Heartland Financial USA Inc (HTLF) 2023 Q4 法說會逐字稿

Greetings, and welcome to the HTLF 2023 fourth-quarter conference call. This afternoon, HTLF announced its annual earnings and fourth-quarter financial results. And hopefully, you've had a chance to review the earnings release that is available on HTLF's website at htlf.com.

您好，歡迎參加 HTLF 2023 年第四季電話會議。今天下午，HTLF公佈了年度收益和第四季度財務業績。希望您有機會查看 HTLF 網站 htlf.com 上發布的收益報告。

With us today from management are Bruce Lee, President and CEO; Kevin Thompson, Chief Financial Officer, Bryan McKeag; and Nathan Jones, Chief Credit Officer. Management will provide a summary of the quarter and then we will open the call to your questions.

今天與我們一起出席的還有管理階層的總裁兼執行長李小龍；凱文湯普森 (Kevin Thompson)，財務長 布萊恩麥基格 (Bryan McKeag)；和首席信貸官內森瓊斯。管理層將提供本季度的摘要，然後我們將召開電話會議回答您的問題。

Before we begin the presentation, I would like to remind everyone that some of the information provided today falls under the guideline of forward-looking statements as defined by our Securities and Exchange Commission. As part of these guideline, the statements made during this presentation concerning the company's hopes, beliefs, expectations, and predictions of the future and forward-looking statements and actual results could differ materially from those projected. Additionally, information on those factors is included from time to time in the company's 10-K and 10-Q filings, which may be obtained on the company's or the SEC's website.

在我們開始演示之前，我想提醒大家，今天提供的一些資訊屬於美國證券交易委員會定義的前瞻性陳述的指導方針。作為這些指南的一部分，本簡報中有關公司對未來的希望、信念、期望和預測以及前瞻性陳述和實際結果的陳述可能與預測的結果有重大差異。此外，有關這些因素的資訊不時包含在公司的 10-K 和 10-Q 文件中，這些文件可以在公司或 SEC 的網站上取得。

I will now turn the call over to Mr. Bruce Lee, HTLF's President and CEO. Please go ahead, Mr. Lee.

我現在將電話轉給 HTLF 總裁兼執行長李小龍先生。請繼續，李先生。

Thank you, Valerie. Good afternoon, everyone. This is Bruce Lee, President and CEO. Welcome to HTLF's 2023 fourth-quarter earnings conference call. I appreciate you joining us as we discuss our results and the strategic initiatives we've undertaken to drive performance and position HTLF as a top-performing bank.

謝謝你，瓦萊麗。大家下午好。我是總裁兼執行長李小龍。歡迎參加 HTLF 2023 年第四季財報電話會議。我感謝您加入我們，我們將討論我們的業績以及我們為提高業績並將 HTLF 定位為表現最佳的銀行而採取的策略性舉措。

For the next few minutes, I'll discuss our highlights for the fourth quarter and the year. I'll then turn the call over to Kevin Thompson, our new CFO, for more on our results. Also joining us today is Nathan Jones, Chief Credit Officer, who can answer questions regarding the stable credit quality across our portfolios.

在接下來的幾分鐘裡，我將討論第四季和今年的亮點。然後我會將電話轉給我們的新任財務長凱文湯普森 (Kevin Thompson)，以了解有關我們業績的更多資訊。今天加入我們的還有首席信貸官內森瓊斯 (Nathan Jones)，他可以回答有關我們投資組合的穩定信貸品質的問題。

Bryan McKeag, our retiring CFO, is also on the call. I want to personally thank Bryan for his numerous contributions to HTLF over the past decade. His expertise and stewardship have helped guide our significant growth during his tenure, and we wish him well during his retirement.

我們即將退休的財務長 Bryan McKeag 也參加了電話會議。我想親自感謝 Bryan 在過去十年中對 HTLF 做出的眾多貢獻。他的專業知識和管理能力幫助我們在任職期間實現了顯著增長，我們祝他在退休期間一切順利。

The HTLF Board of Directors has approved a quarterly cash dividend of $0.30 per share on the company's common stock payable on February 27, 2024. The Board also approved a dividend of $175 for Series E preferred stock, which results in a dividend of $0.4375 per depository share payable on April 15, 2024.

HTLF 董事會已批准於 2024 年 2 月 27 日支付本公司普通股每股 0.30 美元的季度現金股利。董事會還批准了 E 系列優先股 175 美元的股息，這意味著 2024 年 4 月 15 日應付的每股存託股股息為 0.4375 美元。

For more than 40 years, HTLF has increased or maintained our common stock dividend every quarter. This reflects our strength, stability, and confidence in our strategies and performance. Stockholders also benefited from a significant increase in tangible book value per common share, ending the year at $28.77, a 19% increase from 2022.

40 多年來，HTLF 每季都會增加或維持普通股股利。這反映了我們的實力、穩定性以及對我們的策略和績效的信心。股東也受惠於每股普通股有形帳面價值的大幅成長，截至年底達到 28.77 美元，較 2022 年成長 19%。

2023 was a year of significant progress and successful execution of our strategic plans. We completed charter consolidation, strategically and structurally positioning the company to focus on our next phase, HTLF 3.0, our connected set of initiatives that will drive efficiency, enhance EPS growth, deliver higher return on assets, and more efficient use of capital.

2023 年是我們策略計畫取得重大進展和成功執行的一年。我們完成了章程整合，在策略和結構上將公司定位為專注於我們的下一階段，HTLF 3.0，我們的一系列相互關聯的舉措將提高效率，提高每股收益成長，提供更高的資產回報率，並更有效地利用資本。

One component of HTLF 3.0 was repositioning our balance sheet. In the fourth quarter, HTLF sold investment securities, with proceeds totaling $865 million and a pre-tax loss of $140 million. The proceeds of the sale were used to repay high-cost, wholesale deposits in short-term borrowings. By selling low yielding investments and reducing high-cost wholesale funding, we increased our net interest margin, improved our balance sheet efficiency and flexibility, and significantly strengthened our capital position. This, in part, resulted in a $72.4 million loss for the quarter to common stockholders and EPS of negative $1.69.

HTLF 3.0 的組成部分之一是重新定位我們的資產負債表。第四季度，HTLF 出售投資證券，收益總計 8.65 億美元，稅前虧損 1.4 億美元。出售所得款項用於償還短期借款的高成本批發存款。透過出售低收益投資和減少高成本批發融資，我們提高了淨利差，提高了資產負債表效率和靈活性，並顯著增強了我們的資本狀況。這在一定程度上導致該季度普通股股東損失 7,240 萬美元，每股收益為負 1.69 美元。

For the year, net income available to common stockholders was $71.9 million and EPS of $1.68. Adjusted earnings for the quarter were $45.6 million available to common stockholders and EPS of $1.06, which excludes losses related to the balance sheet repositioning, losses on sale or write-down of assets, FDIC special assessment expense, and restructuring costs. Adjusted earnings for the year were $193.9 million available to common stockholders and EPS of $4.53.

