝謝大家的參與。正如您所知，對於淨息差來說，現在是一個有趣的時期。我們正處於一個拐點，很難給出絕對的指導。但我們只是回顧了我們的歷史。 2022 年第一季度，我們的利潤率為 3.03%。隨著利率迅速上升，它確實一路上升至 3.72%，而且我們受益於可變利率貸款組合和滯後存款利率的能力。最終，情況發生了變化，我們不得不開始支付更多的押金。在發生矽谷失敗之後，我們也變得更加激進。因此，本季度我們的增長率為 3.39%。 6 月份我們的利率是 3.40%。

It's hard for us to come out and say, hey, we think the next rate increase causes margin to go up because we know there's still some additional modest pressure on deposits, but really looking forward to getting through the quarter, having a Q3 net interest margin number that we think kind of establishes a run rate going forward.

我們很難站出來說，嘿，我們認為下一次加息會導致保證金上升，因為我們知道存款仍然面臨一些額外的適度壓力，但我們真的很期待度過這個季度，擁有第三季度的淨利息我們認為保證金數字可以確定未來的運行率。

So we appreciate your time and I know as you're working through all the different models and forecasts, it's a key component. So look forward to talking to you next quarter and we appreciate your investment in First Merchants. Thank you.

因此，我們感謝您的寶貴時間，我知道您正在研究所有不同的模型和預測，這是一個關鍵組成部分。因此，期待下個季度與您交談，我們感謝您對 First Merchants 的投資。謝謝。

And with that, thank you all for participating. This concludes the conference and you may now disconnect.

在此，感謝大家的參與。會議就此結束，您現在可以斷開連接。