本年度，普通股股東可獲得的淨利為 7,190 萬美元，每股收益為 1.68 美元。該季度調整後的普通股股東收益為 4,560 萬美元，每股收益為 1.06 美元，其中不包括與資產負債表重新定位、資產出售或減記損失、FDIC 特別評估費用和重組成本相關的損失。調整後的當年普通股股東收益為 1.939 億美元，每股收益為 4.53 美元。

We're already seeing benefits from our balance sheet repositioning. In the fourth quarter, net interest income was $156 million, an increase of $10 million, or 7%, from the linked quarter. For the year, net interest income was $601 million, an increase of $3 million, or 1%, from the previous year.

我們已經看到了資產負債表重新定位的好處。第四季淨利息收入為1.56億美元，較上一季增加1,000萬美元，即7%。全年淨利息收入6.01億美元，較上年增加300萬美元，增幅1%。

We a saw notable expansion of our net interest margin on a tax-equivalent basis, rising 34 basis points from the linked quarter to 3.52%. In total assets, we're $19.4 billion, a decrease of $718 million, or 4%, from the linked quarter. The decrease was largely due to the securities sold to repay wholesale funding and short-term borrowings.

我們發現，以稅收等值計算的淨利差顯著擴大，較上一季上升 34 個基點，達到 3.52%。總資產為 194 億美元，較上一季減少 7.18 億美元，即 4%。減少的主要原因是為償還批發融資和短期借款而出售的證券。

HTLF maintained strong momentum in commercial loans, and we continue to see growth in customer deposits. Let's start with loan growth highlight. In the fourth quarter, we saw strength in our commercial and ag portfolios. In total, commercial and ag loans grew $224 million, or 2%, from the linked quarter, in line with our guidance. For the year, commercial and ag loans grew $719 million, or 7%.

HTLF 商業貸款維持強勁勢頭，客戶存款持續成長。讓我們從貸款成長亮點開始。在第四季度，我們看到了商業和農業投資組合的實力。整體而言，商業和農業貸款較上一季成長 2.24 億美元，即 2%，符合我們的指引。今年，商業和農業貸款增加了 7.19 億美元，即 7%。

In the fourth quarter, we added 234 new commercial relationships, representing $196 million in funded loans and $54 million of new deposits. Our commercial pipeline remains strong at over $1 billion. It's distributed across our regions with strength in the Mountain West and Southwest.

第四季度，我們新增了 234 個商業關係，相當於 1.96 億美元的融資貸款和 5,400 萬美元的新存款。我們的商業管道仍然強勁，價值超過 10 億美元。它分佈在我們的各個地區，主要集中在西部山區和西南部。

While we added more than 2,200 consumer relationships in the quarter, our consumer loan portfolio decreased $12 million, or 2%, from the linked quarter, and residential mortgage loans decreased $16 million, or 2%. For the year, consumer loans decreased $14 million, or 3%. Residential mortgage loans decreased $56 million, or 7%.

雖然我們在本季增加了 2,200 多個消費者關係，但我們的消費者貸款組合比相關季度減少了 1,200 萬美元，即 2%，住宅抵押貸款減少了 1,600 萬美元，即 2%。今年消費貸款減少了 1,400 萬美元，即 3%。住宅抵押貸款減少 5,600 萬美元，即 7%。

Turning to deposits, wholesale deposits decreased $958 million from the linked quarter, as the proceeds from the balance sheet repositioning were used to pay down high-cost wholesale funding. Our deposit base continues to be diverse and granular. Customer deposits are diversified by geography and industry, with no industry concentration higher than 10% across our portfolios.

至於存款，批發存款較上一季減少 9.58 億美元，因為資產負債表重新定位的收益被用於支付高成本的批發資金。我們的存款基礎仍然多樣化且細化。客戶存款按地域和行業多元化，在我們的投資組合中，沒有行業集中度高於 10%。

Customer deposits increased $59 million from the linked quarter, the second consecutive quarter of customer deposit growth. Average customer deposits were up substantially from the linked quarter, increasing $271 million, or 2%. While we maintain a favorable deposit mix, customer demand accounts decreased to 30% of customer balances, reflecting the ongoing transition to interest-bearing accounts.

客戶存款較上一季增加 5,900 萬美元，這是客戶存款連續第二季成長。平均客戶存款較上一季大幅增加，增加 2.71 億美元，成長 2%。雖然我們維持有利的存款組合，但客戶活期帳戶佔客戶餘額的比例下降至 30%，反映出正在向計息帳戶過渡。

Total deposits for the quarter decreased to $16.2 billion, largely due to the paydown of wholesale deposits. 61% of total balances are insured or collateralized. Total deposits for the year decreased $1.3 billion, with customer deposits declining only $367 million, or 2%. Importantly, we saw a momentum in the second half of the year, with customer deposits increasing $295 million combined in the third and fourth quarters for 4% annualized growth.

該季度總存款減少至 162 億美元，主要是由於批發存款的償還。總餘額的 61% 有保險或有抵押。全年存款總額減少 13 億美元，其中客戶存款僅減少 3.67 億美元，即 2%。重要的是，我們看到了下半年的勢頭，第三季和第四季客戶存款總計增加了 2.95 億美元，年化成長率為 4%。

Turning to key credit metrics. Our disciplined approach continues to enable strong credit performance. Delinquency ratio increased -- decreased, I'm sorry, to 9 basis points of total loans and our lowest ratio of 2023. Net charge-offs declined to $392,000, or 1 basis point of total average loans. Non-performing assets increased to 57 basis points, primarily driven by the downgrade of a well collateralized long-term Midwest manufacturing customer, who is experiencing cash flow challenges due to a recent acquisition.

轉向關鍵信用指標。我們嚴格的方法繼續確保強勁的信用表現。拖欠率有所上升，但很抱歉，貸款總額下降了 9 個基點，是 2023 年的最低比率。淨沖銷額下降至 392,000 美元，即平均貸款總額下降 1 個基點。不良資產增加​​至 57 個基點，主要是由於抵押良好的長期中西部製造業客戶的評級被下調，該客戶因最近的收購而面臨現金流挑戰。

NPAs have already improved in the first quarter of 2024, with the sale of a real estate owned property decreasing the amount by $10 million with no additional loss associated. Market conditions continue applying additional pressure on commercial real estate across the country and the office market, specifically. Our office exposure is low at 3.2% of our total loan portfolio.

不良資產在 2024 年第一季已經改善，出售擁有的房地產使金額減少了 1,000 萬美元，且沒有帶來任何額外損失。市場狀況繼續給全國商業房地產尤其是辦公室市場帶來額外壓力。我們的辦公室風險敞口較低，佔總貸款組合的 3.2%。

We're conducting targeted reviews of our portfolios where we see stress or additional potential weakness. We continue to enhance our ongoing portfolio management and surveillance and refine how we screen new opportunities for underwriting.

我們正在對我們的投資組合進行有針對性的審查，發現存在壓力或其他潛在弱點。我們持續加強持續的投資組合管理和監督，並完善我們篩選新核保機會的方式。

In 2023, HTLF continued executing our strategies despite industry challenges. We completed charter consolidation and introduced HTLF 3.0, the next phase of our strategic plan, which includes repositioning the balance sheet, reducing our retail delivery costs by centralizing our retail structure, decreasing the number of retail leaders and increasing their span of control, and reducing real estate expenses through branch rationalization, size, and location.

2023年，儘管面臨產業挑戰，HTLF仍持續執行我們的策略。我們完成了章程合併，並推出了HTLF 3.0，這是我們策略計畫的下一階段，其中包括重新定位資產負債表、透過集中零售結構來降低零售交付成本、減少零售領導者的數量並增加他們的控制範圍，以及減少透過分支機構合理化、規模和地點來支出房地產費用。

Our current footprint is also under review as we look to maximize our return on capital. We're investing in growth by expanding middle market banking and adding talent in California's Central Valley, Denver, Kansas City, Milwaukee, Minneapolis, and Phoenix; expanding treasury management products and capabilities; and creating a digital platform to serve consumers and small business. Each of these components are underway and at various stages, but all will help us better serve our customers and drive efficiency, enhance EPS growth, deliver a higher return on assets, and more efficient use of capital.

我們目前的足跡也正在接受審查，因為我們希望最大限度地提高資本回報率。我們透過擴大中間市場銀行業務並在加州中央山谷、丹佛、堪薩斯城、密爾瓦基、明尼阿波利斯和鳳凰城增加人才來投資成長；擴大資金管理產品與能力；創建一個為消費者和小型企業服務的數位平台。這些組成部分均處於不同階段，但都將幫助我們更好地服務客戶、提高效率、提高每股收益成長、提供更高的資產回報率以及更有效地利用資本。

(technical difficulty) on HTLF 3.0, please refer to pages 5 through 12 in the Investor deck. HTLF is moving forward together in 2024. We're executing our 3.0 strategies, investing in quality revenue growth, reducing our operating costs, improving EPS growth, return on assets, and efficient use of capital, and most importantly, serving our customers and communities.

關於 HTLF 3.0 的（技術難度），請參閱投資者平台第 5 至 12 頁。2024年，HTLF攜手並進。我們正在執行 3.0 策略，投資於高品質的收入成長，降低營運成本，提高每股收益成長、資產回報率和資本的有效利用，最重要的是，為我們的客戶和社區提供服務。

This is all due to the hard work and dedication of HTLF's employees. I want to recognize and thank them for their continued commitment to delivering strength, insight, and growth to our customers, communities, investors, and each other.

這一切都歸功於HTLF員工的辛勤工作和奉獻。我要表彰並感謝他們持續致力於為我們的客戶、社區、投資者和彼此提供力量、洞察力和成長。

I'll now turn the call over to Kevin Thompson, Chief Financial Officer, for more details on our performance and financials.

我現在將把電話轉給財務長凱文湯普森 (Kevin Thompson)，以了解有關我們業績和財務狀況的更多詳細資訊。

Thank you, Bruce. I first want to say how thrilled I am to be part of the HTLF team. I've long admired HTLF from positions in peer banks. And I'm very excited to be part of a talented team that's just in the beginning of the HTLF 3.0 strategic transformation.

謝謝你，布魯斯。我首先想說的是，我很高興能成為 HTLF 團隊的一員。長期以來，我一直很欣賞 HTLF 在同業銀行的職位。我很高興能成為一支才華橫溢的團隊的一員，該團隊正處於 HTLF 3.0 策略轉型的開始階段。

The unusual items in the quarter that Bruce described are detailed in our earnings release and on page 13 of our earnings presentation. Most of these items are related to actions that will improve the profitability of the bank going forward.

Bruce 描述的本季度不尋常的項目在我們的收益發布和收益演示第 13 頁中有詳細說明。其中大多數項目都與提高銀行未來獲利能力的行動有關。

We had a pre-tax loss of $140 million related to a sale of securities. The proceeds from this repositioning were used to pay down high-cost wholesale deposits and borrowings. This both improves our liquidity profile and will result in approximately $6 million in improved net interest income per quarter going forward.

我們因出售證券而產生了 1.4 億美元的稅前損失。此次重新定位的收益用於償還高成本的批發存款和借款。這不僅改善了我們的流動性狀況，還將導致未來每季淨利息收入增加約 600 萬美元。

We had $4.4 million of restructuring expenses, $2.1 million related to sales and valuations of facilities and 1.3 million of expenses as we consolidated our final bank charter in the quarter. We executed on projects to centralize our retail management and to consolidate our footprint. These are just the beginning of the plans under HTLF 3.0 to increase our operational leverage, optimize our efficiency, and to serve our customers more effectively. Refer to our earnings deck for more details on our strategic transformation.

我們有 440 萬美元的重組費用、210 萬美元與設施的銷售和估值相關的費用以及 130 萬美元的費用，因為我們在本季度合併了最終的銀行章程。我們執行的專案旨在集中零售管理並鞏固我們的足跡。這些只是 HTLF 3.0 計劃的開始，旨在提高我們的營運槓桿、優化我們的效率並更有效地服務我們的客戶。有關我們戰略轉型的更多詳細信息，請參閱我們的收益表。

Finally, we had an FDIC insurance special assessment, as many banks did this quarter, of $8.1 million. We continue to see good economic trends in our business. Loan growth totaled $196 million; and customer deposits grew $59 million, with average customer deposits increasing $271 million compared to the prior quarter.

最後，正如許多銀行本季所做的那樣，我們進行了 FDIC 保險特別評估，金額為 810 萬美元。我們繼續看到我們業務的良好經濟趨勢。貸款成長總計 1.96 億美元；客戶存款增加 5,900 萬美元，平均客戶存款較上一季增加 2.71 億美元。

Loans to deposits increased to 74% as we decreased our wholesale deposits. Investments decreased $832 million due to bond sales of $865 million and normal amortization, offset by improvements in fair value with the decline in interest rates.

由於我們減少了批發存款，貸款與存款的比率增加至 74%。由於 8.65 億美元的債券銷售和正常攤銷，投資減少了 8.32 億美元，但被利率下降帶來的公允價值改善所抵消。

We are very pleased that our revenue growth exceeded analysts and even our own expectations in the quarter. Net revenues increased 6%, or $10 million, when adjusting for the securities loss. This is driven mostly by our expanding net interest margin, which increased to 3.52%. Loan yields increased 28 basis points to 6.49%, while interest-bearing liabilities only increased 10 basis points to 3.11%. The total cost of deposits decreased 1 basis point to 2.09%.

我們很高興本季的營收成長超出了分析師甚至我們自己的預期。調整證券損失後，淨收入增加了 6%，即 1,000 萬美元。這主要是由我們不斷擴大的淨利差推動的，淨利差增加至 3.52%。貸款收益率上升28個基點至6.49%，而付息負債僅上升10個基點至3.11%。存款總成本下降1個基點至2.09%。

Non-interest expense was up in the quarter. And adjusting for the $15 million of unusual items, expenses were up $4.8 million. Professional fees were higher than usual, and we expect them to normalize going forward. Also, we made additional investments in tax credit projects, which are offset with benefits and tax expense. These two items account for $6 million of additional expenses in the quarter, and excluding them, expenses would have been down around $1 million.

本季非利息支出增加。調整 1500 萬美元的不尋常物品後，費用增加了 480 萬美元。專業費用比平常高，我們預計未來會正常化。此外，我們還對稅收抵免項目進行了額外投資，這些投資被福利和稅收支出所抵消。這兩項費用佔本季 600 萬美元的額外費用，如果排除它們，費用將減少約 100 萬美元。

The adjusted efficiency ratio was 59% for both the quarter and full year. Non-interest income when adjusting for securities losses was flat to the prior quarter. This included a decrease of $600,000 in consumer NSF and overdraft fees in the month of December as we instituted new fee policies across our single-charter customer base. This is a permanent change to our consumer fee structure that will impact our fee income going forward. But we expect to offset this with growth in treasury management, card fees, and other strategic fee initiatives.

本季和全年調整後的效率均為 59%。調整證券損失後的非利息收入與上一季持平。這包括 12 月消費者 NSF 和透支費用減少了 60 萬美元，因為我們在單一包機客戶群中製定了新的費用政策。這是對我們的消費者費用結構的永久性改變，將影響我們未來的費用收入。但我們預期透過財務管理、卡費和其他策略費用舉措的成長來抵銷這一影響。

The provision for loan losses was $11.7 million in the quarter, with an allowance for lending-related credit losses of 1.15% of total loans. The provision was driven by loan growth and one credit that moved to non-accrual status that required a specific reserve. Net loan charge-offs remain low at 1 basis point for the quarter and 11 basis points for the full year, and delinquencies were also low at 9 basis points to total loans.

本季貸款損失準備金為 1,170 萬美元，與貸款相關的信用損失準備金佔貸款總額的 1.15%。該準備金是由貸款增長和一項轉為非應計狀態且需要特定準備金的信貸推動的。本季貸款淨沖銷維持在 1 個基點的低位，全年維持在 11 個基點的低位，拖欠率佔貸款總額的比例也很低，為 9 個基點。

Capital ratios are strong with the CET1 ratio of 11%, even after the securities loss and other restructuring expenses that will improve our profitability going forward. The tangible common equity ratio increased 80 basis points to 6.53%, which benefited from the increase in market value of our investments and the reduction in assets as part of our balance sheet repositioning.

即使在扣除將提高我們未來獲利能力的證券損失和其他重組費用之後，資本比率仍然強勁，CET1 比率為 11%。有形普通股比率增加80個基點至6.53%，這得益於我們投資市值的增加以及資產負債表重新定位中資產的減少。

If you refer to page 28 of our earnings deck, we provide our management outlook for 2024 compared to our 2023 results, assuming no change in the economic environment. We expect loan growth of 68%, principally in our commercial portfolio in the year. We anticipate a 5% to 7% increase in deposits to fund loan growth with strong commercial and some consumer growth.

如果您參閱我們收益報告的第 28 頁，我們將提供與 2023 年業績相比的 2024 年管理展望，假設經濟環境沒有變化。我們預計今年貸款將成長 68%，主要是在我們的商業投資組合中。我們預計，隨著商業和部分消費者的強勁成長，存款將增加 5% 至 7%，為貸款成長提供資金。

We plan to let our securities portfolio amortize down with the cash flows used to pay off wholesale funding. We expect a stable net interest margin of around 3.5%, assuming a stable interest rate environment. We expect our full-year provision for credit losses to increase modestly. We expect core non-interest income to be flat, with growth in treasury management and card fees, offset by lower consumer and small business NSF and overdraft fees, as well as lower mortgage fees with our exit of the mortgage business in 2023.

我們計劃用用於償還批發融資的現金流量來攤提我們的證券投資組合。假設利率環境穩定，我們預期淨利差將穩定在 3.5% 左右。我們預計全年信貸損失準備金將小幅增加。我們預計核心非利息收入將持平，財務管理和卡費用增長，但被消費者和小型企業 NSF 和透支費用下降以及我們在 2023 年退出抵押貸款業務而降低的抵押貸款費用所抵消。

Core expenses should be down around 2%, with lower occupancy, marketing, legal, and operational expenses, offset by performance (technical difficulty) and technology investments. Our effective tax rate should be around 24%, excluding discrete items such as new tax credits. And finally, earnings accretion and securities amortization are expected to increase all capital ratios, with CET1 approaching 11.5% to 12% by year end.

核心費用應下降 2% 左右，佔用率、行銷、法律和營運費用較低，但被性能（技術難度）和技術投資所抵消。我們的有效稅率應該在 24% 左右，不包括新的稅收抵免等離散項目。最後，獲利成長和證券攤銷預計將提高所有資本比率，到年底 CET1 將接近 11.5% 至 12%。

I will now turn the time back over to Bruce.

現在我將把時間交還給布魯斯。

Thanks, Kevin. 2023 was a year of significant progress and successful execution of our strategic plans. We completed charter consolidation on time, under budget, and exceeded estimated net savings. We then initiated HTLF 3.0. We've repositioned the balance sheet, centralized our retail structure, and increased retail leaderships’ span of control.

謝謝，凱文。 2023 年是我們策略計畫取得重大進展和成功執行的一年。我們按時在預算範圍內完成了包機合併，並超出了預計的淨節省金額。然後我們啟動了HTLF 3.0。我們重新定位了資產負債表，集中了我們的零售結構，並擴大了零售領導層的控制範圍。

We're reviewing our current footprint to maximize return on capital, reducing real estate expenses through branch rationalization, size, and location; investing in middle market banking and adding talent in key growth markets; expanding treasury management products and capabilities; and creating a digital platform to serve consumers and small business customers.

我們正在審查我們目前的業務佈局，以最大限度地提高資本回報率，透過分支機構、規模和地點的合理化來減少房地產支出；投資中間市場銀行業務並在關鍵成長市場增加人才；擴大資金管理產品與能力；創建一個數位平台來服務消費者和小型企業客戶。

We remain focused on continuing to achieve organic growth while reducing expenses, enhancing EPS growth, delivering a higher return on assets, and efficiently using our capital.

我們仍然專注於繼續實現有機成長，同時減少開支，提高每股盈餘成長，提供更高的資產回報率，並有效利用我們的資本。

So I think now we can turn it over to Q&A.

所以我想現在我們可以把它交給問答環節。

(Operator Instructions) Jeff Rulis, D.A. Davidson.

（操作員說明）Jeff Rulis，D.A.戴維森。

Hi, Jeff.

嗨，傑夫。

Hi, good afternoon. Just a couple of questions, I guess on the outlook. The first on the margin, stable here. I guess in line with Q4, I wanted to check in on sensitivity with rate cuts in the second half, if there were to be some, generally speaking.

嗨，下午好。我想問幾個關於前景的問題。第一個在邊緣，這裡穩定。我想與第四季度一致，我想檢查下半年降息的敏感度（一般來說，如果有的話）。

Well, first question is, surprise, maybe no tail of benefit from the restructuring. Maybe that's chewed up by deposit costs in the first part of the year. But then if you could just position us for where the balance sheet is should you see some rate cuts in the second half?

嗯，第一個問題是，令人驚訝的是，重組可能沒有帶來任何好處。也許這會受到今年上半年存款成本的影響。但如果你能把我們的資產負債表定位在哪裡，你會看到下半年會出現一些降息嗎？

I'll respond that. It really depends on how the yield curve plays out this year. We're inverted now. We do hope that the yield curve normalizes over time, and that really will impact banks across the country.

我會回應這一點。這實際上取決於今年殖利率曲線的表現。我們現在顛倒了。我們確實希望殖利率曲線隨著時間的推移而正常化，這確實會影響全國各地的銀行。

I'll say that we are asset-sensitive. So on a raw basis, unadjusted, any 25-basis-point decrease rates impacts us about 5 to 7 basis points in our NIM. That's on a raw basis. We do have the opportunity to react and strategically create some opportunities to buoy that up.

我會說我們對資產敏感。因此，在未經調整的原始基礎上，任何 25 個基點的下降都會對我們的淨利差產生大約 5 到 7 個基點的影響。這是在原始基礎上的。我們確實有機會做出反應並策略性地創造一些機會來推動這一勢頭。

Among many other things that we're talking about right now, we can put some hedging floors in place with our loans. We have some opportunities to reposition some of our wholesale funding. We have a lot of deposit programs going on that should benefit us. And we have some hedges in place that make us more asset-sensitive, but those roll off over time.

在我們現在討論的許多其他事情中，我們可以用我們的貸款來設定一些對沖底線。我們有機會重新配置部分批發資金。我們正在進行許多存款計劃，這應該會讓我們受益。我們採取了一些對沖措施，使我們對資產更加敏感，但這些對沖措施會隨著時間的推移而消失。

And so this is the topic of the year, obviously, and we are all over it and have some strategic initiatives right now to be able to be prepared for a write-down scenario.

因此，顯然，這是今年的主題，我們已經對此進行了全面討論，並且現在有一些戰略舉措，以便能夠為減記情況做好準備。

Jeff, this is Bruce. I might add a couple of things. It's really very dependent upon what the deposit betas are. And if we're able to overachieve what we've modeled, that helps the margin. Also if as we expect, we're able to grow deposits to fund loan and use the cash flow off the investment portfolio to repay wholesale funding, I mean, that, in essence, shrinks our balance sheet, but that is an accretive trade to our margin and to our revenue.

傑夫，這是布魯斯。我可能會補充幾件事。這實際上很大程度上取決於存款貝塔值是多少。如果我們能夠超額實現我們所建模的目標，這將有助於提高利潤。此外，如果正如我們所預期的那樣，我們能夠增加存款來為貸款提供資金，並利用投資組合的現金流來償還批發資金，我的意思是，這本質上會縮小我們的資產負債表，但這是一項增值交易我們的利潤和收入。

So it really depends on our ability to execute on those couple of things on whether or not we'll be able to improve on the decrease in margin that Kevin discussed with each [0.25%] move.

因此，這實際上取決於我們執行這幾件事的能力，以及我們是否能夠改善凱文討論的每次 [0.25%] 舉措的利潤率下降。

Okay, thank you for that. And a quick one on the expense guide, what would you put the base of the core expense in ‘23 to kind of base off of the down 2%?

好的，謝謝你。快速了解費用指南，您會將 23 歐元中的核心費用基數與下降 2% 的基數相比是多少？

I think the easiest way to look at it is the fourth quarter. So expenses came in at about $130 million. You take out $15 million of those unusual items. And then I also called out another $6 million of run rate that was higher than normal. So that puts you at about $109 million, $110 million quarterly.

我認為最簡單的看待方式就是第四季。因此開支約為 1.3 億美元。你拿出價值 1500 萬美元的這些不尋常物品。然後我還指出另外 600 萬美元的運行率高於正常水平。這樣一來，每季的營收約為 1.09 億美元、1.1 億美元。

That seems like our run rate going forward. And that includes merit increases, performance increases. So underlying, there are a lot of benefits we're seeing from the initiatives we've been doing over the past few years.

這似乎是我們未來的運行速度。這包括功績的增加、績效的提升。因此，從根本上來說，我們從過去幾年所做的舉措中看到了許多好處。

So, Kevin, if I take that $109 million, $110 million again, and then you're going to hope to improve expenses by 2% over the course of the year off that quarterly run rate?

那麼，凱文，如果我再拿 1.09 億美元，再拿 1.1 億美元，那麼您是否希望在這一年中將季度開支提高 2%？

I should be a little more clear; that would be our run rate, $109 million to $110 million a quarter on average.

我應該更清楚一點；這就是我們的運行率，平均每季 1.09 億美元到 1.1 億美元。

Okay, for the balance of the year.

好的，今年剩下的時間。

That's right.

這是正確的。

Okay. Okay. One last one if I could. Wanted to -- Bruce, you've laid out a pretty good plan here with 3.0. First question would be the timeline of that. I haven't had a chance to look through all of the slides. And I guess in '24, the tangible, what do you think you complete this year?

好的。好的。如果可以的話，最後一張。我想 -- Bruce，你已經為 3.0 制定了一個非常好的計劃。第一個問題是其時間表。我還沒有機會瀏覽所有幻燈片。我想在 24 年，有形的，你認為你今年完成了什麼？

And then second part of that question is, I guess if M&A were to present itself in terms of bankers or markets that you've targeted that you want to grow into the -- not abandon the plan, but you pivot to say, well, we can acquire this for a cheaper -- I guess clarifying that question, what part does M&A come up if it did and it were attractive and it accelerated, kind of what you're doing with 3.0 in terms of some of the growth in talent acquisition?

然後這個問題的第二部分是，我想併購是否會以銀行家或你想要發展的目標市場的形式出現——不是放棄該計劃，而是你轉向說，好吧，我們可以以更便宜的價格獲得這個——我想澄清這個問題，如果併購確實發生了，那麼併購會產生什麼部分，而且它很有吸引力並且加速了，就像你在人才增長方面對3.0 所做的那樣獲得？

Yeah. Thank you. Thanks, Jeff. So let me maybe first talk about what we'll achieve in 2024 and beyond. If you look on page 12 of the earnings deck, it lays out what our targets are for three years. And we would expect to make progress in every single area during 2024.

是的。謝謝。謝謝，傑夫。因此，讓我先談談我們在 2024 年及以後將實現的目標。如果您查看收益報告的第 12 頁，您會發現它列出了我們三年的目標。我們預計 2024 年每個領域都會取得進展。

But it really starts to ramp up in 2025 and 2026 because a lot of the investments, particularly in people and in our treasury management investments, are really being made in 2024. So I think that's probably, at the moment, the best I can do. But we would expect, again, to make progress. But the significant progress happens in 2025 and 2026. And we feel very confident to be able to achieve these targets over that period of time.

但它在 2025 年和 2026 年才真正開始加速，因為很多投資，特別是在人員和我們的財務管理投資方面，實際上是在 2024 年進行的。所以我認為這可能是目前我能做的最好的事情。但我們希望再次取得進展。但重大進展發生在 2025 年和 2026 年。我們非常有信心能夠在這段時間內實現這些目標。

And if we look at M&A, so first, we're very far along in the talent acquisition in those specific markets. And we would look at M&A if it was the right culture, provided the right accretion, they were focused as a commercial bank and they were in market, particularly in those growth markets that I mentioned.

如果我們看一下併購，那麼首先，我們在這些特定市場的人才獲取方面取得了很大進展。我們會考慮併購，如果它是正確的文化，提供了正確的成長，他們專注於商業銀行並且他們在市場中，特別是在我提到的那些成長市場中。

So we're not opposed at all to M&A and have ongoing dialogue with some institutions in those markets. But our focus right now is on talent acquisition as opposed to M&A. But we would pivot if we needed to, or if the opportunity presented itself.

因此，我們根本不反對併購，並且正在與這些市場的一些機構進行持續對話。但我們現在的重點是人才獲取，而不是併購。但如果需要，或是機會出現，我們會轉向。

That's good. Thank you.

那挺好的。謝謝。

Thanks, Jeff.

謝謝，傑夫。

Terry McEvoy, Stephens Inc.

特里·麥克沃伊，史蒂芬斯公司

Hi. Good afternoon, everybody.

你好。大家下午好。

Hey, Terry.

嘿，特里。

Kevin, welcome to the call; and Bryan, best of luck to you in the future. Maybe if I could start, when I was looking through slides 8 through 9, I just kept seeing dollar signs. Just a significant investment in a lot of important areas.

凱文，歡迎您的來電；布萊恩，祝你未來好運。也許我可以開始，當我瀏覽幻燈片 8 到 9 時，我一直看到美元符號。只是在許多重要領域的重大投資。

So I guess my question is how are you paying for HTLF 3.0? Is it all footprint and facilities optimization? And I guess how do you alleviate any concerns that there'll be some expense creep as we move through 2024 and into 2025?

所以我想我的問題是你要如何支付 HTLF 3.0 的費用？都是佔地面積和設施優化嗎？我想，隨著 2024 年和 2025 年的到來，您將如何緩解人們對費用上漲的擔憂？

Yeah. So maybe let's talk first about facilities for a moment. I think it's pretty obvious as we look at all of our facilities and how we've grown over the years that our facilities are 20 to 30 years old. They are too large. They were built at a time where branches were utilized by consumers, and it's a whole different world. So this -- we're now going to attack our cost structure.

是的。所以也許我們先談談設施。我認為，當我們查看我們所有的設施以及多年來我們的發展情況時，我們的設施已有 20 至 30 年的歷史，這是非常明顯的。它們太大了。它們是在消費者使用分支機構的時代建立的，這是一個完全不同的世界。所以，我們現在要攻擊我們的成本結構。

We believe that not only the real estate, but also the people, will all come down. So I'm not really worried about account or expense creep. Because while we're doing it, we're also investing in additional technology, particularly the digital bank for the consumers and small business.

我們相信，不只是房地產，還有人，都會下降。所以我並不真正擔心帳戶或費用的增加。因為在我們這樣做的同時，我們也正在投資額外的技術，特別是面向消費者和小型企業的數位銀行。

So we're really -- we feel very confident that our delivery system will actually decrease pretty significantly over this three-year period of time. Did I answer your question there, Terry?

因此，我們真的非常有信心，我們的交付系統實際上將在這三年期間大幅減少。我在那裡回答了你的問題嗎，特里？

Yes, yeah. And just as a follow-up. In your prepared remarks, when you say -- kind of take a look at your footprint, do you mean individual locations within a region or a state? Or are you implying looking at a state or something larger than just one branch, if my question makes sense?

是的，是的。並且只是作為後續行動。在您準備好的演講中，當您說「看看您的足跡」時，您是指某個地區或州內的各個位置嗎？或者，如果我的問題有意義的話，您是在暗示著看一個州或比一個分支更大的東西嗎？

Yeah, Terry. In my comments, I was really talking about much more than a branch, or potentially even a region. We are really taking a deep dive into each of our markets and looking at the capital that we have invested, the returns that we're getting, and where we look out a couple of years to see whether or not the growth will be there in those markets. So we're taking a very heavy look at that, which, honestly, we've never really done in the past.

是的，特里。在我的評論中，我真正談論的不僅僅是一個分支機構，甚至可能是一個地區。我們確實正在深入研究每個市場，研究我們投資的資本、我們獲得的回報，以及我們未來幾年是否會成長。因此，我們正在非常認真地審視這一點，老實說，我們過去從未真正這樣做過。

Okay. And then maybe just a quick question for Nathan. The increase in non-accrual or non-performing loans, it was company specific, not connected to any broader weakness in your manufacturing customer base. Is that a fair statement?

好的。然後也許只是問內森一個簡單的問題。非應計貸款或不良貸款的增加是公司特定的，與製造業客戶群中任何更廣泛的弱點無關。這是一個公平的說法嗎？

That's a very fair statement. And again, it's well collateralized. So it's something we're actively working and have a hopeful as we look forward on it. But we're continuing to work through it.

這是一個非常公平的說法。再說一次，它有很好的抵押。因此，這是我們正在積極努力並充滿希望的事情。但我們正在繼續努力解決這個問題。

Thanks for taking my questions.

感謝您回答我的問題。

Andrew Liesch, Piper Sandler.

安德魯·利施，派珀·桑德勒。

Hi. Good afternoon, everyone. Thanks for taking my question.

你好。大家下午好。感謝您提出我的問題。

Hey, Andrew.

嘿，安德魯。

Hi. The provision, though, that looked like there was a company that voluntarily is shutting down. Is that tied to this manufacturing credit? Just kind of curious from specifics around that.

你好。不過，該條款看起來像是有一家公司自願關閉。這與製造業信用有關嗎？只是對這方面的細節感到好奇。

I'm going to let Nathan take that one, Andrew.

我會讓內森拿那個，安德魯。

I'll take that one, Andrew. No, that's a different company. It's one of the ones that we just decided to take a very conservative posture. As you start to get into accounts receivable and a lot of there, so we're working through that one. We decided to go ahead and just take a conservative posture, so we don't keep coming back. We can just deal with it upfront and then move through it.

我要那個，安德魯。不，那是另一家公司。這是我們剛剛決定採取非常保守姿態的其中之一。當你開始涉及應收帳款等大量問題時，我們正在解決這個問題。我們決定繼續前進，採取保守的態度，這樣我們就不會再回來了。我們可以先處理它，然後再處理它。

Got it. All right. And then the expense guidance here does not include any tax credit amortization. And I guess that you've had those now for several quarters. So it's kind of -- we have to forecast those out some way or another. So I guess what's your expectation on that going forward?

知道了。好的。這裡的費用指引不包括任何稅收抵免攤銷。我猜你已經擁有這些了幾個季度了。所以我們必須以某種方式預測這些。所以我想你對未來的期望是什麼？

Yeah, you're right. The tax credits we've been doing recently are solar tax credits that are more short term in nature. And they do impact expenses, but they also benefit the tax line. And so we don't currently anticipate any for this year, but we will be opportunistic if anything interesting comes up.

是啊，你說得對。我們最近實施的稅收抵免是太陽能稅收抵免，本質上是短期的。它們確實會影響支出，但也有利於稅收額度。因此，我們目前預計今年不會有任何進展，但如果出現任何有趣的情況，我們將抓住機會。

Got it. Okay. So it should be a pretty clean year for the tax rate and for the expense base, right?

知道了。好的。因此，對於稅率和費用基礎來說，今年應該是相當乾淨的一年，對吧？

That's what we expect at this point.

這就是我們目前所期望的。

Got it. All right. You've covered all my other questions. I'll step back. Thank you.

知道了。好的。你已經回答了我所有其他問題。我會退後一步。謝謝。

Thank you.

謝謝。

Thanks, Andrew.

謝謝，安德魯。

Damon DelMonte, KBW.

達蒙·德爾蒙特，KBW。

Hey, good afternoon, everybody. Hope everybody is doing well. Kevin, welcome; and Bryan, best of luck in your new endeavors.

嘿，大家下午好。希望每個人都做得很好。凱文，歡迎；布萊恩，祝你新的事業順利。

Just wanted to follow up on the outlook for provision. I think you noted that it would be up slightly over the 2023 year. Does that include the elevated amount here in the fourth quarter? Or are you talking about if it was a normalized level?

只是想跟進供應前景。我想您已經注意到，該數字將比 2023 年略有上升。這包括第四季增加的金額嗎？或者你是在談論它是否是標準化水平？

That mostly includes loan growth, and it does carry forward our current credit outlook and the credits that Nathan mentioned earlier, which we think are well controlled. But we do -- we are being conservative in case the economy softens a little bit and we're providing a little bit for loan growth there.

這主要包括貸款成長，它確實延續了我們當前的信貸前景以及內森之前提到的信貸，我們認為這些信貸得到了很好的控制。但我們確實如此——我們採取保守態度，以防經濟稍微疲軟，並且我們會為那裡的貸款成長提供一點支持。

Got it. And the one credit that drove the provision higher, is that loan included in the NPL increase this quarter as well?

知道了。推動撥備增加的一項信貸是否也包含在本季不良貸款增加中？

Yes, it was. It was just a smaller piece of it. And honestly, if those two loans weren't there, it would have been a recovery. So the other one, the major driver was the other one that was a manufacturing company. That was primarily driving the increase.

是的。這只是其中的一小部分。老實說，如果沒有這兩筆貸款，那就是一次復甦。因此，另一家主要推動者是另一家製造公司。這主要推動了成長。

Got it. Okay. And then lastly, on fee income, do you expect it to remain flattish but a little bit of pressure? I think you said on the service fee line kind of offset by growth in some other areas. Did I hear that correctly?

知道了。好的。最後，在費用收入方面，您是否預計會保持持平但有一點壓力？我認為你所說的服務費線有點被其他一些領域的成長所抵銷。我沒聽錯嗎？

That's correct. Yeah, a little bit of pressure. We already saw in the fourth quarter, and you saw we were flat still the third quarter. So we've already started to overcome that in treasury management and some of the other HTLF 3.0 initiatives that we're working on.

這是正確的。是的，有點壓力。我們已經在第四季看到了，你也看到我們在第三季仍然持平。因此，我們已經開始在資金管理和我們正在進行的其他一些 HTLF 3.0 計劃中克服這個問題。

Got it. Okay. That's all that I had. Thank you.

知道了。好的。這就是我所擁有的一切。謝謝。

Thank you.

謝謝。

David Long, Raymond James.

大衛朗，雷蒙德詹姆斯。

Good afternoon, everyone.

大家下午好。

Hi, David.

嗨，大衛。

Hi. I want to follow up on the footprint review question. Maybe Terry was kind of going this route. But as you're completing this footprint review, would one of your subsidiary banks, could that potentially be a sale candidate? Is that something that we can go that far to mention or to talk about that as an option?

你好。我想跟進足跡審查問題。也許特里正在走這條路。但是，當您完成足跡審查時，您的一家附屬銀行是否有可能成為銷售候選人？我們可以這麼遠地提及或談論它作為一種選擇嗎？

Yeah. I would say that everything's on the table when we look at one of our subsidiaries. And again, we're very focused on the capital that we have allocated, the growth of our subsidiaries, as well as the expense structure of those same subsidiaries.

是的。我想說，當我們審視我們的一家子公司時，一切都擺在桌面上。再說一遍，我們非常關注我們分配的資本、子公司的成長以及這些子公司的費用結構。

And I'll just add. As part of HTLF 3.0, part of that is bringing on talent. And we brought on a really talented team to help us understand the underlying economics of our business and really help us understand capital allocations and funds transfer pricing, what is truly contributing to the profitability of this company going forward. So that we can really dynamically and strategically look at that and adapt to this interesting banking environment. I believe, we'll see it in the next several years.

我補充一下。作為 HTLF 3.0 的一部分，其中一部分就是引進人才。我們聘請了一支非常有才華的團隊來幫助我們了解我們業務的基本經濟原理，並真正幫助我們了解資本配置和資金轉移定價，這些定價真正有助於公司未來的獲利能力。這樣我們就可以真正動態地、策略性地看待這個問題並適應這個有趣的銀行環境。我相信，我們會在未來幾年內看到它。

Nathan, I would also say, David, now that we have all of our charters consolidated and we're looking at everybody through the same lens, it does have a different approach to things where before when we had separate charters, separate balance sheets, they may have a different investment portfolio with a different yield, which generates a different answer. But now, as we've consolidated everything and we'r1e looking at everybody on a consistent basis, it comes up with different answers.

內森，我還要說，大衛，現在我們已經合併了所有的章程，並且我們通過相同的視角來看待每個人，它確實對事情採取了不同的方法，而以前我們有單獨的章程，單獨的資產負債表，他們可能有不同的投資組合和不同的收益率，這會產生不同的答案。但現在，由於我們已經整合了所有內容，並且我們以一致的方式看待每個人，因此得出了不同的答案。

Got it. No, that's great color. Thanks, guys. And then the other question I had, I think, Kevin, you mentioned a $6 million in incremental NII from the portfolio restructuring with the security sale. Is that -- when you say $6 million incremental, is that on top of what you reported here in the fourth quarter? Or what does that $6 million incremental based on?

知道了。不，那是很棒的顏色。多謝你們。然後我想問的另一個問題是，凱文，您提到了透過證券銷售進行投資組合重組，增加了 600 萬美元的 NII。當您說增加 600 萬美元時，這是在您第四季度報告的基礎上嗎？或者說這 600 萬美元的增量是基於什麼？

We benefited from some of that. In the fourth quarter, the securities repositioning happened on November 14. So we saw about half of that benefit, $3 million of that in the quarter. And so there are obviously a lot of puts and takes in your net interest margin going forward. That's a benefit.

我們從中受益匪淺。第四季度，證券重新配置發生在11月14日。因此，我們在本季看到了大約一半的收益，其中 300 萬美元。因此，未來的淨利差顯然有很多看跌期權和賣出期權。這是一個好處。

There are still headwinds in the economy, with banks still experiencing higher deposit costs. Thank goodness, we did not. We were flat this quarter, which is a really good sign going forward. But a lot of good puts and takes going forward.

經濟仍面臨阻力，銀行的存款成本仍然較高。謝天謝地，我們沒有。本季我們的業績持平，對未來來說是一個非常好的跡象。但未來會有很多好的進展。

We could do better than that on net interest margin if, again, the yield curve cooperates, but we're not sure how the Federal Reserve is going to react. We're not sure how -- what competition is going to look like. This is a kind of unchartered territory that we're making sure that we're prepared for.

如果殖利率曲線再次配合，我們可以在淨利差方面做得更好，但我們不確定聯準會將如何反應。我們不確定競爭會是什麼樣子。這是一個未知的領域，我們要確保做好準備。

Excellent. That's great. Thanks for the clarity. And then just finally, the HTLF 3.0, are you expecting any non-core expenses on top of that $109 million or $110 million run rate? Or do you think most of those have already been included?

出色的。那太棒了。感謝您的澄清。最後，HTLF 3.0，除了 1.09 億美元或 1.1 億美元的運行費用之外，您是否預計還會有任何非核心費用？或者您認為其中大部分已經包含在內？

Most of those are already included. There could be some as we're going through. We're just in the initial stages of HTLF 3.0, and we're evolving as we go. So there could be areas where there are additional expenses. But there would be, from our view, a very quick earn back of those expenses to buoy up our model.

其中大部分已經包含在內。我們正在經歷的可能會有一些。我們正處於 HTLF 3.0 的初始階段，我們正在不斷發展。因此，某些領域可能會產生額外費用。但在我們看來，這些費用很快就能收回來，以支撐我們的模式。

Awesome. Great. Thanks for taking my questions.

驚人的。偉大的。感謝您回答我的問題。

You bet. That includes real estate, I'll add, if there's something in our footprint that needs adjustments.

你打賭。如果我們的足跡中有什麼需要調整的話，我會補充說，這包括房地產。

Thank you. As there are no further questions, I'd like to turn the call back over to Mr. Lee for any closing comments.

謝謝。由於沒有其他問題，我想將電話轉回李先生以徵求結束意見。

Thank you, Valerie. Again, I want to thank Bryan McKeag for all that he's done. This will be the last time he's going to be in the room with us. So thank you, Bryan, and I really appreciate that. And again, welcome to Kevin for his first earnings call with us. Really appreciate that.

謝謝你，瓦萊麗。我要再次感謝 Bryan McKeag 所做的一切。這將是他最後一次和我們一起待在房間裡。所以謝謝你，布萊恩，我真的很感激。再次歡迎凱文參加我們的第一次財報電話會議。真的很感激。

And thank you all for joining us. Our next quarterly earnings call will be in late April. Have a good evening.

感謝大家加入我們。我們的下一個季度財報電話會議將於四月下旬舉行。祝你晚上愉快。

Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.

謝謝。女士們、先生們，今天的會議到此結束。感謝大家的參與。您現在可以斷開連線。祝你有美好的一天。